We sometimes get so caught up in market positioning and language that the truth becomes obscured. In reading a column this week in the New York Post by John Crudele, I realized that the greatest practitioners of this, to our detriment, is the United States Government.
While I understand the role of government is not to create panic in the streets, not revealing the truth doesn't give us the ability to act on accurate information. As Dom Rossi, my mentor at N.W. Ayer Advertising would say, "look reality in the eye and deal with it." (he actually had a light up neon sign on his office wall with that inscription)
In his column John describes the housing crisis as a function of the "real" unemployment numbers. The government claims that there were 84,000 jobs lost in August, while the unemployment rate rose to 6.1 percent from 5.7 percent. However, the Labor department adds in 125,000 jobs as an adjustment for jobs that can't be counted. It is based on a mystery model called the birth/death model. What is amazing is that the government provides a breakdown of what sectors of the economy the made up jobs come from. For example, 16,000 jobs come from new companies in construction (say what) and 26,000 from new leisure and hospitality positions. Are they kidding? In this economy?
The government goes further in obscuring the truth by not fully publicizing what is called the U-6 jobless rate. This rate includes people that are unemployed and those working part time because they can't find full time work. The U-6 rate plus the reported unemployment rate is 10.7%. If you add in those people that stopped looking for work the rate can get as high as 15%.
Now as John points out, this explains softness in retail and why the real estate market is not coming back any time soon. There are significantly fewer people who can afford to buy a house.
The point is that if you knew that the unemployment rate is 15%, you would think long and hard about the need to change our economic policies and who is in office. We would understand that taking over Fannie Mae is a short term fix. We would set more realistic expectations at work by understanding that how much we sell will be deeply impacted by 1.5 out of every 10 Americans being either unemployed or under employed.
It's time to start telling the truth to the American people. It's time for government to get out of the marketing business. I hope either the Democrats or the Republicans try something as novel as telling it as it is vs. the cliched speech and talking points they drill into the electorate. Yes we need "change", but enough already.