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Shocking numbers: Real unemployment tops 22%
Posted By -NO AUTHOR- On 11/09/2009 @ 1:16 pm In Front Page | Comments Disabled
Editor’s Note: The following report is excerpted from Jerome Corsi’s Red Alert, the premium online newsletter published by the current No. 1 best-selling author, WND staff writer and columnist. Red Alert subscriptions are $99 a year or $9.95 per month for credit card users. Annual subscribers will receive a free autographed copy of “The Late Great USA,” a book about the careful deceptions of a powerful elite who want to undermine our nation’s sovereignty.
The true rate of unemployment for October 2009 may be 22.1 percent, not the 10.2 percent reported by the Bureau of Labor Statistics, Jerome Corsi’s Red Alert reports.
Unemployment at 22.1 percent, if accurate, would be at numbers not seen since peak unemployment during the 1973 to 1975 recession.
Economist John Williams, publisher of ShadowStats.com, estimates that the peak of unemployment in nonfarm unemployment in the Great Depression of the 1930s would, by his methodology, have registered at 34 to 35 percent in 1933.
So, how does the Obama administration get away with reporting the lower unemployment percentage?
Corsi explained that the Clinton administration changed the way BLS calculates unemployment statistics by excluding “discouraged workers,” those who had given up looking for a job because there were no jobs to be found.
Since the Clinton years, discouraged workers looking for a job for more than one year are not counted as “unemployed” because they are considered to have dropped out of the labor force.
The BLS still includes in “U6 Unemployment” calculations short-term discouraged workers, as long as they have been looking for a job less than one year.
This definition permits the Obama administration to under-report “U3 unemployment” at 10.2 percent when real unemployment as calculated before the Clinton administration redefinition is twice that amount, Red Alert contends, and U6 unemployment lies somewhere in between.
These differences are illustrated in the following chart that Williams produces in the “Alternative Data” section of his website named “Shadow Government Statistics: Analysis Behind and Beyond Government Economic Reporting.”
(Illustration by shadowstats.com)
“The convenience is that by reporting unemployment at 10.2 percent instead of at 22.1 percent, the Obama administration can clearly continue advancing the argument the U.S. economy is in recovery and the recession is over, even if the truth belies those claims,” Corsi wrote.
Williams concludes that the economy is not recovering, but has been stimulated by excess liquidity placed into the financial system by the Federal Reserve keeping federal-funds rates at the historically low rate of zero, or near zero.
“Understanding that the real level of unemployment in October 2009 was closer to 22 percent than to the officially reported 10 percent is an important corrective,” Corsi wrote, “especially if we are to appreciate the extent to which a Dow at or above the 10,000 benchmark is nothing more than another Fed-created bubble.”
With millions of jobs outsourced to China and India under free-trade globalism, the dollar weakness that accompanies most recessions is not stimulative, he explained, largely because the U.S. has lost so many manufacturing jobs that are never returning to its shores.
“Truly, the only way the Fed can stimulate the economy is through creating bubbles generated by keeping interest rates artificially low,” Corsi wrote. “As I argued in ‘America For Sale: Fighting the New World Order, Surviving a Global Recession, and Preserving USA Sovereignty,’ the Bernanke stock-market bubble caused by keeping interest rates at zero is merely a repeat of the Greenspan housing bubble that was caused by keeping interest rates at 1 percent in 2003-2004.”
The housing bubble burst when interest rates began rising in late 2004 and peaked at just above 5 percent in mid-2006.
“The stock-market bubble will most certainly burst when interest rates rise, as they inevitably will,” Corsi wrote, “both to fight the increasing risk of hyperinflation and to maintain the needed incentive for foreign nations to lend the U.S. Treasury the hundreds of billions of dollars monthly that will be needed to float yet another $1 trillion Obama administration federal budget deficit in 2010.”
Red Alert’s author, whose books “The Obama Nation” and “Unfit for Command” have topped the New York Times best-sellers list, received his Ph.D. from Harvard University in political science in 1972. For nearly 25 years, beginning in 1981, he worked with banks throughout the U.S. and around the world to develop financial services marketing companies to assist banks in establishing broker/dealers and insurance subsidiaries to provide financial planning products and services to their retail customers. In this career, Corsi developed three different third-party financial services marketing firms that reached gross sales levels of $1 billion in annuities and equal volume in mutual funds. In 1999, he began developing Internet-based financial marketing firms, also adapted to work in conjunction with banks.
In his 25-year financial services career, Corsi has been a noted financial services speaker and writer, publishing three books and numerous articles in professional financial services journals and magazines.
For financial guidance during difficult times, read Jerome Corsi’s Red Alert, the premium, online intelligence news source by the WND staff writer, columnist and author of the New York Times No. 1 best-seller, “The Obama Nation.”
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