Posted by Michael A. Kamperman on November 17, 2009
The mantra that is being repeated over and over again amongst the political intelligentsia is the U.S. economy consumes too much, imports too much, doesn’t produce enough, and exports too little. The Whitehouse shares this view. President Obama would like to see Americans consume less, save more, and export more. He is in the middle of a trip to Asia telling China, Japan, and others that they can no longer rely on the U.S. consumer and that trade needs to needs to be rebalanced. The reception he has received can best be described as a cold shoulder. The President and his collection of academic advisers seem oblivious to the real world reality that these nations are not going to shutter their own factories and let go their own workers go just to buy more goods made by U.S. workers. Exports will not revive our economy because the overseas consumer markets are not large enough to absorb all of the products they can make, no less the products we can make.
The U.S. is currently only using about 70% of its industrial capacity because of a lack of demand, both internal and external. Normally a country needs to use over 80% of its industrial capacity before it begins to invest in more production capacity. The U.S. doesn’t have a production problem. We have the capacity to produce a lot more than we are currently producing. What the U.S. has is a demand problem. We do not have enough demand from consumers in our country, or in other countries, to buy all of the goods and services we can produce. For example, while we can produce over 16 million cars a year and we are currently selling a little over 10 million cars a year. We used to sell over 16 million cars a year when our consumers could easily access affordable credit, even if they didn’t have a prime credit rating. What we need to weigh as a nation is the cost of losses from subprime lending versus the benefits of employing millions of people to make more trains, planes, and automobiles.
President Obama’s economic philosophy of restrained consumption, exports, savings, and responsible lending is boxing him into an untenable position. He cannot create the 10 million jobs the economy has lost unless U.S. consumers resume spending. The Asian nations just rudely told him don’t look to us to bail you out of your problems. The only way consumers can spend more is to borrow more. The President will have to choose between a country that continues to borrow and spend or a country that continues to have double digit employment and huge fiscal deficits for as far as the eye can see. The jobs situation is so bleak that Teach for America has created a waiting list for qualified applicants because they are not sure they will have as many teaching positions available as they have in the past. The coalition the President put together to win included enthusiastic young voters. He will not have these voters with him in 2012 unless he finds them jobs. And he will not find them jobs unless he fixes the broken credit markets allowing small businesses and consumers to borrow and spend again.
Posted by Michael A. Kamperman on November 14, 2009
The President has already decided that he is only interested in small and minimalist ideas to create jobs. He does not want to consider programs that will cost a lot of political capital or a lot more of the Treasuries dollars. He and his band of Hoover Liquidationist political and economic advisers are more interested in bringing down the deficit than in putting America back to work. The word is his budget directors are asking his Cabinet Secretaries to prepare two budgets, one for zero growth and one for a 5% across the board reduction in spending for the next fiscal year. They are more interested in making things and selling than to foreigners than to other Americans. He and his liquidationists are crazy if they think the Chinese and the Japanese are going to accept selling a lot less to us and buying a lot more from us. In effect, President Obama is in favor of the American standard of living going down. Therefore, his jobs summit is dead on arrival and will prove to be nothing more than a big show so he can say he tried.
Paul Krugman just said “But these aren’t normal times….so it’s time to try something different.” Yes it is time to try something different. But it is not time to buy into the idea that Washington has already stretched itself to the max and can’t do much more because of the debt and the deficit. President Obama and his economic team are looking for creative ideas to create 10 million jobs on the cheap. There are no magic tricks to turn around the economy. There is only the reality that we will not solve the economic crisis without significant leadership from Washington. President Obama needs to be willing to not only try something different, but something big.
We need to create 10 million new jobs. Assuming each job costs employers an average of $50,000, then it will cost the nation $500 billion a year to add these jobs. The private sector cannot do it right now because the credit markets remain broken and it remains very difficult for many consumers and small businesses to borrow money. Yet one of the ideas to reduce the deficit is to use $200 billion in TARP funds to repay debt and lower the current deficit. Wouldn’t this money be better spent bolstering the community banks that are vital to the small business job creation engine? Yes the New Deal helped during the Great Depression, but the unemployment rate was still over 15% at the end of the 1930′s. It was only the massive fiscal spending to fight World War II that truly ended the Great Depression. A comparable stimulus program today would amount to 8 trillion dollars a year for 4 consecutive years. While that may be over-kill, it emphasizes there is no way to end the economic crisis on the cheap just by tinkering at the edges. Two years ago almost everyone would have agreed that if we entered a deflationary depression there are three things we should avoid doing at all cost. First, the federal government should not cut spending. Next, the federal government should not raise taxes. And finally the federal government should not sanction Zombie banks that only pretend to lend. Amazingly, the Obama administration is hell bent on doing the three things it shouldn’t. What’s worse they want the average American to accept the pain of change.
Posted by Michael A. Kamperman on November 6, 2009
This October the official unemployment rate rose to 10.2% and the true U-6 unemployment rate that includes discouraged workers and those forced to work part-time rose to 17.5%. Anyone that is still in denial that we are in a New Great Depression is like an Ostrich with their head in the sand. In October the teen retailers reported much worse than expected sales numbers. The conventional wisdom explanation is that because Halloween fell on Saturday the teens didn’t shop at the end of the month. I guess it was a who-knew surprise to retail analysts that Halloween fell on Saturday. The real reason the teens cut back on shopping is because they and their parents are unemployed. Many adults have been forced to take the traditional part-time jobs normally held by kids. These are the people now counted in the U-6 number. Despite the stimulus bill focused on state and local governments there were zero government jobs created in the last month. Importantly hours worked again remained unchanged at the very low level of 33 hours. The mantra that many keep repeating is that unemployment is a lagging indicator. While unemployment was a lagging indicator in the last two milder recessions, it did not lag the recovery after the deep recessions of the mid 1970’s and early 1980’s. The current economic decline is already deeper than those two recessions.
These numbers are shocking and were not predicted by the econometric forecasting models relied on by Wall Street and Washington. Don’t forget the worst case assumption used by the federal government to stress test the banks assumed unemployment would peak at 10.3% by the end of 2010. Can there be any doubt that the worst case is going to be a lot worse than that? If these leaders would drive back and forth from New York to Washington rather than snooze on the express train or the plane they would have to drive through New Jersey. New Jersey, like the rest of America, is hurting and the reason Governor Corzine lost his re-election bid is directly attributable to the lack of available jobs.
What the rising unemployment rate is telling us is credit remains extremely tight for both small businesses and consumers. Without access to credit the small business jobs engine is sputtering. Without access to credit the consumer spending so many businesses rely on is still retrenching. Hopefully this unemployment number will serve as a wake-up call to the Whitehouse and the Congress that the economy needs a lot more help from Washington. President Obama wants to solve the jobs crisis on the fiscal and political cheap. He is looking for ideas to create jobs that won’t raise the deficit. One plan touted by the Whitehouse is to get those businesses that export to only one country to increase exports by exporting to two countries. Have these Harvard geniuses not figured out most businesses exporting to only one country are located on either the northern or southern border and trade with either Canada or Mexico? President Obama, the time has come for you to put forward a real trillion dollar plus jobs plan and to put all of your remaining political capital on the line to defend it. Otherwise come 2012 you also will wind up being tossed out of office.
Posted by Michael A. Kamperman on October 29, 2009
The third quarter GDP rose by 3.5%. Media outlets and economic pundits have hailed the report as irrefutable evidence the recession is over. It is not over. Consider that 1% of the gain came from a decline in the decline of inventories. The country shrank inventories at an annualized rate of $130 billion in the third quarter. But because that was an improvement over the second quarter the alchemists consider this negative a positive. A careful reading of the GDP report shows that 1.66% of the gain came from an increase in auto production. This is attributable to a combination of the cash for clunkers program and of GM and Chrysler restarting production that was totally shut down for parts of the second quarter as they went through government controlled bankruptcy proceedings. In September auto sales fell back to depression levels once the cash for clunkers program ran its course. Residential fixed investments increased 23.4% in the third quarter after decreasing 23.3% in the second quarter. But in September sales of new homes fell 3.6%, while sales of existing homes rose 9.4%. This is due to the first time home buyers tax credit. The discrepancy between existing homes sales and new home sales is because in order to qualify for the credit a buyer must close on the home by November 30 and new home cannot be built in less than 90 days. This indicates that just like the cash for clunkers program as soon as federal government stimulus is removed from the marketplace depression level final demand resumes. There is a real possibility a new home buyers tax credit will be extended in some form. However, it will probably not juice sales as much as the last tax credit since everyone who was waiting to buy a home ran out and bought one to take advantage of the tax credit. In other words in both situations demand was pulled forward. The collapse in consumer confidence in October and the persistently high rates of weekly jobless claims indicate the underlying fundamentals of the economy have not materially improved. The banks are still tightening lending and as long as that continues the depression will continue.
The GDP report revealed some stark weaknesses in the economy that will eventually drag the whole economy down again. First and foremost state and local government expenditures shrank by 1.1%. The decrease in tax revenues means local government spending will remain weak for an extended period of time. Also, non-residential spending decreased by 2.5%. The commercial real estate market is flat on its back and will only continue to contract going forward. Finally, disposable personal income decreased by $20.4 billion in the third quarter. This means the 3.4% increase in consumer spending is not sustainable, especially if the consumer remains unable to borrow their way to prosperity.
The real tragedy about the 3rd quarter positive GDP report is the high fives at the Whitehouse and Federal Reserve will prevent much needed economic assistance from Washington making its way to Main Street. The real measure of economic growth is jobs. Unless the federal government statisticians again drop hundreds of thousands of people out of the workforce the unemployment rate will rise to 10%, or higher in next Friday’s report. If not for the federal government dropping 1.5 million people out of the labor force in the last few months the official unemployment report would already be close to 11%. The Obama administration can only hide their heads in the sand like Ostriches for so long. If the new Hoover administration doesn’t get their act together by creating millions of jobs soon they will be looking at a Republican controlled Congress in 2010.
Posted by Michael A. Kamperman on October 26, 2009
The number one issue in America is jobs. The number two issue in America is jobs. The number three issue in America is jobs. Yet somehow the Whitehouse remains tone-deaf to the cries and lamentations of the American people. The President is much more interested in minimalism when it comes to any job creation efforts than he is in risking raising the deficit higher than it already is. However, if you’re the world’s biggest currency manipulator named China and you complain about the U.S. printing money the President is all ears. If you run around saying we are stealing from our grandchildren by increasing the national debt the President is easily cowered. But if you are some poor Joe or Jane without a job the President is willing to give you a few more weeks of unemployment benefits, and not much else. He is certainly not willing to create a job for you.
A friend of mine lost his job as an architect one year ago. His unemployment benefits just ran out. Because of the commercial real estate bust no architectural firm is hiring. Its not that he can’t compete for a job, there are no jobs to compete for. What good will a few more weeks of unemployment insurance do him in the big scheme of things? When those checks run out there will still be no jobs available for him.
What the President needs to do is provide the change we can believe in that he campaigned on. Rhetoric and flowery speeches will not put food on the American workers table. We need action. The President should come forward with a two year one trillion dollar infrastructure bill that would repair or replace roads, bridges, federal government buildings, national parks, and schools in poor districts. The President should also remind the Fed that unemployment is their most important mandate right now, not inflation. He should have a meeting with Ben Bernanke and tell him if he doesn’t up the quantitative easing program at the next meeting he will pull his nomination for a second term. Basically, we need for the President to become proactive on the jobs front and take charge. Finally, he should fire all of his economic and political advisers that are counseling him to worry more about the deficit than about jobs. It is simply stunning how President Obama has surrounded himself with the same type of liquidationist advisers that President Hoover surrounded himself with during our last debt-induced deflationary depression. President Obama, you will not be able to re-create 10 million missing jobs on the cheap.
Posted by Michael A. Kamperman on October 20, 2009
The Whitehouse needs to stop defending the stimulus plan and come forward immediately with a big and bold job creation plan. The one part of the stimulus plan that most people agreed would create new jobs was fast forwarding funding for shovel ready infrastructure jobs. Well don’t hold your breath. Proof has just emerged that the stimulus plan is not only failing to create infrastructure jobs as promised; it is now failing to save even previously budgeted infrastructure jobs. A few days ago federal and state transportation officials told local planners in Texas they would need to significantly restrict their previously budgeted spending on roads and bridges for the next two years. In fact, the only money available for state and federal highways is whatever funds local transportation authorities have received directly from the stimulus plan, and nothing else. The Waco Tribune Herald quoted Waco MPO director Chris Evilia as saying “If it’s not economic stimulus, it’s pretty much a no go for the next two years.” She described the turn of events as a “complete meltdown.” The Waco area is slated to receive $7.2 million from the stimulus plan for roads and planned to use the money for a needed overpass on highway 6. Still, the stimulus money will not be diverted to higher prioritized projects but to routine road maintenance. Without stimulus money the area already planned to widen parts of I-35 and to build an overpass on highway 84. Those two top priority projects will now have to wait for future funding, since the expected annual road money is no longer coming.
We are in a federal and state funding crisis due to a lack of tax receipts because of the economic crisis. Jobs widening I-35 that would have existed anyway without the stimulus plan will now not exist even with the stimulus plan. It is simply stunning things are unraveling so fast at the federal and state level. It is imperative the Whitehouse put together an emergency spending bill to restore fully all budgeted transportation funds without using funds from the stimulus plan to cover the normal budget. The word stimulus means an extra spark. It does not mean replacement money.
There is no doubt we need much higher levels of federal spending to stabilize the economy. There is no doubt the Federal Reserve needs to print a lot more money. What is doubtful and what is an open question is whether or not President Obama has the wisdom and the courage to stand in front of the American people and tell them the economic crisis is proving to be more severe than he and his advisers realized. He must come forward with a one trillion dollar job creation program as a minimum down payment if he wants to see unemployment go down. It is also doubtful whether or not Fed Chairman Bernanke will push through another round of quantitative easing at the Fed’s next meeting. The economic crisis will not end until the President is willing to use all of his political capital on creating jobs.
I need to offer a mea culpa and a retraction. Earlier I attempted to coin the phrase the “Great Unraveling” as a term to describe how the economic dominoes are continuing to fall into each other causing more and more economic losses. The recent cut in highway funds is a perfect example of why we are in a depression and why it is not close to being over. However, it has been brought to my attention that Paul Krugman published a book in 2003 titled The Great Unraveling: Losing our Way in a New Century, which is a collection of his New York Times columns railing against President Bush’s economic policies. At least I have seen Professor Krugman forced to issue retractions of his own.
Posted by Michael A. Kamperman on October 6, 2009
Historians look back on the Great Depression of the 1930’s and assure us that things turned out much worse than they could have because of policy errors from both central banks and governments. Australia just committed a significant policy error by raising their short term interest rate by a quarter of a point to 3.25%. This sparked a surge in the Australian dollar. It also sparked a surge in gold. Only last week Australia pledged, along with all of the other G-20 nations, not to prematurely withdraw stimulus spending plans or to raise interest rates. But Australia quickly waived that pledge off by assessing that a short term liquidity driven speculative bubble in commodities prices brought about by artificial demand from China indicates their economy has recovered sufficiently enough to withdraw stimulus. Australia isn’t even going to wait to see if Chinese demand will continue once its 60 year anniversary eight day long holiday is over. Since much of the recent demand from China has gone into building inventories in warehouses rather than into finished goods for which few firm orders exist, it remains to be seen if China will continue to purchase commodities at a rate that significantly exceeds demand. I would not be surprised to see Australia reverse course and lower interest rates in a few months just like the European Central Bank was forced to do an abrupt about face when they prematurely raised interest rates last summer. Have Australian central bankers forgotten that only 6 months ago the prices of many of the commodities they track were much lower than they are today? Does Australia realize real final demand for most commodities has not risen substantially from 6 months ago?
Australia’s go it alone strategy will hurt strategic global efforts to coordinate economic recovery strategies between the major industrialized nations. Just how good is the word of any nation that participates in the G-20, including ours? It was only a few weeks ago we started a tariff raising tiff with China over tires. What the world needs from the G-20 is a firm understanding of the depths of the crisis and a clear and united vision on how to lead the world out of the crisis. It is clear Australia just doesn’t get it. Could beggar thy neighbor policies be far behind?
The question Bob Herbert raised in today’s New York Times is does President Obama get it? Bob questions why there is no bold job creation plan coming from the Whitehouse. The radio talk shows are now all quoting the U-6 unemployment rate of 17%. The pressure is building on the Whitehouse to create jobs. The early word is they are planning on extending jobless benefits and the first time home buyers tax credit. We already had these programs in place this September and still lost over a ¼ of a million jobs. Obviously we need something much bigger and much bolder than the $3,000 tax credit for new full-time jobs the Whitehouse is considering. Would you spend $30,000 to open up a job position your company doesn’t need just to get back $3,000? The economy needs real final demand to return. Real demand will not return until the global credit markets are fixed for small businesses and consumers, not just for mining giants in Australia enjoying a temporary windfall.
Posted by Michael A. Kamperman on October 4, 2009
Vice President Joe Biden has been the Whitehouse’s point man on implementing and defending the failed stimulus bill. After Friday’s unemployment report he bailed on being the sacrificial lamb for the President’s political and economic advisers. He said “We don’t think that ‘less bad’ is good. ‘Less bad’ is not our measure of success. One job lost is one job too many, and it’s still too much pain. That is not what the American people were promised.” How could he possibly defend the stimulus bill or the other economic programs as working in light of Friday’s unemployment report? It was so bad the government itself lost 53,000 jobs. There were 15,000 teachers who were not returned to the classroom. The stimulus bill is not only failing to create jobs, it now not even saving the jobs of state and local government employees, or even teachers. Financial support for state and local governments and for schools was a key component of the stimulus bill. But stimulus support from the federal government is simply insufficient to make up for the lost tax revenues the states are experiencing. State governments are being forced to either raise taxes or cut spending. In many cases they are doing both. This is precisely the wrong response to dealing with a severe economic contraction in the private economy. Total tax revenues from all sources fell by double digits in 39 out of 50 states in the second quarter of 2009 compared to the second quarter of 2008. The economic contraction is so severe that sales tax revenues in all of the states fell by 9%. There is no better measure of consumer spending than sales tax revenues.
The cause of continuing job losses is not the stimulus plan. There is no doubt things would be even worse if nothing were done. But we need Washington to succeed in solving problems and not just say at least we tried. The real reason we are still hemorrhaging jobs is the stress test of the banks. Treasury Secretary Timothy Geithner supported Wizard of Oz style smoke and mirrors over the politically painful steps of fixing the broken credit markets. He should have created a “bad bank” to absorb the toxic assets, he didn’t. He doesn’t even want to encourage the FDIC to borrow money directly from the Treasury now that it is obvious it is broke, even though the FDIC has a $500 billion unsecured line of credit already set up with the Treasury. Remember, the stress test’s worse case assumption was that unemployment would not rise above an average of 8.9% in 2009. If not for removing 1.5 million people from the labor force the unemployment report would have already reached 11%. The banks cannot side step the fact that the real unemployment rate is much higher than the stated unemployment rate. People without jobs cannot pay their debts no matter how the statisticians in Washington categorize them. The losses at the banks will be much higher than the worst case scenario modeled by the Treasury. Therefore, they do not have enough capital and that is the reason they are not lending. Zombie banks do not lend.
The creative destructionist on the Fed and the liquidationists in the Obama Whitehouse are reaping what they have sown. The Whitehouse and the Fed have been talking tough on the need to reign in the deficit. The Fed has been talking tough about rapidly withdrawing monetary support to prevent the return of inflation. The Fed is concerned about the appearance of their independence. What the Fed should be concerned with is they are talking about withdrawing monetary support when they should be talking about adding it. They will add it. The Fed will back pedal and up its quantitative easing program. This reminds me a lot of August of 2007 when the Fed met in the first week of August and refused to lower interest rates. Less than three weeks later they started cutting rates drastically in an emergency session. The unemployment report and the state sales tax reports are better indicators of future Fed policy than tough talk. The Whitehouse has no political option but to back pedal come forward with a real job creation plan. Even the New York Times has turned against the President and his economic policies. Here is what the Times said in its editorial this morning “If successful, ambitious goals like health care reform and energy legislation may generate jobs, but officials have not persuasively linked them to job growth. Congress and the administration also have not done enough to directly create jobs. That could be done with more stimulus to spur job creation, or a large federal jobs program, or tax credits for hiring, or all three. Or surprise us. Just don’t pretend that the deteriorating jobs picture will self-correct, or act as if it is tolerable.” Ouch! The talking heads on the Fed and in the Whitehouse look like economic fools. At least Joe Biden is done with being made to look like one.
Posted by Michael A. Kamperman on October 2, 2009
Today’s unemployment report was a cold slap in the face to those thinking the economy has turned the corner and an economic recovery is underway. The official unemployment report rose to 9.8% and the economy lost another 263,000 jobs. The real U-6 unemployment rate reached a stunning 17%. There are currently 6 times as many people unemployed as there are job openings. The work week fell again to 33 hours. Wages rose by only a penny. Once again the labor department reduced the number of people officially looking for work by over 500,000. Since the beginning of the summer the Labor Department has thrown 1.5 million people out of the Labor force because they are discouraged. If I were unemployed and had failingly searched in vain for a job for months and months I would be discouraged too. However, I would still be unemployed and should be counted in the statistics. Without these revisions the official unemployment rate would be 11%. The Department of Labor statisticians are providing cover to a weak kneed Congress and Whitehouse that want to continually insist all is well because of the stimulus plan. At this point even they don’t believe the spin they keep giving us. We need a real plan to create real jobs.
The key to creating jobs is to restore credit. In today’s Wall Street Journal influential banking analyst Meredith Whitney detailed how credit is tighter than ever to small businesses. According to Meredith the two key credit sources of small business creation are credit cards and home equity loans. Both have been slashed by the banks and Meredith contends the banks will cut credit card lending by well over another trillion dollars. Small businesses employ 50% of the workforce in the U.S. Additionally, they create most of the new jobs in America. We cannot restore the job creation machine until we fix the broken credit markets that provide credit to small businesses and consumers.
President Obama’s chief economic adviser is Lawrence Summers. Larry believes we have probably entered a recovery because that is what the vast majority of econometric forecasts are predicting. But these forecasts rely only on data inputs from the post World War II inflationary era and do not incorporate the economic data from the debt-induced deflationary depression of the 1930’s in their models. Hence, the models are unable to accurately predict the trajectory of the economy. We need an original thinker advising the President and not someone captivated by the tools of the modern day economist. The President’s other key adviser is Christina Romer. She is touting that the actions taken by the federal government to date have avoided the risk of entering a depression. Maybe she doesn’t bother to read the details of the unemployment report. Both of these individuals should be fired along with Treasury Secretary Timothy Geithner, who prefers smoke and mirrors like phony stress tests to concrete solutions like a “bad bank.” The President should hire Meredith Whitney. She may not know how to get us out of the depression, but at least she understands we are in one and understands why we are in one.
Posted by Michael A. Kamperman on October 1, 2009
The debate between most economists is whether we are in a V-shaped recovery or whether we will have a double dip W-shaped recovery. What recovery are they talking about? Yes, based on the flawed GDP calculation we probably have a positive reading in the third quarter. The final GDP report for the second quarter showed the economy only contracted at -.7% annualized rate. In the second quarter real U.S. exports to willing buyers fell by 4.1%. But because our imports fell 14% the GDP calculation claims that “net exports” added a positive 1.65% contribution to overall second quarter GDP. If the calculation simply used actual exports, then 2Q GDP would have contracted at -2.8%. The flaw in the GDP calculation has economists overstating the strength of the real economy. This morning weekly jobless claims rose to 551,000. This is higher than the highest week of jobless claims in either the 2001 or 1991 recessions. It has been over a year since we have had a weekly jobless claim number below the 2001 peak of 517,000. Can any sane person accept that we are in the middle of an economic recovery when the official unemployment report will soon reach 10%, possibly as soon as tomorrow?
Auto sales plummeted in September just as soon as the cash for clunkers program ended. The annual sales rate is once again well below 10 million units per year. Consider that September of 2008 was the worst month for auto sales since 1993. Yet the supposed recovery we are in saw Ford sales fall 6% from September of 2008, Toyota sales fall 13%, and GM sales drop by 45%. Does that look like a recovery to you? I look for home sales to follow auto sales into the ditch in October now that sales from the first time home buyers tax credit are behind us. Remember you have to close by November 30 and it is taking an average of 60 days to process a mortgage application.
Sales of autos and homes are big ticket items. Most buyers need both a job and access to credit to acquire either. With unemployment still rising and credit still tightening, it is unrealistic to believe the economy is in a full blown recovery. We need someone in Washington to show some leadership and come forward with a small business and consumer credit program. The Treasury and the Federal Reserve are too content to sit back and wait for the Zombie banks to heal. These banks are undercapitalized and they will not heal on their own. They are going to need more federal support. The housing market is going to need more federal support. The auto market is going to need more federal support. And the job market needs a lot more federal support.
