It’s the Consumer, Stupid, Who Will Lead Us Out of This Downturn!!

Black Unemployment
Black youth unemployment is the worst in the country

AFRICANGLOBE – This economy is poised for another difficult period of economic upheaval. Blacks are finding themselves facing difficult headwinds as our unemployment rates turn upward. While the national unemployment rate for Blacks in February remained at 13.8% overall, there are ominous state unemployment rates lurking behind the national numbers that should bother us. The national number, of course, is an average. When you look out across the United States and examine the unemployment rates for Blacks, on a state by state basis, it should give you pause.

Remember, following are the official numbers. Blacks are now entering their fifth year under these severe numbers, which were previously higher, with no relief in sight. We all know from experience, “the real numbers” are generally a few points higher, than the official numbers.

The Following are stats from the Economic Policy Institute of the top twelve states with the highest Black unemployment rates, including the District of Columbia, for the fourth quarter, December, 2012. Michigan’s Black unemployment rate is 18.7%; New Jersey’s rate is 17.8%; Illinois’ rate is 17.6%; North Carolina’s rate is 17.3%; California’s rate is 17.2%; District of Columbia’s rate is 16.3%; Ohio’s rate is 15.4%; South Carolina’s rate is 14.9%; Arkansas’ rate is 14.3%; Mississippi’s rate is 14.3; Florida’s rate is 14.1% and Pennsylvania’s rate 14.0%.

When you look at these numbers, remember they are in states where there are a good number of Black people. To put these rates in perspective, historically, the United States was declared to be in a Great Depression when the national unemployment rate reached 25.0% in the 1930’s.

We see the NAACP, the National Urban League and similar organizational representatives get face time with the President of the United States, along with Al Sharpton. They represent an era of the past, which they want to bring back, and that is big government grant programs with them sitting at the helm in executive positions overseeing the dispensation of millions of dollars of grant monies. These grants programs are not enough to seriously impact these high rates of unemployment among Blacks.

Additionally, with the House of Representatives in the Republican Party’s hands, such programs stand little or no chance of passage. If we seriously want to change things, let’s get these folks out of the middle man role. Besides, many Blacks, including myself feel their credibility as bankable assets, when it comes to leadership of the Black community in these tough economic times is questionable.

Consumers represent 70% of the economic activity of this economy. Thus any recovery program which will genuinely affect our 13.8% unemployment rate has to involve the consumer. (http://www.sslumpsum.com ) Think of it this way, the fuel used in your car is gasoline and ethanol. The gas comprises about 90% of the mixture. Take away the gasoline and the car does not move. Your car is not designed to just run on ethanol. That is the way the American economy functions, also. If you reduce the amount of money the consumer spends in this economy, the economic engine of this economy stalls. This is why our economy is sputtering, due to the reduced purchasing activity of the consumer. Wall Street is doing great, due primarily to the Federal Reserve keeping interest rates low.

Most American corporations are in great shape financially with solid balance sheets and products ready to sell. THEY JUST DON’T HAVE CUSTOMERS! If they don’t have customers, it hard to make long-term hiring decisions, thus unemployment rises. Demand starts with the consumer!

While grants programs of the type these folks discussed might appear to be helpful to Blacks in the short run, such as, job interviewing skills training, how to prepare and dress for job interviews, skill training for the low income or programs to reduce the incarceration rate of inner city youth may look good and benevolent on paper, they do nothing to seriously impact the Black unemployment rate nationally. Any remedy that will affectively reduce Black unemployment will have to be race neutral because if it does not affect the entire population, it will amount to nothing more than a band-aid.

Unfortunately, the civil rights organizations represented in the meeting with the President recently are more than willing to apply these band-aid type remedies to the American Black unemployment problem for “a price” and even convince the gullible among us these remedies are a cure while they enrich themselves. It is time Blacks every where, demand this President and his team come up with a real solution which will address the national job problem as a whole. In doing so, he and his team will have to address the issue of how to re-engage the consumer.

With national state and local governments reducing their budgets, thus leaving gaping holes where their spending provided employment through government services and purchases, the issue of addressing the missing purchasing power of the consumer looms even larger.

If there is any justified criticism of this President, it is his lack of focus in regard to leveraging the resources of his office to come up with a consumer driven solution to our nation’s job crisis. The facts are the facts, the consumer represents 70% of the activities of this economy. Either the consumer will re-enter this economy as a purchaser of its good and services through slowly acquiring jobs over a period of time or through an economic job creation plan iniated by the federal government. Economist predict, the former will take at least 4-5 years for the economy to create enough jobs to match consumer spending prior to the downturn of 2008.

That means Blacks will endure another four devastating years of double digit unemployment. The question is, “Does this current Administration possess the will, skill, wisdom, knowledge and insight to adopt a national job creation plan geared to the consumer?” The Obama Administration if it isn’t careful will turn in the worse performance since Ronald Reagan when it comes to Black unemployment. Reagan left the White House after eight years in office with the Black unemployment rate at 11.9%. The rate of Black unemployment now stands at 13.8% and rising. I don’t recall Blacks giving Ronald Reagan 94% OF OUR VOTE! May God be with us!

 

By: James Davis

More information about Mr. Darvis and his Deficit Neutral Stimulus Plan Can be founded at http://www.sslumpsum.com.