Unemployment Details

Posted: March 4, 2011 | Author: | Filed under: jobs, U.S. Economy, unemployment | Tags: , , , , | 12 Comments


Here’s the details on the current BLS job survey for February.  It came in pretty much as anticipated.  The nifty graph and the following analysis come via Calculated Risk. We can say definitively that this is the worst job market since World War 2.  The recovery path has created far few jobs than any of the previous post WW2 recessions.  You can’t judge a jobs market by the unemployment rate alone.  The devil is definitely in the details so let’s get into the report’s finer points.

This wasn’t a great report. Heck, it wasn’t a “good” report. But it was a little better than most recent reports.

If we average the last two months together, the 63,000 payroll jobs added in January and the 192,000 payroll jobs in February, that gives 127,500 payroll jobs per month. And that is a barely enough to keep up with the growth in the labor force. Private payrolls were a little better at an average of 145,000 per month, as state and local governments continued to lay off workers (something we expect all year).

The decline in the unemployment rate from 9.0% to 8.9%, was good news, especially since the participation rate was unchanged at 64.2%. Note: This is the percentage of the working age population in the labor force.

The decreases for the long term unemployed, and for the number of part time workers for economic reasons, and the decline in U-6 to 15.9% is all welcome news – although the levels are still very high.

The average workweek was unchanged at 34.2 hours, and average hourly earnings ticked up 1 cent. Both disappointing.

You can see the details here at the BLS site. The details that are most overlooked by people that don’t know how to view unemployment statistics representing people that have become so discouraged they either leave the labor force or become what is known as ‘marginally attached’.  Another tell tale sign of problems are the underemployed, workers who can only find part time jobs when they really want to work full time, and workers that are stuck working as temporary workers.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was essentially unchanged at 8.3 million in February. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job. (See table A-8.)

In February, 2.7 million persons were marginally attached to the labor force, up from 2.5 million a year earlier. (These data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. (See table A-16.)

Among the marginally attached, there were 1.0 million discouraged workers in February, a decrease of 184,000 from a year earlier. (These data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.7 million persons marginally attached to the labor force in February had not searched for work in the 4 weeks preceding the survey for reasons such as school attendance or family responsibilities. (See table A-16.)

This is a very sluggish recovery that suggests policymakers are just letting the recession take its ‘natural path’ to recovery. We definitely have do-nothing economic policy right now. What really frightens me is the forthcoming do-damage austerity policy coming from states and the federal government. We wouldn’t have the size of budget deficits that we know have if the government had spent last time healing the capital positions of Wall Street shadow banks and more time healing the jobs and household situation. After all, the real wealth and well-being in an economy comes from actual goods and services produced that add-value. There is a lot more economic well-being derived from better roads, households with modern cars and appliances, and more thriving small businesses than paperwork mills that stand between buyers and sellers of goods and services and financial gambling that drives prices of things unrealistically high through speculation.

What we need is some real leadership with knowledge of economic policy. It’s obvious from these sluggish numbers that we don’t have that at all.

There’s a good article up at Truth Out that you may want to check out. It’s called “How the Rich Soaked the Rest of Us”. It’s got some nifty graphs too. It basically explains how hoarding of money in the hands of a very few has cut off the kind of growth in industries, jobs, and commerce that would allow every one to share in a robust economy.

Over the last half-century, the richest Americans have shifted the burden of the federal individual income tax off themselves and onto everybody else. The three convenient and accurate Wikipedia graphs below show the details. The first graph compares the official tax rates paid by the top and bottom income earners. Note especially that from the end of the Second World War into the early 1960s, the highest income earners paid a tax rate over 90 percent for many years. Today, the top earners pay a rate of only 35 percent. Note, also, how the gap between the rates paid by the richest and the poorest has narrowed. If we take into account the many loopholes the rich can and do use far more than the poor, the gap narrows even more.

One conclusion is clear and obvious: the richest Americans have dramatically lowered their income tax burden since 1945, both absolutely and relative to the tax burdens of the middle income groups and the poor.

It’s obvious this tax policy has contributed to this horrible middle class against middle class anger that is contributing to the current war on teachers, firefighters, and police.   The wealth accumulated from the last few decades of economic growth has shifted to the top while the burden of taking care of everything has shifted to the middle and bottom.  This has fueled this dangerous resentment.  Many people are clearly mad at the wrong folks.   The old conservative adage is that these rich people create businesses and jobs. Evidence shows that this clearly isn’t the case.

How do the rich justify and excuse this record? They claim that they can invest the money they save from taxes and thereby create jobs etc. But do they? In fact, cutting rich people’s taxes is often very bad for the rest of us (beyond the worsening inequality and hobbled government it produces).

Several examples show this. First, a good part of the money the rich save from taxes is then lent by them to the government (in the form of buying US Treasury securities for their personal investment portfolios). It would obviously be better for the government to tax the rich to maintain its expenditures, and thereby avoid deficits and debts. Then, the government would not need to tax the rest of us to pay interest on those debts to the rich.

Second, the richest Americans take the money they save from taxes and invest big parts of it in China, India, and elsewhere. That often produces more jobs over there, fewer jobs here, and more imports of goods produced abroad. US dollars flow out to pay for those imports and so accumulate in the hands of foreign banks and foreign governments. They, in turn, lend from that wealth to the US government because it does not tax our rich, and so we get taxed to pay for the interest Washington has to give those foreign banks and governments. The largest single recipient of such interest payments today is the People’s Republic of China.

Third, the richest Americans take the money they don’t pay in taxes and invest it in hedge funds and with stockbrokers to make profitable investments. These days, that often means speculating in oil and food, which drives up their prices, undermines economic recovery for the mass of Americans and produces acute suffering around the globe. Those hedge funds and brokers likewise use part of the money rich people save from taxes to speculate in the US stock markets. That has recently driven stock prices higher: hence, the stock market recovery. And that mostly helps – you guessed it – the richest Americans who own most of the stocks.

It’s obvious that we’ve basically slowed the US jobs and growth machine down with policy that siphons off economic growth to wealth hoarding instead of job-creating businesses and infrastructure.  It’s time to find some leaders that realize this and will do what it takes to get us off the ‘natural’ sluggish path and on the path to a better future for every one.  Until we actually have real commerce producing real goods and services being serviced by people with real jobs, we’re not going to see much of a change.  Shuffling paper, creating exotic financial instruments and bubbles, and devastating people’s home values and savings through speculative quagmires isn’t getting the majority of us anywhere.  It’s time for the  majority of us to stand up and demand that our tax dollars and policies represent improvements for all.  It’s time to end privatization schemes, excessive speculation, and captured regulators and move back to the days of when our economy benefited more than just the privileged few.

update: You may want to check out this study at Brookings Institute:  Have Earnings Actually Declined?

This analysis suggests that earnings have not stagnated but have declined sharply. The median wage of the American male has declined by almost $13,000 after accounting for inflation in the four decades since 1969. This is a reduction of 28 percent!

Friday Reads

Posted: March 4, 2011 | Author: | Filed under: GLBT Rights, jobs, Marriage Equality, morning reads, U.S. Economy | Tags: , , | 33 Comments

Good Morning!

I’ve turned into a bit of broken record on the inability of the U.S. economy to produce not only jobs, but well-paying jobs.  This article at The Nation basically says a lot of the same things I’ve been saying and thinking for several years.  It’s called ‘Why Washington Doesn’t Care About Jobs’.

This disconnect between the jobs crisis in the country and the blithe dismissal thereof in Washington is the most incomprehensible aspect of the political moment. But I think there are two numbers that go a long way toward explaining it.

The first is 4.2. That’s the percentage of Americans with a four-year college degree who are unemployed. It’s less than half the official unemployment rate of 9 percent for the labor force as a whole and one-fourth the underemployment rate (which counts those who have given up looking for work or are working part time but want full-time work) of 16.1 percent. So while the overall economy continues to suffer through the worst labor market since the Great Depression, the elite centers of power have recovered. For those of us fortunate enough to have graduated from college—and to have escaped foreclosure or an underwater mortgage—normalcy has returned.

The other number is 5.7 percent. That’s the unemployment rate for the Washington/Arlington/Alexandria metro area and just so happens to be lowest among large metropolitan areas in the entire country. In 2010 the DC metro area added 57,000 jobs, more than any in the nation, and now boasts the hottest market for commercial office space. In other words: DC is booming. You can see it in the restaurants opening all over North West, the high prices that condos fetch in the real estate market and the general placid sense of bourgeois comfort that suffuses the affluent upper- and upper-middle-class pockets of the region.

What these two numbers add up to is a governing elite that is profoundly alienated from the lived experiences of the millions of Americans who are barely surviving the ravages of the Great Recession. As much as the pernicious influence of big money and the plutocrats’ pseudo-obsession with budget deficits, it is this social distance between decision-makers and citizens that explains the almost surreal detachment of the current Washington political conversation from the economic realities working-class, middle-class and poor people face.

It is unbelievable we could be facing such a serious level of unemployment and underemployment at this time in our history.  We have full knowledge of what it takes to deal with this problem and yet our policy makers do nothing.  No less than Ronald Reagan would’ve found this situation intolerable who once said:

“Idle industries have cast workers into unemployment, human misery and personal indignity.”

Our economy is seriously under-performing.  At the same time, our politicians are slashing both taxes and budgets which have been shown by nearly 70 years of economic data and history to be a short road to disaster.   Our politicians are only responsive to their political donor base and to their own personal whims.  Christopher Hayes’s continues this theme in his article cited above in The Nation.

In a 2007 paper titled “Inequality and Democratic Responsiveness in the United States,” Princeton political scientist Martin Gilens analyzed 2,000 survey questions from 1981 to 2002, looking for the relationship between public opinion and policy outcomes. He found that “when Americans with different income levels differ in their policy preferences, actual policy outcomes strongly reflect the preferences of the most affluent but bear little relationship to the preferences of poor or middle income Americans.”

There is only so much social distance a society can take. The social science literature shows that as social distance increases, trust declines and aberrant and predatory behavior increases. The basic mechanisms of representation erode, and the social fabric tears. “An imbalance between rich and poor,” Plutarch warned, “is the oldest and most fatal ailment of all republics.”

I’ve posted a graph from FRBSF Economic Research that shows our ‘output’ gap and its trajectory.  I don’t think you have to be a mathematical genius to extrapolate how many years it’s going to take before we close the gap and return to our potential. It looks at least between 6 -8 years just from eyeballing that graph.  The output gap represents what our economy should be producing–implying more jobs–and our production shortfall.  We not only have a huge output gap but a measurable and significant income gap between those who actually produce something and those that skim money off of transactions or gamble themselves into a profit via arbitrage.  It is never a good sign when wealth goes to gamblers and third party payers who drive a wedge between buyers and sellers and distort market prices and quantities.  I continue to be amazed at the callous disregard for history, economics, and people that characterize our policy makers. We have too many lawyers and not enough economists at the helm.

Agent Orange is promising “GOP cover” for slashing “entitlements”.  I still hate the way  that benefits that I have paid for since I was 14 years old and held my first job down as a docent at a museum could be called an “entitlement” .  They spit that word out with the implication that only lazy and shiftless people collect THAT kind of money.  We’re entitled to it because we paid for it dear Speaker!  Anyway, raise you’re hand if you think this is a honey trap of sorts!  This is from The Hill.

Moreover, Boehner has personally promised Obama that he will stand side-by-side with him to weather the strong political backlash expected from any proposal to cut entitlement costs.

So far, Obama has not taken Boehner up on the deal, as Democratic strategists have warned the White House not to cut payments from the Social Security trust fund or to reopen the acrimonious debate over healthcare.

Social Security reform has been prominent in behind-the-scenes talks about entitlement spending because it is relatively easy to reduce its cost projections — at least, compared to the complex morass of healthcare policy reform.

Social Security has been known traditionally as the “third rail” of politics, because grappling with the issue is considered as deadly as touching an electrified subway rail.

President George W. Bush saw his post-election political capital plummet in 2005 after Democrats led by Sen. Max Baucus (D-Mont.) excoriated his administration’s proposal to divert a portion of Social Security revenues into private retirement accounts.

Boehner has promised that Republicans will not exploit entitlement reform for political gains if Obama shows leadership on curbing the cost of Social Security and other mandatory spending programs, according to sources familiar with the offer.

An interesting post has shown up at Politico implying that many Democratic Senators have decided to retire.  It’s a rather long bit but I’d like to concentrate on one senator I will not miss.

Five senators from the Democratic side of the aisle have already decided to hang ’em up after this term. Each has his own reasons, but it mostly boils down to this: For some senators, a job in the “most exclusive club” is not worth the hassle anymore.

“It’s about campaigns,” Sen. Joe Lieberman (I-Conn.), a retiring member of the Democratic Caucus, told POLITICO. “It’s about both the unremitting — that’s a bad word to use — about the constant pressure to raise money and travel all over the country doing that and the nastiness of the campaign. … I have no second thoughts about it.”

Here’s the list of the five retirees:  Kent Conrad (ND), Joe Lieberman (CT), Daniel Akaka (HI), Jeff Bingaham (NM), and Jim Webb (VA). Does this make life easy or difficult for Patty Murray who gets the job of funding and re-electing Democratic Senators?

“As Republicans face a brutal primary between a flawed Washington establishment candidate and a right-wing extremist who is raising money at a good clip, Democrats will field a strong candidate,” promised Democratic Senatorial Campaign Committee Chairwoman Patty Murray (Wash.). “The 2012 Virginia Senate race will be competitive but Democrats will prevail there just like we did in 2006 and 2008.”

Given Democrats’ near-certain difficulties in holding the North Dakota open seat and its incumbents representing Republican-leaning states like Nebraska, Missouri and Montana, the party has to hope Murray is right.

So, I’ve got one last item to leave you with before I turn the comments and the reading suggestions over to you.  It comes from WAPO columnist Jonathan Capehart.  It seems GLBT activists are having a difficult time holding on Congressman to his promise on the issue of marriage equality.  Congressman Sam Arora from Maryland holds a key vote in the Judiciary Committee and is being noncommittal after accepting a lot of dollars and support from GLBT groups.

According to the Baltimore Sun, Arora has said he will vote for the marriage equality bill in the judiciary committee, but has yet to commit to voting for the measure when it hits the floor, possibly next week. “This bill deserves an up-or-down vote, so I’m voting to send it to the floor,” he told the Sun. That sudden reluctance to say he will vote for a bill he co-sponsored has friends mystified and former supporters fuming, at best, calling him a liar and demanding their donations back, at worst.

Even Arora’s friends from Democratic Party politics and Hillary Clinton’s presidential campaign are mystified. Democratic strategist Karen Finney called his apparent change of heart “[v]ery disappointing” in a post on Arora’s Facebook page. And Neera Tanden, policy director for Clinton’s campaign and then the domestic policy adviser on the Obama-Biden campaign, is among those who wants her contribution refunded.

This brings me back to my neighbor Antwoine’s sage advice on politicians.  It doesn’t matter who they are or where they come from, you elect them and then they turn on you.  That about sums it up for me.

What’s on your reading and blogging list today?

The Year of Wishful Thinking

Posted: March 2, 2011 | Author: | Filed under: Barack Obama, Democratic Politics, Domestic Policy, Hillary Clinton, U.S. Economy, U.S. Politics | Tags: , , , , , , , | 39 Comments

I’m not one to look back to the past. I definitely am not one to obsess on the past. It’s possible that my Buddhist training keeps me rooted in the pragmatic present. It’s likely that it had something to do with my bout with inoperable and deadly cancer.  It took me at least five years to think beyond about one month.  I completely lost my ability to project ahead during that time. While I have regained my foresight and I have an appreciation for hindsight, I’m still not one to rehash what coulda, shoulda, woulda been.  However, Ruth Marcus shoved my thoughts back to the year of wishful thinking.

It was about 3 years ago when I started to realize who the only credible Democratic candidate was for the post-Dubya years. I came to that after listening to about three primary debates and reading a lot of background material. I was tempted by the lot of them but I always found it odd that the first one I discounted as more vice presidential material than presidential material given his appalling performance in the first primary debate wound up with the top job.  The world keeps spinning on.  We now have so many crazies in the Republican party that it’s a wonder they all don’t walk through the statehouse with a set of visible knuckles dragging the floor.  The economy isn’t creating enough jobs to sustain us and we have people advocating the same kinds of policy that caused the great depression now.  One of the worst ones wants to repeat the 20’s era Fed’s mistakes and is in charge of the House oversight committee on the Fed. Then, we have irresponsible tax cuts while running two wars.  And THAT’s just a few of the economic policies ruling topsy turvy land these days.

So, again, my chagrin and thoughts were peaked by this Ruth Marcus Op Ed piece.  So, I had to look back to read now and look forward.

For a man who won office talking about change we can believe in, Barack Obama can be a strangely passive president. There are a startling number of occasions in which the president has been missing in action – unwilling, reluctant or late to weigh in on the issue of the moment. He is, too often, more reactive than inspirational, more cautious than forceful.

Each of these instances can be explained on its own terms, as matters of legislative strategy, geopolitical calculation or political prudence.

He didn’t want to get mired in legislative details during the health-care debate for fear of repeating the Clinton administration’s prescriptive, take-ours-or-leave-it approach. He doesn’t want to go first on proposing entitlement reform because history teaches that this is not the best route to a deal. He didn’t want to say anything too tough about Libya for fear of endangering Americans trapped there. He didn’t want to weigh in on the labor battle in Wisconsin because, well, it’s a swing state.

Yet the dots connect to form an unsettling portrait of a “Where’s Waldo?” presidency: You frequently have to squint to find the White House amid the larger landscape.

This tough assessment from someone who generally shares the president’s ideological perspective may be hard to square with the conservative portrait of Obama as the rapacious perpetrator of a big-government agenda.

Then, read on, the rationalizations are still there but we finally get back to the punchline: “Where’s Obama? No matter how hard you look, sometimes he’s impossible to find.”  I’d just like to say that any one with an impressive career of voting present so many times, who was known to hide out in bathrooms during the tough votes, spent his entire senate career campaigning and not voting, and only introduced minor legislation into the Chicago legislature after it was carefully crafted by others already had shown his brand of leadership.  How a standing record that was way out of its way in proving  “he who hesitates is lost” got translated into national ‘hope and change’ by so many people will be something I will ask myself whenever books come out with themes similar to Marcus’ WAPO musings. Past performance is usually an indicator of future performance.  Next time, check your data.   That is all.  Back to the present for me.

HB Gary Federal CEO Resigns in Wake of Anonymous Attack

Posted: February 28, 2011 | Author: | Filed under: just because, U.S. Economy, U.S. Politics, Wikileaks | Tags: , , , , , | 4 Comments

Aaron Barr

After being turned into a laughingstock by the Wikileaks-defending activist hacker group “Anonymous,” HB Gary CEO Aaron Barr has stepped down.

The announcement comes three weeks after Barr became the target of a coordinated attack by members of the online mischief making group Anonymous, which hacked into HBGary Federal’s computer network and published tens of thousands of company e-mail messages on the Internet. HBGary did not respond to telephone and e-mail requests for comments on Barr’s resignation.

In an interview with Threatpost, Barr said that he is stepping down to allow himself and the company he ran to move on in the wake of the high profile hack.

“I need to focus on taking care of my family and rebuilding my reputation,” Barr said in a phone interview. “It’s been a challenge to do that and run a company. And, given that I’ve been the focus of much of bad press, I hope that, by leaving, HBGary and HBGary Federal can get away from some of that. I’m confident they’ll be able to weather this storm.”

Good luck with that. For a nice, lucid explanation of what happened, along with numerous informative links, please refer to Sima’s recent post, Opening the Hive.

Here’s a quick and dirty summary of what Barr did to invite the attentions of Anonymous:

Barr had found himself at the center of a scandal that began when he told the Financial Times he planned to reveal the names of some “leaders” of the hacker group Anonymous. Anonymous responded by hacking HBGary Federal’s site, stealing 71,000 emails from the company and its sister firm HBGary, and defacing Barr’s Twitter account.

[….]

But the worst was yet to come. Anonymous posted HBGary’s emails in a searchable format, and the ensuing press scrum exposed a darker side to HBGary Federal’s business that offered a variety of dirty tricks on behalf of clients. In a proposal intended for Bank of America and written on behalf of a law firm referred to the bank by the U.S. Department of Justice, Barr suggested borderline illegal tactics that aimed at responding to a potential release of the bank’s documents by WikiLeaks. Those methods included cyberattacks, misinformation, forged documents, pressuring donors and even blackmailing WikiLeaks supporter and Salon journalist Glenn Greenwald. In another deal, HBGary suggested similarly a shady response to the Chamber of Commerce in its campaign against the Chamber’s political opponents including non-profit organizations and unions.

Another corporate buffoon bites the dust. Good riddance. Of course there are probably plenty of others like him still employed by HB Gary Federal.

Indiana’s Mitch Daniels: 2012 Republican Presidential Nominee?

Posted: February 24, 2011 | Author: | Filed under: 2012 presidential campaign, Anti-War, Barack Obama, Elections, U.S. Economy, U.S. Politics, We are so F'd | Tags: , , , , , , , , | 28 Comments

Indiana Gov. Mitch Daniels

Lots of Republicans are urging Indiana Governor Mitch Daniels to run for the Republican presidential nomination in 2012. Will he do it? Can he win?

Who’s touting Daniels? New Jersey Governor Chris Christie loves the guy.

Chris Christie, the governor of New Jersey, said Wednesday that his counterpart in Indiana, Mitch Daniels, is the only prospective Republican presidential candidate who is honestly talking about how to confront the nation’s biggest fiscal challenges.

Jeb Bush thinks Daniels is “the best Republican candidate.”

Jacksonville’s Florida Times-Union reports that former Florida Gov. Jeb Bush favors Indiana Gov. Mitch Daniels for president in 2012.

Bush reportedly told a private reception for business leaders, “Mitch is the only one who sees the stark perils and will offer real detailed proposals.”

Daniels’ speech at CPAC 2011 was very well received, and get this–George Will introduced Daniels to the CPAC audience as “the thinking man’s Marlon Brando,” apparently because Daniels likes to right around the Indiana countryside on a Harley Davidson chopper. Judge for yourself.

Mitch Daniels on his Harley

Marlon Brando in "The Wild One"

Daniels has some other problems too. For one thing he thinks Republicans should forget about social issues and focus on economic ones (cutting deficits, natch). Conservatives are not at all happy with Daniels for asking Indiana Republican legislators to withdraw their proposed “right to work” bill. In addition, he reportedly is a pretty serious policy wonk who likes to talk to his fellow wingnuts as if they were adults.

By far, the most important speech at CPAC was delivered by two-term Gov. Mitch Daniels of Indiana at Friday night’s banquet. It was an eloquently crafted, intellectually compelling call to arms against the red-ink forces of the national debt. Daniels, who was George W. Bush’s budget director, proposed dramatically revamping Social Security and Medicare as he called for “an affectionate thank you to the major social welfare programs of the last century.”

What was most striking about Daniels’ speech, which inspired careful listening rather than pep-rally applause, was that it treated his CPAC audience as adults rather than as just another constituency group demanding pandering. Whether it was dismissing the easy-answer attacks on earmarks (“in the cause of national solvency, they are a trifle”) or suggesting that most voters do not appreciate the sharp-edged rhetoric of the Republican right (“it would help if they liked us, just a bit”), Daniels’ speech was an exercise in speaking truth to conservatives who have the power to derail a presidential candidacy.

Come on, that’s never going to work with Republican primary voters!

On top of that, several media outlets reported today that Daniels was busted for drugs when he was in 1970 when he was a junior at Princeton. And it wasn’t for possession of just a little pot, either.
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