Will Jobs Numbers Sink Obama in 2012? by Micahel Tomasky, The Daily Beast
Here are my comments to his article:
Jobs schmobs. Nixon won in 1972 when unemployment went up +2%? What really happened when Nixon sought re-election other than Watergate?
1. Phase I price and wage freeze in Aug/Sep 1971. Phase II controls came along later.
2. Hyped money supply underneath this in run up to Nov 1972.
3. Breton Woods agreement was falling apart because of Vietnam spending and monetary policy which resulted when US dollar floated and fixed exchange rates ended.
4. US was just coming out of the 1969/70 market and economic debacle where letter stock like Toxic Debt remained hidden destroying portfolio values.
5. Penn Central commercial paper crisis in May 1970 created a liquidity crises forcing the Fed to turn on the monetary spigot.
6. The Vietnam War was a disaster with demonstrations in Washington that rattled the White House. Kent State killings occurred in May 1970. Nixon was looking for a way out.
All of the options that were available in 1971/2 such as they were except wage and price controls are not available today. The debt is out of control, and the money supply cannot be used. Floating exchange rates value the dollar without intervention depending upon what the market players think. There are two wars (Afghanistan and Libya) underway and Iraq is still smoldering. Other Muslim states are in a state of revolution.
The only thing that can save the US is to cut spending which will impact jobs making unemployment worse, but it has to be done. Obama won't do it. There will be a lot less employment in the future the longer the borrowing and spending goes on along with monetising the debt. It is a very dark scenario.
There could be a military take over of the US as is occurring in secret with Toxic Surveillance and Top Secret America. Martial Law will solve the employment problem, but very little money will be available. It's all over for awhile due to terrible mis-management. The question is whether the US will ever climb out of the hole it is sinking into. The 1930s could be seen as a picnic by comparison.
I wouldn't worry about unemployment percentages at the moment or next year. That is the least of the problems. And, look at what happened after Nixon was re-elected. He bombed Hanoi for 12 days in Dec 1972 after saying "Peace is at hand." The 1973/4 recession and stock market debacle with inflation changed the world forever. He wasn't around to finish his term in office since he was forced to resign over Watergate. Obama’s in the bubble created by the US military who want perpetual war.
The context of these comments can be found here.
