The Bureau of Labor Statistics realeased its June, 2010, jobs report, which clearly shows a worsening employment situation, even though the official unemployment rate dropped to 9.5 percent.

Total non-farm employment dropped by 125,000 thanks to the layoffs of temporary census workers. The private sector added 83,000 jobs -- good news and likely the angle the media will play up.

Total private employment edged up over the month (+83,000) due to modest increases in several industries. So far this year, private-sector employment has increased by 593,000 but in June was 7.9 million below its December 2007 level. (emphasis added)

That is a staggering figure. Remember that this is just the private sector. Municipalities and state governments have also laid off a lot of people (how many, exactly, is unclear) in the past two years.

One important figure that you won't hear much about in the mainstream press is this: The labor force participation rate dropped to 64.7 percent. That means that more than one third of people between the ages of 16 and 64 are not working. Some are homemakers and students. Some are early retirees. A lot of them are officially unemployed or discouraged. Some are "marginally attached," meaning that they have looked for work in the past year but not in the past four weeks.

But, you see, of the 64.7 percent of the labor force who are working, many are temporary, part-time, or otherwise underemployed. The average work week dropped to 34.1 hours in June. As many full-time workers are now doing the jobs of 2-3 people, this can only indicate that a fair percentage of the work force is now working only part-time, not that full-time workers are putting in fewer hours on average. The fact that private sector hiring was up bolsters this case.

What I would like to know is what percentage of the 64.7 percent who are working are working on a part-time or temporary basis. If it is even 20 percent, then we're looking at an abysmally low percentage of the working-age population actually being "employed enough" to pay the bills.

The unemployment rate of 9.5 percent is a joke. I would be willing to bet that the real figure -- including discouraged workers, the underemployed, and involuntary "retirees" -- is at least 30 percent.
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Editorial: How do we fix this?

As I see it, the primary problem is one of capital constipation. Money is sitting on the sidelines or tied up in unproductive derivatives contracts. Corporations are sitting on a huge pile of cash. The very rich are sitting on huge piles of cash. The money needs to circulate in the form of productive investment and middle class consumption or this situation will only become much worse.

Here are some ways to soften the stool of capital constipation:

1. Root out fraud in defense contracting -- tens of billions of dollars are being stolen every year by shady defense contractors who overcharge for shoddy work or otherwise bilk the government. This is a drain on the productive use of capital. Find that money and put it to good use.
2. Incentivize productive investment and punish idle speculation. Wall Street needs a big fat bitch slap. 100 percent of derivatives profits should be taxed away, and incentives should be given for investment in actual Main Street enterprise.
3. Tax the rich. Sorry, but people making millions of dollars a year need to pay a little bit more into the kitty of our failing society. The country did fine when the top marginal rate was over 50 percent. Business went on. Rich people were still rich, and working people could support their families. This is a patriotic duty. Taxing the wealthiest one percent at an additional 3 percent would eliminate the budget deficit. Remember the Clinton years? Yeah, well, a darn lot of that prosperity had to do with the fact that the rich had their taxes raised in 1993, and the net effect was to balance the federal budget. Bring back the Clinton tax hikes, and raise them. This will allow true Keynesian stimulus, speaking of which...
4. ... we need a massive jobs program. The plain-vanilla infrastructure needs a 1.6 trillion-dollar upgrade. We could also be building the foundation of a sustainable economy by investing in renewable energy and high-speed rail.

The problem is that capital flows are not the only thing that is constipated these days. We're suffering from a lack of leadership. What is it about the Beltway that instantly corrupts every politician who goes there? Guys, if you want mistresses, cocaine, free vacations, steak dinners -- whatever it is, just take it, but do right by the frickin' people for once!