Obama Jobs Scorecard, Part 2 : Beyond the Private Sector

June 17, 2012August 19, 2017 / L. M. Walker / 3 Comments

“He might as well have said that his stimulus plan would provide a temporary fix and a temporary economic recovery, which may have to be repeated over and over again to provide the impression that we are getting somewhere, even if we are really just going broke.”

* By: Larry Walker, Jr. *

The Great Recession lasted for a total of 19 months, beginning in December 2007 and ending in June 2009. So the U.S. economy has technically been in a state of recovery for exactly three years. Yet, other than the federal government, which has realized a net gain of 234,300 non-postal employees, since the recession began, the rest of the economy is worse off today than it was on the day Barack Obama was sworn in.

We addressed the Private Sector in Part 1. Today we’ll examine Total Nonfarm Employment, which includes the Private Sector, the Federal government, and State & Local governments, in order to assess our economic progress, since Barack Obama promised to deliver “a new foundation for our lasting economic growth and prosperity”.

Government Sector

The chart below summarizes the Government employment situation since the start of the Great Recession. The figures come from the Bureau of Labor Statistics, Table B-1 – Establishment Data. The main highlights are outlined below the chart.

The number of Federal government employees has increased by +75,000 from December 2007 through May of 2012. The federal government is the only sector of the economy with a net employment gain since the recession began. (Note: The huge spike represents temporary hiring by the U.S. Census Bureau.)

Federal jobs grew by +33,000 during the last 13 months of President Bush’s term.

Federal jobs have grown by an additional +42,000 during Barack Obama’s 41-month term.

Non-postal workers increased by +234,300 [+82,100 during Bush’s last 13 months, and +152,200 during Obama’s 41-month term to-date].

Postal workers decreased by -158,500 [-48,500 during Bush’s last 13 months, and -110,000 during Obama’s first 41 months].

The number of State government employees has declined by -64,000 since December of 2007.

State government jobs actually grew by +52,000 during the last 13 months of President Bush’s term.

State government jobs have declined by -116,000 during Obama’s 41-month term to-date.

The number of Local government employees has declined by -376,000 since the start of the Great Recession.

Local government jobs continued to increase by +136,000 during the last 13 months of President Bush’s term.

Local government jobs have since declined by -512,000 under the policies of Barack Obama.

Overall, the Government Sector has suffered a net loss of 365,000 jobs since the start of the Great Recession. But it’s important to note that 221,000 jobs were gained during President Bush’s final 13 months in office, while 586,000 jobs have been lost during Barack Obama’s 41-month term to-date. Digging a little deeper, we find that, since the baton was passed to Obama, 628,000 State and Local government jobs have been lost, while 42,000 Federal jobs were gained. Since government employment did not decline during the 19 months comprising the Great Recession, nor during President Bush’s term, who’s to blame for the decline?

You would think that a decline in the number of State & Local government workers is a good thing, but Barack Obama doesn’t think so. He has thus proffered more government borrowing and spending to fix the alleged problem. But as I pointed out previously, and it’s only common sense, even if the Federal government handed State and Local governments $1.0 trillion to rehire all 628,000 workers, whom they can obviously no longer afford, they will find themselves dumbfounded when the taxpayer funded handout expires.

Thus far, all of Barack Obama’s economic proposals have been temporary fixes, one after another. But the barrage of temporary measures hardly lines up with his 2009 rhetorical promise, that his stimulus plan would ‘lay a new foundation for our lasting economic growth and prosperity’. It’s been three and a half years, and he still doesn’t seem to understand that government stimulus is by its very definition, temporary. He might as well have said that his stimulus plan would provide a temporary fix and a temporary economic recovery, which may have to be repeated over and over again to provide the impression that we are getting somewhere, even if we are really just going broke.

Total Nonfarm Jobs

In Part 1, we discovered that a total of 3,735,000 Private Sector jobs were lost during the first 13 months of the Great Recession, and that an additional 784,000 have been lost since Barack Obama promised that his stimulus plan would, ‘save or create more than 3.5 million jobs by January of 2011’. But now, as we factor in the number of government sector jobs gained or lost since the recession began, we discover the following facts.

Total Nonfarm jobs declined by 3,514,000 during the last 13 months of President Bush’s term.
Total Nonfarm jobs have declined by an additional 1,370,000 during Barack Obama’s 41-month term to-date.

Overall, the U.S. economy has lost a total of 4,884,000 nonfarm jobs since December of 2007. Among them, 1,370,000 have been lost since Barack Obama was sworn into office. So his claim, that we have created 4.3 million jobs over the last 27 months, is wishful thinking. In reality, we lost 5,135,000 nonfarm jobs during his first 14 months in office. Do the math. The facts speak for themselves. And although the Federal government has gained 234,300 new non-postal workers, 152,200 of which are attributable to Mr. Obama, we haven’t created a single net job in the last 54 months. The chart above summarizes where we are statically, but as we shall see, the real employment situation is far worse.

That’s the end of Part 2, but it’s still not the end of the story. In Part 3 we’ll discuss how the increase in the Working-Age Population, since December 2007, in conjunction with a decline in the Labor Force Participation Rate, has made the real employment situation far worse than it appears, placing the American Dream in jeopardy.

To be continued… Obama Jobs Scorecard, Part 3 : The American Dream

Continued from… Obama Jobs Scorecard, Part 1 : The Private Sector

Obama Jobs Scorecard, Part 1 : The Private Sector

June 13, 2012August 18, 2017 / L. M. Walker / 3 Comments

According to Barack Obama, “We’ve created 4.3 million new jobs over the last 27 months, over 800,000 just this year alone. The private sector is doing fine.” But what he failed to mention is what any American paying attention already knows, that we lost 5.0 million jobs during the first 14 months of his 41-month term.

* By: Larry Walker, Jr. *

Using simple math, it doesn’t take much for any American to figure out that Mr. Obama has been in office for a total of 41 months. Curiosity leads us to believe that there must be some reason Mr. Obama isn’t saying anything about his first 14 months in office. So here’s what we found. By the time Mr. Obama reached the White House, the private sector had already lost 3.7 million jobs to the Great Recession. Then between January of 2009 and February of 2010, his first 14 months in office, another 5.0 million jobs were lost. And finally, over the last 27 months, 4.3 million jobs were either created or saved. Once again simple math leads us to the conclusion that the private sector is worse off today than before Mr. Obama was sworn in, by roughly 700,000 jobs.

Over George W. Bush’s eight-year term, the economy went through two recessions. The first was much shorter than the second, lasting only nine months, from March of 2001 to November of 2001. But the Great Recession lasted for a period of 19 months, commencing in December of 2007 and not ending until June of 2009, six months into Mr. Obama’s term. However, in the month after the Great Recession began, the number of private sector jobs reached an all-time record high of 115,647,000. In fact, when we summed together all private sector employment gains and losses during Mr. Bush’s time in office, it resulted in a net gain of 3,970,000 jobs through January of 2008. But once the recession heated up, from its beginning until the baton was passed to Barack Obama in January of 2009, a total of 3,735,000 of this net gain had been wiped out. As a result, the number of net jobs gained during the Bush presidency was a paltry 147,000 (see chart above, and table below).

Obama’s First 14 Months

In January of 2009, Barack Obama stepped in to rescue us from the disaster of 2008. His stimulus plan was passed by both houses of Congress on February 14, 2009. At the time, Mr. Obama delivered the following statement. “Congress has passed my economic recovery plan – an ambitious plan at a time we badly need it. It will save or create more than 3.5 million jobs over the next two years, ignite spending by business and consumers alike, and lay a new foundation for our lasting economic growth and prosperity.” But the promises he made on that day would soon come back to bite him.

Obama’s economic team calculated that without the stimulus plan, the economy would lose another 1,613,000 jobs over the ensuing two-year period. But with passage of the stimulus bill, they claimed that not only would those 1,613,000 jobs be saved, but an additional 1,887,000 would be created, all by January of 2011. But as you can see in the table below, Mr. Obama’s economic team was way off the mark. By February of 2010, just one year later, an additional 5,051,000 private sector jobs were lost. This brought the total number of jobs lost from the beginning of the Great Recession to 8,786,000. Fortunately, this turned out to be the end of the decline.

Obama’s Broken Promises

By January of 2011 it was time to tally the results of Mr. Obama’s $831 billion stimulus plan. As the next table reveals, instead of saving 1,613,000 jobs and creating another 1,887,000, from the beginning of his term through January of 2011 the private sector had instead lost a net total of 3,617,000 jobs. This brought the total number of private sector jobs lost since the beginning of the Great Recession to 7,352,000.

Since the recession had already wiped out 3,735,000 private sector jobs before Mr. Obama came along, if his plan had worked as promised, then the number of jobs lost to the recession should have been reduced to 1,848,000 by January of 2011. But instead this number rose to 7,352,000. In other words, if 1,613,000 jobs were expected to be lost and saved over his first 25 months, then there should not have been any losses at all. And since we were already 3,735,000 jobs in the red before Mr. Obama’s time, if the private sector had created 1.887,000 jobs as promised, then by his 25th month we should have only been off target by 1,848,000 jobs (3,735,000 minus 1,887,000). Thus, the stimulus plan failed miserably. When Barack Obama was sworn in, he inherited an economy that was 3,735,000 jobs in the hole, but after two years of his policies, and $831 billion tax dollars squandered on his stimulus plan, the private sector lost an additional 3,617,000 jobs.

Are we there yet?

Skipping ahead to May of 2012, we find that since the time of Mr. Obama’s inauguration, the private sector has lost a total of 784,000 private sector jobs, for an average loss of 19,122 jobs per month. This is in addition to the 3,735,000 lost under Mr. Bush, for a cumulative loss of 4,519,000 jobs since the beginning of the Great Recession (see table below). In other words, the private sector is worse off today than it was on the day Barack Obama was sworn into office. And if you will, not only is the private sector worse off than it was three years and five months ago, the Federal government has taken on an additional $5.3 trillion in debt just to get us where we are – nowhere.

The total number of private sector jobs lost, since the beginning of the Great Recession, is shown graphically in the chart below. In spite of his repetitious rhetoric, and no matter how many times he boasts that his policies have “created 4.3 million private sector jobs over the last 27 months,” the truth is that not one private sector job has been created since the beginning of Barack Obama’s 41-month term.

The Bottom Line: No one likes to discuss Mr. Obama’s initial 14 months in office, but it will nevertheless go down in history as a part of his record. The truth is that over his first 14 months the private sector lost 5,051,000 jobs. Then during his last 27 months it recovered 4,267,000 of the jobs lost during his first 14 months. So it was only after suffering far worse job losses under the influence of Mr. Obama than we started with, that the private sector was able to recover 4,267,000 of the 5,051,000 jobs lost during his 41-month term. So where is the private sector today? We are still down by the same 3,735,000 jobs lost to the Great Recession before Mr. Obama arrived, plus an additional 784,000 lost during his 41-month term to-date. Yet, Mr. Obama seems to think that the private sector is doing fine, and that for some reason he deserves a second shot. Sorry pal, but we don’t have another $5.3 trillion to throw away.

That’s the end of Part 1, but it’s not the end of the story. In Part 2 we’ll tack on the total number of Government sector jobs, Federal, State and Local, lost over Mr. Obama’s 41-month term. Then we’ll discuss how the 8.2 million person increase in the Working-Age Population, during Mr. Obama’s term, has made the real employment situation far worse than it appears to a casual observer.

Note: Some economists and pundits will attribute the 839,000 jobs lost in January of 2009, Mr. Obama’s first month in office, to Mr. Bush. If you insist on doing so, then that would mean that the total number of private sector jobs gained over Mr. Obama’s 40-month term would be 55,000 (i.e. 839,000 minus 784,000). However, the number of jobs lost since the beginning of the Great Recession is unchanged, at 4,519,000. But before you start boasting about how Barack Obama added 55,000 private sector jobs over his 40-month term, you might want to consider whether a job creation record averaging just 1,375 jobs per month is worth the effort.

To be continued… Obama Jobs Scorecard, Part 2 : Beyond the Private Sector

The Private Sector is NOT Doing Fine | How’s the Federal Government Doing?

June 11, 2012August 18, 2017 / L. M. Walker / 1 Comment

* By: Larry Walker, Jr. *

“The Private Sector is doing fine.” ~ Barack Obama *

A couple days ago, Joe Weisenthal wrote an article, inappropriately entitled, “Here’s What’s Really Happened to the Private Sector Under Obama”, in which he sought to prove why Mr. Obama will be reelected. His premise, like Obama’s, is that the Private Sector is doing fine, but State and Local governments aren’t. There was no mention at all of how the Federal government, the part of the economy Mr. Obama actually influences, is doing (see the chart above). However, what Mr. Weisenthal actually did was highlight the main reasons why Mr. Obama should not be reelected, and should lose by a landslide in November. I hate to burst Mr. Weisenthal’s bubble, but he’s in La-La Land if he thinks his 24 chart presentation will convince even Mr. Obama to defend his own senseless remark.

First of all, Mr. Weisenthal’s article was inappropriately titled because by definition, the “Private Sector” is not “under Obama”, as he so implies. To the contrary, the only part of the economy Mr. Obama presides over is the Federal government, whose $16 trillion debt, $5.3 trillion of which has been added by Obama himself, actually imposes a drag on the private economy. Yet, Mr. Weisenthal supports Mr. Obama’s plea for more Federal borrowing, to be expended at the State and Local level. Secondly, Mr. Weisenthal doesn’t provide any benchmarks. It’s as if he’s comparing the pre-2010 Obama to the post-2009 Obama. That’s all well and good, but if this were baseball, Mr. Obama would be heading back to the Minor Leagues (and so he is).

Here’s a brief summary of Mr. Weisenthal’s main points (in bold type) and my comments. You may view his 24-chart catastrophe here.

‘Corporate profits after tax are higher than ever.’ – I concur. But this is primarily due to corporate austerity, which has nothing at all to do with Mr. Obama. Although some corporations have been able to increase sales, most all of them have actually improved profitability through reductions in labor and other operating costs. We call this productivity, which is something Mr. Obama could learn from, but not something he practices within his sphere of influence.
Rental Income is higher than ever. – I agree. But, the fact that more than 3.3 million families lost their homes since September of 2008, and are now forced to rent, is hardly anything to boast about. Could there be any other reason for the 125% increase in rental income since the recession began, such as some program implemented by Mr. Obama? The claim that rental income has reached a new record, under the policies of Barack Obama, is more of an admission of failure than anything else.
‘Gross private domestic investment is coming back nicely.’ – If you consider a rebound to 1999 levels a nice comeback, that’s all fine and well, but I think it’s rather pathetic. By the way, this particular chart has actually moved sideways and to the right since 1999, not upwards. So far in 2012, it looks like most of what should go towards gross private domestic investment is actually being invested into U.S. Treasury’s. After all, someone has to buy all of the newly created Federal debt, and the Federal Reserve appears to be closed for business, at least for the time being.
‘The private sector has been adding jobs steadily since the end of Obama’s first year, and today there are more private sector jobs than there were before Obama took office.’ – Did he say, ‘since the end of his first year’? Of course no good Democrat should ever discuss Obama’s first year in office. It’s as if he took over the reigns in January of 2010, instead of 2009. In reality, the Private Sector lost a total of 5,051,000 jobs between January of 2009 and February of 2010, before things started to turn around. Even still, the Private Sector has only gained 55,000 jobs over the last three years and four months (not including the 839,000 jobs lost in January of 2009). This represents an annual growth rate of just 0.015%, and a total growth rate of a mere 0.050%.

Meanwhile, the Working Age Population increased by more than 8.2 million over the same period. So let’s see, that’s 55,000 private sector jobs created since Obama took office, for 12.2 million unemployed workers (4.0 million who had already lost their jobs before Obama took office, and another 8.2 million who reached working age during his term). That’s gotta be a record alright, but it’s not exactly the kind of record either Mr. Weisenthal, or Mr. Obama should be ginning up.

‘It would be great if the [Private] Sector were stronger, but things are going up and to the right in these charts.’ – Yes, and things are going up and to the right in some other charts as well. For example, Federal budget deficits (shown below) are far outpacing any of the statistics above. The fact that a chart is moving upwards and to the right doesn’t mean anything on its own merits. The following questions come to mind. Is this good or bad? What’s the trend? What’s the growth rate? Is it keeping pace with population growth? How is its performance against other benchmarks? Comparing the last two years and five months of Obama to his first year in office, and then drawing conclusions, is like saying that a baseball player with a batting average of .000 in his first year and who is now batting .00015 has improved. Yeah, he’s improved alright, but he won’t be playing in the Majors next year.

‘Total government employment is far below where it was when Obama started office.’ – This is true, and it’s actually a good thing. Who can afford to pay for more public sector workers when more than 23 million Americans are either unemployed or underemployed? Mr. Weisenthal and Mr. Obama seem to think that more State and Local government hiring will solve our unemployment problem. What they really mean is that the Federal government should take more money from a shrunken private sector labor force to pay others. What planet have they been living on? Apparently neither one of them received the memo issued in November of 2010.
‘Why is employment going down? Because state and local government spending growth has hit its lowest level ever.’ – The first part of this statement is false; the second part is true. To say that the decline in State and Local government spending is causing the decline in employment may fire the emotions of a few State and Local government workers, but it’s simply untrue. State governments employed a record 5,198,000 workers in January of 2009, versus 5,073,000 today. Local governments employed a record 14,588,000 in January of 2009, versus 14,077,000 today. So State and Local government employment is only off the mark by 636,000 from an all time high in January of 2009. If all 636,000 workers were rehired tomorrow, how would that solve the problem for the 23 million Americans who are either unemployed or underemployed?

Although it’s true that State and Local government spending has declined, the reason is that revenues have plummeted. Unlike the Federal government, State and Local governments can’t spend money they don’t have. Nor should they borrow what they can’t repay. The decline in revenues is due to the downturn in real estate values, high unemployment, and the need to cover unfunded pension liabilities. With legal requirements to balance their budgets and an inability to print their own currencies, State and Local governments are prohibited from implementing the disastrous borrow-and-spend policies of Washington, DC.
During the crisis, the state & local pain was mitigated by aid from the Federal Government, but that has since dropped off dramatically. – He’s referring to the part of Obama’s $831 billion Stimulus Program that went to State and Local governments in 2009/2010. Remember that? The problem is that it didn’t work then, and it won’t work now. The reason it didn’t work the first time is because it’s not the Federal government’s job to tell State and Local governments what to do. The Federal government is not in charge of State and Local budgets and thus cannot mandate more hiring.

State and Local governments legislate according to the desire of their residents; they don’t take orders from Washington. State and Local government officials actually have to live under the policies they implement. They are in-touch with their constituents, while Mr. Obama seems to be completely out-of-touch with most of America. Even if the Federal government handed State and Local governments another $1.0 trillion to hire more workers, how would they pay those same workers in subsequent years? And if they have to pay the money back as well, how will they be able to pay the additional workers while repaying the loans? Ideas that make sense to a desperate reelection campaign are not always practical in the real world, or in the best interests of anyone other than the candidate. Think about it.

Monetizing the Debt

Mr. Obama presides over the Federal government, whose $16 trillion national debt imposes a drag on the Private Sector. For example, in 2011 the Federal Reserve monetized 77% of the Federal deficit (see chart below). By the way, that’s the opposite of what it said it would do. Eventually the Fed will have to reduce its Treasury holdings, and as you can see, the last time it did so the economy went straight into recession. Maybe the Fed can afford to sit on piles and piles of low interest Federal debt forever, but that doesn’t mean everyone else can, or will. The question Mr. Weisenthal ought to be asking himself is where will the Federal government get the money to repurchase this debt? It will ultimately come out of the Private Sector, through higher taxes, fees, and fines. The prospects for additional Federal borrowing are growing slim.

Private Sector Employment Benchmarks

Mr. Weisenthal’s charts don’t provide any benchmarks, so I will. Assuming that Private Sector Employment should grow at the same rate as the working age population, approximately 1.0% annually, the chart below compares actual Private Sector jobs growth to a 1.0% benchmark, beginning with the terms of the last 5 presidents.

By the end of Ronald Reagan’s first term, Private Sector Employment beat the benchmark by 2,088,000 jobs. He was reelected based on his pro-business policies.
By the end of Reagan’s second term, Private Sector Employment had topped the benchmark by 8,248,000 jobs.
By the end of George H.W. Bush’s only term, Private Sector Employment fell behind the benchmark by 2,466,000 jobs.
By the end of Bill Clinton’s first term, Private Sector Employment beat the benchmark by 6,901,000 jobs. He was reelected based on small government, pro-business policies.
By the end of Clinton’s second term, Private Sector Employment had topped the benchmark by 13,291,000 jobs.
By the end of George W. Bush’s first term, Private Sector Employment had fallen behind the benchmark by 5,562,000 jobs. He was reelected based upon his strong defense and anti-terrorism policies, not for his economic record. Were it not for the War on Terror, Mr. Bush would have lost his reelection bid.
By the end of W’s second term, Private Sector Employment had fallen behind the benchmark by 9,100,000 jobs.
After three years and five month’s of Barack Obama, Private Sector Employment has fallen behind the benchmark by 3,801,000 jobs. Short of finding another reason, such as convincing Americans that the killing of thousands of innocent civilians in drone attacks is important to their security, Obama’s anti-business policies should make this his final term.

Federal Government Employment Benchmarks

Who wants more Federal workers? Instead of telling State and Local governments what to do, Barack Obama should spend some time figuring out how to shed the 29,000 Federal positions added under his administration. Assuming that Federal Government Employment should grow at 0.0% or less, the chart below compares actual Federal government jobs growth to a 0.0% benchmark, beginning with the terms of the last 5 presidents.

By the end of Ronald Reagan’s first term, Federal Employment exceeded the benchmark by 3,000 jobs.
By the end of Reagan’s second term, Federal Employment exceeded the benchmark by 195,000 jobs.
By the end of George H.W. Bush’s only term, Federal Employment dropped below the benchmark by 57,000 jobs.
By the end of Bill Clinton’s first term, Federal Employment dropped below the benchmark by 253,000 jobs.
By the end of Clinton’s second term, Federal Employment was below the benchmark by 347,000 jobs.
By the end of George W. Bush’s first term, Federal Employment dropped below the benchmark by 25,000 jobs.
By the end of W’s second term, Federal Employment exceeded the benchmark by 24,000 jobs.
After three years and five month’s of Barack Obama, Federal Employment has exceeded the benchmark by 29,000 jobs.

State Government Employment Benchmarks

Not that the Federal government has any control, but assuming that State Government Employment should grow at the same rate as the working age population, approximately 1.0% annually, the chart below compares actual State government jobs growth to a 1.0% benchmark, beginning with the terms of the last 5 presidents.

By the end of Ronald Reagan’s first term, State Government Employment dropped below the benchmark by 5,000 jobs.
By the end of Reagan’s second term, State Government Employment exceeded the benchmark by 183,000 jobs.
By the end of George H.W. Bush’s only term, State Government Employment exceeded the benchmark by 149,000 jobs.
By the end of Bill Clinton’s first term, State Government Employment dropped below the benchmark by 56,000 jobs.
By the end of Clinton’s second term, State Government Employment was below the benchmark by 9,000 jobs.
By the end of George W. Bush’s first term, State Government Employment dropped below the benchmark by 6,000 jobs.
By the end of W’s second term, State Government Employment was below the benchmark by 16,000 jobs.
After three years and five month’s of Barack Obama, State Government Employment has fallen behind the benchmark by 306,000 jobs.

Local Government Employment Benchmarks

The Federal government has no jurisdiction over Local governments, but assuming that Local Government Employment should grow at the same rate as the working age population, approximately 1.0% annually, the chart below compares actual Local government jobs growth to a 1.0% benchmark, beginning with the terms of the last 5 presidents.

By the end of Ronald Reagan’s first term, Local Government Employment dropped below the benchmark by 622,000 jobs.
By the end of Reagan’s second term, Local Government Employment was below the benchmark by 118,000 jobs.
By the end of George H.W. Bush’s only term, Local Government Employment exceeded the benchmark by 416,000 jobs.
By the end of Bill Clinton’s first term, Local Government Employment exceeded the benchmark by 334,000 jobs
By the end of Clinton’s second term, Local Government Employment was above the benchmark by 943,000 jobs.
By the end of George W. Bush’s first term, Local Government Employment exceeded the benchmark by 151,000 jobs.
By the end of W’s second term, Local Government Employment was above the benchmark by 207,000 jobs.
After three years and five month’s of Barack Obama, Local Government Employment has fallen behind the benchmark by 1,018,000 jobs. This is certainly not due to any lack of Federal spending.

The bottom line:

If the creation of 55,000 net Private Sector jobs, over 40 months, for 23 million unemployed or underemployed Americans, is considered “doing fine”, then Mr. Obama’s prospects for a second term, one in which another 8.0 million plus will reach working-age, should be nipped in the bud right now. Mr. Obama had a fair shot and his policies failed. If he is so concerned about State and Local government employment now, then why didn’t he focus his stimulus plan on this sector back in 2009? Instead he placed the emphasis on extending unemployment benefits, which actually exacerbated the problem. And why did he focus so much of his time on passing Obamacare, instead of worrying about how 23 million unemployed and underemployed Americans would be able to afford it? This isn’t Little League. When you’re batting .00015 in the Major’s, the chances of keeping your job are pretty much nonexistent.

If Barack Obama wants to control State and Local government budgets, then perhaps he should be running for Governor, Mayor, State Senator, County Commissioner, or City Councilman. If he wants to take credit for improvements in the Private Sector, then perhaps he should take a shot at running a corporation, in his next career. But if he wanted to continue as President of the United States, he should have paid more attention to the Federal budget while he had the job. There’s an old saying, “If you want a different result, try something different.” So make up your mind today, do you want more insanity, or something different?

References:

Here’s What’s Really Happened To the Private Sector Under Obama

U.S. Government Spending

Data: Spreadsheets

Manipulation 401 : U-3 vs Real Unemployment

May 5, 2012August 18, 2017 / L. M. Walker / 3 Comments

Another 522,000 left the labor force in April 2012.

April’s Bogus Unemployment Rate

* By: Larry Walker, Jr. *

Now that economists, media pundits, and the Obama administration have weighed in with half-hearted and inaccurate theories respecting April’s decline in the U.S. unemployment rate, it’s time to set the record straight. We learned yesterday, that the official rate declined from 8.2% in March to 8.1% in April, but what’s really beneath the decline? To know, one must have an understanding of how the unemployment rate is calculated, and how to access the appropriate reports. From there it’s just a matter of simple mathematics. After poring through the numbers, I have concluded that the official unemployment rate actually rose to 8.3% in April, while the real unemployment rate ticked up to 11.1%.

According to the U.S. Bureau of Labor Statistics (BLS), as of May 4, 2012, “Nonfarm payroll employment rose by 115,000 in April, and the unemployment rate was little changed at 8.1 percent.” What’s wrong with this pronouncement? The quandary is that nonfarm payroll employment comes from Establishment Data, reported in Table B-1, and has nothing to do with the official unemployment rate. The official unemployment rate is completely derived from Household Data, which is found in Table A-1.

Nonfarm payroll employment and the official unemployment rate are inapposite (one has nothing to do with the other). In fact, if you take a gander at Table A-1, from which the unemployment rate is officially derived, you will notice that the number of employed persons actually declined by 169,000 from March to April of 2012. Does it make sense that establishments reported the creation of 115,000 jobs, while households reported losing 169,000 jobs? Which data set are we to trust? Well, since most of the hoopla surrounds the decline in the unemployment rate, we shall focus on Household Data.

As I outlined in Manipulation 101: The Real Unemployment Rate, the Labor Force is comprised of those who are either Employed or Unemployed, and the Unemployment Rate is calculated by dividing the number of unemployed persons by the size of the labor force, as follows:

[ (A) Total Unemployed / (B) Labor Force = (C) Unemployment Rate ]

Thus, the official unemployment rate of 8.2% in March, as reported by the Bureau of Labor Statistics on April 6, 2012, was calculated as follows:

[ 12,673,000 / 154,707,000 = 8.2% ]

As shown in the table below, at the end of March 2012, 12,673,000 persons were officially unemployed, out of a labor force totaling 154,707,000, equaling an unemployment rate of 8.2%. Got it?

To take it a step further, if 12,673,000 persons were unemployed, out of a labor force of 154,707,000, then it should follow that the remaining 142,034,000 were employed. I found this to be consistent with BLS data and labeled the number of employed as item (D) in the table above. Next, in order to determine whether or not the decline in the unemployment rate is completely bogus, we must take into account some additional statistics from Table A-1, so I included the number of persons “Not in the Labor Force” (E), and the “Civilian Noninstitutional Population” (F). Now we will compare the March statistics to April’s calculation.

The April Employment Situation Summary concluded that a total of 12,500,000 persons were unemployed, out of a labor force totaling 154,365,000, equaling a decline in the official unemployment rate to 8.1%, from 8.2% in March. So what changed?

Comparing the monthly changes in the table below, you will note that from March to April, the number of unemployed persons (A) declined by 173,000. This would be a good thing, if they were all able to find jobs, right? So how many found jobs? Well, none. As you can see, according to Table A-1, the number of employed persons (D) also fell by 169,000. Since the number of employed and unemployed persons both declined, where did they go? As you can see the entire labor force declined by 342,000. Is it a coincidence that 173,000 plus 169,000 equals 342,000? No, it’s not.

The number of unemployed persons declined by 173,000, not because they were able to find work, the BLS merely removed them from the labor force. The BLS also removed an additional 169,000 persons from the labor force, who were considered employed just a month prior. Thus, 169,000 persons were ushered directly from a status of employed in March, to completely out of the labor force by the end of April. Does this raise any eyebrows? Also noteworthy are changes in the number of persons “Not in the Labor Force” which increased by 522,000, and the “Civilian Noninstitutional Population” which increased by 180,000. How de we reconcile this?

Reconciliation

The table below summarizes the truth behind the decline in the official unemployment rate.

Here’s what happened.

The number of unemployed persons declined by 173,000 in April.
The number of employed persons declined by 169,000 in April.
The labor force declined by 342,000 in April, which is the sum of #1 plus #2.
The 342,000 persons in #3, who officially dropped out of the labor force in April, were added to those considered “Not in the Labor Force”.
The Civilian Noninstitutional Population (working age population) increased by 180,000 in April, but none entered the labor force.
The number of persons counted as ”Not in Labor Force” increased by 522,000 in April, which is the sum of the 342,000 persons who were previously counted as unemployed (173,000) and employed (169,000), plus the 180,000 new working age persons who were swept under the rug.

Sequitur

To sum it up, in April, 342,000 persons dropped out of the labor force, while another 180,000 new entrants fell by the wayside. In effect, a total of 522,000 persons were removed from the labor force. So what would the official unemployment rate have been had the 342,000 April dropouts been instead left in the labor force and counted as unemployed? The answer is 8.3%, as shown below. Thus, the true unemployment rate ticked up by 1 basis point, from 8.2% in March to 8.3% in April, rather than down by 1 basis point as the BLS reported.

The labor force has historically grown at an annual rate of 1.0% (mirroring population growth), but looking back to December of 2008, it is safe to state that the labor force stopped growing altogether since Obama’s inauguration (see chart below). [Note: The labor force participation rate has likewise declined from 65.8% to 63.6% over the same period, or by 220 basis points.]

Final question: What would the unemployment rate be if the 1.0% per annum shortfall in the labor force, since January of 2009, was restored? Well, since 40 month’s have passed, the labor force should have grown by 3.33% ((1.0% / 12) * 40). And since the labor force stood at 154,626,000 in December of 2008, it should have grown to 159,775,000 by April of 2012, a difference of 5,149,000. Thus, the real unemployment rate is 11.1%, not 8.1%, as shown below.

Are we really moving the right direction? That depends on ones definition of the word “right”. Is manipulating the truth right?

“Anyone who doesn’t take truth seriously in small matters cannot be trusted in large ones either.” ~ Albert Einstein

Data:

Spreadsheets

Fair Shot, Fair Share and a Glass of Algae

April 12, 2012August 19, 2017 / L. M. Walker / Leave a comment

* By: Larry Walker, Jr. *

“Lake Erie is facing its worst toxic algae bloom since the 60’s and somehow it is going unnoticed…” ~ JoeOH111 *

According to Mr. Obama, you don’t have a fair shot right now, and it’s all because millionaires aren’t paying enough income tax. If millionaires would just give the federal government its fair share, then you, I, and everyone else would have a fair shot…, and a glass of algae.

What, pray tell, is a fair shot?

The best definition I can surmise is “a lawful chance at odds.” But don’t we all have this already? For example, the odds of winning the recent $640 million Mega Millions jackpot were 1 in 176 million. In order to guarantee a win, one would have had to spend $176 million buying up every combination. So if some nefarious millionaire had purchased all 176 million combinations, would he or she have had an unfair advantage?

Well, perhaps, but what millionaire would be dumb enough to blow $176 million on lottery tickets? What are the odds of that ever happening? The odds of one person buying all 176 million winning combinations, across multiple States, would probably be 1 in ∞ (infinity). In other words, a guaranteed win is impossible, at least when it comes to the Mega Millions lottery. But a fair shot is open to anyone who plays the game. “You gotta be in it to win it.”

According to CBS News, one person purchased $2,600 worth of lotto tickets, and another threw down $55, while the more frugal played their usual dollar or two. Did the one who blew $2,600 have an unfair advantage over $55 and $1 players? I will concede that the $2,600 player had an advantage, but I would hesitate to call it unfair. The poor sap simply had more to lose, yet not a dime more to gain. Not one dime. Now let’s flip over to the Mega Trillions Federal Debt Lotto.

Mega Trillions Federal Debt Lotto

If a taxpayer earns $176 million in taxable income and pays $29.9 million in federal taxes (a rate of 17%), while another earns $50,000 and pays $8,500 in taxes (also a rate of 17%), and yet another earns $25,000 and pays $0, does either have an unfair advantage? Since both the millionaire and the $50,000 wage earner pay the exact same tax rate (17%), the non-taxpayer has an advantage. But is it an unfair advantage? I would say so, especially since in the recent past we all pitched in at every level of income. Yet the one paying $29.9 million in taxes has a lot more to lose than both the $8,500 payer, and the non-taxpayer.

But who wins in this crapshoot? With the federal government borrowing and spending hundreds of billions of dollars, in advance, and squandering it to produce test-tube sewage-fed algae biomass for fuel, while Lake Erie and other U.S. lakes are full of “free” blue-green scum, the answer is no one. You’d have to be an idiot to waste hundreds of billions of dollars manufacturing something that’s sitting right in front of your face, wouldn’t you? Hindsight is 20/20, foresight is priceless.

When it comes to the national debt, those who don’t pay federal income taxes make out like bandits, they have nothing to lose. And those who already pay more than their “fair share” (i.e. taxed enough already) have nothing to gain. It’s not the 2% of top earners that worry me, they generally pay their bills on time, but rather the federal government which has already borrowed more than 100% of our entire economy, an amount estimated to reach $16.3 Trillion by September 30th of this year.

Only a depraved leader would have his nose in other peoples finances while ignoring his own debt laden, broken, overspent, and soon to be bankrupt enterprise. The federal government is not the solution to our problems; it’s the $16.3 Trillion in the hole, deadbeat, money squandering, largest debtor-nation in the Universe, leach, which is forever in the way and constantly on our collective back.

The moral of this story: Never confuse motion with action.

In other words, quit giving speeches and fix the problem. No one is going to vote for a tax increase in the middle of an election cycle, no matter how many speeches are enounced and dribbled. Especially not the one proffered, which in the end will barely cover one day’s worth of current deficit spending. No not a one! We don’t have a revenue problem; no, no, no, what we have is a deadbeat, money squandering, and largest debtor-nation in the Universe, ass-backwards, leach of a federal government problem. Get a clue!

Rather than paying more taxes, or spending multi-millions on lottery tickets to become multi-millionaires all over again, our well-to-do brethren would do better by investing in their own casinos, creating jobs and fair shot opportunities for others. And that leads us back to square one all over again: cut taxes, cut spending, and get out of our way and off our backs.

Photo Credit: Lake Erie, Stirred Up | Via: NASA Earth Observatory (March 21, 2012)

The Real Employment Situation – January 2009 through March 2012

April 8, 2012August 18, 2017 / L. M. Walker / 4 Comments

* By: Larry Walker, Jr. *

“Our economy’s now created more than 4 million private sector jobs over the past 2 years. And more than 600,000 in the past 3 months alone,” Mr. Obama boasted to a forum at the White House on women and the economy, on Friday (CBS News).

And in related news, on the previous evening, Egan-Jones Ratings Co. cut the U.S.A.’s credit rating one step to AA, the second downgrade in nine months and two levels below its highest grade, with a negative outlook citing the nation’s increasing debt burden (Bloomberg).

Most of us are well aware of the nation’s impending debt implosion, but the real employment situation has been distorted beyond reason. I understand how badly Mr. Obama is fighting against returning to the obscure existence he led prior to 2008, but if he was at all capable, he would at least tell us the truth about where we stand. I’m frankly weary from all the sugarcoating and distortion of facts. So what’s the real employment situation?

The Truth Shall Set You Free!

In order to know the truth, we must examine not so much monthly trends in employment, but rather changes which have occurred from the end of January 2009 through March 2012. When we examine the entire record, we find that our economy hasn’t created any jobs at all over the past 3 ¼ years, on a seasonally adjusted basis. Instead the unemployment rate has risen from 7.8% to 8.2%, the number of nonfarm jobs has declined by 740,000, the number of unemployed persons has increased by 624,000, and total employment has declined by 153,000. Meanwhile, the working age population has grown by 7,865,000, while the civilian labor force has only managed an increase of 471,000, causing the number of persons no longer counted in the labor force to balloon by 7,395,000.

The truth is that our economy hasn’t created any new jobs since Obama’s policies took effect. The total number of jobs peaked at an all time high of 146,595,000 in November of 2007, and through March of 2012 the number stands at 142,034,000, more than 4.5 million off the mark. If we had more jobs than existed in November of 2007, then Obama would have something to brag about, although not much. But since the truth is somewhat inconvenient, we are supposed to ignore the fact that we are more than 4 million jobs in the hole, and submit to repeated media brainwashing and succumb to the belief that we have somehow moved ahead by over 4 million. Phooey! Here are the facts.

Unemployment Rate

The unemployment rate rose from 7.8 percent in January of 2009 to 8.2 percent as of March 2012, according to the U.S. Bureau of Labor Statistics (Employment Situation 4/6/2012). (See table A-1 / Seasonally Adjusted)

Nonfarm Employment

Nonfarm payroll employment declined by 740,000 through March of 2012, from 133,561,000 in January of 2009 to 132,821,000. (See table B-1 / Seasonally Adjusted)

Unemployed Persons

The number of unemployed persons increased by 624,000 through March of 2012, from 12,049,000 in January of 2009 to 12,673,000. (See table A-1 / Seasonally Adjusted)

Total Employment

The number of persons employed declined by 153,000 through March of 2012, from 142,187,000 in January of 2009 to 142,034,000. (See table A-1 / Seasonally Adjusted)

Civilian Noninstitutional Population

The Civilian Noninstitutional Population (working age population) increased by 7,865,000 through March of 2012, from 234,739,000 in January of 2009 to 242,604,000. (See table A-1 / Seasonally Adjusted)

Civilian Labor Force

The labor force increased by 471,000 through March of 2012, from 154,236,000 in January of 2009 to 154,707,000. The labor force hasn’t grown at all since October of 2008. (See table A-1 / Seasonally Adjusted)

Not in Labor Force

The number of persons not in the labor force increased by 7,395,000 through March of 2012, from 80,502,000 in January of 2009 to 87,897,000. (See table A-1 / Seasonally Adjusted)

To make the claim of having created more jobs than Mr. Bush, which we all know was Mr. Obama’s insinuation; he must first match Mr. Bush’s all-time-high of 146,595,000. If the number of persons who involuntarily dropped out of the labor force (7.3 million), since Mr. Obama’s policies took effect, had instead been jobs created, Mr. Obama might go down in history as the all-time greatest. However, since we presently have 4.5 million fewer jobs than existed at Mr. Bush’s peak, and since, under the direction of Mr. Obama, 7.3 million new working age persons have been pushed straight into joblessness and generational dependency, Mr. Obama’s policies should perhaps be branded as the most ineffective in U.S. history.

Since employment is a lagging economic indicator, and because economists are calling for recession in 2012, and since the statistics above represent the sum total of Obama’s economic accomplishments, we’re in for serious troubles ahead. To reiterate, Mr. Obama’s policies of Inordinate Stimulus, Undue Debt and Global Warming Foolishness caused the Looming Recession.

Photo Credit: A swarm of Western Toad tadpoles eating algae. Photo: Kristiina Ovaska

Reference: Bureau of Labor Statistics, Employment Situation Summary

Data: Worksheets

The Malaise of 2012 | Part IV

March 23, 2012August 18, 2017 / L. M. Walker / 5 Comments

* Inordinate Stimulus, Undue Debt and Global Warming Foolishness Caused the Recession

* By: Larry Walker, Jr. *

“With few exceptions no educated person in the history of Western Civilization from the 3rd Century B.C. onward believed that the earth was flat… No one before the 1830’s believed that medieval people thought that the earth was flat.” ~ Jeffrey Burton Russell (The Myth of the Flat Earth)

Global Warming Foolishness

In an article entitled, “Algae for Waste Water Treatment and BioFuel Production: A Double Winner,” Dr. John Kyndt and Dr. Aecio D’Silva discuss the process known as phycoremediation, which is short for treating waste water with micro algae, for the purpose of producing low cost algae biofuels and other biomass products.

Biofuel is a type of fuel whose energy is derived from biological carbon fixation. The advantage of algae is that it will supposedly consume more CO2 than is released in the process. Unfortunately, and unbeknownst to many, this has not been the case with previous generations of biomass. So how did scientists arrive at the recent pronouncement that algae-biomass is the answer to our future fueling needs?

In 2008, two groups of US researchers independently concluded that most biofuels commonly thought of as solutions for reducing greenhouse gases, turned out instead to increase greenhouse gas emissions. Clearing grassland or forests to plant them released more carbon dioxide than could be saved in the process. The analyses proved that large amounts of trapped carbon are released into the atmosphere when vegetation burns or decays as land is cleared. This up-front ‘carbon debt’ could take centuries to break even with emissions gradually avoided by substituting biofuels in place of fossil fuels. Many studies subsequently arrived at the same conclusion.

For example, sugarcane ethanol grown on the converted Brazilian savannah would need to replace petrol emissions for 17 years just to repay the carbon released when the savannah was converted. Other examples, such as soybean biodiesel from cleared Amazonian rainforest, took centuries to break even. The studies concluded that, only biofuels made from waste products, or grown on abandoned lands would do less harm than good. Thus the algae boom was born. The same line of reasoning eventually lead to the latest craze: treating waste water with algae for biofuel production. A double ~~winner~~ loser!

Ironically, fossil fuels have their origin in ancient carbon fixation, a similar process to that realized through detoxifying sewer water with algae. However, green scientists don’t recognize fossil fuel as a biofuel because it contains carbon that has been out of the carbon cycle for a very long time (which might actually be a good thing). Thus, we have green fuel, manufactured through synthetic carbon fixation, versus black gold, created through naturally aged carbon fixation.

Here’s how the algae fad works. Instead of waiting on Mother Nature to naturally form fossil fuels, mankind is now capable of producing the same effect in a fraction of the time. We have arrived. The idea is that as you flush your toilet, instead of the waste flowing to costly, energy consuming, waste water treatment facilities; it will instead be treated with algae before returning to your tap. In turn, the algae will be converted into biodiesel, green diesel, bio-jet and chemicals. The residual biomass, which is high in proteins and carbohydrates, will be used in aquaculture, animal feed, and food ingredients. Did I say food ingredients? Yes. And that makes algae a triple loser!

In fact, one particular algae biofuel manufacturer, Solazyme, boasts of its ability to create renewable oil – for fuel, and for food. Among its primary inputs are waste streams. When I recently learned that one of my favorite frozen food companies, which I won’t name here, was using the residual biomass from Solazyme in its food-line, I immediately discontinued its use. The thought of diesel fuel, and food coming from the same sewage fed algae-brew was more than I could take, as I alluded to in, Ends of the Green Agenda – Costs of Algae Biofuel.

The U.S. Navy has announced the objective of operating at least 50% of its fleet on clean, renewable fuel by 2020. According to Marine Corps Times, in 2009 the Navy paid $424.00 per gallon for 20,055 gallons of biodiesel made from algae, which set a world record at the time for the cost of fuel. Solazyme was the recipient of this lucrative contract. In the midst of the worst recession since the Great Depression, the U.S. Navy presumed that paying $424.00 per gallon for algae biodiesel (while petroleum based diesel was selling for an average of $2.50 per gallon) was somehow not a foolish waste of taxpayer’s money.

How has the company fared since the stimulus well ran dry? Solazyme (symbol: SZYM) opened on the NASDAQ Exchange at $20.71 in May of 2011, peaked at $27.03 in July of 2011, then tanked to $8.29 by October of 2011. Although it recently closed at $15.05 on March 21, 2012, and its total revenue for the fiscal year ended December 31, 2011 was $39.0 million compared with $38.0 million in the prior year, its fiscal year 2011 GAAP net loss attributable to its common stockholders was $(54.0) million, compared with $(16.4) million in the prior year.

So since Solazyme had $39 million in revenue but wound up losing $54 million in 2011, it appears to be a huge boondoggle. It’s quite a feat for a company to lose more than 100% of its total revenues. Were it not for the government’s inordinate stimulus coupled with undue debt, this foolish endeavor, along with a myriad of others, wouldn’t exist.

Yes, it’s true, global warming foolishness is a major cause of the looming recession. Instead of focusing on root causes of the previous recession, the Obama Administration has gone awhoring after science fiction myths and bowed itself to strange gods. And because of this we must all pay a price.

Economist Raymond Richman of Ideal Taxes sums it up:

The growth of state-subsidized bio-fuels, windmills and solar panels, hybrid vehicles, electric cars, and lithium battery manufacturers has highly negative effects on employment and regressive effects on the distribution of income.

We estimate that about $100 billion in grants and tax credits have been extended by the federal and state governments to the proprietors of those establishments, making many of them rich and eager to take advantage of the free capital and guaranteed loans.

Tax rebates and tax credits do not appear in our federal budget.

American economists are at a loss to explain the continuing high level of unemployment in the face of the $800 billion Recovery Act expenditures, the $1.5 and $1.8 trillion budget deficits in 2010 and 2011, and “green” energy subsidies, federal and state.

Moreover, none of the “global warming” could compete with fossil fuels without huge government subsidies. The states and federal government provided about 60 percent of the capital of the green enterprises and got nothing in return. The government made sure that wind and solar plants got a high enough price for the electricity they produced by requiring electric utilities to buy their electricity output regardless of price. The subsidies are so costly that Spain had to end the wind and solar subsidies to avoid bankruptcy and we shall have to as well.

Recently, while attempting to defend his global warming panic policies, Barack Obama made the following humorous remark, “If some of these folks were around when Columbus set sail, they probably must have been founding members of the flat earth society. They would not believe that the world was round.” Apparently everyone but Obama knows that, with few exceptions, no educated person in the history of Western Civilization from the 3rd Century B.C. onward believed that the earth was flat.

Am I supposed to trust a man who is roaming around the countryside proclaiming that the world will turn into a giant incinerator within a couple of years, unless we start making our food and fuel out of our own feces?

I simply refuse to believe that the World will turn into a ball of fire through our continued, prudent use of natural, God-given, carbon based fossil fuels. However, I do believe that the U.S.A. is headed for a cliff. If this nation keeps on borrowing and spending like it is today, we might be forced into bankruptcy within a couple of years, a concept which is apparently beyond Mr. Obama’s grasp.

The U.S. is sitting on a 200-year supply of oil. If the idea is to break free from our dependence on foreign oil, I’m game, and we can start doing that right now, with our God-given natural resources. But if the idea is some foolish Doomsday notion, based on panic and fear, then Obama should be removed from the White House, and returned to the nearest urban street corner, cardboard sign and all. Global warming foolishness is the third and final element contributing to the Malaise of 2012.

Continued from: The Malaise of 2012 | Part I | Part II | Part III

——————————————————————————————————

Other references:

http://en.wikipedia.org/wiki/Biofuel#cite_note-Science2-51

Unilever’s new Durban plant a model of sustainable savoury dry food production – Well alrighty then!

11 Great Things to Do With Sewage

Algae Meal Performs as Dairy Cattle Feed

The Malaise of 2012 | Part III

March 18, 2012August 18, 2017 / L. M. Walker / 5 Comments

* Inordinate Stimulus, Undue Debt and Global Warming Foolishness Caused the Recession

* By: Larry Walker, Jr. *

It is impossible to calculate the effect of deficit-financed government spending on demand without specifying how people expect the deficit to be paid off in the future. ~ The Theory of Rational Expectations

Undue Debt

Obama’s three-point plan for deficit reduction can be summed up in three words, “Spend Baby Spend.” In fact, Obama will have borrowed more than $6.3 trillion during his four-year term, which is more than the first 42 and 1/4 presidents combined. And what do we have to show for it? Nothing! The only thing that his profligate spending has accomplished is to effectively stifle any chance of recovery from the December 2007 recession.

The total debt outstanding, from the inception of the United States through George W. Bush’s second year in office was $6.2 trillion. Since Obama has borrowed $6.3 trillion in four years, that’s more than the total debt incurred in the first 226 years of American history. Now that this is clear, there is really only one question:

Have we recovered yet?

To answer this, all one has to do is look at employment. The number of jobs reached an all-time high of 138,023,000 in January of 2008, but today, we are still 5.3 million jobs short of this mark.

As of the February 2012 Employment Situation Report, employers logged in a total of 132,697,000 jobs. Well great, but that’s only 170,000 more jobs than there were in February of 2001. In fact over the same 11-year period, the civilian non-institutional population grew by 29,692,000 persons. So since the working age population has grown by over 29 million, while the number of jobs has grown by a mere 170,000, the answer to that question is negative. The handwriting is on the wall.

So what was Obama’s three-point deficit plan, again? Step one was to borrow, step two to spend, and step three to repeat step one. As you may recall, “We have to spend more to keep from going broke.” It’s Endless Stimulus! Spend baby spend! As far as when principal repayments will begin, well, even with a second term, that would be never, since Obama failed to produce a budget during his first term.

As we discussed in War on Wealth III | National Debt Review, since the gross public debt as a percentage of GDP has skyrocketed from 69.9% in 2008, to 104.8% in 2012, and is projected to reach 107.8% by 2014, our ability to repeat the mistakes of the Obama administration is over. This means there won’t be a second term. The Era of Obamanomics is over.

Obama prematurely increased spending to DEFCON 1 levels, yet World War III isn’t here yet. And in spite of this undue debt, we are now heading directly into another recession, this year, in 2012. The Economic Cycle Research Institute (ECRI) reiterated its recession call on March 15, 2012, in a detailed report entitled, Why Our Recession Call Stands.

Honey baby, when the federal government borrows and spends $6.3 trillion dollars, as it has done between fiscal years 2009 and 2012, that’s 6.3 trillion fewer dollars the private sector has had access to. Having trouble qualifying for a loan? Did your local bank go belly up while you waited for approval? Small wonder; for even lenders are rational beings.

Shall we lend more money to homeowner’s who are already upside down on their mortgages, to small businesses owners who lack guarantees, or shall we instead lend to the federal government which has a guaranteed ability to repay? A printing press, that is. Undue Debt is the biggest factor contributing to the Malaise of 2012.

“When people do not accept divine guidance, they run wild. But whoever obeys the law is joyful.” ~ Proverbs 29:18

To be continued …

Continued from: The Malaise of 2012 | Part I and Part II

The Malaise of 2012 | Part II

March 17, 2012August 18, 2017 / L. M. Walker / 3 Comments

* Inordinate Stimulus, Undue Debt and Global Warming Foolishness Caused the Recession

* By: Larry Walker, Jr. *

“… an unprecedented degree of federal government spending and intervention vis-à-vis the $787 billion dollar economic stimulus package, the $81 billion dollar bailouts of GM and Chrysler, and the enactment of health care and financial regulatory and reform bills have done nothing to stimulate our anemic recovery and have fundamentally failed at creating private sector jobs, or generating economic growth necessary for a sustainable, healthy recovery.” ~ Douglas Schoen via: The Daily Beast

Inordinate Stimulus

According to Economist Raymond Richman of Ideal Taxes Association, “The recession of 1937-38 indicated that there was no Keynesian multiplier.” That is to say, as soon as the stimulus of the preceding four years was reduced, the economy tanked. Nevertheless, Keynesians believe that the Roosevelt administration reduced stimulus spending too soon. The same argument has been made by Nobel Prize winner Prof. Paul Krugman and former Chairman of the Council of Economic Advisers, Prof. Christina Romer, and many others, after the failure of the $787 billion Recovery Act of 2009.

If four years of government stimulus isn’t enough, how long should it take, until the nation declares bankruptcy? The truth is it really doesn’t matter how long a stimulus program lasts, whether it endures for a day, a week, a month or a century; as soon as the program ends, so does all of the propped up economic growth. Is there any proof to the contrary? No, not unless hot air can be likened to proof. Let’s us ponder the stimulus theory.

For example, if the government were to give each citizen a $40 per month advance out of their future Social Security retirement entitlement, such stimulus may provide a small boost to personal consumption, or private savings. Why a family of four might even be able to purchase an extra half-tank of gasoline, at today’s prices. But will the ability to buy an extra half-tank of gas lead to a permanent $40 per month pay raise?

Not unless the extra mileage is used to obtain either a second, or higher paying job. Short of that, once the stimulus ends, so will the temporary boost to disposable monthly income. The point is that unless a stimulus program results in a permanent increase to future income, when the program ends, the recipient is demoted back to square one, or in the current economy, square zero.

With inflation soaring as it is today, an extra $40 per month will, if one is lucky, afford the same amount of gasoline that could have been purchased three years ago, at half the cost. And what’s the trade off? Well, one can either look forward to a smaller retirement annuity in the future or a tax hike in the near-term in order to make up the difference.

Green wasn’t as green as we thought!

To further drive home the point, if the government were to identify certain promising green energy companies, and to grant them billions of dollars in loan guarantees; would this represent the kind of stimulus capable of permanent growth? Well, that would depend on whether such companies produced marketable products. We know the U.S. Department of Energy has already engaged in precisely such activity. And what were the results?

As soon as the funds were disbursed, the companies purchased buildings, equipment, hired workers, and began to manufacture. But in most cases, the products in question have turned out to be overpriced and unmarketable. Since there was no unsubsidized present day demand for imaginary 22nd Century products, once the stimulus well ran dry, most of these grand endeavors collapsed. The remainder will soon follow suit.

Dr. Valerie Ramey, Professor of Economics at the University of California, San Diego recently published a Working Paper Series in the National Bureau of Economic Research (NBER) entitled, “Government Spending and Private Activity,” in which she drew the following conclusions:

Private spending falls significantly in response to an increase in government spending.
Increases in government spending lower unemployment, but in most cases virtually all of the effect is through an increase in government employment, not private employment.
And that on balance, government spending does not appear to stimulate private activity.

Although in early 2010 the economy received a jolt, the bump in the road we all felt was nothing but a speed bump on the way to another recession. The sheer size of the injection propelled us upward for a fleeting moment, but in the aftermath, GDP declined from a year-over-year growth rate of 3.0% in 2010, to a year-over-year growth rate of just 1.7% in 2011. Alas, once the stimulus subsided, economic growth was cut nearly in half. Inordinate stimulus is a major contributor to the Malaise of 2012.

No matter how you slice it, deficit-financed government stimulus doesn’t provide the requisite spark essential to permanent economic growth, it never has, and it never will. There is no Keynesian multiplier. So what else is new?

To be continued …

Continued from Part I

Why Our Recession Call Stands – Economic Cycle Research Institute (3/15/12)

Black Employment | Back to the 1970s

August 14, 2011September 23, 2024 / L. M. Walker / 1 Comment

– Halfway to Nowhere

– Larry Walker, Jr. –

One of the figures that stood out in the July 2011 Employment Situation Report was that Black labor force participation had declined to 60.4%, or to the same level attained in March of 1973, from a rate of 63.2% in January of 2009. The rate has fluctuated between a record low of 58.5% during 1975, to a record high of 66.4% in 1999. It stood at 63.4% in December of 2007, the first month of the Great Recession, and clocked in at 62.6% when the recession ended in June of 2009. In fact, the rate hasn’t dropped below 62.0% since May of 1984. But since February of 2009, the Black labor force participation rate has declined by 2.8 percentage points, and most of that decline, 1.7 points to be precise, has occurred since the beginning of 2011. So why did Black labor force participation suddenly plummet during Obama’s 3rd year in office, over two years after the recession ended?

Black labor force participation rate – The labor force participation rate measures the labor force as a percent of the civilian non-institutional population.

From Black Employment – July 2011

Why hasn’t a Black White House resident correlated with improvement in the lives of Black and African American people, or anyone else for that matter? It’s one thing to be giddy that a Black man made it into the White House, but entirely another when you take a look around the community. The fact that the Black labor force participation rate has fallen back to 1970s levels, and exclusively on Obama’s watch, either means that his policies aren’t working; or that they are, but just in reverse.

For example, does the act of extending unemployment benefits to an historic 99-weeks mesh with increasing labor force participation? Is the act of handing out record amounts in government food stamps somehow in lock-step with prosperity? Does legislation providing a $50,000, per unemployed household, government subsidy to cover mortgage payments for up to two years help get folks back to work? Will Obama’s policies of doling out record amounts of unemployment, food stamps, and $50,000 per household mortgage subsidies, concurrently, lead us out of the ditch, or over a cliff? When ‘shovel ready’ turned out not be so shovel ready, it appears that this was Obama’s Plan B.

The Black employment-population ratio is also at 1970s levels; while the Black unemployment rate, although not the worst ever recorded, has averaged 15.6% since February of 2009.

Black employment-population ratio (Current Population Survey) – The proportion of the civilian non-institutional population aged 16 years and over that is employed.

The Black employment-population ratio has fluctuated between a record low of 48.8% from December of 1982 through January of 1983, to a record high of 61.4% in April of 2000. It stood at 57.7% in December of 2007, the first month of the Great Recession, was 55.2% in January of 2009, and clocked in at 53.3% when the recession ended in June of 2009. It has since declined to 50.8% as of July of 2011, a decline of 4.4 percentage points since Obama’s inauguration.

From Black Employment – July 2011

Black unemployment rate – The unemployment rate represents the number unemployed as a percent of the labor force.

The Black unemployment rate has fluctuated between a record low of 7.0% in April of 2000, to a record high of 21.1% in January of 1983. It stood at 9.0% in December of 2007, the first month of the Great Recession, was 12.7% in January of 2009, and clocked in at 14.9% when the recession ended in June of 2009. It has risen to 15.9% as of July of 2011, an increase of 3.2 percentage points since Obama’s inauguration.

From Black Employment – July 2011

At a fundraiser in Chicago on August 3, 2010, Barack Obama remarked, “…But the thing that we all ought to remember is that as much as good as we have done, precisely because the challenges were so daunting, precisely because we were inheriting so many challenges, that we’re not even halfway there yet. When I said ‘change we can believe in’ I didn‘t say ’change we can believe in tomorrow.’ Not change we can believe in next week.”

Well, it’s been about two and a half years already, so if they’re not even halfway “there” yet, does that mean it will take another 3, 4, 5, or 40 years? And exactly what does Obama mean by, “we’re” and “there”? Who is we, and where is there? It looks to me like our nation is around three-fourths of the way to declaring bankruptcy; the economy is maybe four-fifths of the way towards a depression, and the labor force statistics for Black and African Americans have receded to levels not seen since the 1970s and early 1980s.

So if I’m reading this correctly, as long as Obama has the bully pulpit, change will kick-in after my girls graduate from college, but not right now when it’s needed? Just wait a few more years, after my twin granddaughter’s start pre-school, but not now, two month’s before their birth, when my son needs it, eh? Heck, it may take another 40 years just to fill in the trench Obama has dug. I guess since ‘shovel ready’ wasn’t as shovel ready as he thought, and since “we’re not even halfway there”, unemployment benefits will have to be extended for another 99 weeks, while those who are able to endure carry the water. Heck, we might as well extend unemployment benefits for the rest of Obama’s term, since according to most of today’s Democrat Party, unemployment compensation and food stamps add more to the economy than the private sector anyway?

Obama has turned this economy around alright — back to the 1970s. Now he wants another four years, after he campaigns his way through the remainder of this term? Thanks, but no thanks. Every policy he’s put on the table has failed. The fact that he lost the USA’s triple-A credit rating, through devil-may-care spending, ought to say it all. What would the USA’s credit rate be after another term, since he’s only halfway there, BBB? Four more years to bobble his head from one teleprompter to the other, lecturing us on bugged out Socialist ideals from decades past, yeah right! If his plans don’t work in the real world, it may be that they are simply outdated. I say it’s time for Conservatives to take the horns of this democracy, and make a quick U-turn.

Halfway to nowhere – Heck, Obama’s policies might be succeeding beyond our wildest dreams, but we just can’t see it. Maybe where we get confused is when we open our eyes and look around. After all, he never said it was change we would be able to see, or change that would actually occur. He merely said it would be something intangible, an idea that we could believe in. In other words, a fairy tale, a chimera of the way we wish things were, but know they could never be. A world where electricity is generated without power plants, where heating oil rains down like manna from heaven, and where a big government hands us everything we need. But when we keep it in the day, and open our eyes, what do we see? – An incompetent, partisan, rascal, spouting half-truths, and railing away at his enemy, which turns out to be at least half of America.

“The best social program is a good job.” ~Bill Clinton

“I do not believe we can repair the basic fabric of society until people who are willing to work have work. Work organizes life. It gives structure and discipline to life.” ~Bill Clinton

“Nothing in this world can take the place of persistence. Talent will not; nothing is more common than unsuccessful people with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent. The slogan ‘press on’ has solved and always will solve the problems of the human race.” ~Calvin Coolidge

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Definitions:

Labor force (Current Population Survey) – The labor force includes all persons classified as employed or unemployed in accordance with the definitions contained in this glossary.
Civilian non-institutional population (Current Population Survey) – Included are persons 16 years of age and older residing in the 50 States and the District of Columbia who are not inmates of institutions (for example, penal and mental facilities, homes for the aged), and who are not on active duty in the Armed Forces.
Employed persons (Current Population Survey) – Persons 16 years and over in the civilian non-institutional population who, during the reference week, (a) did any work at all (at least 1 hour) as paid employees; worked in their own business, profession, or on their own farm, or worked 15 hours or more as unpaid workers in an enterprise operated by a member of the family; and (b) all those who were not working but who had jobs or businesses from which they were temporarily absent because of vacation, illness, bad weather, childcare problems, maternity or paternity leave, labor-management dispute, job training, or other family or personal reasons, whether or not they were paid for the time off or were seeking other jobs. Each employed person is counted only once, even if he or she holds more than one job. Excluded are persons whose only activity consisted of work around their own house (painting, repairing, or own home housework) or volunteer work for religious, charitable, and other organizations.
Unemployed persons (Current Population Survey) – Persons aged 16 years and older who had no employment during the reference week, were available for work, except for temporary illness, and had made specific efforts to find employment sometime during the 4-week period ending with the reference week. Persons who were waiting to be recalled to a job from which they had been laid off need not have been looking for work to be classified as unemployed.
Not in the labor force (Current Population Survey) – Includes persons aged 16 years and older in the civilian non-institutional population who are neither employed nor unemployed in accordance with the definitions contained in this glossary. Information is collected on their desire for and availability for work, job search activity in the prior year, and reasons for not currently searching. (See Marginally Attached Workers.)
Marginally Attached Workers (Current Population Survey) – Persons not in the labor force who want and are available for work, and who have looked for a job sometime in the prior 12 months (or since the end of their last job if they held one within the past 12 months), but were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. Discouraged workers are a subset of the marginally attached. (See Discouraged Workers.)
Discouraged Workers (Current Population Survey) – Persons not in the labor force who want and are available for a job and who have looked for work sometime in the past 12 months (or since the end of their last job if they held one within the past 12 months), but who are not currently looking because they believe there are no jobs available or there are none for which they would qualify.