Fewer People Being Dumped. Economists Joyful. But Wait…

The Lion does not pretend to be an economist, nor even to understand too much about that dark art. In fact, The Lion and money are either archenemies or playful friends: that issue has yet to be settled. In any event The Lion finds himself mildly confused about some of the things the financial three-card-monte men are saying.

For example, in today’s Globe there is a story proclaiming that the Massachusetts jobless rate is higher than it’s been in seventeen years. And that’s apparently good news:

Mike Lynch, regional economist at IHS Global Insight in Lexington, said the pace of job loss has slowed markedly in the second quarter, to a 3 percent annualized rate from 5 percent in the first quarter. Lynch forecasts job losses will continue through 2009, but at a “greatly decelerating pace.’’

“The worst is behind us,’’ Lynch said. “We are certainly heading in a better direction.’’

Perhaps The Lion is naive, but given the generally unrelenting bad news on the economy could it not be that business is simply running out of people to dump? Rather than signaling a turnaround, could it not be that businesses are reaching that last gasp of viability, wherein if they fire a couple of more people they will be unable to continue and must close their doors? After all, when a train wrecks it does slow as careens off the tracks to become a smoking heap of twisted metal.

But then economists don’t run the trains. They do, however, run the financial industry, the touchstone of economists and MBAs and overpaid CEOs, and given the recent record profits being reported by some of the same companies that put the world into this mess, The Lion has to wonder what’s going on? Millions of people have lost their jobs and their homes, more are losing those things every day, and yet the malefactors rake in big profits and pay huge bonuses to their employees while they fight the imposition of responsible oversight regulation from the government.

But apparently that’s considered success. Vive l’America? Keep a tight hand on your wallet. The rich people apparently aren’t done with you yet.

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4 Responses

  1. I couldn’t have said it better myself.

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    • That’s why you have me.

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  2. “The worst is behind us,’’ Lynch said. “We are certainly heading in a better direction.’’

    Weeell, sorta. Imagine if you nicked your femoral artery. There’d be considerable bleeding at first, but after applying pressure and perhaps a tourniquet, you’d be heading in a better direction and the “worst”, the profusive bleeding, would be behind you. However as long as you’re still bleeding, you face the possibility of dying, which I think everyone would agree would be the worst.

    The problem lies in the implication of “worst”. On face value he’s right in terms of the relative “worst”, but lack of clarity, accidental or intentional, will lead most to see “worst” as the implied valuation of the economy as a whole.

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    • I’m not convinced the tourniquet isn’t made of crappy material that’ll break.

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