We stated last December that our nation and economy is in a "stealth recession." One of our decisive indicators was the labor participation rate. It stood at a little over 62%. When we added inflation to those poor numbers, we knew people were hurting no matter what President Biden or Jerome Powell of the Federal Reserve said.
We also knew that 48% of our labor force is in service be it trucking, retail or similar. We put two-and-two together. The conclusion would be a slow-down in these firms that would result in layoffs and bankruptcies. We were correct on that aspect. However, what we didn't know until now is this: what happened to those employees who lost their job?
Do the Math
We did. Beginning from a full employment level which correlates to a 69% participation rate and the actual 62% rate. Our estimate is 10-12 million workers. We also knew many women left the labor force due to COVID. Many have not returned. They are among the lost workers. So, how did these people adjust to a life without a paycheck?
Disability
Ambulance lawyers fill nighttime television on smaller channels with ads. One of their best and most repeated sound bites concerns unemployment, "Maybe your lost job has caused you mental distress and or, other internal problems? Maybe you filed a claim and you were rejected? No longer. We're here to help." These type of lawyers are gaming the system. We all lose.
They take a piece of your benefit, and they generally win. We now have the answer to where all those who lost a job have gone. There are 12 million people in the age group of 18-64 who collect on the dole. This has nothing to do with unemployment insurance. This is a separate agency. Even if a new plant came into their district that offered employment, these check-living souls would not seek to reenter for employment. Why risk a sure thing when this company may pack up and leave after a few years? This new psyche is terrible. It goes against our American character of self-reliance. It goes against our optimistic outlook. This is very sad.
It Gets Worse
The above disability claims are predominantly men who are over 30. The younger group (18-30) are wasting away in their parents home. They found a hobby that makes them happy in their present state. They are not on drugs, per se. They are abdicted to video games. They have friends locally, nationally and internationally on the internet. They will wake up one morning to their 30th birthday with no job, no relationship skills and no future. There are untold millions like this who are not looking for work or continuing with ther education. Many cannot afford college and living in the present does not force them to feel that they need to change their lifestyle.
3.9%
That is the stat released by the government for our unemployment rate. It really is around 15%. This lie is covered with disability payments. Then, you add the millions of immigrants on the border and we will go from the most productive nation ever, to one that is living by government subsidence. This will lead to a more declining standard of living. When neighborhoods decline in value, people will burn their homes for insurance to flee because no one will buy them. These potential negative spiral needs action now before it is too late. We have nothing against compassion, but people need more than meeting rent and food on the table. We need to feel safe. We need a purpose. We need to know and trust our neighbors. We need belief in a better tomorrow. When you outsourced jobs, you put a nail into a coffin for our American way of life. The greedy, the Republicans, the Democrats and the Federal Reserve are all guilty.
We Conclude:
The market bulls are placing bets that the Fed is done with rate hikes. They see a return to the way "things get done." We don't. The market may continue to rally, but our economy is built on sand. There are too many problems for everyday people to make ends meet. $King Dollar has peaked. This will help the market, but hurt the rest of us. Inflation is now ingrained and all it needs and what we see is this: more worker unrest and more strikes in 2024. One geopolitical disturbance like one that affects oil and a wave will disrupt the market's present thinking. We believe that the haves will sell at the next high. If you look for distribution selling, this will confirm our belief. If we enter a recession by government standards, things will take a turn for the worst. AI and robotics will take millions of jobs. This will not be an overnight occurrence. It will be like the weather, sunny in some places and raining in others. The result is danger. It could lead to social unrest. Let us hope that the government stops using our nation as a dumping ground for foreign products. We need more tariffs on all imports. There are other options. Our water solution could be the answer, but first our book needs to be published. Even with this pessimistic outlook, be of good cheer and try to have a wonderful and blessed Thanksgiving. Peace.
