Wednesday, August 07, 2013
The U.S. unemployment rate
Table 15 BLS Alternate Measures of Unemployment
Table A-15 is where one can find a better approximation of what the unemployment rate really is. Notice I said "better" approximation not to be confused with "good" approximation.
The official unemployment rate is 7.4%. However, if you start counting all the people who want a job but gave up, all the people with part-time jobs that want a full-time job, all the people who dropped off the unemployment rolls because their unemployment benefits ran out, etc., you get a closer picture of what the unemployment rate is. That number is in the last row labeled U-6.
U-6 is much higher at 14.0%. Both numbers would be way higher still, were it not for millions dropping out of the labor force over the past few years.
Were it not for people dropping out of the labor force, the unemployment rate would be over 9%. In addition, there are 8,245,000 people who are working part-time but want full-time work.
Digging under the surface, much of the drop in the unemployment rate over the past two years is nothing but a statistical mirage coupled with a massive increase in part-time jobs starting in October 2012 as a result of Obamacare legislation.
Is Liberalism Keeping The Poor, Poor?
There is a new study out with the finding that urban sprawl contributes to inequality, making it more difficult for the poor to climb the income ladder.
Okay, let's accept that idea for a moment. Why is there urban sprawl? Isn't it directly tied to liberal policies that have prevailed over the past 40 years? Federal judges and the teachers unions combined to destroy the inner city schools. So middle class families who wanted a decent education for their children had no choice but to turn to private schools or retreat to the suburbs. Then, minimum wage laws, labor monopolies and the lure of welfare made the inner city increasingly unattractive to employers seeking a productive workforce.
As the tax base shrinks and taxpaying voters disappear, city government becomes completely captured by the public sector unions. They use their power to pad their own compensation at the expense of deteriorating city services and to wrest promises of post-retirement benefits that can only be paid by an (unlikely) influx of new taxpayers. Thus starts a downward political death spiral that can only end in bankruptcy.
So what's the obvious public policy conclusion? Don't adopt policies that chase the middle class and the job creator community away. Or at least that would be obvious unless you write for The New York Times. Here is Paul Krugman, who does a decent job of describing the study's conclusions:
"Atlanta looks just like Detroit gone bust: both are places where the American dream seems to be dying, where the children of the poor have great difficulty climbing the economic ladder. In fact, upward social mobility — the extent to which children manage to achieve a higher socioeconomic status than their parents — is even lower in Atlanta than it is in Detroit…
And in Atlanta poor and rich neighborhoods are far apart because, basically, everything is far apart; Atlanta is the Sultan of Sprawl, even more spread out than other major Sun Belt cities…As a result, disadvantaged workers often find themselves stranded; there may be jobs available somewhere, but they literally can't get there."
As it turns out, the sprawl theory of perpetual poverty may be completely wrong. Randal O'Toole says it won't hold water and notes that only a few years ago Krugman blamed the housing bubble on anti-sprawl policies.
Even so, what are the solutions? All Krugman has to offer is:
"[T]his observation clearly reinforces the case for policies that help families function without multiple cars."
Cars? What about the teachers unions? Not a word. What about the lack of school choice? Nada. Minimum wage laws, labor union monopoles, and other restrictions on the right to work? Not a peep. A culture of welfare dependency that erodes the willingness to work? Zero. City governments doing what private companies are no longer allowed to do: promising post-retirement benefits without funding them? Zilch.
What about the fact that the policies routinely advocated on the editorial pages of the Times are far more harmful to social mobility than the automobile could ever be? Not a word about that either.
What's true of cities is also true of states. People and capital move where they are welcome. As Travis Brown and I wrote the other day in the Dallas Morning News:
"Texas is the nation's No. 1 job creator. Since the official end of the recession in 2009, Texas has been responsible for almost one out of every two jobs created in the entire country."
This is not a new phenomenon. For decades, Texas has been creating jobs faster than other states. Between 2001 and 2011, while many other states were hemorrhaging jobs, Texas increased private-sector employment by 732,800…
Why has Texas been so successful at job creation? We're a very labor-friendly state — meaning that government doesn't very often get between job creators and job seekers. The Mercatus Center at George Mason University ranks Texas No. 1 in labor market freedom.
I don't know what it is about the left, but they can't see the connection between the policies they advocate and the harmful results they decry.
Take President Obama. He is now talking about the economy. But the way he talks about it is as though (after 4 ½ year in office) he bears no personal responsibility for anything that's happened. As Charles Krauthammer pointed out the other night, Obama talks about the economy "as if he has been a bystander," as someone who "just arrived on a boat." "It's his economy and he's pretending he just stumbled on it."
Hmmm. Maybe we should send them all back to school for a course in mainstream economics.
Is Populism Dead?
There is a strange lack of effective agitation about some big issues
Victor Davis Hanson
Occupy Wall Streeters claimed that they were populists. Their ideological opposites, the Tea Partiers, said they were, too. Both became polarizing. And so far populism, whether on the right or left, does not seem to have made inroads with the traditional Republican and Democrat establishments.
Gas has gone up about $2 a gallon since Barack Obama took office. Given average yearly rates of national consumption, that increase alone translates into an extra $1 trillion that American drivers havencollectively paid in higher fuel costs over the last 54 months.
Such a crushing burden on the cash-strapped commuter class is rarely cited in the liberal fixation on cap-and-trade, wind and solar subsidies, and the supposed dangers of fracking.
When the president scaled back the number of new gas and oil leases on federal lands over time, he was appealing to his boutique base -- not to those who can scarcely meet their monthly heating and cooling bills.
Should there not be an opening for a conservative populist response?
Unfortunately, pro-drilling conservatives sound more like spokesmen for oil companies than grassroots champions for strapped motorists.
Total student debt is approaching $1 trillion. That is an unsustainable burden for recent graduates under 25 facing an adjusted youth unemployment rate of over 20 percent.
Yet the well-off are more interested in ensuring that their children get into tony, name-brand colleges than in fretting about how to pay for it -- a fact well known to our price-gauging universities.
On the other end, need- and ethnic-based scholarships and waivers have made college more affordable for the poor than it is for the middle classes. The parents of the latter make enough to be disqualified from most government help, but not enough to afford soaring tuition.
Banks find student loans backed by government guarantees profitable.
Top-heavy universities assume that there will always be more income from the subsidized poor and the rich. Again, middle-class students are caught up a creek without the paddles of wealthy parents or a generous government.
There is also a populist argument to be made against the farm bill.
There are more than 48 million Americans on food stamps, an increase of about 12 million since the beginning of the Obama presidency. At a time of record-high crop prices, the U.S. government still helps well-off farmers with some $20 billion in annual crop payouts and indirect subsidies.
The left mythicizes food-stamp recipients almost as if they all must be the Cratchits of Dickensian England.The right romanticizes corporate agriculture as if the growers all were hardscrabble family farmers in need of a little boost to get through another tough harvest. Those in between, who pay federal income taxes and are not on food stamps, lack the empathy of the poor and the clout of the rich. Can't a politician say that?
Illegal immigration is likewise not a left vs. right or Republican vs. Democrat issue, but instead mostly one of class.
The influx of millions of illegal immigrants has ensured corporate America access to cheap labor while offering a growing constituency for political and academic elites. Yet the earning power of poorer American workers -- especially African-Americans and Hispanic-Americans -- has stagnated.
The common bond between the agendas of La Raza activists and the corporate world is apparently a relative lack of concern for the welfare of entry-level laborers, many of them in America’s inner cities, who are competing against millions of illegal workers.
Given the slow-growth, high-unemployment economy, and the policies of the Federal Reserve, interest on simple passbook accounts has all but vanished.
The poor are not so affected. They are more often borrowers than lenders, and they are sometime beneficiaries of federally subsidized debt relief. The rich have the capital and connections to find more profitable investments in real estate or the stock market that make them immune from pedestrian, underperforming savings accounts.
In other words, this administration's loose money policy has been good for the indebted and even better for the stock-invested rich. But it is absolutely lousy for the middle class and for strapped retirees with a few dollars in conservative passbook accounts.
The aftermath of the 2008 financial meltdown followed the same script. The crisis arose from a strange connivance between loans to the unqualified and huge profits for Wall Street. Its remedy was to have the lowly taxpayer pick up the walk-away debt of the former while offering bailouts for the latter.
Polls show the president's approval numbers are tanking. Congress can hardly become any more unpopular. Maybe one reason is that neither seems to care much about those who are not rich and not poor.
America has plenty of community organizers and agitators, and even more smooth corporate lobbyists, but populist politicians disappeared long ago.
Al Qaeda is Back
By all accounts, the attack was planned with care and executed with precision. At two notorious Iraqi prisons, Abu Ghraib and Taji, al-Qaeda combatants last week used mortars, small arms, suicide bombers, and assault forces to free 400 prisoners, including several who had been on death row. AQ spokesmen hailed those released as “mujahedeen,” holy warriors, who will rejoin the jihad on battlefields throughout the Middle East and beyond.
Soon after, we were seeing headlines such as this: “Al Qaeda Is Back.”
Where had al-Qaeda gone? Dig deep in the memory hole — all the way to last summer. At the prestigious Aspen Security Forum, Peter Bergen, CNN’s national-security analyst and a director at the New America Foundation, gave a talk titled, “Time to Declare Victory: Al Qaeda Is Defeated.”
Lieutenant Colonel Thomas Lynch III (retired), a distinguished research fellow at the National Defense University, was writing and speaking widely on the same theme. And President Obama’s reelection campaign was making similar claims, e.g. “The tide of war is receding,” “Osama bin Laden is dead and General Motors is alive.” Mitt Romney hardly attempted to rebut the thesis.
I don’t like to say “I told you so” — oh, who am I kidding? Of course I do. But in this instance there is more than ample justification. Scholars at the Foundation for Defense of Democracies, in particular Thomas Joscelyn and Bill Roggio, have argued consistently and forcefully, based on solid evidence, that the May 2011 killing of Osama bin Laden, followed by the elimination of other al-Qaeda leaders, did not, by any stretch of the imagination, mean the demise of al-Qaeda.
Instead, it led AQ to adapt, evolve, and morph. It is essential to study these changes and probe their strategic significance — an assignment unlikely to be seriously undertaken by those convinced al-Qaeda swims with the fishes.
There is a new lot of postings by Chris Brand just up -- on his usual vastly "incorrect" themes of race, genes, IQ etc
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Posted by JR at 12:07 AM