Tag: Unemployment

The Menace of a Double Dip

The initial numbers for 2012 Q4 show the economy shrank at 0.1%. Are we entering a double-dip recession? Ed Morrissey breaks the numbers down a bit:

In other words, much of this drop seems to be a lack of inventory expansion. Real final sales to end purchasers rose, even if it didn’t go up by much. That would indicate that inventory expansion in Q3 and prior periods was based on overly-optimistic views of the economy.

Government spending also fell dramatically by 15% in Q4, meaning that private spending was actually up. Of course, it was up in Q3, so if you average the two quarters out, we’ve got a slow economy, but not one in recession. Possibly.

A few reasons not to run for the hills just yet:

1) The numbers are preliminary and will be revised again and again over the next year and a half. Remember that the economy was actually in recovery when Bush was voted out in 1992 but it took a while for the numbers to become clear. By the same token, the economy was crashing badly in the final quarter of 2008 but that didn’t become clear until over a year later. The most dramatic revision is likely to occur at the end of February, but don’t be surprised if the numbers change a lot. That could mean the economy is better; but it could also mean it’s worse. It’s unlikely to be good.

2) A shrinking economy is at variance with a number of other economic indicators, notably falls in unemployment, jobless claims and job creation figures. Long-term unemployment is starting to fall for the first time in a while and housing is starting to recover. This may indicate the growth number is bad. Or may be a lagging indicator.

3) If the economy is slowing down, it means that the “Debt Truthers” like Paul Krugman and, alarming, Bruce Bartlett, are even more full of shit than they were a week ago. The idea that our budget is coming into balance is predicated on strong economic growth. If that isn’t happening, the debt is still a Big Fucking Deal.

4) Sniping about the media calling economic news “unexpected” is silly. Economic figures are very noisy and almost never come in at expectations. The news is always “unexpected”. That’s not media bias; that’s media ignorance of how economic figures work.

5) I suspect that the real reason Q4 was slow was because of the uncertainty created by the fiscal cliff combined with the impact of Hurricane Sandy. The last time we saw growth slow like this was … during the debt ceiling crisis. If Congress and the President would quit creating these self-induced economic crises, we might be in much better shape. And having a Katrina-level event — one that cause $60 billion in direct damage and God knows how much in lost productivity in the midst of this political mess was a huge blow. Sandy alone might have knocked a percentage point of our growth.

So we should be concerned, but I’m not ready to panic just yet. 2013 Q1 might also be a bit weak with the expiration of the payroll tax holiday and I do think this will get Congress to punt the debt ceiling and possibly the sequester just to keep the economy from any more shocks.

Update: More:

For one thing, most of the collapse was due to a stunning fall in military spending. That’s not good for GDP, but it doesn’t reflect the real underlying strength of the economy.

And it’s mostly due to war drawdown. That’s a good thing for everyone!

There was also a big decline due to a reversal of big inventory buildups.

What’s key is that the numbers that really reflect the strength of the economy were much better.

Personal consumption, fixed investment, and equipment/software all grew nicely. This is the real economy humming along.

I’m not quite that optimistic. We had a real problems last quarter with the fiscal cliff and Sandy — problems that have not magically gone away. I’m expecting Q1 to be mediocre if we’re lucky.

Shovel This

I remember last year replying to one of Muirgeo’s mindless rants about unemployment ( I kept my dealings with him at a minimum, deducing early on the pointlessness of the endeavor) that the unemployment problem could be solved very easily. Using Americorp or something similar the federal government could fund a program where anybody that wanted a job would be hired at $25 bucks an hour (probably the sum necessary to get the real slackers off of the couch). All would be working an 8 hour day where the first hour they would dig holes with a shovel and the second hour they would fill those holes up (accounting for 10 minute breaks in between of course), and this cycle would continue 4 times a day, ending up where all the holes were filled as to not expose anyone to the hazards of an unfilled hole while walking home. If full employment was your goal, presto chango, America is back to work again, Hallelujah.

Proud of myself in solving one of the country’s stickier issues I retired for the day with a cold one, not expecting anyone to see my brilliance and act on it. Well, someone has found that nut after all. If you think giving a man a fish is a good idea, wait till you see what he does with a shovel:

Finally, some people are using their head. With minimal training (this is the end with the handle, this is the end with the spade, insert the spade end into soil, congratulations,honor student) and for the price of a shovel (union made shovel, made right here in America of course) unemployment will be a thing of the past.

I realize that the video was meant to embarrass the union officials, make them out as some kind of dishonest unethical thugs, but really, their job is to service and elevate their members, not tax payers. This is the status quo. It matters not that the jobs are phony, useless, or redundant with other jobs, getting the members paid doing anything at all is the stated goal.

Whether it is about union corruption, as the byline states, I don’t know, this is how the wheels are greased in big labor. Public funds are there for the taking, qualifications are more of an after thought. But the union guys are right, it is all about the jobs, everything else is secondary.

Feelin’ Fine

OK. So yesterday, Obama said this in an economy speech. I’ll give the entire quote so you don’t think it’s out of context:

We’ve created 4.3 million jobs over the past 27 months. The private sector is doing fine. Where we’re seeing problems is with state and local government, often with cuts initiated by governors or mayors who are not getting the kind of help they’re accustomed to from the federal government.

(Aside before I get into this. That’s a pace of 159,000 jobs a month. That’s decent, but barely above population growth. We are still in the slowest recovery since the Depression, no matter how much you manipulate the stats.)

As you would expect, the Right Wing is jumping all over the statement that the private sector is doing fine while various left-wingers try to defend it. The problem is that it’s not the dumbest thing in that sentence. The second half — about the loss of government jobs — is the more disconcerting phrase. Ezra Klein, linked above, explains the numbers and thinking behind the statement:

Since Obama was elected, the public sector has lost about 600,000 jobs. If you put those jobs back, the unemployment rate would be 7.8 percent.

But what if we did more than that? At this point in George W. Bush’s administration, public-sector employment had grown by 3.7 percent. That would be equal to a bit over 800,000 jobs today. If you add those hypothetical jobs, the unemployment rate falls to 7.3 percent.

Both of those numbers, it should be said, are holding all else equal: If more workers had reentered the labor force, the unemployment rate could be higher. And if there were 1.4 million more Americans with jobs, they’d be spending money and creating jobs for other people. So private-sector employment could be higher, too.

Barack Obama continues to push “jobs” legislation that would, in effect, shovel money to the states to encourage them to hire. And according to people like Klein, this would bring the unemployment rate down at least a full point. But I find this thinking dangerous and misinformed for three reasons:

First, as I have sad many times, you should not be using George W. Bush as your standard. The point of the 2000’s was that government grew way too fast and became far too large and bloated. It was a bubble as much as housing was. The contraction in the public sector is necessary; it’s the result of a bubble popping. You do not respond to this by re-inflating the bubble. You do not “help” states that have just gotten their fiscal house in order by giving them money to hire new workers and create massive future obligations.

That’s the thing people forget about stimulus: it becomes part of the baseline. Today’s “shovel ready project” is tomorrow’s continuing support. Today’s hire is tomorrow’s retiree. With states already groaning under the burden of employee benefits, a wave of new hires is not what they need.

Second, the idea that hiring government workers will stimulate the economy and even, in the words of Pelosi, “pay for itself”, requires assumptions even a Keynesian would blush at. Presently, the government collects 15% of GDP. That means you would need an economic multiplier of six for these things to pay off. That’s twice what even the most optimistic Keynesian imagines and almost six times what many economists believe.

Finally — and most importantly — government is not a jobs program. When government creates jobs, it is a side effect of government doing the things that we, the people, have decided government should do. And our goal should be to have government do those things with the minimum number of jobs. If it is using too many people to accomplish its goals, that is simply wasting money and wasting human potential on busy work. It is paying people to, effectively, dig holes and fill them up again.

The purpose of a police department is to enforce the law, not to “create jobs” for cops. The purpose of a fire department is to fight fires, not to “create jobs” for firefighters. The purpose of our military is to fight wars, not to “create jobs” for soldiers. Hell, we could drive the unemployment rate to zero by starting a war and drafting everyone. Does anyone think that’s a good idea? Then why is it a good idea to do it on a smaller scale? It’s fine that people can find careers in government, but that’s incidental to government doing what government does.

We need to stop thinking of government as some kind of gigantic jobs program. Creating jobs is not the purpose of government nor is it something government is particularly good at. It stinks that 600,000 people have lost their jobs. But what stinks more is having hired them in the first place when there was no long-term ability to retain them. And it would be a stench beyond measure to engage in yet another unsustainable wave of hiring.

The Next Bubble

You remember the housing bubble, yes? One version of that narrative goes like so: homeowners are better off financially than renters; therefore we decided it would benefit the economy to subsidize housing through cheap loans, mandates, low interest rates, etc. — the “ownership society”; this mainly served to inflate housing prices and saddle millions of Americans with unaffordable debts; in 2008, it blew up in our faces to the tune of trillions of dollars.

I said a while ago that I thought the next asset bubble would be green energy. I still think it will be a bubble, but I’m now convinced that higher education is the more imminent problem:

More than half of America’s recent college graduates are either unemployed or working in a job that doesn’t require a bachelor’s degree, the Associated Press reported this weekend.

By comparison, in December 2011, only a fifth of 16 to 19-year-old Americans couldn’t get work. Meanwhile, according to the OECD, just 18.4 percent of all Americans under the age of 25 were unemployed in 2010. By those measures, college grads are actually faring worse in the job market than the overall youth population. They’re also suffering terribly compared to the older college-educated populace, which has an unemployment rate of 4.2 percent.

So is a college education simply less valuable than in the past? In some respects, yes. According to the Census, the number of Americans under the age of 25 with at least a bachelor’s degree has grown 38 percent since 2000. Not nearly enough jobs have been created to accommodate them, which has resulted in falling wages for young college graduates in the past decade, as well as the employment problems we’re now seeing.

Here’s what’s left out of the analysis. The explosion in college degrees — an explosion which has made each college degree less valuable — has been heavily fueled by massive federal investment. The last three Presidents have made it a mission to make college more “affordable” through an ocean of subsidized loans and grants. The result has been a huge surge of new college students and, since loans have only driven tuition prices higher, a five-fold swelling of student debt to about a trillion dollars.

The analogy isn’t quite perfect. There’s no derivative industry in higher education creating a multi-trillion dollar market for bogus education (yet). But the government is making the same mistakes it made in the housing bubble, assuming that subsidized loans can drive prosperity. And just as subsidized cheap loans drove housing prices higher and put people into mortgages they couldn’t afford, the student debt push is driving college prices higher and putting people into educations they can’t afford. Only this time, we can’t blame Bank of America.

The reasoning behind the heavy push for higher education is just as sloppy as the push for home ownership. College graduates earn more than non-college graduates. Therefore, all we have to do is send everyone to college and everyone will have a good paying job, right?

Wrong. College graduates are paid more because some of the highest-paying professions — medicine, law, banking, engineering — require a college education. And, as the article notes, people who get degrees in those fields are doing fine. But most of the influx of students are not getting these kind of degrees. They are getting degrees in liberal arts and other professions which are not as in demand. You can imagine how the job interviews are going:

Employer: So it says here you have a Bachelor’s from Ohio State. What did you major in?

Unemployed: Women’s studies.

Employer: Uh, so do you have any marketable skills?

Unemployed: I can get angry really well.

Employer: We’ll let you know.

A real educational loan industry would not let this shit go on. They would not loan $35,000 to some dude getting a degree in puppetry. They would happily finance degrees in medicine or science, where the likelihood of future prosperity is good. But puppetry? Most of the liberal arts? I don’t think so.

And, yes, I’m seeing education in purely practical terms. I’m not saying that there isn’t value to someone getting a college degree and broadening their mind just for the sake of it. I am saying that I see little reason for the taxpayers to support it for everyone.

Just as our political class ignored the housing bubble until it was too late, we can expect our politicians not to do anything until the roof caves in and we’re facing tens or even hundreds of billions in loan defaults. Right now, both our Presidential candidates are trying to keep student loans cheap and subsidized, keeping the interest rates in the mid 3’s or so. Ironically, as Daniel de Vise points out, these two Nanny Staters are suddenly unwilling to act like parents and say, “No!” to young people. And that’s just for interest rates. It takes a lot more courage than either Barack Obama or Mitt Romney can muster to say, “Not everyone should go to college.”

But that’s what they should be saying. A lot of people getting college degrees would be better off getting more practical and technical education or job training than reading Das Kapital. A lot would be better off going to community or junior colleges, at least for the first couple of years.

The only alternative view that has gotten any attention is that of the Occupy crowd who want student loan forgiveness. If anything, this is more asinine. While student loan in aggregate is a concern, the typical student has $25,000 in debt when they graduate. While I think some have incurred that expense needlessly, that’s hardly crippling. It’s less than a loan for a nice car, and typically given on better terms. There are millions with bigger medical bills who muddle through. Spare me your sobs.

What we should be doing is making interest rates realistic, moving the loan industry back to the private sector and allowing student loans to be discharged in bankruptcy (the exemption of student loans from bankruptcy is a huge back-door subsidy). We should be capping loans or linking them, in some way, to potential earnings. But neither side wants to risk the wrath of young voters (or academia).

The final act in this drama, of course, will be finding someone — anyone — to blame other than the people who caused the problem. Thankfully, the Left is hard at work on that. For a while, for-profit colleges were the target, but they aren’t really fitting the bill. The recent meme has pointed to a slight decline in state contributions to higher ed as the reason for such high tuition and so much student debt. But the figure they use in their analysis is dollar per student. The absolute dollar amounts poured by states into higher education has fallen in recent years — Pennsylvania just cut higher ed funding by 25% and want to cut it by a similar amount this year. But overall, the last decade has seen these contributions remain steady or rise. The real factor is the explosion in the number of students (hence the drop in dollar per student) and an explosion in tuition, both driven by cheap subsidized loans.

Never forget that when people use the wrong number in an analysis, it’s because they don’t want to use the right one. The problem is not cheap GOP-controlled state governments, no matter how much Daily Kos wants it to be. The problem is a splurging federal government. We’re spending too much on college, we’re sending too many people to college and we’re building a bigger and bigger bubble. And the real victims, in the end, are the students, who are in debt and unable to find good jobs. And it will probably end the same way the housing bubble did — with huge bailouts for the politically powerful and ruinous debt for the masses.

How can this be seen as a good thing? And how can we keep listening to the people who are causing the problem?

Post Scriptum: I am informed by British friends that the UK is experiencing this problem too. The Labour government massively increased the number of students going to college. As a result, the degrees have become less valuable and there are a lot of unemployed college-educated Brits. The Cameron government tried to reign this in and provoked riots, which just demonstrates that the British haven’t learned anything about economics since Adam Smith died. I’d appreciate some confirmation of this.

Update: Please don’t tell me that the government is profiting student loans. It is … now. And mainly based on accounting gimmicks. Again, the analogy to the housing bubble is unavoidable.

THIS!!!!

The stock market seems to be pretending that the economy is doing good, but people are not buying this bullshit:

With the Dow Jones Industrial Average moving past 13,000 toward pre-financial-crisis highs, the conventional wisdom is that the stock markets expect a robust economy soon — just what President Obama needs to guarantee his re-election this fall.

Not so fast.

Yes, the economy may be improving after its anemic growth in 2011, which is better than a double-dip recession for a president seeking a second term. Stock prices — traditionally a good indicator of future growth — have been rising.

But much stock market “strength” appears to have less to do with a firm investor consensus that the economy is about to take off and more to do with technicalities.

For starters, returns on bonds are rock bottom, thanks to the Federal Reserve’s policy of keeping interest rates near zero. That forces many professional traders to bid up stocks.

Plus, while the pros these days cruise in and out of the markets at lightning speed and with no purpose other than to make a quick buck, the average investors who’ve traditionally used the markets to save and invest for retirement seem to have come to a far different conclusion about the markets’ prospects.

Main Street is ignoring the market’s rapid rise, no matter how much money the pros are making. Rather than investing in the much-hyped Obama recovery, small investors are giving it a big, fat thumbs down.

I keep getting told by the LSM and leftists that things are getting much better and full recovery is right around the block. Then we discuss jobs and growth, and they all admit that when you look at the real numbers, not the crap they peddle, things are bleak, if not downright messed up, and will remain so for a long time. These two things completely contradict each other and the narrative that the economy is soon to start flying again.

We keep getting told by the LSM that unemployment is dropping! That’s a sure sign things are getting better, right? Not so fast. If the occupier at 1600 Pennsylvania Ave had a (R) by his name, do you doubt that the LSM would be pointing out that drop is primarily caused because so many people no longer can get unemployment and have been dropped off the ledger? What about the fact that when you do statistical comparisons you see that we have one of the largest number of unemployed and under employed in the past century? Let’s not forget the massive swelling of the ranks of people on the dole in the last 3 years. The LSM and the left would love for you to think it is all someone else’s fault, and that what the retarded collectivists that have been making decisions in the last 3+ years have done has no impact, but you have to be a moron or a progressive – same thing I know – to fall for that nonsense.

If the average investor doesn’t think Obama is producing economic recovery, then the president may be in ever bigger trouble come November than his low approval ratings suggest.

That’s exactly why we are getting bombarded by the LSM with bullshit about everything but the current economic conditions and the actual actions of the people that have been running the country for the last 3+ years, unless they can also blame someone else for things going bad. The American public however is catching on, and even the most hard core leftists knows these clowns have been an epic fail, even if they are not admitting that, and that’s going to hopefully make sure that we get a real change and finally some hope come November.

Things to ponder

The WSJ has an interesting article about the current job claims puzzle:

Something about the U.S. economy isn’t adding up.

At 8.3%, the unemployment rate has fallen 0.7 percentage point from a year earlier and is down 1.7 percentage points from a peak of 10% in October 2009. Many other measures of the job market are improving. Companies have expanded payrolls by more than 200,000 a month for the past three months, according to Labor Department data. And the number of people filing claims for government unemployment benefits has fallen.

Yet the economy is barely growing. Many economists in the past few weeks have again reduced their estimates of growth. The economy …

Exactly! I keep hearing things are getting better, and fast. Only, whenever you get real data, that claim seems not only ludicrous exaggeration, but impossible. Time after time we get told by the LSM how everything is golden or just about to go gold, but then the real details come out and it looks like a turd. I wonder what could be going on?

That was sarcasm for the lefties that know damn well what is going on. No wonder they are all more interested in pretending people that do not like the idea of government mandating yet another bullshit program that will cost the people that do not make the dumb choices or ignore responsibility are actually women haters. The job market is only getting better in what passes for news from the LSM, and that’s because they have to tell this lie in this election year.

Unemployment, Obamanomics, and the young.

While this news comes as no surprise to me, I wonder how many are actually getting it. Especially with the LSM constantly lying about recovery being right around the bend or happening. But the indisputable fact is that some of the people that where the most smitten with the collectivist community organizer and his message of “Hope & Change” now are the ones suffering the most from the politics that flow from those beliefs and policies.

Economy: President Obama surfed into office on a wave of support from the nation’s youth. And what did those young voters get in return? Sky-high unemployment, lower wages, fewer prospects and a student debt crisis.

It’s fair to say that just about everyone has suffered the ill effects of Obamanomics, which has produced growth rates during the 31-month “recovery” that are far below any in modern times.

But a new report out of the Pew Research Center shows that when it comes to economic pain, young workers trying to get a start in life have suffered the most. Among the grim statistics:

The unemployment rate among 18-to-24 year olds was 16.3% at the end of last year, compared with 8.8% for the rest of the working-age population. That gap in unemployment rates, the Pew study notes, is “the widest in recorded history.”

Meanwhile, the share of this population that’s managed to find work has fallen to 54.3% — the lowest level since 1948, the first year the government started collecting such data.

Young workers are also doing far worse than everyone else when it comes to income. Between 2007 and 2011, their real median weekly earnings fell 6%. By comparison, those between the ages of 35 and 64 saw earnings climb 1%, while everyone else saw earnings dip slightly by 0.1%.

I guess I could take consolation that there is justice in the universe and stupid people get punished for doing stupid things, but that is unfortunately not enough, since we all are paying for their stupidity. I told many people when Obama was elected, that I expected 4 years of Obama to teach most of his voters, but especially the young that broke in great numbers for him based on his thin resume and teleprompter skills, the same things 4 years of Carter did. I firmly believe that Obama is making many of us that experienced both time periods think Carter was not that bad.

The thing is that anyone that wanted to know the young where going to get hammered only needed to look at Europe, where they do things in a way Obama wants to reform America to be like, for proof. It is well documented that unemployment in Europe, even during boom times, is very high, and amongst the young in Europe is always sky-high. And there is no disputing that is a direct consequence of liberal policies and economics. Well, OK, liberals will dispute it: they always do. But the fact remains that government meddling to control wages, dictate benefits, and to control which businesses win and which lose, always results in an employment environment where employers have massive overhead and are forced to cut their losses, and the young suffer the worst. We have the same problem now here in America after 3+ years of European style Obamanomics.

And I don’t foresee things getting better for a long time, if they do, for most of us, but especially for the young. This will likely be the first generation of Americans to be worse off than their parents. The left would like you to believe that’s because they have not done more of that nonsense that has caused the problems in the first place, as the CNN article pointing out young people make less I link, does. And many amongst the young are buying into the anti-capitalist drivel by the “social engineering” class warrior, credentialed academic class that pretends people, by the virtue of being born, are entitled to anything and everything, at other people’s expense.

Here is some advice for the young joining the workforce: ditch the collectivist nonsense schools have been shoveling into your brains, and do that quickly quickly. It’s cool when you are young to actually let your emotions rule, and naïveté drive, your beliefs and actions. However, in the grown up world, believing in and acting out on this crap, only leads to failure followed by suffering, misery, jealousy, and greed. Unlike what the left’s bullshit has caused so many young people to believe, you are not entitled to a trophy just for showing, let alone being. Yes, the game is rigged against you. But you are a bigger fool if you believe the people that rigged it that way in the first place, when they use that class warfare nonsense to get you to believe they have the answer and want to help you. Fool me once: shame on me. Fool me twice… Well, you get the message. I sure hope you do, because if you don’t, the wounds are going to continue to be self inflicted.

Weekend Roundup

As of tonight, I am on the other side of the world. Actually, most people would say I blog like someone on from a completely different world. But in this case, it’s literally true: I’m back in Australia. As a result of preparations and travel, I’ve missed the biggest news stories of the week. So I’ll go through them quickly in a weekend roundup form to hopefully start a few (well-reasoned) fights.

….

First, Indiana became the latest right-to-work state over fierce labor union opposition. Ever so slowly, the unions are losing their grip on power. Watch out for Mitch Daniels come 2016. That guy has President written all over him.

….

Eric Holder continues to lower the bar for attorneys general. His latest statement is that he will crack down on Operation Fast and Furious. Actually, he will crack down on OFF whistleblowers. This man’s allegiance to government power should be a much bigger story.

….

The latest jobs report is out. Not only did job creation numbers blow by expectations, but December and November numbers were revised upward. All told, 300k jobs were added in multiple sectors, including manufacturing, and the unemployment rate is down to 8.3%. It’s been many years since we had a jobs report that solid.

Now, the total unemployment number — which accounts for people who have given up looking for work — has only fallen a little. But it has fallen … a little. This is ceasing to be a blip and starting to look like a resurgence. It’s not near strong enough. But it’s hopeful. We’ll know things are really getting better when job creation numbers rise and the unemployment rate also rises. That will tell us when people are rejoining the labor force.

….

I don’t have a lot of interest in the spat between the Komen Foundation and Planned Parenthood over the former pulling funding from the latter because of abortion, then reversing that decision. I do however, think Josh Barro has a legitimate point: Planned Parenthood supporters need to quit pretending that abortion is only incidental to PP’s mission and function. They are one of the largest abortion providers in the nation, it is a huge part of their budget and anyone who has been to a clinic can not but notice how big a part abortion is of what they do.

The Planned Parenthood defenders are throwing out a statistic that abortions are only 3% of Planned Parenthood’s services. That may be literally true, but it’s comparing apples to watermelons. An abortion is a far more involved and expensive procedure than a breast cancer screening or a birth control consultation. By way of illustration, a surgeon may do see a patient ten times for follow-up of a single surgical procedure. But only an idiot would claim that surgery is only 10% of what a surgeon does.

People who support Planned Parenthood do so, in part, because of their abortion services. If Planned Parenthood ended abortions tomorrow, their support would shrink, at least a little. You can not both support Planned Parenthood because someone needs to provide abortions and then turn around and claim abortion is only a small part of what they do. Agreeing with this doesn’t make you pro-life or anti-woman or anti-choice or even anti-Planned-Parenthood. It makes you connected with reality.

….

Finally, the CBO released their latest projection, which is for a $1.1 trillion deficit this year (believe it or not, that’s down by several hundred billion from the peak) and more trillions over the next decade. They also project that the economy will weaken as tax hikes and spending cuts kick in. Color me very skeptical on that last part. The CBOs models are rigged a certain way. And that way is of dubious accuracy.

More disinformation and pre-election propaganda from the LSM

Rueters has another bullshit piece about how unemployment is getting better, right in time to help Team Blue claim things are getting better because of them, as the election approaches.

(Reuters) – Employment growth accelerated last month and the jobless rate dropped to a near three-year low of 8.5 percent, offering the strongest evidence yet the economic recovery was gaining steam.

Nonfarm payrolls increased 200,000 in December, the Labor Department said on Friday. It was the biggest rise in three months and way above economists’ expectations for a 150,000 gain.

The unemployment rate dropped from a revised 8.7 percent in November to its lowest level since February 2009, a heartening sign for President Barack Obama whose re-election hopes could hinge on the state of the labor market.

Of course, this is all slight of hand. Reuter’s Team Blue propaganda piece omits some key information:

While some of these forward-looking numbers hold promise, the actual jobs numbers so far have been middling. Hopefully the numbers tomorrow will turn that around. But the real missing piece for a true recovery in the job market has been workers. Even as the unemployment rate dropped from 9 percent to 8.6 percent last month, a little over half of that decline was due to workers dropping out of the labor force.

Labor force participation averaged 66 percent through most of the 2000s. It now stands at 64 percent after declining again last month. If more people were still looking for jobs, and the participation rate were back up at 66 percent, the unemployment rate would now be 11.4 percent instead of 8.6 percent.

What all this means is that workers have been voting with their feet and choosing to not participate in a job market they see as weak. Because participation is a measure of worker/voter attitude, it will be an interesting metric to watch this election year. It points as much to how voters are thinking about the job market as how the job market is actually performing.

This is more of the same. If you recall last spring’s CBO prediction that we would add 2.9 million jobs between 2010 and 2012, halfway there we had only added 200K jobs, would mean an unbelievable 170K plus per month job creation scenario, till the election date, to meet that 2.9 million number. Seriously, how do you get that to happen, with Europe about to implode and China’s economy grinding to a halt, when your policies continue to be anti job creation? The answer is you don’t. So hence, this need to make up shit to pretend you are doing good. And have no doubt this is made up/manipulated numbers. And don’t forget all the part timers looking for full time jobs either.

They are not counted. Things are far worse than they have been trying to convince you for the last 3 years. As I pointed out in this post, get ready for a whole world of misinformation, intended to convince fools that things are getting better. The economy however is doing nothing of the sort, and the people getting hammered by it know it. They will fool many, but they won’t be able to fool enough people.

UPDATE: Even MSNBC watchers seem to understand this is bullshit propaganda.

When I looked at that poll 61.1% of them were saying they saw no improvement whatsoever. I guess they have not been told hard enough that things are better. Don’t worry. More tripe will be shoveled out to try and convince them that what they see and feel and thus perceive as the truth, is not true, but that what the propagandists are telling them should be considered true. They did the exact same thing back in the old USSR and this gets done constantly in most shit hole communist “paradises” these days, yet the people know better.

Back from the Abyss?

This is somewhat good news:

Hiring accelerated in November, and the unemployment rate unexpectedly plummeted to its lowest rate in nearly three years.
Employers added 120,000 jobs in November, the Labor Department reported Friday, marking a pick-up in hiring from October.

Meanwhile, the unemployment rate fell to 8.6%, the lowest rate since March 2009 and a significant decline from 9% just a month before.

About 230,000 jobs were also added in revisions to previous months.

The reason I call this somewhat good news is that the unemployment rate is not all there is. The labor force participation rate also dropped — many people simply stopped looking for work — and is currently the lowest in about 25 years. The basic measure — the percentage of our population who have jobs — did not really move. If the labor force participation had stayed level, unemployment would only have drop to 8.9%.

On the other hand, there is good news here. The job situation is the best it has been in a couple of years and is slowly improving, not rapidly collapsing. Governments at all levels have continued to shed jobs as stimulus funds evaporate and a modicum of … well, we can’t really call it “austerity”; let’s call it “semi-sanity” — returns to spending. This shows that the private sector is gaining jobs faster than the public sector is losing them. Now you combine this with what looks to be a strong Christmas spending season and, while we’re not out of the woods, we’re at least seeing some daylight.

What to do from here? Congress is contemplating extending jobless benefits. I’m not opposed if it combined with Germany-type reforms that require people to take whatever work they can get and is balanced with spending cuts elsewhere. Extending the payroll tax cut is another proposal. It may have done some good. But I don’t want us to get into the habit of keeping this thing going every year. If we balance it with spending cuts, maybe having half the payroll tax cut remain would be a good middle ground.

In the end, however, I don’t think either of these policies have contributed much. If we let them both end, the Left will scream but I doubt it will impact the economy much in real terms. If employment is picking up, then our attention needs to be even more focused on the deficit and the negative savings its giving the economy.

That’s the key to solving this in the long term.