Government manipulated unemployment numbers

If you massage and manipulate numbers just right, you can make them say anything you want. Through detailed and specific exclusions, coupled with generous estimations, you can always provide the statistic that agrees with your hypothesis. The more constrained and manipulated the numbers are, the less value the actually have.

Such is the case with unemployment. The government had redefined unemployment so much, that the actual number isn’t nearly as informative as it once was. Unemployment should refer to people who seek employment but are unable to find it. It gets a little more complicated when considering people who seek full-time employment, but settle for part-time employment. I suggest accounting for the underemployed with a partial-employment offset. Somebody who would like to work full-time (40 hours), but is only able to find part-time work (10 hours), should be considered 1/4 employed. Somebody working 30 hours a week would be considered 3/4 employed. When estimating unemployment, these two workers should be added together to show one employed worker and one unemployed worker.  By government standards, both employees are considered fully-employed. The Bureau of Labor Statistics’ (BLS) has redefined unemployment to coincide with popular political agenda, so much so that it is no longer useful.

Only through such refinement can today’s increased jobless rate actually be a good thing.

Employers stepped up job creation in April, expanding payrolls by 290,000, the most in four years. The jobless rate rose to 9.9 percent as people streamed back into the market looking for work. AP

The unemployment rate rose .2% from 9.7 percent in March to 9.9 percent in April. This increased unemployment rate was due to the creation of new jobs! Again, an increase in existing jobs, led to an increase in unemployment. The article continues…

The unemployment rate rose… because 805,000 jobseekers — perhaps feeling better about their prospects — resumed their searches for work.

Because there were no jobs available and people stopped looking, they were no longer counted as unemployed. Now that they have hope, they are considered unemployed. That’s illogical to me. I consider somebody who is able, and has the desire to work, unemployed. Not the government.

For once, the government manipulation of the unemployment number makes progress look like failure. Even though there are more jobs available, unemployment is up!

When I want an accurate estimation of unemployment, I look at John Williams’ Shadow Government Statistics.
Chart of U.S. Unemployment

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Calvin and Hobbes – June 10, 1986

I thoroughly enjoy this comic. Simple and accurate.

Calvin and Hobbes, June 10, 1986

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Peter Schiff v. James Bullard and Alan Blinder

Peter Schiff says that, “Ben Bernanke has never gotten anything right”  while on a panel with St. Louis Fed President James Bullard and former Fed Vice Chair Alan Blinder.

Alan Blinder then claims that “Ben Bernanke got a lot of things right”. When prompted by Schiff to name one thing that Bernanke got right, Blinder says that he doesn’t have enough time. That’s right, not enough time to name one.

Schiff then rattles off that,

he [Benanke] said that there was no housing bubble, and then that even if we have a decline in the housing market its not going to have a meaningful impact on employment. He said that the subprime mortgage problems were contained, that we didn’t have to worry about it. I can’t think of one thing that he got right. Not only was he wrong, he was as wrong as you can possibly be on a grand scale.

In this short video, Schiff also explains the effect of savings in China on spending in the US, a response to Bernanke’s Global Saving Glut.

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Our Enemy, The State

Albert Jay Nock’s “Our Enemy, The State” is as relevant now, as it was when it was published in 1935. It’s especially relevant today, as the government starts taking over the health care industry. Below are a few of Nock’s insightful perspectives that can be found in the first few pages of the book.

To read the whole book… buy it online | read it for free

Our Enemy, The State
by Albert Jay Nock, 1935

If we look beneath the surface of our public affairs, we can discern one fundamental fact, namely: a great redistribution of power between society and the State.

It is unfortunately none too well understood that, just as the State has no money of its own, so it has no power of its own. All the power it has is what society gives it, plus what it confiscates from time to time on one pretext or another; there is no other source from which State power can be drawn. Therefore every assumption of State power, whether by gift or seizure, leaves society with so much less power; there is never, nor can there be, any strengthening of State power without a corresponding and roughly equivalent depletion of social power.

Every positive intervention that the State makes upon industry and commerce has a similar effect. When the State intervenes to fix wages or prices, or to prescribe the conditions of competition, it virtually tells the enterpriser that he is not exercising social power in the right way, and therefore it proposes to confiscate his power and exercise it according to the State’s own judgment of what is best.

The process of converting social power into State power may perhaps be seen at its simplest in cases where the State’s intervention is directly competitive… It is obvious that private forms of these enterprises must tend to dwindle in proportion as the energy of the State’s encroachments on them increases, for the competition of social power with State power is always disadvantaged, since the State can arrange the terms of competition to suit itself, even to the point of outlawing any exercise of social power whatever in the premises; in other words, giving itself a monopoly.

Thus the State “turns every contingency into a resource” for accumulating power in itself, always at the expense of social power; and with this it develops a habit of acquiescence in the people. New generations appear, each temperamentally adjusted–or as I believe our American glossary now has it, “conditioned”–to new increments of State power, and they tend to take the process of continuous accumulation as quite in order. All the State’s institutional voices unite in confirming this tendency; they unite in exhibiting the progressive conversion of social power into State power as something not only quite in order, but even as wholesome and necessary for the public good.

In the last section of the book (page 38), Nock makes one of, what I believe to be, his most simple and insightful statements.

It is a curious anomaly. State power has an unbroken record of inability to do anything efficiently, economically, disinterestedly or honestly; yet when the slightest dissatisfaction arises over any exercise of social power, the aid of the agent least qualified to give aid is immediately called for.

Nock continues, making reference to the banking industry,

Does social power mismanage banking-practice in this-or-that special instance – then let the State, which never has shown itself able to keep its own finances from sinking promptly into the slough of misfeasance, wastefulness and corruption, intervene to “supervise” or “regulate” the whole body of banking-practice, or even take it over entire.

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A solution to US health reform

While listening to Nancy Pelosi talk during the bipartisan meeting on health reform, I came up with the ultimate solution to health care reform. I won’t take all of the credit for it, it was mostly Nancy’s idea.

Ms. Pelosi wants to pass new legislature so that everybody can have access to health care. Not just healthcare, but better healthcare. The new health reform will lower costs, increase accessibility and increase performance. This is great. I didn’t realize that all of this can happen with the stroke of a pen. Capitalism and the markets are totally unnecessary… And that’s when it hit me.

If she can just legislate the way to better healthcare, she should start at the heart of the problem. Don’t mandate healthcare for everybody. Mandate away the need for healthcare at all. Mandate an end to cancer. That’s right, make it impossible to get cancer, with the stroke of a pen. Not just cancer, mandate away diabetes and obesity and heart disease and asthma and osteoporosis and depression and AIDS. Once we’re legislated our way out of all of these health problems, we’ll be in great shape. Then we can start getting into the more exciting things. Legislate my ability to fly. Legislate my ability to have mind control. Oh, and legislate the end to war and famine.

Thanks.

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Citibank – Seven day advance notice for withdrawals

According to the Citibank’s client manual (see the last paragraph on page 23),

Withdrawal Notice
We reserve the right to require seven (7) days advance notice before permitting a withdrawal from all checking, savings and money market accounts. We currently do not exercise this right and have not exercised it in the past.

After receiving a lot of attention online, Citibank confirmed the notice with the following comment:

When Citibank moved to unlimited FDIC coverage in 2009, we had to reclassify many checking accounts to allow for immediate withdrawals in order to ensure all customers qualified for the additional coverage. When we moved back to standard FDIC coverage with most major banks in 2010, Citibank decided to reclassify those accounts back to make them eligible again for promotional incentives. To do so, Federal Reserve Reg D requires these accounts, called NOW accounts, to reserve the right to require a 7-day notice of withdrawal. We recently communicated this technical requirement to our customers. However, we have never exercised this right and have no plans to do so in the future.

While Citibank claims to have no plans to enforce this rule, its good to know that it exists.

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Bank failures 1/2010

Here’s an update on my previous post on bank failures.

 

Since the end of October there have been 40 more bank failures (9 in November, 16 in December and 15 in January).

 

With 15 bank failures in January, it’s still too early to tell if we’ll break 2009′s record of 144 failures, but my money is on yes! We might even break the 181 bank failures of 1992. Going any further back isn’t a fair comparison because multi-branch banking wasn’t nearly as popular.

 

6 month trend

Although there was a small drop in the 6-month trend in January, the trend is still upward.

 

Failures by state

Georgia (34), Illinois (26), California (24) and Florida (24) combined now account for a slight majority (51% or 108/212) of bank failures across the country.

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Tag cloud of Obama’s 2010 State of the Union Address

Here’s a tag cloud of Obama’s 2010 State of the Union Address. Thanks to the New York times for the text and to Wordle for the tool.

Obama tag cloud

Update: A lot of people are asking why the words “I” and “me” aren’t included.  The reason is that Wordle probably thinks that the word is a “stop word” (a frequently-used, but unimportant word, such as “the”, “and” or “but”).

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Closure Of Guantanamo Detention Facilities

On January 22, 2009 Obama issued an Executive Order stating, among other things, that

The detention facilities at Guantánamo for individuals covered by this order shall be closed as soon as practicable, and no later than 1 year from the date of this order. If any individuals covered by this order remain in detention at Guantánamo at the time of closure of those detention facilities, they shall be returned to their home country, released, transferred to a third country, or transferred to another United States detention facility in a manner consistent with law and the national security and foreign policy interests of the United States.

That’s right. By January 22, 2010, the Guantanamo Detention Facilities will be closed. Except it didn’t happen. It’s one year later, and Guantanamo is still open. Sure some of the detainees have been transferred to other countries, and there’s talk of moving many of the inmates to another prison in Illinois (still without a trial), but bottom line, this hasn’t happened yet. Obama’s Executive Order has come due, and has been ignored. What’s the point of speaking and writing up documents when they’ll just be ignored. Was Obama hoping we’d just forget what he was saying a year ago? Maybe if he messes up the economy enough, he’ll be able to take our minds off of Guantanamo?

In the end, there is no accountability. It doesn’t matter what Obama said last year, because things are different now. We should forget about what he said the same way we’ve forgotten about bi-partisanship (when it comes to health care trying to eke by along party lines).

So Obama – don’t make promises you won’t deliver just to look good. You’ll end up looking like a fool with your pants on the ground … sorry couldn’t resist.

It’s no wonder Obama’s ratings continue to drop. There’s no way he’ll be able to keep his 510 promises, if he ever even intended to. Each broken promise will disappoint a little more.

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Quote on health care

“Now, let me get this straight…We are going to pass a health care plan written by a committee whose chairman says he doesn’t understand it, passed by a Congress that hasn’t read it but exempts themselves from it, to be signed by a president that also hasn’t read it and who smokes, with funding administered by a treasury chief who didn’t pay his taxes…all to be overseen by a surgeon general who is obese, and financed by a country that’s nearly broke. What could possibly go wrong?”

 

 

I’m not sure who said it, but I like it.

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