Category Archives: Labor

‘The Recovery That Isn’t’

Debt, Economy, Free Markets, Inflation, Labor

As you go over the alarming new unemployment numbers, remember what was said in this space with respect to that “unbeatable bit of political fraud; that fig leaf of a ‘jobless recovery’: “A jobless economic recovery is the equivalent of a housewarming for the homeless.”

It was revealed today that “employers shed 263,000 jobs in September. The losses propelled the headline unemployment rate to a 26-year high of 9.8%. U6, the Bureau of Labor Statistics’ most complete measure of unemployment, has risen to a dismal 17%. This figure includes those people who want to work full time, but have simply given up looking, or who have accepted part-time work in the interim. As it is similar to the methodology used during the Great Depression, U6 offers better historical perspective on the severity of our current crisis.”

More from Peter Schiff: “Those who do cling to the absurd belief that, absent exponential productivity gains, the economy can expand while workers are being laid off will undergo a massive test of their convictions now that it’s clear the employment picture is bleak. Today’s weaker-than-expected report on non-farm payrolls revealed that employers shed 263,000 jobs in September. The losses propelled the headline unemployment rate to a 26-year high of 9.8%. U6, the Bureau of Labor Statistics’ most complete measure of unemployment, has risen to a dismal 17%. This figure includes those people who want to work full time, but have simply given up looking, or who have accepted part-time work in the interim. As it is similar to the methodology used during the Great Depression, U6 offers better historical perspective on the severity of our current crisis.”

“Taken together with yesterday’s larger-than-expected pickup in unemployment claims (first time claims rose by 17,000 to 551,000), today’s report makes it certain that the job market is still contracting, even while some indicators like GDP and consumer confidence are moving in the opposite direction.”

“There is no question that the sense of panic has temporarily subsided. In recent interviews, Treasury Secretary Geithner has been almost giddy in his descriptions of the recovery – all the while crediting his own policies for averting disaster. Americans are once again taking the government’s bait by spending money they don’t have to buy things they can’t afford. Evidence of this trend was contained in data released earlier this week which showed that even while income growth was largely stagnant, U.S. consumers showed the biggest month-over-month increase in personal spending in ten years! With the same report showing a 25% drop in the savings rate, the source of the spending money is clear. But depleting savings and increasing borrowing does not a recovery make.”

“To really recuperate, the government must allow market forces to restructure our economy. The government and individuals must rein in their spending; we must replenish our stock of savings, allow interest rates to rise, asset prices to adjust to economic reality, insolvent businesses to fail, and wages to reflect productivity. To accomplish these goals, subsidies that distort market forces must be removed and regulations that undermine our competitiveness must be repealed.”

'The Recovery That Isn’t'

Debt, Free Markets, Inflation, Labor

As you go over the alarming new unemployment numbers, remember what was said in this space with respect to that “unbeatable bit of political fraud; that fig leaf of a ‘jobless recovery’: “A jobless economic recovery is the equivalent of a housewarming for the homeless.”

It was revealed today that “employers shed 263,000 jobs in September. The losses propelled the headline unemployment rate to a 26-year high of 9.8%. U6, the Bureau of Labor Statistics’ most complete measure of unemployment, has risen to a dismal 17%. This figure includes those people who want to work full time, but have simply given up looking, or who have accepted part-time work in the interim. As it is similar to the methodology used during the Great Depression, U6 offers better historical perspective on the severity of our current crisis.”

More from Peter Schiff: “Those who do cling to the absurd belief that, absent exponential productivity gains, the economy can expand while workers are being laid off will undergo a massive test of their convictions now that it’s clear the employment picture is bleak. Today’s weaker-than-expected report on non-farm payrolls revealed that employers shed 263,000 jobs in September. The losses propelled the headline unemployment rate to a 26-year high of 9.8%. U6, the Bureau of Labor Statistics’ most complete measure of unemployment, has risen to a dismal 17%. This figure includes those people who want to work full time, but have simply given up looking, or who have accepted part-time work in the interim. As it is similar to the methodology used during the Great Depression, U6 offers better historical perspective on the severity of our current crisis.”

“Taken together with yesterday’s larger-than-expected pickup in unemployment claims (first time claims rose by 17,000 to 551,000), today’s report makes it certain that the job market is still contracting, even while some indicators like GDP and consumer confidence are moving in the opposite direction.”

“There is no question that the sense of panic has temporarily subsided. In recent interviews, Treasury Secretary Geithner has been almost giddy in his descriptions of the recovery – all the while crediting his own policies for averting disaster. Americans are once again taking the government’s bait by spending money they don’t have to buy things they can’t afford. Evidence of this trend was contained in data released earlier this week which showed that even while income growth was largely stagnant, U.S. consumers showed the biggest month-over-month increase in personal spending in ten years! With the same report showing a 25% drop in the savings rate, the source of the spending money is clear. But depleting savings and increasing borrowing does not a recovery make.”

“To really recuperate, the government must allow market forces to restructure our economy. The government and individuals must rein in their spending; we must replenish our stock of savings, allow interest rates to rise, asset prices to adjust to economic reality, insolvent businesses to fail, and wages to reflect productivity. To accomplish these goals, subsidies that distort market forces must be removed and regulations that undermine our competitiveness must be repealed.”

The Price Of The Parasitical Class

Business, Debt, Government, Labor, Politics, Regulation, Socialism, Taxation, The State

Maybe the following sobering statistics will penetrate the thick skulls of those who crave the creation of new government departments filled with workers who are free to pay themselves very generous packages, out of tax dollars, while looking forward to retiring a decade sooner than the stiffs who support them; and providing, in return, that stellar service for which the US Postal Service has become famous. Ah, for a government job!

The obscene numbers come courtesy of the “The Free Enterprise Nation”:

• When wages and benefits are combined, federal civilian workers averaged $119,982 in 2008, twice the average compensation of $59,909 for private sector workers.
• A State of California retiree gets an annual pension of $500,000
• A driver’s education teacher in Illinois gets a $170,000 annual salary and $120,000 annual pension.
• In New York, some city workers amass more than $100,000 in overtime during their last year before retirement to create a monthly pension higher than their salary.
• 420 of Illinois’s physical education teachers, 332 English teachers and 94 driver’s education teachers make more than $100,000 a year, with salaries for each position topping out at more than $160,000 a year.
• A senior citizen in Houston, Texas would find their number of police officers has remained the same for six years running, despite a 40 percent budget increase to cover higher salaries, pension and healthcare benefits.
• A small business receiving an IOU in California might be surprised to learn that in 2008, 40 percent of Vallejo’s 613 employees had salaries greater than $100,000 a year, the same year the city filed for bankruptcy.
• In Fort Worth, Texas, one police chief recently retired at age 55 with a guaranteed annual pension of $188,692. His successor retired at age 52 with an annual pension of $113,614. In the Northeast, two University of Connecticut professors are currently collecting six-figure pensions while simultaneously collecting a six-figure salary.

There are 115 million workers in the private sector, a portion of whom carry 20 million of these pampered parasites on their backs. (Yes, Republicans: Your beloved police and military are numbered among them!)

ANY PUNDIT WHO preaches, as MSNBC’s Rachel Maddow does nightly, more bureaucracies, should have to hear from YOU. Flood their miserable cable station with indignant letters.

“The Free Enterprise Nation” “is beginning a national effort to unite more than 5 million businesses with 115 million employees and everyday citizens to fight excessive government spending on a bureaucracy too big to sustain.”

The Free Enterprise Nation represents the economic interests of the businesses and employees who are taxed to provide government and public education employees higher wages and pension benefits, 10 to 25 years sooner, than can be provided in the private sector. The effort launched today with a full-page ad in the Wall Street Journal to be followed by full-page ads in Inc., FORTUNE Small Business, Forbes, and Fast Co.

Update III: Who's Hiring? (Switzerland)

Affirmative Action, Canada, Debt, Federal Reserve Bank, Government, Healthcare, Inflation, Labor, Regulation

GOVERNMENT IS. “The government will have to hire some 600,000 people during the four years of President Obama’s term. That would bump up the current workforce by a third,” reports MSNBC.

The New York Times informs that, “While the private sector has shed 6.9 million jobs since the beginning of the recession, state and local governments have expanded their payrolls and added 110,000 jobs, according to a report issued Thursday by the Nelson A. Rockefeller Institute of Government.”

It then adds a stupendously silly afterthought:

“Government jobs are always more stable than private sector jobs during downturns, but their ability to weather the current deep recession startled Donald J. Boyd, the senior fellow at the institute who wrote the report.”

[SNIP]

Government jobs come into being by political fiat, not by market forces or necessity. Political will is what sustains them; it is state force that accounts for their stability and longevity. This is why these jobs, so to speak, “write” their own conditions of employment.

Government jobs have another signal characteristic:

“Government job creation schemes are predicated on government taxing, borrowing or inflating the money supply—activities that reduce capital available to the private sector. Such programs are politically popular because they are visible. However, for every job ‘created’ by government, an unidentifiable job will be destroyed in the private sector.”

It’s a zero-sum game: The parasite is sucking the lifeblood of the host. The larger he gets, the weaker the host grows.

The growth of government, of course, means that many more leaches will be implementing onerous rules and regulations that make it even harder for the struggling private economy to recover.

Still, the Times is perplexed at “the disparity between the public and private sector job market.”

Update I: “CANADA’S private sector added 49,200 workers in August, the first time they have hired more than fired since September,” reports the AP.

Of greater interest is the fact that, “while the U.S. has seen 81 banks fail in 2009 alone, Canada has not experienced the failure of any major financial institution. There has been no crippling mortgage meltdown or banking crisis north of the border, where the financial sector is dominated by five large banks.”

Update II (Sept. 5): MILTON FRIEDMAN (Via Roy B.) on the fallacy of government as an agent of wealth creation and on needing production—goods and services—not spending:

Update III (Sept. Eighth): SWITZERLAND HAS “knocked the United States off the position as the world’s most competitive economy” (via Reuters & Drudge).

The U.S. as the world’s largest economy lost last year’s strong lead, slipping to number two for the first time since the introduction of the index in its current form in 2004.

The study also factors in a survey among business leaders, assessing for example the government’s efficiency or the flexibility of the labor market. …

The WEF applauded Switzerland for its capacity to innovate, sophisticated business culture, effective public services, excellent infrastructure and well-functioning goods markets.

If to go by the report, the depression is some kind of swine flu, which randomly infects some, but not other, banks. However, American banks were leveraged like no other financial institutions in the world. (I’m not including Zimbabwe’s banks, although maybe I should, given how close the US is to Tanzania with respect to the soundness of its banks: “In the assessment of banks’ soundness, the Alpine country still ranked 44th. U.S. banks fell to 108 — right behind Tanzania — and British banks to 126 in the ranking, now topped by Canada’s banks.”)

US banks were also uniquely subject to state-mandated affirmative-action lending: a “State-mandated spoils system for minorities.”

Wait until the insurance industry collapses because of an Obama decree against “discrimination” based on health status. This is the very definition of insurance. Remove the costs of risk taking and you remove the incentives to avoid risks. Doesn’t Dipstick associate this incentive structure with his oft-repeated objective: inculcating healthy habits in the population? Moreover, unless the industry can charge premiums based on risk, it becomes a non-profit. Remove profit from the insurance equation, and the industry will be on its way to croaking.