While I waited for the DOL to release the official July unemployment numbers on Friday I never could have guessed that BO's economic adviser Alan Krueger would be giving us a lesson later in the day re terms from my analytical chemistry class like "precision, accuracy, number, digit, & significant figures."
Krueger made the point that the July unemployment rate really is not the 8.3% the BLS reported but rather is 8.254% up from 8.217% in June. The term "essentially unchanged" was used – this term may not be as complimentary as BO's administration thinks.
Caring absolutely nothing about innocent unsuspecting hard-trying people's lives BO spun all of the job stats in his constant attempt to gain reelection to conclude "that means that we've now created 4.5 million over the last 29 months and 1.1 million new jobs so far this year."
Of course the truth is BO hasn't created any value producing jobs @ all & neither has any politician. The economy is so weak that in July 150,000 people left the work force to live off of their savings for awhile & 45,000 more people joined the ranks of those looking for work but cannot find any. Do you know any of these people? I do.
Thanks to a subscriber of RTE who alerted me to the following graph that shows a more realistic analysis of the job stats done by IBD.
IBD found that since BO took office 7.5 million people have left the workforce meaning there are no net "job gains" under BO's total time in office. IBD made the above graph to show a more realistic picture of the unemployment condition in America based on holding the labor force participation rate constant @ 65.7% (where it was when BO took office) & projecting how many jobs have been destroyed in coming to the current 64.3% labor force participation rate. The labor force participation rate is the percentage of the potential labor force population which actually belongs to the labor force. This analysis resulted in an 11.0% unemployment rate to compare against the official 8.3% rate.
Even more dramatic to me is the 15.0% underemployment rate (the most comprehensive measure of labor unemployment) that includes the 12.9 million Americans who are looking for work but cannot find it (because it is not there per BO's design) plus discouraged workers (2.5 million) who have given up looking for work because they believe no jobs are available & their continued search would be futile & are therefore spending down their assets to live on plus those who are working part time (8.2 million) but really prefer full time work & therefore are also spending down their assets to maintain their standard of living.
But lets not be fooled by unemployment statistics regardless of how bad they really are because a job is not the job we remember or expect unless it provides a salary with a living wage not to mention healthcare insurance & a pension be it defined benefit or defined contribution. Seeing this type of job creation may very well be a thing of the past for much of our population & the dreadful unemployment stats don't even mention it. Instead job applications flood fast food restaurants so we can serve burgers to one another (or more fashionably chicken sandwiches @ CFA).
To set our sail straight we have to begin with the idea that not only doesn't government (be it Mitt or BO) create jobs but that no businessman or entrepreneur goes into business with the idea of creating jobs. In fact creating jobs is the last thing they want to do.
The way to maximize the creation of value producing jobs that increases our standard of living is for the government to stop its constant intervention & interference in the economy (this is the stimulus they can provide) & unleash entrepreneurs & innovators in a true free enterprise system - which is far from what we have had in a long time. BO's policies not only don't maximize the chance for creating such jobs, they don't even minimize it - they virtually eliminate the possibility of any such jobs being produced. And of course this is by design.
To understand how value producing jobs are created think of the world economy as a ladder - a metaphor presented to me by Professor Robert Carbaugh of Central Washington University. The U.S. is currently on the top rung & developing nations with low tech labor intensive jobs are on the bottom rungs. The other countries are in between. All countries try to climb to the next rung. This works well if the topmost countries create new industries & products, thus adding another rung to the ladder like when we replaced horse drawn carriages that used buggy whips with cars. Older industries can move overseas while new jobs are generated @ home. It is when innovation stalls @ the highest rung that the portion of Americans near the bottom of the income distribution must compete with workers in developing countries. This is what we are facing today as far too many Americans are poorly educated with skills so limited that no employer can use them. It is only through constant brainwashing that the government will take care of you that would allow someone to become so ill-prepared to support themselves that they are now competing with third world people who make pennies a day.
Hi Doug - Thirty years ago we lived and died by manufacturing data - today it's insignificant. I am starting to entertain the theory that unemployment numbers are also insignificant. Realizing this theory runs counter to contemporary thinking lets peek behind the curtain at some facts. The Romney Camp cannot get traction with unemployment - it's like trying to use manufacturing data as a campaign tool - its old school. We are approaching 50% of America's population receiving income from a source outside the traditional 8 to 5 job routine. This 50% receives monies from pensions, Social Security, disability, welfare, investments, inheritances, trust funds, and self-pensioned. Moreover, the greatest transfer of wealth is taking place at this very moment and will continue for the next 15 years as the World War II generation passes away leaving their wealth to their children. Additionally, Baby Boomers are retiring at record numbers which will also continue for the next 15 years. Many companies are laying off their senior workers who collect unemployment for two years and subsequently retire. This technique skews the unemployment data. We are a mature and wealthy country with 80% of us owning our homes. As with manufacturing data, the above wealth facts, leaves few Americans, outside the news media, concerned with unemployment data.Since the country is seemingly deft to unemployment information, in my opinion, Romney will need to dig deeper into his tool chest otherwise he will pass into history as a final jeopardy question.
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