Saturday, August 4, 2012

Quick Hits - August 3, 2012

July's jobs numbers were released this morning.  On the surface, the numbers appear to be good news for the President as, according to the Bureau of Labor Statistics, seasonally adjusted 163,000 jobs were created in July - above expectations and the most created since February 2012.

However, while supporters of the President, and the President himself, promoted these numbers as another sign of an economic recovery, below the surface the news is not quite that promising.  The number is barely above what is needed to keep pace with population growth - and the 'official' unemployment rate ticked up to 8.3% - marking the 41st consecutive month the official unemployment rate has been above 8%.  Even worse, the U-6 rate, which represents the 'total' unemployment rate moves back above 15% to a 15.2% rate.

Looking a little more closely, the report from the BLS offers little 'good' news for the economy - 12.8 million Americans remain out of work, 5.2 million have been out of work more than 6 months, and despite the fact that 163,000 jobs were 'created' in July - there are 195,000 more people out of work today than were working one month ago.

ZeroHedge drills even deeper in the data that came from the Administration's Bureau of Labor Statistics and sees that in July, the number of full time jobs actually decreased by 197,000 while gains were made (31,000) in part-time jobs - which generally pay little or no benefits to the employee.
We got the pre-spun job quantity data already, where we learned that nearly 3 times the headline print was due to seasonal and B/D adjustments and is thus nothing but noise. Now we get the quality. As can be seen below, courtesy of Table A9 from the Household Survey, in July the number of part-time jobs added was 31K, bringing the total to 27,925, just shy of the all time record of 28,038. Full time jobs? Down 228,000 to 114,345, lower than the February full-time jobs print of 114,408. Once again, more and more Americans are relinquishing any and all benefits associated with Full Time Jobs benefits, and instead are agreeing on a job. Any job. Even if it means working just 1 hour a week. For the BLS it doesn't matter - 1 hour of work a week still qualifies you as a Part-Time worker.

This is hardly a good trend.

You may be asking yourself, why does this jobs report, which appears to be good, actually be bad?  Simply it's because not only is the Administration 'cooking the books' on these numbers, but once one starts down that path, pace of 'cooking the books' tends to increase rather than decrease since our economy remains trapped in a dismal recovery fueled by bad economic policy.  ZeroHedge highlights how the books were cooked this month in this post....
Seasonal and Birth Death Adjustments add 429,000 statistical jobs - Consider this: the number was based on a non seasonally adjusted July number of 132,868. This was a 1.248 million drop from the June print. So how did the smoothing work out to make a real plunge into an "adjusted" rise? Simple: the BLS "added" 377K jobs for seasonal purposes. This was the largest seasonal addition in the past decade for a July NFP print in the past decade, possibly ever, as the first chart below shows. But wait, there's more: the Birth Death adjustment, which adds to the NSA Print to get to the final number, was +52k. How does this compare to July 2011? It is about 1000% higher: the last B/D adjustment was a tiny +5K! In other words, of the 163,000 jobs "added", 429,000 was based on purely statistical fudging. Doesn't matter - the flashing red headline is good enough for the algos.
[Chart at the link]

Wait, the jobs report indicated the economy had a net growth of jobs in July of 163,000 - but the Bureau of Labor Statistics added 429,000 jobs to the calculations in the name of 'seasonal adjustment'?  One thing can be certain - we didn't add 163,000 jobs or likely created any new jobs in July.

Ace of Spades highlights something that is very interesting....  Here is Barack Obama responding to a 2004 monthly jobs report that reflected 310,000 jobs being added and a 5.6% unemployment rate...

How things have changed.

American Enterprise Institute's James Pethokoukis revisits the graph that was produced by the Obama economic team in 2009 demonstrating what would happen if Congress approved the $800 billion stimulus plan - and what would happen if Congress would not.
“Not only is the 8.3% unemployment rate way above the 5.6% unemployment rate that Team Obama predicted for July 2012 if Congress passed the $800 billion stimulus plan. It’s way above the 6.0% unemployment rate they predicted if no stimulus was passed.”

According to Obama's 'crack' economic team, if we didn't spend $800 billion in a stimulus effort, we'd have a 6% unemployment rate today.  But instead we spent it - and that combined with the anti-business, anti-private sector policies of the Obama Administration, we're at an 'official' [cooked book] unemployment level of 8.3%.

Wait - Stop the presses!!!

The Obama White House would like us all to clarify that the 'official' unemployment rate is NOT 8.3% - but that it is really 8.254%.

Hot Air highlights former Obama economic adviser, Austan Goolsbee, undertaking some post jobs report spin...
How goes the post-jobs report spin for Barack Obama, his administration, and Democrats in general? After all, the number of jobs added (163,000) wasn’t bad, especially considering that the previous three months averaged only half of that number. One might expect apologists for the Obama White House to hail that number as “a step in the right direction,” the facepalm claim from Obama himself after a lousy jobs report for June. One might expect that even from someone who used to work for President Obama on the very economic policies that puts us in position to think of a treading-water job-creation level as relatively good news. However, Austan Goolsbee dispensed with the spin on CNBC earlier today, arguing that this was as good as we could expect from our “measly” growth rate:

So what do we need in growth?  Well, we need 11 million new jobs to be created just to get back to the level of employment we were at prior to the 2008 recession.  Can Obama's policies create 11 million new jobs?

How does President Obama's 'job creation' record look compared to other President's?  This is an interesting graph...


Barack Obama's regulatory czar, Cass Sunstein, has announced that he will leave the Administration and return to his position at the Harvard Law School.  Sunstein, a hard left progressive, pushed through an onslaught of regulations against American businesses that contributed in no small manner to the stagnant economic recovery that we remain trapped in.

According to pollster Scott Rasmussen's Rasmussen Reports, Barack Obama's job approval rating has slipped to 44% - matching his 2012 low water mark.  He is also -23 in the Approval / Disapproval index - one of his lowest numbers...

This does not bode well for the President, although I suspect he will get a small boost early next week as the disengaged accept the July jobs numbers at face value...

Mitt Romney has finally replied to the demands of the loony Senate Majority Leader's demands that he prove his innocence regarding the accusation of not paying any federal income taxes - telling Harry Reid to either "put up [his proof] or shut up on my taxes".

Vile uber-partisan blowhard, NY's Chuckie Schumer, rushed to defend Reid's 'presumed guilty, not presumed innocent' approach to the issue over the unsubstantiated allegations made by the Senate Majority Leader.  As if there was any doubt as to where the partisan divide comes from...  Of course, neither is exactly the sharpest tool in the tool cabinet...

Our government at work....
The Government Accountability Office has identified $460 million dollars in Supplemental Nutrition Assistance Program, or food stamp, benefits that went to households with incomes over the federal SNAP eligibility limits.

The recently released report explains that for fiscal year 2010, states which have expanded eligibility for SNAP through broad-based categorical eligibility (BBCE) made 473,000 additional households eligible SNAP benefits, resulting in an estimated $38 million a month in extra costs, or $460 million in total.
Nearly half a billion to those who didn't technically qualify.

But this pales to the mismanagement, incompetence, and waste of taxpayer funds that takes place in Amtrak.
Amtrak has lost $833 million over the last 10 year serving food and beverages?! “It costs passengers $9.50 to buy a cheeseburger on Amtrak, but the cost to taxpayers is $16.15," said [Rep. John Mica (R-FL)]. "Riders pay $2.00 for a Pepsi, but each of these sodas costs the U.S. Treasury $3.40."

To some on the panel like Rep. Lou Barletta (R-PA), whose family is in the restaurant business, the figures were hard to swallow.

"Obviously the business model here is not working," said Barletta, who joined the grumbling over why Amtrak can't just recover their costs on food and beverage service aboard trains.

Barletta made clear that technically, Amtrak is breaking the law, because Congress approved a plan many years ago that said the railroad must at least break even on food and beverage service.
However, we can't place all the blame on the incompetent numbskulls running Amtrak.  Operation of the food and beverages at Amtrak are controlled by unions - and here's what a union representative has to say about the alternative approach of Amtrak contracting out food and beverage services to a private company to run at a profit...
"Why are some members of Congress promoting the elimination of good middle class jobs with decent pay and benefits?" asked Dwayne Bateman, who has been working for Amtrak since 1977 and is Vice General Chairman of a union that represents train service workers.
Actually, people do need to lose their jobs over this.  $9.50 for an 'effin Amtrak cheeseburger and they can't make a bleeding profit?  This isn't a full employment opportunity for the damn union - it's about making money and perhaps weaning the rail company off the taxpayer's teat.  It's about time that the Unions learn about competition and how to be competitive.

Today is another activist day at Chick-fil-A restaurants across the country - with gay rights activists calling for a 'kiss-in' to take place to protest the company's owner's values and the Christian values of the company which stand in opposition to same-sex marriage.

On Wednesday, the company's restaurants were inundated with supporters visiting locations in support of those values and to oppose the actions of progressive politicians to punish and demonize the company over their values.

Fox News Channel has a live broadcast at a Chick-fil-A location that had hundreds, if not over a thousand, appear on Wednesday.  They are showing barely 30 people attending today's 'Kiss-in' - a huge contrast to the turnout on Wednesday and apparently far less than the 500 or so organizers were expecting at that location today.

A corporate executive who posted a You Tube video of him berating a Chick-fil-A drive through window worker over the company's policies was terminated by his employer for his actions on Wednesday.  Said Vante, a medical device manufacturer, in a press release announcing the dismissal of their CFO...
We respect the right of our employees and all Americans to hold and express their personal opinions, however, we also expect our company officers to behave in a manner commensurate with their position and in a respectful fashion that conveys these values of civility with others.
Bravo - and exactly right.

The Investor's Business Daily's editorial page sets its sights today on a recent President Obama campaign advertisement...

...saying that the President is very busy revising economic history in this advertisement.
For starters, Republican deregulation could not have caused the recession because there was nothing of the sort in the run-up to the crisis. In fact, it was Bush who publicly called for financial regulation — namely, reforming Fannie Mae and Freddie Mac, the central culprits in the crisis — no fewer than 17 times before 2008.

What brought down the economy was overregulation of the mortgage industry through the Community Reinvestment Act, which controlled bank underwriting, and HUD, which controlled the underwriting of Fannie and Freddie and primary lenders. Now what's retarding the recovery is Obama's re-regulation of that sector.

And far from triggering the recession, the Bush tax rate cuts of 2003 sparked a 46-consecutive-month boom in small-business job gains.

"In January 2003, I called on Congress to accelerate the tax cuts from 2001, which had not fully taken effect, and to pass further tax cuts that would encourage business investment and job creation," Bush said.

He was right. The final round of tax cuts took effect in May 2003, when the economy was still soft from the Clinton recession and 9/11. By September, the economy started adding jobs again. After the tax cuts, unemployment averaged 5.3%, compared with Obama's 9%.
This advertisement demonstrates the 'Big Lie' is in effect.

Then there is our daily look at the fecklessness, vapidity, and bias of the mainstream media.  Today's example highlights the WaPoo's fact checker, Glenn Kessler, who flushes what little credibility he had remaining right down the drain.  Kessler not only approves of one of the latest Obama campaign advertisements that attacks Mitt Romney over his tax returns, but also touts the 'independent' and 'non-partisan' Tax Policy Center analysis of the Romney tax plan - even though that review was developed by a former Obama WH staffer and an uber-progressive partisan Keynesian economist with a long track record of hard left economic activism and policy support.

Calling the Tax Policy Center 'independent' and 'non-partisan' is like calling the Democratic Underground 'independent' and 'non-partisan'.  To call Kessler a fool is an insult to fools.

Today in History

1492 - Christopher Columbus sets sail from Palos, Spain with three ships - he would 'discover' the New World in October when he reaches what are today, the Bahamas.

1914 - Germany declares war on France.  Hours later, France makes its own declaration of war against Germany and starts efforts to reenter the provinces of Alsace and Lorraine - which were forfeited to Germany after the Franco-Prussian War in 1871.

1936 - US Olympian Jesse Owens wins the first of his four Gold Medals at the Berlin Olympics.

1948 - In hearings before the House Un-American Activities Committee, Whittaker Chambers accuses former State Department official Alger Hiss of being a communist and a spy for the Soviet Union.  This started a major kerfuffle that ultimately resulted in the trial and conviction  of Hiss for perjury.  Hiss would serve 44 months in jail - but always assert his complete innocence of Chamber's charges.  However, based on information from the Venona Project - decryption of Soviet communications to agents in the West - Alger Hiss is confirmed to have been a Soviet agent, and one of Moscow's most important inside the State Department.

1958 - The nuclear submarine USS Nautilus accomplishes the first undersea voyage to the geographic North Pole, traveling nearly 1,000 miles under the polar ice cap to reach the top of the world.  From this point, she would sail to Iceland - transiting from the Pacific to the Atlantic via the North Pole.

1990 - Iraqi troops push to the Kuwaiti-Saudi Arabian border raising fears of an Iraqi invasion of Saudi Arabia.

2004 - The Statue of Liberty re-opens to the public.  The Statue had been closed to the public since the September 11, 2001 terror attack.

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