Free Markets, Free People

Daily Archives: September 7, 2012


August employment report in one word? Awful (UPDATE)

Of course the spin will be that the unemployment rate has dropped to 8.1%.

Unstated is the fact that the reason the unemployment rate dropped is because 368,000 more Americans left the labor force.

In fact, the labor participation rate in the US is at its lowest level since September of 1981. Had we not seen 350,000 dropped from the labor force last month, the unemployment rate would be 8.4%. And if the labor participation rate was the same as the day Obama took office, unemployment would be at 11.2%.

96,000 jobs, while better than nothing, isn’t even close to what is necessary to get this economy going again. And don’t forget, the average monthly gain in 2011 was 153,000 a month. In fact, the U-6, which includes part-time workers looking for full time work, is at 14.7%.

I keep telling you that when you talk about jobs or lack thereof and what that means to individual Americans, it’s personal. While they may care or not care particularly who has the best record in foreign policy or whether or not abortion is something they believe in, being jobless, struggling, and/or knowing someone in the family who is, has much more of a direct effect on a potential voter than the other issues.

14.7% fall into that category with probably twice to three times that many effected by what those 14.7% are struggling with. Believe what you will about the polls right now, but if history is any indicator, Obama isn’t going to get a round 2.

Oh, and just as a reminder of the depth of the failure:
RomerBernsteinAugust-600x352.jpeg
UPDATE: Meanwhile at the Ministry of Truth the “Spin-o-matic” is in overdrive:

While there is more work that remains to be done, today’s employment report provides further evidence that the U.S. economy is continuing to recover from the worst downturn since the Great Depression.

It does?  Wow … who knew?  Certainly not the 350,000 who dropped out of the labor force this month.  But hey, be happy, don’t worry … and ignore the chart.

~McQ

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Economic Statistics for 7 Sep 12

The only economic release today is the monthly Employment Situation. In August, 96,000 net new jobs were created, with the unemployment rate falling to 8.1%. Analysts had predicted a steady 8.3% unemployment rate with 125,000 new jobs created. Instead, job creation remains anemic, though the exit of 368,000 workers from the labor force lowered the unemployment rate, which makes the lower unemployment rate bad news. The labor force participation rate declined -0.2% to 63.5%, while the employment-population rate fell -0.1% to 58.3%, near the low since the recession, and, before that, 1983. 119,000 fewer workers identified themselves as employed last month, with the total falling to 142,101,000.

Average weekly hours were unchanged at 33.7. Average hourly earnings declined by one penny to $19.75. 

If the labor force participation rate were at the historical average of 66.2%, the real rate of unemployment would be 11.37%, up from 11.16% last month and 11.04% in June.

There’s just nothing positive in this report.

~
Dale Franks
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Obama means 4 more years of disaster

A reminder:

Obama 2012: “I never said it would be quick or easy”

Obama 2009: “If this isn’t done it three years, we’re talking about a one term proposition”

Last night we heard, well, we heard a speech that was not so hot. Oh he said lots of stuff, but we’ve all learned over the past 3 plus years not to really trust what he says, but instead to watch what he does. He knows how to own the rhetoric, he just rarely if ever lives up to it.

He’s the “I want to have it both ways” president.

For instance – last night he said this:

We don’t think the government can solve all of our problems, but we don’t think the government is the source of all of our problems …

And this:

And the truth is, it will take more than a few years for us to solve challenges that have built up over decades. It’ll require common effort, shared responsibility, and the kind of bold, persistent experimentation that Franklin Roosevelt pursued during the only crisis worse than this one.

On the one hand he tells us government isn’t the answer and on the other, he claims it more government is the answer. Which should we believe?

Well in this case, the latter, given his actions (see ObamaCare which he never once mentioned last night, just like the number “8.2%.). He spent two years going the FDR route with a Democratic Congress and had he not seen his party go down in flames in 2010 and a check put on him in the House of Representatives, you can be assured he and the Democrats would have attempted to grow government even more.

This is a guy on whose watch we almost doubled the debt. Yet not a mention of that last night. Instead he tried to tell us how much he was going to take off the debt . 4 trillion he claims.

Independent experts say that my plan would cut our deficit by $4 trillion.

But another thing you learn listening to this president is to take his claims with a grain of salt. 4 trillion? Only if you believe in “creative” accounting. Jennifer Rubin, quoting the Washington Post’s Glenn Kessler’s fact check of that claim points out why it is a load of rubbish:

By the administration’s math, you have nearly $3.8 trillion in spending cuts, compared to $1.5 trillion in tax increases (letting the Bush tax cuts expire for high-income Americans). Presto, $1 of tax increases for every $2.50 of spending cuts.

But virtually no serious budget analyst agreed with this accounting. The $4 trillion figure, for instance, includes counting some $1 trillion in cuts reached a year ago in budget negotiations with Congress. So no matter who is the president, the savings are already in the bank.

Moreover, the administration is also counting $848 billion in phantom savings from winding down the wars in Iraq and Afghanistan, even though the administration had long made clear those wars would end.

In other words, by projecting war spending far in the future, the administration is able to claim credit for saving money it never intended to spend. (Imagine taking credit for saving money on buying a new car every year, even though you intended to keep your car for 10 years.)

Rather than good arithmetic, independent budget analysts called the maneuver “a major budget gimmick.”

The administration also counts $800 billion in savings in debt payments (from lower deficits) as a “spending cut,” which is a dubious claim. We didn’t realize that debt payments were now considered a government program.

There are a number of other games being played, so fake money is being used to pay for real spending projects. In effect, most of Obama’s claimed deficit reduction comes from his proposed tax increases.

And, as we’ve all learned, those tax increases are but a drop in the sea of red ink this president has unleashed. His appeal to authority notwithstanding, his claim is as empty as his rhetoric.

As most have figured out, the problem isn’t about who is or isn’t “paying their fair share”, it’s about out-of-control spending. In the entire speech last night, that was not a subject that was addressed. Instead, as you saw above, we were given a real preview into what he has in store for us when he can be “more flexible”. FDR type experimentation.

What does FDR type experimentation require? More government and more spending.

Finally, if you missed this, you need to be reminded:

And yes, my plan will continue to reduce the carbon pollution that is heating our planet, because climate change is not a hoax.

That says two things. One, he plans to do the same sort of slow walking for fossil fuel he’s done this past four years while doubling down on his disastrous green policy. And part of the doubling down is undoubtedly to somehow impose a carbon tax that will help feed a ravenous spending machine.

The president who said he would return science to preeminence in decision making during his administration, is now planning on using the pseudo-science of AGW as an excuse to raise taxes on everyone. If that’s not clear, you’ve just not been paying attention.

So he’s right, there’s never been a more clear choice. Continued disaster, keeping a country on the wrong track on that track or an attempt to change that.

Will Romney be better?

He’s actually a turn-around specialist with experience and success in the field. How could he be worse?

I say we make Obama stick with the 2009 statement – for the good of the country.

~McQ

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