May and June Jobs Reports Call for Policy Exactly Opposite of What is Being Proposed

The Law of Consensus Economics:  Bad Policy Drives Out Good Policy

The June jobs report is out and shows an increase in unemployment and almost zero job creation.  The Dismal Political Economist had earlier warned about making a judgment on the economy on just the similar reporting May, but now with two months of data and other statistics it is clear that the operative word for the economy is “stagnant”.  The recovery that the U. S. had been experiencing has been a technical rather than a real recover, a concept explained here.

So the proper response to the continuing news of weakness in the economy would be for the government to announce a new round of specific spending increases targeted to critical areas of the economy like construction and consumer durables so that demand for goods and services can be increased, resulting in higher employment, higher investment and higher economic growth. 

Instead a bi-partisan effort is underway to significantly cut government spending, and to target those cuts at the most vulnerable and needy within the population thus slowing the economy even more and placing an even greater burden on those in the economy least able to bear the difficulties.  On the plus side, Mr. Romney, Mr. Obama’s likely 2012 Republican opponent was almost giddy,

"Today's abysmal jobs report confirms what we all know - that President Obama has failed to get this economy moving again. Just this week, President Obama's closest White House adviser said that 'unemployment rates or even monthly jobs numbers' do not matter to the average American.

All of this confirms one of the The Dismal Political Economist’s basic rules of economic policy,

If the Wrong Policy Can be Adopted, the Wrong Policy will be Adopted.

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