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Mass Layoffs: The Continuing Devastation

July 26, 2009
Gary North

Stock market investors shrug off a disaster in our midst: mass layoffs. Investors act as though it will soon be business as usual. Companies cut costs by firing employees that have been with them for decades. Then the companies can report higher earnings from cost-cutting measures. The media then proclaim an increase in earnings. But how will these increases be sustained? How will an unemployment rate of 11% help get the economy back on its feet?

Companies do have to cut costs. Consumers are telling them this is no uncertain terms. But it is not a time for rejoicing when people are laid off. They trusted senior management. They trusted the economic system. They have never heard of the Federal Reserve System. They know nothing about derivatives. All they know is that the Federal government bailed out the big banks in 2008, while they have lost their jobs. In this report, I will consider the question of mass layoffs. This topic does not get much attention by the financial press. It should.

Instead, we are told about three statistics: the unemployment rate, initial requests for unemployment insurance benefits, and total unemployment.

The story continues …..

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