American Elephants

The Mysteries of Who Is Really Getting the New Jobs. Hint: Not Who You Think. by The Elephant's Child
June 10, 2015, 9:16 pm
Filed under: Economy, Unemployment | Tags: , ,

We are in the seventh year of “recovery,” such as it is. The first quarter of the year, the economy, the economy not only didn’t improve, it declined by 0.7 percent. The administration blames it on the weather, which was indeed a harsh winter in the East.

So it is unsurprising that economists are looking closely at the new reports on last month’s results. Hiring was picking up, last month’s jobs numbers came in at 280,000, an improvement over the average of 207,000 for the past three months.  But if hiring is picking up why are wages and GDP stagnant or even shrinking?

The Bureau of Labor Statistics ( reports the Establishment survey (the source of the monthly nonfarm payrolls change) and the Household survey (the source of the monthly unemployment rate data). In this case the numbers were almost identical. an increase of 280K jobs and the Household survey reported 272K jobs added. Only 251,000 jobs were expected. Two thirds of all jobs were low-paying, low-quality, primarily teachers, retail, temporary help and waiters.  The vast majority were in the 20-24 age group, and the number of self-employed workers jumped by 350K to 10 million. At Zero Hedge, the pseudonymous Tyler Durden is more helpful

So the “recovery” has almost entirely benefitted foreign-born workers, or 3 to 1 times more than native born Americans.

Here’s how the BLS describes a foreign-born worker.

The foreign born are persons who reside in the United States but who were born outside the country or one of its outlying areas to parents who were not U.S. citizens. The foreign born include legally-admitted immigrants, refugees, temporary residents such as students and temporary workers, and undocumented immigrants. The survey data, however, do not separately identify the numbers of persons in these categories.
Seventy-five percent of all the jobs since December, 2007 have gone to foreign-born workers. We don’t know how many of those are here legally, but their bargaining power for wages is nil. They are happy to just have a job, which leads to depressed wages for native-born workers. That’s why there has been little  wage growth over the past 8 years. The Center for Immigration Studies has been telling us this for some time. The Census Bureau estimates that by 2013 immigrants will account for more than one in seven Americans — the largest number in history.

The Human Race is Not just Flawed, but Truly Funny. by The Elephant's Child
December 18, 2012, 7:47 pm
Filed under: Capitalism, Humor, Law, Politics, Taxes | Tags: , ,

—Some days one is struck by the absolute absurdity of the human race. John Hinderaker of Powerline keeps close track of the corrections published by The New York Times, The Times dutifully publishes a lot of corrections and their prim recitation of getting everything just about totally wrong gets me right in my weird sense of humor.

—Most people are aware that the much vaunted plug-in electric cars are not exactly selling like hotcakes. Their share of the total market is only a pathetic 0.65%. But that’s nothing to compare to the sales of the used EV market. All new cars lose about 20% of their value the minute they roll off the lot, but plug-ins have some specific problems. You don’t get President Obama’s $7,599 bribe on the used ones. The higher retail price is rarely made up in fuel savings over the life of the model.  The $40,000 Chevy Volt is basically a $17,000 Cruze with a 500 lb., 25 mi. range, eight-hour-to-charge battery. The big question is how much does a new battery cost? GM claims $8,000-$9,500. Ford say between $12,000 to $15,000.  The humor comes in the fact that we’ve wasted more than $6.5 billion in subsidies just since 2008. We are indeed absurd.

—A Muslim country with a 25% slave  population is elected Vice President of the United Nations Human Rights Council. The UN human Rights Council met in Geneva on Dec. 12, and elected Mauritania as its Vice-President and Rapporteur for the next year, the second highest position at the world’s top human rights body. According to a recent report by the Guardian, “up to 800,000 people in a nation of 3.5 million remain chattels,” with power and wealth overwhelmingly concentrated among lighter-skinned Moors,”leaving slave-descended darker skinned  Moors and black Africans  on the edges of society.” Must not criticize a cultural tradition.

—A new report just out from the Internal Revenue Service reveals that  thirty-six members of President Obama’s executive office staff owe the country $833,970 in back taxes. A reminder that the best taxers aren’t always the best at being taxed. Federal employees as a group owe a whopping $3.4 billion in unpaid taxes. This includes 1.181 employees of the Treasury Department who are delinquent on a total of $9.3 million in taxes. Bad example from the boss. Tim Geithner had to pay $42,000 in back taxes before his confirmation as Treasury Secretary. Some of the worst offenders are: the Government Printing Office, The Court Services and Offender Supervision Agency, and also —the Federal Reserve Board of Governors. Among the worst of the small department offenders, with only 77 employees, is the U.S. Office of Government Ethics.

If at first you don’t succeed, keep doing the same damn thing over and over again. by The Elephant's Child

Barack Obama gave a speech today, to insist that we must make “a clean break from a troubled past and set a new course for our nation.”  Instead of the speech he might have given, offering citizens some certitude for the future; he remained in campaign mode, trying to scare the public into instant acceptance of his “American Recovery and Reinvestment Plan”.   He could have guaranteed that he wouldn’t raise taxes during a recession by asking that the Bush tax cuts be made permanent.  He could have offered some growth-oriented proposals like cutting corporate taxes to at least the level that other countries pay.  Until businesses and people have some confidence in the future, they are not going to shop and spend, and banks are not going to lend.

Confidence is not engendered by “acting boldly” and spending a larger percentage of our national GDP than has ever been spent since World War II.  Mr. Obama is unclear about what is happening in the economy and what can effectively be done by government, which in general, is not much.

“We start 2009 in the midst of a crisis unlike any we have seen in our lifetime, a crisis that has only deepened over the last few weeks.”  Well, no.  “Manufacturing has hit a 28-year low.  Many businesses cannot borrow or make payroll.  Many families cannot pay their bills or their mortgage.  Many workers are watching their lif savings disappear.  And many, many Americans are both anxious and uncertain of what the future will hold. ” This is simply scare talk, and he offers only nebulous miracles.

“Now I don’t believe it’s too late to change course, but it will be if we don’t take dramatic action as soon as possible.  If nothing is done, this recession could linger for years.”

This is not creating confidence in the future.  It is trying to make you go for a plan that your common sense tells you is nonsense.  The idea that there is nothing wrong with the economy that printing up and dispensing several trillion more dollars won’t fix, is denied by past experience, by common sense, and by economic history.

We have a long history of recessions and depressions.  So do other countries.  We have a long history of stimulus payments — sending people a check.  It never works.  You might, at best, get an upward blip for a week or so, but it doesn’t cure anything.  FDR believed that a big infrastructure program and a lot of government jobs would cure the Depression.  He was wrong.  Pumping government money into the economy simply prolonged the Depression, and for many parts of the country the Depression lasted well into the fifties and sixties.  The Japanese believed that they could fix their economy with government jobs and a vast program of improving infrastructure. They did it over and over for ten years under several prime ministers.  It didn’t work, and their national debt soared.

Economist Arnold Kling mentioned listening to  [economists] Joseph Stiglitz and Martin Feldstein being interviewed by Charlie Rose.  “Both of them” he says, “are keen on trying a big stimulus.  Stiglitz says that everything done so far has been a failure, but again he doesn’t draw the obvious conclusion.  Instead, he says we have to try something bigger and different.”

I was reminded of the Battle of the Somme, one of the worst policy blunders of all time.  Having experienced nothing but failure using offensive tactics up to that point, the Allies decided that what they needed to try was…a really big offensive.  Just as Feldstein and Stiglitz pay no attention to on-the-ground housing market, the British generals ignored the impact of machine guns on men advancing over open fields.

My guess is that in 1916, anyone who doubted his own ability to direct an enormous offensive involving hundreds of thousands of soldiers would never have made it to general.  Similarly, today any who doubts the ability of a handful of technocrats to sensibly allocate $800 billion would never make it into government or the mainstream media. …

The arithmetic is mind-boggling.  If 500 people have meaningful input, and the stimulus is almost $800 billion, then on average each person is responsible for taking more than $1.5 billion of our money and trying to spend it more wisely than we would spend it ourselves.  I can imagine a wise technocrat taking $100,000 or perhaps even $1 million from American households and spending it more wisely than they would.  But $1.5 billion?  I do not believe that any human being knows so much that he or she can quickly and wisely allocate $1.5 billion.

Do read the whole thing. If you think the money they want to take from you now is a lot, just wait.  The government has no money of its own; it all comes from your pocket.  Government jobs do not improve the economy.  The salaries that pay for government jobs come from your pocket.  Studies show that infrastructure projects are completed more quickly and more inexpensively by private industry.  This is true in every country.

Ronald Reagan said that ” Government is like a baby; An alimentary canal with a big appetite at one end and no sense of responsibility at the other.”  He got it right.


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