According to Gallup’s private read on unemployment, we currently stand with an unemployment rate of 10.1%. Gallup says:
Unemployment, as measured by Gallup without seasonal adjustment, increased to 10.1% in September — up sharply from 9.3% in August and 8.9% in July. Much of this increase came during the second half of the month — the unemployment rate was 9.4% in mid-September — and therefore is unlikely to be picked up in the government’s unemployment report on Friday.
The government’s final unemployment report before the midterm elections is based on job market conditions around mid-September. Gallup’s modeling of the unemployment rate is consistent with Tuesday’s ADP report of a decline of 39,000 private-sector jobs, and indicates that the government’s national unemployment rate in September will be in the 9.6% to 9.8% range. This is based on Gallup’s mid-September measurements and the continuing decline Gallup is seeing in the U.S. workforce during 2010.
So, when looking at the numbers we have from ADP, showing a 39,000 job loss for the month, plus the sharp spike upward in the last half of September, tomorrow’s unemployment figures from the BLS will miss most of the job losses, and will show a national unemployment rate that is smaller than it truly is.
U.S. District Court Judge George Steeh has ruled that the individual mandate to purchase health insurance is a constitutional exercise of Congress’ power under the commerce clause.
The plaintiffs have not opted out of the health care services market because, as living, breathing beings, who do not oppose medical services on religious grounds, they cannot opt out of this market…
As inseparable and integral members of the health care services market, plaintiffs have made a choice regarding the method of payment for the services they expect to receive. The government makes the apropos analogy of paying by credit card rather than by check. How participants in the health care services market pay for such services has a documented impact on interstate commerce…
Obviously, this market reality forms the rational basis for Congressional action designed to reduce the number of uninsureds.
The Supreme Court has consistently rejected claims that individuals who choose not to engage in commerce thereby place themselves beyond the reach of the Commerce Clause. See, e.g., Raich, 545 U.S. at 30 (rejecting the argument that plaintiffs’ home-grown marijuana was “entirely separated from the market”); Wickard, 317 U.S. at 127, 128 (home-grown wheat “competes with wheat in commerce” and “may forestall resort to the market”); Heart of Atlanta Motel v. United States, 379 U.S. 241 (1964) (Commerce Clause allows Congress to regulate decisions not to engage in transactions with persons with whom plaintiff did not wish to deal).
The logical extensions of this ruling, if it were to stand, are obvious. For instance, since everyone inevitably dies, Congress can require you to purchase life insurance, or a pre-paid funeral services. Similarly, we all eat, wear clothes, etc.
Essentially, this decision gives power the Congress to regulate practically any area of human necessity.
Here’s something I’ve been re-reading a lot, lately:
Prudence, indeed, will dictate that governments long established should not be changed for light and transient causes; and accordingly all experience hath shown that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same object evinces a design to reduce them under absolute despotism, it is their right, it is their duty, to throw off such government, and to provide new guards for their future security.
In case you missed it, there’s a currency war going on. It may not be the sexiest thing in the world to talk about, but it is important to understand. Probably the most important thing to understand is, in the midst of all this financial upheaval, it’s not healthy for anyone. In fact that best thing right now would be to back off and let things chill for a bit.
That’s why the US Congress passed a bill calling China a “currency manipulator.” So much for cool heads. Blame it on election year politics and the need to seem to be sticking up for America … even if what you’re really doing is adding more heat to an already ferociously hot situation.
The baseline here is the US believes the Chinese yuan is undervalued by about 25%. And it has been on China’s case for some time to get them to revalue their currency upward. That would make US exports more competitive against China.
But, there’s more to the story than just that.
First thing to know is because of the horrific global financial climate, “Japan, Brazil, Peru and countries all over the world are trying to beggar thy neighbor (just as happened during the 1930s) and gain a leg up for their exports by cheapening their currencies,” according to The Market Oracle. So we have any number of countries trying to boost exports at the expense of their currencies.
You have to then dial it back to June of this year to understand the second part that makes this so complex. June 19th specifically. Jack Perkowski explains:
That is the day that China, by far the world’s largest currency trader, announced that it would no longer peg the yuan to the U.S. dollar, but would instead peg it to a basket of currencies. What China’s announcement meant in practice is that at the margin, beginning on June 19, China would tilt its purchases in favor of buying assets denominated in the euro, the Japanese yen, the British pound or some other major currency, rather than those denominated in the U.S. dollar. When an investor with $2.5 trillion of buying power makes such a statement, markets tend to listen.
Here is what has happened since.
As of the September month-end, the euro has increased in value by 10.3% against the U.S. dollar since June 19, the pound by 6.3%, and the yen by 7.8%. In fact China’s purchases of yen-denominated securities has heightened trade tensions between Japan and China to the point where the Japanese have complained publicly that China is effectively pricing Japanese products out of the market with its yen purchases, threatening to derail Japan’s economic recovery.
In the broadest measure possible, the United States Dollar Index (“USDX”) has declined by over 9.6% percent since June 19. The USDX measures the value of the US dollar against a basket of currencies that includes the euro, yen, pound, Canadian dollar, Swiss franc and the Swedish krona — exactly the currencies that China is most likely including in its own basket and which are now appreciating as a result. The USDX began in March 1973 with a value of 100.000 and has since traded as high as the mid-160s. At its current level of 78.691, the USDX is approaching its 33-year low of 70.698, which was reached on March 16, 2008.
On the one hand you have countries everywhere trying to cheapen their currencies to sell their exports (China wants theirs to stay right where it is) in order to boost GDP growth. And on the other you have China’s move away from pegging the yuan to the US dollar to pegging it to a basket of other currencies, and driving those currencies higher and making their exports less competitive.
Unpegging from the US dollar has also driven the dollar down relative to those other currencies but still much higher than the yuan, which has only appreciated 2%.
Back to the point about the bill just passed by Congress. It doesn’t really help:
But the former U.S. trade representative, Susan Schwab, says that – while there’s a very real problem in terms of China artificially keeping the renminbi low, this isn’t the way to solve anything. Schwab calls it "a signal-sending exercise during an election season". She says that the bill won’t really do anything, even if the Senate passes it and it is signed into law. Schwab says it "makes no sense", won’t solve any problems, will escalate tensions, and will only divert attention from the real trade problems between the U.S. and China.
In fact the “election signals” may blow up in our face:
Indeed, Schwab warns that other countries might decide that this U.S. bill means that it’s open season for addressing currency manipulation, and that other countries believe that the U.S. is manipulating our currency. She says there could be a "boomerang effect" from the legislation.
All we’d need now to kill our recovery as weak as it is, is to have a full blown, open season, take no prisoners currency war where the dollar would be weakened even more than it is now. And that’s especially true if the “quantum easing” (printing more money) the Fed has been hinting about is about to take place.
What no one seems to want to admit is now is not the time for any country to be revaluing its currency upward. The US is demanding of China what it wouldn’t do itself. Until the financial crisis has passed, these demands that China push the value of the yuan up should be on hold. Then, as Zachary Karabell explains, it is in China’s best interest to see the value of the yuan eventually increase:
China has been revaluing its currency, nearly 20% between 2005 and 2008 and now nearly 3% since June when the government resumed that policy having shelved it during the midst of the global financial crisis. It is in the domestic interest of the Chinese government to raise the value of their currency because they are focused on building up on internal, domestic consumption market. They have no wish to be dependent long-term of the vagaries and whims of American consumers, and higher purchasing power for Chinese consumers is the answer. They are not revaluing quickly enough to suit an America stuck in second gear and looking for someone to blame, but revaluing they are.
And there’s the bottom line – the US recovery isn’t going as well as we’d like it and as seems to be the penchant among US politicians, they have to have someone else to blame for the problem.
Solution: throw gas on a raging fire. I sure hope China has cooler heads at the helm.
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The answer to that question is “probably.” That’s a step up from “possibly.” But in the Hermit Kingdom, nothing is really ever certain.
The recent late night announcement by Kim Jong-Il of the promotion of his third son, Kim Jong-un to the rank of general in the North Korean People’s Army (NKPA) has removed any lingering doubt as to which of his sons is his chosen successor. The promotion repeats a pattern from the past. Kim Jong-Il was also promoted to a high post in the NKPA in 1991 by his father, Kim Il Sung, to establish his future claim to the top position in the country.
According to Dr. John Ishiyama, a Professor of Political Science at the University of North Texas and expert on North Korea, the sudden rush to establish his third son as his legitimate and chosen heir to power has been accelerated by Kim Jong Il’s deteriorating health.
But, says Ishiyama, there are some other promotions, which have taken place, which are also important to understand and indicate how any succession in the near future might be handled. Kim Jong-un is in his late 20s and is virtually untried, having had little or no experience to date within North Korea’s power structure. If Kim Jong-Il were to die soon, he’d be left to fend pretty much for himself.
However Kim Jong-Il has now carefully prepared the way for a sort of “regency” if should die unexpectedly. Kim Jong-un’s consort is a visible part of the top leadership, and in the position of Kim Jong Il’s personal secretary for years, is thought to wield exceptional power. Additionally, Jong-un’s uncle, Jang Soong-taek, considered by some to be an opposition figure, has been reconciled with the family and promoted to the vice-chairmanship of the National Defense Council, solidifying his position in the power structure. Kim Kyon-hui, Jong-un’s aunt and Soong-taek’s wife, is a 4 star general in the NKPA as well as holding a powerful position within the ruling Korean Workers Party.
All of that suggests that the consort, aunt and uncle will form a power clique that will be the actual “power behind the throne”, until Kim Jong-un is deemed to be prepared to take the reins of power himself.
In the meantime, and unlike the careful grooming Kim Jong Il got from his father, Kim Jong-un will be set upon a relative crash course to learn what is necessary for him to survive and thrive in the leadership role his father will leave him. The recent promotion sets him on that path and the other promotions are designed to protect him and enable him to learn the levers of power there.
It won’t be an easy task by any means.
The totalitarian nature of the regime, the poor international standing of the nation, the sanctions imposed by other nations for its role in nuclear proliferation, another bad harvest and the subsequent rumors of starvation all combine to paint an even bleaker future for the country than present. All that can be realistically hoped for at the moment is that when the young Kim Jong-un does take power he will look outward with the aim of reform and rejoining the society of nations instead of looking further inward and remaining on the road to eventual catastrophic ruin.
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If you use Google Chrome, you may have noticed a horrific security warning that the Blogrolling RPC script is running malware. As of today, you’ll notice that the warning no longer appears. We’ve used Blogrolling for years to generate the links for the Bear Flag League and Old Dominion Blog Alliance. Those Blogrolling links have now been removed.
Tucows, the owner of Blogrolling, has also noticed these problems. Sadly, they’ve decided that it would cost too much to fix the malware and security problems. As a result, Blogrolling will be shut down completely. This is sad, because Blogrolling was really the first useful link aggregator for managing blogrolls. Now, it seems the march of technology has passed it by. I don’t know how blog alliance links will be managed in its absence.
If you are a blogger, and you use Blogrolling, you should be formulating your plans for how you are going to replace it.
Gloria Borger, although she apparently doesn’t know it, has described why Obama and the Democrats are looking at the distinct possibility of an electoral avalanche that will sweep them out of the majority in the House in November. As Borger notes, when Obama took office, it seemed it was a Democratic majority built to last for years. Now “years” is down to “two”.
She points to one reason that is typical of any politician who wins an election – they read more into their win than is actually there:
Obama was elected as the corrective to the Bush years. Yet when you’re the winner, the temptation is always there to see yourself as something more than just an alternative — something larger, like a paradigm-changer or a transformational political figure. And Obama wanted nothing less than a change from conservatism to his own brand of 21st century activism.
"When you win an election," says political scientist Bill Galston, "you are always inclined to believe you won for the reasons you wanted to win."
In other words, you believe you won for the big stuff, not just because the voters didn’t like the other guy.
Watching Obama’s fading approval numbers and the ever increasing resistance to his agenda, it becomes clear that it was mostly about ‘the other guy’.
But there’s a larger point to be made as to why Obama and the Democrats are in the electoral shape they enjoy today:
Think back to the beginning. There’s an economic crisis, which the public believes Obama inherited. Then there’s his bucket-list of things he wants to get done. He has a choice: Handle the crisis or do the campaign to-do list.
And what does Obama decide? To do both. That is, the economy plus the rest of it — including health care.
"The irony is he didn’t even run on health care," says one Democratic pollster. "In truth, it wasn’t a large part of the general election campaign."
Interesting point. “He didn’t even run on health care”. Well he mentioned it, but it wasn’t his signature campaign issue. But it sure was Nancy Pelosi and the liberal caucus’s number one priority – a wet dream they’d had all their lives. And so while the economy was melting down and should have been the single dominant issued for the White House (and Congress), Obama allowed himself to be seduced into using all his political capital for something that wasn’t that important to the American people.
Borger attempts to make excuses for Obama that simply don’t ring true and certainly don’t pass the smell test:
Obama became convinced that solving the health care mess was key to solving the nation’s economic problems, especially bringing the deficit under control. In fact, when he first spoke of the importance of health care reform, it was all about "bending the cost curve," a slogan lost on most of the public.
BS. Any sane person, with even a cursory understanding of economics, knew that the program outlined in the monstrosity that has since become known as ObamaCare had as much of a chance of “bending the cost curve” down as Togo becoming the first nation in the world to land a man on Mars. Obama’s agenda was hijacked by Pelosi, et al, and he refused to stand up to them and say, “no – it’s the economy stupid”.
Democrats instead quickly passed an ineffective trillion dollar pork laden stimulus bill guaranteed to keep unemployment under 8% (or so they claimed) and then essentially turned away from the nation’s most pressing problem – other than to occasionally give it lip service – to their pet project, health care “reform”.
Borger claims it was Obama’s “ambitious agenda” that did him in and that the agenda “fed into the GOP narrative”. Unfortunately, at the point this was done, the GOP had no narrative. They were in a state of disarray and both powerless and voiceless.
No, the “voice” came out of townhalls. The “voice” showed up at “Tea Parties”. The “voice” expressed anger and frustration.
And what the “voice” was saying and continues to say is Obama and the Democrats made the wrong choice when they chose health care reform over working on the economy.
Nothing’s really changed either. Most of it – the position Democrats are now in – isn’t a result of any GOP narrative. It isn’t even necessarily because of the bad economy. It is a result of a poor leader caving into a special interest caucus within his party and putting that caucus’s priorities in front of the people’s priority.
Pretending it was anything else is simply nonsense. Democrats are facing an electoral avalanche in November because Obama let Pelosi and Reid usurp the leadership role that was his. And now they get to pay the butcher’s bill.
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Any political junkie worth his salt has at some time or another looked around at the wreckage that was once a proud country and asked, “how in the world did we get here”?
Simple – we allowed a malignant political class to arise and we, for some reason, chose to allow them to handle our affairs of state without close monitoring that is the job of any responsible citizenry. The bottom line is we’ve been badly represented by that political class and we’re getting very close to “paying the piper” time.
So how did we get here? Well I’ve been of the opinion that the perks and power that today’s politics promise are so heady and attractive that they draw a particular type person to pursue such positions. Maybe not as much at local levels, but certainly at state and most definitely at a national level. And for the most part this personality type is not who we want in those positions.
At one time, holding office was seen as a public duty, a service and temporary in nature. A person served their time, did their duty – usually at a loss earnings-wise – and then went back to their former life.
Not anymore. Now we have the Bill Clinton-type personalities whose entire focus in life is to become a politician. It isn’t about duty or service anymore, it’s about a career and the trappings of power that go with it. Couple that with a belief that they know better than you what your priorities and responsibilities in life should be and how you should live it, and we end up where we are today.
When the priority changes from being about service to being about a career, the incentives change as well. Under the first scenario, a politician would consider it his or her duty to be a careful steward and do the people’s business with an understanding that his decisions will effect him and his family too. He’d also have an incentive, then, to face difficult problems and solve them quickly before they get out of hand. He’d also be less inclined to worry about the “political” effect of tough decisions since he had no designs on staying in the position of power any longer than necessary to fulfill his obligation to serve.
However, when the focus is on a career in politics, then the focus is decidedly not on the people’s business, but instead on that person’s business – their career. And maintaining that career and lifestyle and the power that comes with it becomes the first and dominant priority.
Those wishing to get elected and stay elected must be prepared to break every moral rule they have ever known if the ends justify it. Economist Frank Knight notes that those in authority, "would have to do these things whether they wanted to or not: and the probability of the people in power being individuals who would dislike the possession and exercise of power is on a level with the probability that an extremely tender-hearted person would get the job of whipping master in a slave plantation."
That paragraph describes, with exceptions, the dominant political class in charge of our country’s politics today. It also helps explain why they’re so out of touch with the rest of the country. Their focus is inward, their constituency is within the party and the beltway, not the populace and they attempt to keep power by throwing out just enough bones to keep the populist dogs at bay. They ensure reelection through devious device only open to incumbents known as “constituent services” which in reality means they offer the only remedy to a situation or law they helped create and propagate to those caught up in its consequences.
In other words, all our politics now are about serving special interests and using those special interests to maintain elected office or advance to higher ones. The issues themselves are somewhat incidental to the process of maintaining or advancing in office. If it is useful to that end, then we’ll see politicians blather on about fixing this or doing that.
For the most part, however, not much really gets done. Oh some money may be thrown at a ”problem” and some bureaucracy set up or a study done. But no solution is really ever forthcoming. Look at how long Medicare and Social Security have been identified as future fiscal black holes. Show me where anyone – anyone – has seriously addressed the real problems we face with them (and no, ObamaCare doesn’t address the Medicare problem, it instead exacerbates it) and taken steps to solve them? We’ve seen them talked about endlessly. We’ve seen accusations fly from one side to the other and back. But when all is said, nothing is done, and the can is once again kicked down the road while politicians point fingers at everyone but themselves.
Meanwhile, those in power stay in power and the only thing that changes is the amount of money you and your family owe due to their profligacy.
Is it any wonder the Tea Parties have arisen? My only question, looking back over the years, is why did it take so long?
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Lots of libs claiming, as Libby Spencer has, that the firefighters who watched a man’s house burn down because he hadn’t paid his fee is representative of the reality of a "conservative/glibertarian free market utopia" (her words, not mine) that we libertarians talk about.
As it turns out, it is nothing of the sort.
It turns out, though, that the fire department in Tennessee was not a private for-profit fire department. It was a government-run fire department. You read that right: the fire department that refused to show up and refused to name a price at which it would show up was run by the government of South Fulton.
Yes, that’s right, it was a government run fire department. We libertarians are always proposing government do more, aren’t we? To Spencer’s credit she mentions that factoid a little further on in her post . But she’s already poisoned the well by then. You’re left to think this is what a "for profit" or "subscription", or to use the words the left usually spits out when saying them, "free market" form of fire service might look like.
As David Henderson points out, in the "free market" version, it is very likely the fire service would show up and charge you appropriately:
You would think at some price, the fire department would show up. After all, a private for-profit fire company could make some good money doing so and, by charging high enough, could limit the incentive for people not to pay in advance for protection.
Standing by is not logical for a company which gains its earnings by doing that sort of work and, at the time of the fire, it’s a seller’s market isn’t it? But you don’t get paid unless you put the fire out.
And there are examples of exactly what we’re talking about. Henderson links to one that provides services in rural Arizona. Here’s a portion of what it says under “services”:
There are four different models Rural/ Metro Fire uses to provide fire protection services. Descriptions are listed below. If you are unsure which service model Rural/ Metro Fire uses to protect your home or property, please call customer service so that we can let you know.
Fire Service Accounts — In select unincorporated county areas where taxes do not pay for a Fire Department, residents are responsible for setting up an account directly with Rural/ Metro Fire Department to provide fire protection services. Annual fees are based on the square footage of the enclosed property. For more information on a Fire Services Account call your area’s customer service department.
Now you have a choice here, don’t you? Sign up and be protected or blow it off and take your chances. And while I’m not here to defend a government run fire department in Tennessee, it’s the same choice the man there had. He chose to blow it off and paid the consequences for his decision, didn’t he? But we know invoking personal responsibility is simply passé, especially if the person involved in the rant thinks they can pin something on the right?
Anyway, the probable difference is in a “pay for service” libertarian situation, it is more likely that the fire service chief on the scene and home owner would have quickly reached agreement on a price to save his home. There’s an incentive for the “pay for play bunch” to reach that agreement.
However, government is more about bureaucracy and rules than it is incentive. If the fire chief on the scene was a government worker he would most likely have no power to make such a decision. And the fire fighters in question would have absolutely no incentive to fight the fire and every incentive not too – after all, this guy was a deadbeat and their rules said no pay, no play and they saw no reason to break the rules and risk their lives for someone who hadn’t thought enough of them or their service to subscribe.
So in reality, this wasn’t some libertarian fantasy gone awry. It was a government driven decision with a pretty drastic consequence. Apparently the government had not been able to imagine a contingency where this might happen, or, if they did, they seemingly had no plan to address it. Most would call that “inept governance”, not a failure of libertarianism.
Benny McGuire is announcing his candidacy for re-election to the office of Obion County mayor in the May 4 Democratic primary. McGuire said the last 31⁄2 years have been very busy and have been productive for the entire county.
Hmmm … how inconvenient.
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…for as long as your health care plan exists, anyway. Which, for retirees of the 3M corporation, it no longer will. It seems that the passage of Obamacare has prompted 3M to join the rush for the door in terms of providing health care coverage.
As we’ve noted repeatedly here, the claims that you could keep your health care plan and physician could not possibly be true, as the “reform” package set up perverse incentives. What we are seeing is precisely what we predicted. Corporations and insurers are responding to Obamacare’s incentives by getting out of the health insurance business. Because that’s what the law’s incentives urge them to do.
It really is one of the most basic principles of economics: people respond to incentives.
Got a huge chuckle out of Steven Levitt’s opening sentence at the Freakanomics blog:
Many economists view the health-care bill passed in the U.S. earlier this year as falling somewhere between “a complete waste of time” and “actually making the situation worse.”
Indeed. In fact, I’d have to go with the “actually making the situation worse” determination, given what we’ve seen this past couple of weeks as more and more companies react to the impact of the legislation.
The context of Levitt’s remark is a story by Delia Lloyd talking about the UK going in precisely the opposite way. Yes, a country which has had socialized medicine for over 60 years is looking at taking steps for a more market-based health care system, with the belief it will improve the British system.
Markets? Pricing signals? Competition?
Nah, our Congress just rejected all of that – couldn’t be a good thing.
Why are we always 60 years late and a dollar short?
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