Thursday, March 03, 2011
Jobless claims improved substantially this week, dropping to their lowest level in 2 1/2 years. Good, more of that, please.
We have in our business noticed that the job market is improving a bit -- more people are leaving for more money, and it is a bit harder to recruit good people, especially at bargain prices. We're not rocking yet, but good news for America, to be sure.
It will be interesting to see how Republicans respond to this. The impulse might be to look at these numbers skeptically, because approval would imply that Barack Obama has done something right. That would be a mistake. When the United States does well, or gets better, or makes progress, Republicans should cheer and make the point that even our government's destructive anti-entrepreneur policies have not actually killed the American economy.
Glenn Reynolds linked to this Investor's Business Daily article:
Layoffs At Pre-Recession Level; Job Openings Down 30%
By SCOTT STODDARD, INVESTOR'S BUSINESS DAILY
Posted 03/02/2011 06:50 PM ET
"Twenty months after the worst recession in decades, job creation remains anemic, weighing on economic growth and making it even harder for the long-term jobless to find work.
Don't blame layoffs. They spiked in 2009 but have returned to pre-slump levels, according to Labor Department data. But job openings remain 30% below their level when the downturn hit in December 2007. Gross hiring is down by 843,000 jobs."
If layoffs have bottomed out, great. But that's only part of the story.
We've been running deficits of 10% of GDP for over two years, and interest rates have been low. Also we just came out of a recession, which usually releases pent-up demand. Normally this would redline GDP growth to high single digits, with a big increase in total jobs.
But that's not been happening. But I am glad to hear that in some sectors we're seeing hiring, but I wouldn't say that's widespread.
Tell me where I'm wrong:
1) Gas will go over $4.00, it may hit $5.00. That alone will trigger recession in some parts of the country.
2) The government has been fudging the unemployment figure. You can only trust "total employed" which is still far from where it had been. We have a big inventory of shadow underemployed.
3) In many parts of the country, residential mortgages are still problematic. Someone still has to eat $1 trillion in losses here, but it' s not clear how much will fall on homeowners v. the Big Banks v. USA/Fannie/Freddie. Also, there's a compelling legal argument that half the mortgages in America are defective (can you say "MERS")
4) We haven't fully felt #2 and #3 yet because we keep extending unemployment benefits, while we're not foreclosing. You can get live on unemployment if you don't pay your mortgage -- but that has to end at some point. When it does, that could mean a few million people left homeless -- people who used to work and pay bills. Reread that last sentence slowly.
5) States are going broke. We'll see more layoffs of state workers. This will be worse than it needs to be, because municipal unions will typically resist any concessions, even if it means their younger members will lose their jobs.
6) Bernanke and the Fed will probably end Quantitative Easing after the current round. So there'll be no sucker to buy US debt -- so expect rates to rise, even though the economy will be stagnant.
... and that's just the Known Knowns, as Rumsfeld would say.
For me, the biggest Known Unknown is how feckless partisan stupid DC will be in dealing with this. Obama has a passive aggressive agenda -- he wants to use a deficit crisis to double taxes on the "rich." But that would kill growth, and bring down the whole house. He may just be too fucking stupid to realize that, or it may be what he actually wants.
I expect growth to fall through 2011 and that we'll be back in recession in early 2012 -- which will push deficits to a $2 trillion annual trajectory. It won't be pretty.
So who do the Republicans run to answer this? Developing .....
Statistics and liars and all that...take a look at the underemployment:
Gallup Finds U.S. Unemployment Hitting 10.3% in February
Underemployment surged to 19.9% in February from 18.9% at the end of January
Ignoramus: "He may just be too fucking stupid to realize that, or it may be what he actually wants."
That's what he wants. This is a Cloward-Piven Strategy administration. When you recognize that, it all makes sense.
Re entitlement reform
Obama's is being passive-aggressive by trying to force the Republicans to move first so that they get the blame. Hence Obama's dead on arrival 2011 budget proposal. In response, John Boehner just said that he wants the Republicans to take the lead on entitlement reform. But without Obama joining in, Boehner won't give specifics. They'd either not be big enough to matter (and not big enough to please the Tea Party) or so specific as to piss off the people that suffer the cuts. So the Mexican Standoff continues ...
Re recent employment announcements
Officially, unemployment just dropped to 8.9% ... so officially I'm wrong.
TH's good buddy -- and White House mouthpiece -- Ezra Klein says its "the best jobs report in three years."
But skeptics will say that Official Unemployment is dropping only because "labor force participation" is at a 27-year low -- we've had 700,000 people "leave the workforce" since November ... presumably not counting Charlie Sheen, who says he's ready, willing and able to work. If you normalized for this, Official Unemployment (U-3) would be around 12%, with other official measures higher still.
There's a better way to assess this, but I can't find the data.
Just look at trends in total wages -- that'd reflect under-employment as well -- but back out all government employees. I'd bet that private sector wages have been down a lot. That's the root problem. Having public sector wages go up -- and they have -- has only exacerbated the problem.
Re: Does Obama have a diabolical Cloward-Piven agenda, or is he just a shithead?
I haven't been able to figure this out, but I'm inclined more to the latter. Word is that "Dr Kevorkian Larry Summers" tried to school Obama in Econ 101 but Obama wouldn't listen. Michael Bloomberg -- of all people -- has said that Obama is the most arrogant person he's ever met -- that you can't tell him anything.
For those who don't know, Cloward-Piven are even more radical disciples of Saul Alinsky -- they want to create economic crisis as a necessary step to creating a guaranteed annual income for all.
Both Cloward and Piven and their acolytes taught at Columbia, but we don't have Obama's transcripts.
What follows is my best insight into how Obama thinks, a repost from back in November 2010.
I posted the following here back in November. I thought it worth repeating re what makes Obama tick:
I'd take the bet that Obama's favorite Harvard Law professor was Roberto Unger. Obama took both the Unger upper-level courses that were on offer. Unger is Brazilian-born and has been quite active in its progressive politics. Unger was once part of the Critical Legal Studies movement (crazy left-wing Ivy League law professors), but ultimately found them too crazy stupid ...
Unger is more a political theorist and a social philosopher than a law professor. If John Rawls floats your boat, you'd love Unger. Here's a comic book summary of Unger:
1) There are no bad people, only bad governments driven by bad constitutions.
2) The USA isn't good enough. We need to deliver on the promise of "life, liberty and happiness." To do so, every citizen needs to be guaranteed adequate food, shelter, medical care and education, else the promise of the Declaration is hollow.
3) We need a constitution and implementing laws to make this so, and enlightened leaders to make it happen.
Sound familiar? It's why Obama's so much into comprehensive legislation with long phase-ins.
I'd love to live in Unger's Utopia, but my cynical side says it'll never happen.
1) People suck. Organizations of people often suck more. See George Orwell.
2) Sounds great, but no one will volunteer to be the janitor. Typical thinking for spoiled faculty brats.
3) This kind of wishful thinking necessitates centralized control, which inevitably leads to tyranny. See Hayek.
Obama was also shaped by the dark forces of Saul Alinsky and his acolytes, ACORN, and Black Liberation Theology ... along with his own fucked-up personal back story.
Obama is at least this radical. Cloward-Piven would just push it further.