News: Alter, alter U.S. Unemployment rate reached 10.2%

USA GDP rose for 3.5% in this quarter. Even it seams that America found the formula from going out from recession, this was the reason only for temporary happiness. The shocking unemployment rate that had reached double digits 10.2% in October, took over all public attention. This is the score that American has not been seeing for 26 years, since the Great Depression.

I have red a couple of different articles from different newspapers Guardian, The New York Times, The Times online.

All of them agreed that this unemployment rate is alarming, considering that it reached astonishing 10.2%. It’s interesting that all newspapers are making parallel with the statistical data from the 80’s, the Great Depression time, what makes this situation even more alarming.

Most of the articles published that president Obama admits that he is not happy with the existing situation and that he will consider all possible solution to encourage and accelerate job creation. But just some of them as The Time online and Guardian, are mentioning that the Republicans did not stayed immune on this information and note this as a weak point of Obama’s Administration. It could be expected that Republicans will use these negative results as their main weapon on the next November’s midterm Congressional elections in 2010, what leaves less then a year for the President and Democrats to take some actions or they can lose their seats.

Most of the articles are not hiding their confusion in the terms that GDP rose for 3.5% comparing to second quarter, and that the rate of unemployment is so high.

In opinion of the Guardian, there are two possible solutions for this paradox; one is that employers still do not have need for new employees and other is that they will wait for some time to be sure that economy is recovered. Guardian also notes that 17.5% of workers are negatively affected, and this data is barley mentioned in Americans newspapers.

Opinion of the blog’s on American newspaper websites, it could be easily seen that people are not surprised, as economist, with these high numbers and that most of them are very skeptical about taken governments actions. Most of them are very cynical about the future and have negative attitude toward to articles. For me as an non-American, who can get the information about the situation in America only through news this rises a question, how independent and accurate American newspaper are? After my deeper search I came up with a conclusion that most of the articles are consisted of data that they get form National Bureau of Labor Statistics and explanation of them, but if a reader wants to have a clearer picture of the existing situation in America he/she should read the blog’s because in my opinion the truth is in the middle.

In conclusion from all previously read, articles and blog’s, American government should take more action to activate labor market, and a logical opinion and the opinion of the public the government supporter packages are not the best solution for that. America’s budget of 787 billion dollars is already at the bottom what brings the need for new finance injection. There is a question how productive is to invest in passive investment. In the theoretical prospective if we are looking into macroeconomic shifts it is reasonable measure, more money given to the population means more spending and social piece but is it so? There is a large scale of experts and labor union representatives that are sharing the same opinion that government should change direction of its actions and start to finance large-scale projects that will make new work places.

In my opinion, this is a much better direction, taking under consideration theoretical knowledge, how most of the European countries resolved the problem of unemployment after the Second World War. For example Yugoslavian government made a program of public work in infrastructure sector. Even the situation in Yugoslavia then, was much different than existing situation in America it seams as a possible solution. This action can force people to work rather than giving them $221 weekly check not to do anything, people could get paid some minimum wage for this work. This action can also be supported with some government benefits which public workers will get when the crisis passes, maybe to give some rights or number of government bonds with 10 year maturity, with the coupons that cannot be paid out until the crisis passes, or similar actions.

One is sure the next year will be very turbulent for Obama and his administration, how successful they will be in their actions, statistics will show.