Category Archives: Economy

The Official Unemployment Rate is, Well, Bogus

For lack of a better word:

The U.S. jobs report, a key measure of how well the economy is doing, has gotten increasingly less accurate in the past 20 years. The fix for that problem could be in a surprising place: Twitter.

Those are the conclusions of two separate reports out this month. The first report, published by the National Bureau of Economic Research, found that the unemployment number released by the government suffers from a problem faced by other pollsters: Lack of response. This problem dates back to a 1994 redesign of the survey when it went from paper-based to computer-based, although neither the researchers nor anyone else has been able to offer a reason for why the redesign has affected the numbers.

What the researchers found was that, for whatever reason, unemployed workers, who are surveyed multiple times are most likely to respond to the survey when they are first given it and ignore the survey later on…

This works out to an under count of the unemployed and/or an over count of people not in the labor force – the bottom line is that the official unemployment rate doesn’t really reflect the unemployment picture. This is something we’ve known for a while just by the labor force participation rate: if we are in a recovery, it should not be going down. The fact that it is down means that something is off – and calculations of unemployment based upon, say, a 2007 level of participation would still likely have the official rate in double digit territory. But now we see that aside from that, the basic survey is just flawed.

I’ve long had grave doubts about the whole methodology we use to judge the state of the economy.  We aren’t quite as bizarre as Spain, which is apparently set to use transactions in, shall we say, ladies who work in a very specialized form of entertainment, as part of their GDP, but we’re close. To me, there is something absurd in counting government spending as part of GDP, let alone counting what a lonely man blows a hundred bucks on. Real economic strength should be judged by what we make, mine and grow.

If the economy is improving, we’ll see it in statistics of corn production, gasoline refined, tons of iron ore mined, and things like that. These things can’t lie and they can’t be fudged. Did we, or did we not, produce more steel in July of 2014 than in June of 2014? July of 2013? July of 2004?  If the answer is “less” then that would be a bad indicator.  It still might be partially explained by other factors (maybe we’re more efficient in our use of steel, for instance), but the bottom line is that if the production is up, then things are better than if production is down…because people don’t produce for customers that don’t exist. I want to know the measure of production for real goods that people use – I want to know what it is last month, the month before that, the year before that and ten years before that…this way I can see how things are going in both the short and long term; and no need to seasonally adjust: each July will be pretty much like all other Julys. Just tell me what was made, mined and grown – I’ll then see for myself if things are worse, better or just the same…and that will also inform me of what the employment picture is like. If we’re producing less steel, it is a cinch that we’ve got less steel workers, and so on.

We don’t need to know how many people are working in the legal industry – it produces no wealth. Don’t need to know how many people are working in the tourist industry – it also produces no wealth, once you understand that wealth is not a casino mogul in Vegas raking it in hand over fist, but a farmer in the midwest growing corn. The reality is that the entirety of our economy – all of that government and law firms and casinos, etc – is dependent upon the ability of the United States to make, mine and grow things. If we don’t make, mine and grow enough things, then the economy is doomed, no matter how much money the Fed prints to keep things going for years after the economy collapsed. So, let’s start counting what matters and see what our economy is actually like – it’ll tell us what we need to do.

 

The Art of Redundancy

If it is one thing the Democrats are very good at, and one thing that their legions of progressive sycophants depend on – it’s redundancy. The Democrats bleat on endlessly over contrived issues and the repetition thereof results in an allegiance amongst their base that rivals that of the most famous Tyrants. It’s at a level now that I have never seen before and the most recent Paul Krugman article is a great example. You may remember Paul Krugman – the Nobel prize winning progressive economist who decries the inequities of a capitalist society and whom recently accepted a six figure position with an institution of higher progressive learning for offering his valued opinion on matters of import, yet not required to lower himself to the masses and actually teaching in the classroom. This latest Krugman article perpetuates the infrastructure redundancy that progressives seemingly fall back on every time they need an economic issue to distract voters with. You may remember the Obama proclamation of 2008 wherein the great orator decreed:

“We will create millions of jobs by making the single largest new investment in our national infrastructure since the creation of the federal highway system in the 1950s. We’ll invest your precious tax dollars in new and smarter ways, and we’ll set a simple rule – use it or lose it. If a state doesn’t act quickly to invest in roads and bridges in their communities, they’ll lose the money.”

Subsequently, in March of 2009, the single greatest stimulus package was passed and funds were given to the administration to use where they sought fit. Strangely, the infrastructure still seems to be a problem, and an issue of which progressive elites like Krugman feel that they can foam up the base with one more time:

“In prosperous times, public spending on roads, bridges and so on competes with the private sector for resources. Since 2008, however, our economy has been awash in unemployed workers (especially construction workers) and capital with no place to go (which is why government borrowing costs are at historic lows). Putting those idle resources to work building useful stuff should have been a no-brainer.”

Now, did Krugman forget his Messiah’s 2008 proclamation and subsequent spending spree, or is he being purposely deceitful? I will leave that to your own imagination, but you can all easily imagine is what Krugman’s answer is to this on-going infrastructure problem – more taxes of course:

“It’s hard to think of any good reason why taxes on gasoline should be so low, and it’s easy to think of reasons, ranging from climate concerns to reducing dependence on the Middle East, why gas should cost more. So there’s a very strong case for raising the gas tax “

The progressive Democrats have yet to find a problem, real or contrived, that can’t be resolved by raising taxes. The problem for them is that these issuess are never resolved despite how many taxes they raise, and fortunately for those of us in “realville”, the majority of voters are starting to come to that realization. One thing is for certain though, you can expect this issue, , and the other redundant issues of climate change, and the patently absurd “war on women” to be part and parcel to the Democrats 2014 and 2016 agenda.

Finished? I Don’t Think So.

As Rush Limbaugh asserted on his radio show Wednesday, the Obama presidency is far from over.

The events to which we are witness presently– world unrest, trampling on personal property rights and State sovereigntyassault on affordable energy–continuous assaults on our ability to grow our economy– is all part of Obama’s original campaign promise to “..fundamentally transform the United States of America.”

I know I’ve said this before, but it’s an important phrase to ponder. “FUNDAMENTALLY” TRANSFORM THE UNITED STATES OF AMERICA.” Think about that. Let that short, simple, yet all-encompassing phrase sink in. First focus on the word “TRANSFORM” and then the root word of “FUNDAMENTALLY.”

To “transform” something, by definition, is to make something evolve into something radically different from what it has traditionally been. “Fundamental” by definition is a defining, basic characteristic. A building block–something foundational to its being.

Now, to “FUNDAMENTALLY TRANSFORM” means to radically transform the United States from what it has traditionally been– the “shining city on a hill”- the land of opportunity–based on the premise of individual liberty and the affordance of self-determination–yes–to transform that– into something *fundamentally different* and thus diametrically opposed to that foundation.

The Third World Despots, the Kruschevs, the Fidel Castros, the Kim Jong Ils and Uns of the world, have given hours-long speeches about their hopes for the destruction of the Free World, but never have they been able to put it so succinctly and eloquently as has Obama in that one simple, yet profound phrase. “..We are five days away from fundamentally transforming the United States of America.”

Many people chalked that phrase to meaningless boilerplate rhetoric, as so much rhetorical fluff. But of all the promises Obama made that were broken, whether it was closing Guantanamo Bay, allowing people to ‘keep their doctors or their health plans–period,” or to decrease health insurance costs by $2500 per year, this– this seminal promise–(along with bankrupting the coal industry)–was the one he meant from the bottom of his joyless, cavernous heart.

No people. The Presidency of Barack Hussein Obama is not ended. He still has a lot of ‘fundamental transformations’ to perform.

Barack Obama’s “scorched earth” policy against America and its people has only just begun.

The Yeomanry & The Clerisy

I recently stumbled upon this excellent article in The Daily Beast from last October, and have never read a better description of the emerging class structure in this country, as unfortunate as that is. You may remember the old saying – as California goes, so goes the country – well let’s hope that this one time, we don’t follow California’s lead:

The OligarchsThe swelling number of billionaires in the state, particularly in Silicon Valley, has enhanced power that is emerging into something like the old aristocratic French second estate. Through public advocacy and philanthropy, the oligarchs have tended to embrace California’s “green” agenda, with a very negative impact on traditional industries such as manufacturing, agriculture, energy, and construction. Like the aristocrats who saw all value in land, and dismissed other commerce as unworthy, they believe all value belongs to those who own the increasingly abstracted information revolution than has made them so fabulously rich.

The  ClerisyThe Oligarchs may have the money, but by themselves they cannot control a huge state like California, much less America. Gentry domination requires allies with a broader social base and their own political power. In the Middle Ages, this role was played largely by the church; in today’s hyper-secular America, the job of shaping the masses has fallen to the government apparat, the professoriat, and the media, which together constitute our new Clerisy. The Clerisy generally defines societal priorities, defends “right-thinking” oligarchs, and chastises those, like traditional energy companies, that deviate from their theology.

The New SerfsIf current trends continue, the fastest growing class will be the permanently property-less. This group includes welfare recipients and other government dependents but also the far more numerous working poor. In the past, the working poor had reasonable aspirations for a better life, epitomized by property ownership or better prospects for their children. Now, with increasingly little prospect of advancement, California’s serfs depend on the Clerisy to produce benefits making their permanent impoverishment less gruesome. This sad result remains inevitable as long as the state’s economy bifurcates between a small high-wage, tech-oriented sector, and an expanding number of lower wage jobs in hospitality, health services, and personal service jobs. As a result, the working class, stunted in their drive to achieve the California dream, now represents the largest portion of domestic migrants out of the state.

The YeomanryIn neo-feudalist California, the biggest losers tend to be the old private sector middle class. This includes largely small business owners, professionals, and skilled workers in traditional industries most targeted by regulatory shifts and higher taxes. Once catered to by both parties, the yeomanry have become increasingly irrelevant as California has evolved into a one-party state where the ruling Democrats have achieved a potentially permanent, sizable majority consisting largely of the clerisy and the serf class, and funded by the oligarchs. Unable to influence government and largely disdained by the clerisy, these middle income Californians are becoming a permanent outsider group, much like the old Third Estate in early medieval times, forced to pay ever higher taxes as well as soaring utility bills and required to follow regulations imposed by people who often have little use for their “middle class” suburban values.

 

White House is Staging A Bloodless Coup!

OK, folks–here’s the deal- I don’t think too many people are realizing this:

1. We currently gather TEN TIMES the amount of revenue required to service our debt, EVERY MONTH.

2. The 14th Amendment states that WE MUST honor and service our debts; meaning that paying and servicing debt MUST COME FIRST.

3. Barack Obama has been threatening that we WILL DEFAULT on our debt if the debt ceiling is not raised in two days.

4. The ONLY way this can happen, is if Barack Obama IGNORES the 14th Amendment and REFUSES to service the debt. This means that Barack Obama MUST OPENLY DEFY the Constitution to bring about what he threatens will happen.

5. Understand also that I believe that Barack Obama FULLY INTENDS to carry out his threat. I believe that Barack Obama MEANS, in direct opposition to the 14th Amendment, to ALLOW the United States to go into default. Like a terrorist with his finger on the button of his suicide vest, he is threatening to DESTROY THE FULL FAITH AND CREDIT OF THE UNITED STATES, placing our economy in RUIN, unless Congress meets his every demand.

6. In effect, Barack Obama is staging what amounts to nothing less than a COUP– a complete usurpation of the power of the purse that IS EXCLUSIVELY THE PURVIEW of the duly and locally elected United States House of Representatives.

7. In completely and WILLFULLY ignoring his Constitutional responsibilities with respect to the 14th Amendment, Barack Obama has effectually denounced the primacy of the U.S. Constitution. He is effectively governing by EXECUTIVE FIAT.

In other words, Barack Obama HAS THROWN AWAY THE CONSTITUTION and is in effect GOVERNING AS A DICTATOR!

UNDERSTAND THIS, PEOPLE–THIS IS NOT HYPERBOLE!

The Petro Currency System

The reserve currency issue is an issue that should transcend partisan politics, as leaders of both parties have ignored this issue over the years to our country’s possible peril.  I want everyone to really think about this issue, because the financial storm that would ensue following the end of our reserve currency status and the eventual collapse of the dollar would make the 2008 housing crisis look like a spring shower. Here’s an excerpt from a 2011 article from CNBC warning of the prospects of losing reserve currency status:

“I think you could see a 25 percent reduction in the standard of living in this country if the US dollar was no longer the world’s reserve currency. That’s how valuable it is.”

That was a comment made back in 2011, and since then we have added a few more trillion dollars of debt, and printed a few more trillion dollars of QE (quantitative easing), “stimulus” money. For those of you unfamiliar with QE – this is a policy that started in 2009 wherein the federal reserve is literally printing and pumping into the economy approximately $80 billion a month, and the mere mention from Bernanke that he was going to slow down the printing presses made the DOW tumble a few hundred points. He quickly backed off that statement. QE is not only used to prime the DOW but it is also used to keep inflation and interest rates in check. In the article, it is mentioned that if the CPI were adjusted for actual economic realities, we would see 5% – 7% inflation on food and energy prices.

Fast forward to 2013. Recent international economic signals do not bode well for the continuance of our reserve currency status:

- China’s subtle dumping of the dollar — using bilateral trade agreements with other developing nations and, more recently, major economic powers like Germany and Japan

- The massive gold-buying spree undertaken by China and Russia — even in the face of extreme market manipulation by JPMorgan Chase and Co. and CME Group Inc.

- The dumping of long-term U.S. Treasuries by foreign creditors in exchange for short-term Treasuries that can be liquidated at a moment’s notice.

- The fact that bonds now are supported almost entirely by Fed stimulus. When the stimulus ends, America’s ability to honor foreign debts will end and faith in the dollar will crumble.

-  Blatant statements by the International Monetary Fund calling for the end of the dollar’s world reserve status and the institution of special drawing rights (SDRs) as a replacement.

These bullet points were taken from another excellent article on this issue found here, (hat tip to Spook for sending me this article) and it is a must read. Why the loss of faith in the US dollar? The fact that our government spends approx. $1 trillion more than it brings in, the fact that our government does not work within a defined budget and funds the government from continuing resolution to continuing resolution (CR’s), the fact that our debt to GDP ratio is now 101%, and the fact that there are no imminent signs of financial discipline or restraint by our federal government. This year our federal government is expected to bring in approx. $2.5 trillion in revenue, which would equal an historical high, yet they are spending $3.6 trillion and they say they need more. So the next time you hear a politician say that we need more money for education, and/or more “investment” in infrastructure, know that they are pushing us closer to the brink of financial collapse.

In spite of all of this, I remain the eternal optimist. We can avoid the loss of reserve currency status and the eventual collapse of the dollar but it will require that our elected officials define our nations priorities, put in place a budget that reflects those priorities and operate within it. It will also require that we aggressively act upon the impending economic boom of the 21st century and that is – energy. We must tap into our domestic crude oil and natural gas reserves to not only fuel our current society, but also to become a net exporter of these resources. That will generate the money necessary to put our country back on sound financial footing, but will also fuel the eventual transition to a new, greener, more sustainable energy platform.

Welfare Must End

Two things about welfare – first off, a Cato study which shows that in some States you can “earn” more being on welfare than by working a full time, minimum wage job.  Then a sensible, liberal critique of Cato pointing out that if Cato gets its way, low wage jobs will go to hordes of immigrants, thus depressing wages even more, in turn making welfare even more appealing.  The sensible liberal – Mickey Kaus – also points out that a huge problem of getting people to get off welfare and start working is that, well, working requires work.  A lot of our senseless liberals will claim that no one wants to be on welfare – which is complete twaddle because for a lot of people it makes no sense to bust one’s hump working when you can get as much, or a little more, by doing nothing…and even if you get a little less, there’s still the compensating factor of not having to get up in the morning and go to work.  I think I can speak for everyone when I say that even those of us who wouldn’t dream of using welfare except in a crisis still wake up, from time to time, and say “good grief; do I really have to go to work today?”.  Work isn’t always fun – which is why its called work, rather than play.

The risk we have is that we’re building up a dependent class which has been on welfare so long that they lose all inclination to work and start to build up a sense of entitlement to welfare.  A nation can carry on with 10% of the population freeloading, but once you start towards 20 and 30% or more doing it, collapse stares you in the face…and I’m talking civil war, end of the country sort of collapse…because those who do work will increasingly resent having to support those who don’t.  We’re at that point – and its time to get off the welfare treadmill to destruction.

The receipt of any aid for a working-age, physically fit person must be dependent upon working, period.  We can make it so that for the first month after losing the job or suffering other catastrophic financial loss is covered without having to put back in, but once we get past that first month, the recipient better have a job, or that person will have to be put to work on something in order go give back for what is obtained.  I don’t care if its picking up trash around the city or scrubbing graffiti off of walls – something must be done by every able-bodied person.  Not full time – we do want them to have the time to seek education, training and new employment – but at least 15-20 hours a week doing the grunt work of society in return for benefits.  This is only fair; those who are paying the welfare bills will see that work is being doing and those who are getting the benefits will have the sense of pride which comes with contributing to the overall benefit of society. And those who have to do such work will have a vested interest in getting off such work and in to something which works out better in the long run.  We make a deal – if you are in a financial crisis we’ll see to it you don’t starve, you keep a roof over your head, you are clothed and have essential medical care; you’re job is to stop needing such assistance as soon as possible or, lacking that, putting your back in to it a bit for what we give.

And just in case any of you liberals out there think I’m being un-Christian, I direct your attention to 2 Thessalonians 3:10:

In fact, when we were with you, we instructed you that if anyone was unwilling to work, neither should that one eat.

Remember, it is “unwilling” to work – not “can’t find a job”; not “I’m disabled”.  You only get stuck in the “neither should that one eat”  if you can work and refuse to work.  The basic concept here it to return to the truth of the matter:  living requires working.  No one gets a free ride.