Free Markets, Free People
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:
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.
We’ve been told for some time that violent crime in America is actually at its lowest point since the 1970s.
But we’re also being told by a certain element that gun deaths are out of hand and we need to reconsider tightening our gun laws.
So lets take one of those “perspective” looks shall we?
First a chart that takes us through 2004 showing murders by firearms:
As an aside, the Assault Weapons ban was in effect from 1994 to 2004. Assault weapons would be found under “other guns”. You’ll note that “other methods” and knives, for the most part, were involved in more murders than “assault weapons” (further note that not all “other guns” were “Assault Weapons”, but may have been hunting rifles or shotguns). Rifles of any sort just aren’t the usual weapon of choice for murders.
Also note that murders of all types have been trending down over the years. If you hit the link in the first sentence, it will show you that in 2004 the number of violent crimes per 100,000 was 463.2 and in 2010 it had fallen to 403.6.
If you add handguns and “other guns” from the chart in 2004, you see approximately 10,500 to 11,000 murders by firearms.
The most recent FBI figures show just 358 of the 8,775 murders by firearm in 2010 involved rifles of any type.
By the way, the article that was pulled from noted that in 2010, more people were beaten to death by fists (758) than were killed by “other guns”, aka rifles of any sort.
Michael Wade does the math:
So, based on these two sites (http://wiki.answers.com/Q/How_many_households_are_in_the_US)(http://www.gallup.com/poll/150353/self-reported-gun-ownership-highest-1993.aspx) there were approximately 115 million households in 2010, and between 41% and 49% (depending on how you do the numbers) had firearms in them.
That’s a minimum of 57.5 million arms (if we assume one firearm per household, which we know isn’t even close to the right number).
If we then assume that each of the 8,775 murders was committed by a separate firearm from a different household each time (again, an assumption we know is wrong but increases the number of households involved), then approximately 0.015% of American households who owned guns were involved with murder by firearm in 2010.
Again, these assumptions make that percentage much higher than it actually is since (a) undoubtedly more households have firearms but don’t report them, (b) households with firearms will typically have more than just one, and may have several, (c) one firearm likely accounted for more than one of the 8,775 murders, and (d) the vast majority of the murders were likely committed with firearms that were illegally possessed!
Even so, slightly more than one one-thousandth of one percent of gun owners is the highest amount you are going to be able to implicate in murder by firearm, despite all the generous assumptions made in favor of the gun control side.
That does not speak to a winning argument IMHO.
No it sure doesn’t, not that they won’t try anyway. Additionally, when you do the math about chances of being a victim of firearm murder, the figure 312.8 million is what you need to divide into the 8,775 yielding a terrifying 0.000028% chance of being a victim of a firearm murder in 2010 (if you’re a gambler, though, move to Chicago and you can quickly reduce the odds).
In fact, you’re much more likely to die from one of these causes than a gunshot murder:
Chance of dying from any kind of injury during the next year: 1 in 1,820
Chance of dying from intentional self-harm: 1 in 9,380
Chance of dying from an assault: 1 in 16,421
Chance of dying from a car accident: 1 in 18,585
Chance of dying from any kind of fall: 1 in 20,666
Chance of dying from accidental drowning: 1 in 79,065
Chance of dying from exposure to smoke, fire, and flames: 1 in 81,524
Chance of dying in an explosion: 1 in 107,787
Life is perilous, but for the most part, not because of guns.
As someone recently said, we don’t need gun control, we need idiot control. Not sure how we control the idiots, but I’m sympathetic to the idea. Statistically though, the number of firearm murders per year simply doesn’t justify any renewed call for banning or restricting the sale or possession of firearms.
In another version of the “pushing granny over the cliff” scare which typified the resistance mounted by Democrats to Social Security reform, VP Joe Biden is out there trying to scare the people about crime in order to spend more on shoring up the Democratic base (more political cronyism) to be found in teacher’s and public servant’s unions:
“Murder will continue to rise, rape will continue to rise, all crimes will continue to rise,” if the Democrats agenda isn’t passed, he added.
Because, you know, there’s a direct correlation between murder, rape and the number of cops on the beat.
Except both murder and rape stats have been in a downward trend since 2006. In 2006 the murder rate per 100,000 was 5.7, rape 30.9.
In 2010 the rate for murder was 4.8 and rape 27.5. In the two intervening years, those numbers continued to fall. And we all know we’ve been in the recession for at least 3 years and there have been cutbacks in police during that time.
So, unsurprisingly Biden is wrong and is pushing a myth (they’ll “continue rising”) when in fact, the stats show a steady drop for the past 4 years.
But he’s shameless in his fact free attack:
Then in the same speech he wished Republicans were themselves rape victims. “I wish they had some notion of what it was like to be on the other side of a gun, or [to have] a 200-pound man standing over you, telling you to submit.”
Amazing. Vice President of the US and trying to pull this political hackery complete with the usual scare tactics off. Of course, look at his boss.
As it happens, there are no statistical releases for today, so we get a slight breather. But we are awaiting some important releases over the course of the week, with the most important of them hitting Wednesday and Thursday. The highlights of the coming week are as follows:
- Tomorrow’s Import/Export prices is of moderate importance, as is the afternoon’s release of the Treasury budget
- Wednesday brings us the PPI and Retail Sales
- Thursday is the big day of the week, with the release of the CPI, Philly Fed, Industrial Production, and Jobless Claims.
- Consumer sentiment closes the week out on Friday.
Obviously, the inflation numbers for producers and consumers are the key data for this week. The consensus estimate for the PPI is for a –0.1% drop in prices, and a 0.2% price increase at the consumer level.
Tis the season where absurd and wild claims are made (to be fair – by both sides) hoping they’ll hold up at least until the election has passed. Some, however, just are too off the wall and blow up immediately upon being uttered. An example is this claim by Democratic Congresswoman Debbie Wasserman Schultz:
“On the pace that we’re on with job creation in the last four months — if we continue on that pace — all the leading economists say it is likely that we will — we will have created more jobs in this year than in the entire Bush Presidency,” Wasserman Schultz, a Democrat from Weston, said on FOX News.
On its face, you immediately say –wait a minute, that can’t be true. To make that claim, one has to ignore the jobs lost prior to the “last four months” and disregard the total jobs created during the Bush era. Obviously the same process was going on during the Bush administration (job losses vs. job gains) which ended with a net positive. Wasserman Schultz would like you to ignore the meaning of “net” and job loss numbers in favor of only focusing on the pace of job creation. And I’m not sure she’s right about that.
As Veronique de Rugy points out over at NRO, while the jobs picture during the Bush administration was nothing to brag about, there’s no way that Wasserman Shultz’s claim has any credibility in the face of an economy that has shed almost 3 million jobs in the private sector during Obama’s presidency.
In effect, it’s a shot at getting a meme started with low information voters hoping they’ll accept it at face value and it will influence their vote. You have to love the “all the leading economists” appeal to authority she dropped in there. But if you want hard numbers, well, forget it.
They do exist however. Instead of providing them (you can see them in de Rugy’s post at NRO), a graph will do a much better job of pointing out the absolute nonsense of the Wasserman Schultz claim. While it is possible that more than 675,000 jobs created in the next 4 months somewhere, as we just saw with the latest numbers, the economy is still shedding jobs (95,000). It is the net that counts – not just one side of the ledger. If you “create” 1,000,000 jobs but lose 2,000,000 during the same period, it’s a net loss. And that’s what we continue to suffer right now. So her’s is an empty and meaningless claim that is disingenuous because ignores the whole picture in a transparent attempt to drag the left’s favorite punching bag back into the argument.
While total employment rose slightly (675,000 net jobs) during the Bush presidency, most of it was government employment. During the Obama presidency there’s been no overall growth of employment except slightly at the federal government level and no net increase. What Wasserman Shultz wants you to ignore is the blue bar on the left and the negative net job numbers we continue to see. If you do that, the claim sounds good. If you don’t, then her claim is nonsense.
Bottom line is Wasserman Schultz’s claim is selective statistical nonsense, but I expect to see it somewhere, sometime repeated as gospel.
UPDATE: Dale sends along the Bureau of Labor Statistics spread sheet which shows:
- From Jan 01 to Jan 09, a net of 1,080,000 jobs were created.
- From Jan 09 to present, 3,348,000 jobs have been lost.
- The low point in non-farm employment was Dec 09, when there were 129,588,000 payroll jobs
- Since that low, 613,000 jobs have been created.
- There are 580,000 fewer payroll jobs today than there were in January of 2000.
Make sure you understand that last line. In a nation that has increased its population during the last 10 years, we have a net job loss of 580,000 jobs since 2000.
I mean, for heaven sake, it seems that weekly the “experts” are surprised by an “unexpected rise” in unemployment statistics. This week was no different than the “unexpected rise” last week:
Unemployment claims filed last week rose unexpectedly, coming in at 496,000, up 22,000 from the previous week.
Taken with other discouraging news released this week — record-low January new home sales and a slide in consumer confidence — the new jobless claims number describes a slow and uncertain recovery.
Forecasters had expected 460,000 new jobless claims to be filed last week
The four-week moving average of new jobless claims — which smooths out volatility in the week-to-week numbers — rose 6,000 to 473,750.
Key phrase – “slow and uncertain recovery”. So a continued “rise” in unemployment, even to this weeks actual numbers, shouldn’t be “unexpected” in such a recovery. Why it is so important to predict what the next week’s unemployment stats will be anyway? As often as they’ve been wrong and seen “unexpected” numbers you have to wonder why they even bother. More significantly, given the track record, you have to wonder why the media even bothers with their numbers. The numbers are what they are. From those numbers we should be able to understand the condition of the economy. But I’m tired of seeing “unexpected” numbers every week treated as some sort of surprise by a group whose credibility was shot a long time ago.
Yesterday we were told the nation’s employers “unexpectedly” shed more jobs last month than forecast. Today we’re told that despite that, the unemployment rate “surprisingly” decreased to 9.7%.
Unsurprisingly I don’t believe a word of it. Call me a cynic, call me a skeptic, but I just don’t believe much of anything coming out of the government these days (I know, let’s call it a “deficit of trust”). Don’t forget that 9.7% number comes on the heels of a report saying the government forgot to count over 800,000 lost jobs last year.
When the government releases Friday’s unemployment report, nearly a million jobs could be erased. The change won’t show up in the monthly report. Rather, the expected job will show up in the government’s revised job losses from April 2008 to March 2009, showing the labor market was in much worse shape than we knew at the time.
So here we are, rampant and exceedingly high unemployment, no relief in sight and the unicorns and rainbows crowd are spinning the numbers and telling us all is well and getting better.
Well, economic well-being, like is said of politics, is all local. And for the most part, the locals aren’t buying the spin. Here’s the brutal truth:
An unemployment rate that’s projected to average 10 percent this year will likely weigh on consumer spending, preventing the biggest part of the economy from accelerating. Without additional gains in sales, companies will be forced to keep cutting costs, limiting staff in order to boost profits.
“Businesses are simply postponing their hiring for as long as possible,” Richard DeKaser, chief economist at Woodley Park Research in Washington, said before the report. “The willingness to hire is not there.”
Fewer customers, less spending. Less spending, less of a need to make things. Less demand for products means less demand for more employees.
Key line: “Without additional gains in sales, companies will be forced to keep cutting costs, limiting staff in order to boost profits.”
And that’s precisely what they’re doing. The Labor Department reports:
Nonfarm business sector labor productivity increased at a 6.2 percent annual rate during the fourth quarter of 2009, the U.S. Bureau of Labor Statistics reported today. This gain in productivity reflects increases of 7.2 percent in output and 1.0 percent in hours worked. (All quarterly percent changes in this release are seasonally adjusted annual rates.) This was the first quarterly increase in hours worked since the second quarter of 2007 (0.9 percent). Productivity increased 5.1 percent over the last four quarters –more than during any similar period since output per hour rose 6.1 percent from the first quarter of 2001 to the first quarter of 2002.
Even the Riddler could puzzle this one out. Worker productivity has increased 5.1% over the last four quarters. But unemployment has continued to grow. What does that mean? Well it means companies and businesses have found a way to increase production with fewer employees. And that, as the key line above suggests, boosts profits.
Now that productivity increase can come in many ways. Simply distributing the same (or even increased) work load to fewer employees. That’s happening all over the place now. Then, in certain industries, automation replaces employees (it doesn’t require health insurance, vacation days, a 401k and isn’t represented by a union). And in some places it’s a combination of both plus modified business models.
The bottom line is there’s not likely to be that much hiring if and when the economy actually turns around unless a huge increase in demand is realized. And even then, employers are likely to try to hold out as long as possible, given their productivity gains, until those productivity gains are neutralized. I’m sure there’s a tremendous gap between now and that point. Then add in the market instability brought on by pending legislation like health care reform and cap-and-trade, and you can see high unemployment in the future for quite some time.
But the unicorn and rainbow crowd are going to tell you everything, relatively speaking, is getting better. The fact that your relatives are all unemployed and your job isn’t looking so hot at the moment either will cause you to doubt their assertions. Do. Doubt them I mean. They’re as full of crap as a Christmas goose. And that’s becoming more and more obvious each day as we watch this dance of the dodgers continue. Because, you know, you can’t handle the truth. No, that’s not true. If they tell you the truth, they too will be unemployed.
“Deficit of trust?”
A true understatement.
Most likely it is much more than what is officially acknowledged.
That’s because it’s all about how you count them. Right now, for instance, the official unemployment number is 10%. If you add the underemployed, though – people working part time who want full time jobs – that number jumps to 17.3%
But is the 10% number right? Most likely not. Don Surber points to one reason:
Crudele explained: “When the Labor Department puts out the January employment figures on Feb. 4, they will include an assumption that a lot of companies went out of business.
“This is something called the birth/death model that is used by the department. Last year it caused 356,000 jobs to be subtracted from the January job count… Nobody in the media will pick up on this, but the Labor Department will also do something called a benchmark revision on Feb. 4 that will subtract around 840,000 jobs that the government thought existed, but really don’t.”
356,000 jobs here, 840,000 jobs there and pretty soon you have 1,196,000 more unemployed than advertised.
That would change that 10.0% to 10.8%.
“Oops” indeed. I have an inherent distrust of estimates based on models. Maybe it’s the AGW nonsense that has turned me so against them. But still, how many “benchmark revisions” have been done in this recession and how many jobs have been shuffled off to the “do not exist anymore” bin without being added to the unemployment rate? In reality, we could easily be in the 13 or 14% area.
The Atlanta Business Chronicle had a short blurb today that gives you insight into the real size of the unemployment problem:
There are 6.4 job seekers for every job opening in the U.S., according to data released Tuesday by the U.S. Bureau of Labor Statistics. That’s the highest rate since BLS began tracking such data in December 2000.
The ratio in December 2007? 1.7 to 1.
The Magic Unicorn and Snake Oil show that is the federal government has invented a new statistic for your entertainment, because it certainly has no real meaning. Why do I say that, you ask?
Well read this and tell me what you think:
The first direct stimulus reports showed that stimulus contracts saved or created just 30,083 jobs, prompting more Republican criticism of the $787 billion package.
The data posted Thursday was the result of the government’s initial attempt at counting actual stimulus jobs. Obama administration officials stressed that data was partial — it represented just $16 billion out of the $339 billion awarded — but they said it exceeded their projections.
Two points – we have no idea, given that number, what percentage were “saved” and what percentage were created. But it is clear that the claim of saving a job is a useful tool to pad the total. Even then, however, that means that each “saved” or created job cost you, Mr. and Mrs. Taxpayer, $533,000 per job. And yes, that’s for those “saved” as well.
Doesn’t government efficiency just dazzle the heck out of you?
Fear not, though, you haven’t seen all the magic unicorns or snake oil yet. Feast your eyes on this:
“All signs — from private estimates to this fragmentary data — point to the conclusion that the Recovery Act did indeed create or save about 1 million jobs in its first seven months, a much needed lift in a very difficult period for our economy,” said Jared Bernstein, the chief economist for Vice President Joe Biden.
According to the White House recovery office’s rough calculations, the 30,083 jobs number projects out to a total of 1.2 million jobs saved or created by the stimulus through September.
Yessiree – when they get into the projecting business, why it’s even better than they thought. It seems – according to those wonderful projections – that we’ve been able to “save” or create 1.2 million jobs, at least in the world of statistics. Again, how many are “saved” vs. created seems to be an unknown. But whatever the mix, 1.2 million seems to be the number they’ll be crowing about.
Of course what they’ll be trying to forget are those other numbers they originally promised when they were selling the magic unicorns and snake oil called “the stimulus”. Seems the rubes were told that passage of that fantastic piece of legislation would most certainly “save” or create 3 to 4 million jobs.
Oh … that and keep unemployment under 8%.
Drink up folks – Dr. Obama’s elixer is guaranteed not to slip, rip, tear, get rusty or roll down the hill sideways. Helps your wallet, does you good and makes child birth pleasant, besides the benefit you get from it. Now who’ll have another bottle of Dr. Obama’s Magic stimulus tonic?
Ah, Dr. Krugman wants more, doesn’t he?
Yet another statistical analysis of the Chrysler dealership closings has been conducted, although this one appears to be both much more thorough (albeit preliminary) and concentrated on the correct data (my emphasis):
To start with, we pulled raw donor data from The Center for Responsive Politics / OpenSecrets.org for the 2008 election cycle and extracted ~865 megabytes of 2008 individual contribution (“IC”) cycle table entries.
… this particular output is the widest available dataset on contributions. We matched this data against two Chrysler dealer lists:
First, Docket #797 “Document #3″ “Schedule of Designated Domestic Dealer Agreements and Cure Costs Related Thereto” (a list of dealers expected to survive).
Second, the famous “Exhibit A” document of dealers to be closed.
We ran binary logistic regressions across the variables. The results are interesting but the most dramatic was saved dealers v. donations by candidate and/or party.
The results of the analysis suggest that donors to Hillary Clinton in the recent presidential race received some preferential treatment. That does not mean that anyone has proven anything, nor that the statistical analysis makes any sort of unassailable case. It merely raises a concern that, given the probabilities, Clinton donors appear to have survived the dealership closings surprisingly well.
This puzzled us. Why would there be an
significantnoticeable (we have rightly been called out for using significant here) and highly positive correlation between dealer survival and Clinton donors? Granted, that P-Value (0.125) isn’t enough to reject the null hypothesis at 95% confidence intervals (our null hypothesis being that the effect is due to random chance), but a 12.5% chance of a Type I error in rejecting a null hypothesis (false rejection of a true hypothesis) is at least eyebrow raising. Most statistians would not call this a “find” as 95% confidence intervals are the gold standard for this sort of work. Nevertheless, it seems clear that something is going on here. Specifically, the somewhat low probability that the Clinton data showing higher survivability of Clinton donors could result just from pure chance. But why not better significance with any of the other variables? Why this stand out?
Then we got to thinking. Steven Rattner, the Car Czar, is married to Maureen White, one-time national finance chairman of the Democratic National Committee. What does Maureen do now? From her website:
Maureen White is currently Chairman of the Board of Overseers of The International Rescue Committee (IRC), a member of the North American Advisory Board for the London School of Economics, and a National Finance Chair of the Hillary Clinton for President Campaign. (emphasis ours)
That website looks dated, but you get the idea.
Again, we want to point out that our findings are preliminary and subject to change. But whatever the result, the Administration has made themselves very vulnerable by taking charge of the dealership closing decisions.
I’m still not sure if there’s anything to the allegations, but there seems to be more than enough anomalies to warrant some questions being asked of the Obama administration. It should be noted that the theory regarding potential shenanigans has morphed from Obama creating a Republican hit list with the closings, to Obama benefiting Democrat donors by allowing their dealerships to survive (and thrive), to Obama’s “Car Czar” rewarding donors to his wife’s favorite political candidate (Hillary Clinton). When the theory moves that much, often it’s a sign that one is fishing for a villain. And despite the evidence amassed in this case showing that an unusual number of Democrat donors are set to prosper from the closing decisions, that may be the case here.
However this all turns out, one thing is certain: by involving itself so deeply in the fate of Chrysler (and GM), the Obama administration invited scrutiny concerning its decision-making processes. Furthermore, in being so opaque about how the government is picking winners and losers (not to mention that it is making these decisions at all), the Obama administration has left itself open to attacks of favoritism. That has nothing to do with Obama or partisanship in particular, but with the fact that unaccountable power rightfully raises fears and suspicions of favoritism. If Chrysler had been left to fend for itself in bankruptcy, none of these questions would have been raised.
The government arrogated to itself tremendous amounts of power over what would normally be private business decisions. In the process, the Obama administration blatantly used its power and influence to reward a favored constituent group (the UAW). Now that statistical evidence suggests more favoritism may have been in play, it’s a little late to cry “conspiracy theory.” Instead, the Obama administration should start opening the books and answering questions.