Essential Employees in the Government Growth Industry

There was a storm raging on Wall Street too. And by the end of the day, traders, investors and speculators probably wished they had stocked more alcohol for the weekend.

The Dow was up 10 points. After being down 100 points. Gold fell $10.

“Clearly we have entered the worry, fear camp,” said one pro.

Unfortunately, today’s action was not as clear-cut as we would like. There was no bounce back. And no further decline. Our guess is that stocks will probably trend downward for a long time. Most likely, the long-awaited – at least by us! – resumption of the bear market has begun. We’ve had our crash. We’ve had our bounce. Now, we’ll take the long slide down to the ultimate, final, this-is-where-it-stops end.

Listening to the radio this morning, the announcer told us that only “essential” government employees had to report for duty this morning. We wondered if any of them really were essential. Surely, not the fellows who are watching after the African horned beetle. Surely, not the ones who are designing a new health care overhaul for the nation. Surely, not the ones who are coming up with a revision to subsection 4.503.02 of the Internal Revenue Code dealing with unlicensed backdated further codicils of provisions dealing with gifts to one-armed wonton turners who are beneficiaries of insurance policy proceeds upon which sufficient basis has been revoked because they failed to read the fine print. Or something like that.

Take out all the non-essential federal employees? Who’s left?

Anyone? Probably a couple guys in the Pentagon who make sure the Canadians are not amassing troops on the border.

But that is another subject, isn’t it? Not exactly. The federal payroll is the only payroll in the nation that is expanding. Government is a growth industry. Just about everything else is in decline.

Wait. The latest number from the feds tells us that joblessness declined by 0.3% last month. Do you believe that, dear reader? Where’s the SEC when you need it? Aren’t the feds misleading investors – intentionally?

There was another ad on the radio this morning asking for census takers. More federal employees! Why not get the non-essential employees to count people?

We don’t have a separate count, but we wouldn’t be a bit surprised to find that the feds’ unemployment number hides as much as it reveals. After all, as near as we can tell, we’re still in a period of private sector de-leveraging. That means fewer jobs. The mistakes of the bubble era must be un-done. Jobs must be eliminated. And employment won’t rise again until the private sector can find ways to put people back to work at a profit.

But how?

The Daily Reckoning