Sometime Drudge sums it up the best!
The signs coming out of the market are troubling. There is no good labor news yet the market is trending upward.
Today it was reported that we lost 598,000 jobs in January, which is the highest month over month loss since 1974. It might not be the 500,000,000 job cuts Nancy Pelosi was hoping for, but nearly 600k is bad enough.
The more jobs we lose, the less consumer spending we have in the markets, the more defaults we have on mortgages and consumer credit. The more jobs we lose, the more people and households we have on social programs which either further increases our debt or our tax bill.
So why is the Street up almost 3% on this news?
Wall Street is pleased that American businesses are figuring out that they can no longer afford the market price of labor in this environment. Cutting American jobs demonstrates that companies are doing what has to be done to survive.
And take note, there is nothing in either stimulus bill that will force TARP/stimulus fund recipients to stop workforce reductions. Nothing that guarantees we won't see 500M layoffs in February! Nancy Pelosi has a prepared speech ready should that occur.
There is also nothing that encourages employers to hire Americans instead of outsourcing or hiring foreign workers. Companies know they will have to dramatically cut costs to survive and foreign labor, which doesn't impose the high social costs of American labor, is a great way to do just that.
Consider the following e-mail I received from Dice.com...
The notice offers me legal assistance should I want to hire foreign workers; visa, green card, etc...
Why would I want to hire foreign labor when I can get American labor for a steal? Why pay attorneys to help legitimize foreign workers?
Many on the unemployment rolls would readily accept 10/20/30% pay cuts just to have a job right now. It's an employee sale! Why wouldn't I hire Americans?
Well, I already gave you the answer.