A potential "shot across the bow" in Syria cannot mask the
nation's on-going economic woes but it can distract a the nation's attention
from the vital subject.
The initial August jobs report was full of bad news for the
nation, once you got past the point where the hokey 'official unemployment rate'
dropped to 7.3%. The most depressing fact was the revised July report dropped
from 162,000 jobs added to just 104,000.
(Please, somebody explain why the government rushes to put out
phony numbers, always missing to the high side and then is able to bury the
correct number in the following month's report. Also, how can anybody with a
modicum of righteousness possibly be allowed to keep their taxpayer-funded
position when they miss the real count by 55.8%. That's like giving a schoolboy
a passing mark when he scores 44.2% on his math test!)
The revised July report was the worst in more than a year.
June's report, originally estimated at a gain of 204,000 in July had been
downgraded to 188,000 in August and was further eroded to 172,000. (Ok, that
time the miss was only 18%. Fair but barely passing.) But June, July and August
have seen the unemployment rate drop sharply, a drop that cannot be supported by
the ever-weakening jobs reports.
The number of people officially dropping out of the work force
count is where the unemployment reports continue to really show big numbers. In
addition to the 10,000 people per day reaching retirement age, the number of
younger, should-be workers, has eroded like a New Jersey beach under the
onslaught of Superstorm Sandy. The average number of "lost work force
participants" over the past three months is over 225,000.
Worse, for waning support for an economic recovery, the number
of part-time jobs continues to outpace full-time work openings and most of the
filled jobs are in the lower-paying service sector. Those in low-paying or temp
jobs accounted for 84,000 of the reported 169,000 August jobs gained. Schools,
no surprise with the start of the school year, were the biggest 'private'
employer. (Another sore point with the Rant, how can education be counted as
"private" industry when it is a mostly tax-supported institute. A better way to
report this sector would be to break down private institutes from public
supported institutes.) (1)
But there is another battle brewing among the economists on the
recovery. Paul Krugman led a charge berating the Obama Administration for not
"spending enough" to push the U.S. over the top in the economic recovery.(2) But there is another element that see the
constant deficit spending problem as the one factor that could positively derail
any recovery for the foreseeable future of our children and
grandchildren.
The National Association for Business Economics (NABE) completed
a survey in the last week of August in which 3 in 8 felt the No. 1 problem
facing the U.S. would come from Federal deficits in the next 10 years. Three in
7 respondents saw looming gaps in the 2020s through the 2030s as an economic
killer. What was really ominous for the economic future was there was no
consensus on how to deal with the on-going deficit problem.(3)
But what the polled NABE members agreed upon was the fact that
spending for the ill-named "Affordable Care Act" will increase Federal spending
on healthcare for America and "add significantly" to the annual deficit gap at
the Federal level.
On one point, Krugman was adamant that more federal spending
could have a significant impact--workforce participation. In 2008, during
Obama's first Presidential run, the participation rate was 63%. It is now down
to 59%. That 4% drop means, at current U.S. population levels, more than 13
million Americans have dropped out of the workforce than have joined it in five
years. If those people were still being counted in the work force, the reported
unemployment rate would be almost 12%.
At the same time, taking into account the dwindling number of
full-time jobs--now less than 99 million, Under-employed or Temporary Employment
ranks would push the unemployment rate over the 27% level without any juggling
of numbers.
The only thing Krugman does not explain, anywhere in
his rambling writings for the New York Times is where the extra tax
dollars for such a spending proposal would come from? When interest rates rise,
as they will have to; when true inflation is taken into account, as taxpayers
must cope with daily; then where is the government going to be able to extract
more from the taxpayer without having a populist revolt?
We've already witnessed the fact printing money is not the
answer, all it does it build debt without any foundation for support when the
fiat collapses, as it always has. No country in history has adopted a fiat,
removed the standard against which it was judged and then recovered economically
without outside debt forgiveness.
When practitioners of the 'dismal science' project ever-larger
storm clouds on the horizon through their often rose-colored glasses, you better
start building a storm shelter. The one that's coming promises to make Sandy
seem like a mere teapot tempest.
"I have sworn on the altar of God eternal hostility to every
form of tyranny over the mind of man."--Thomas Jefferson
(1)-BLS Unemployment Report,
9-5-13
(2)-Daily Ticker, Krugman Overboard!,
9-6-13
3-Associated Press, Future Deficits Seen As
Top US Fiscal Problem, 8-26-13
Rant Readers--Be advised the Rant will be
moving in the near future to a new format. Because of fiscal constraints I have
opened negotiations to supply the Rant for a nominal annual fee through a deal
with VMI. The fee will be $20 per year which works out to under 20 cents per
issue. This change will mean those individuals who are on a tertiary level
(non-direct) will also have to pay to continue access to the Rant on a website.
Many readers will be disappointed but this drastic change is necessary. I have
assurances from VMI there will be no editorial control on the content or tone of
the Rant. The change will probably become official within month of October. To
those who feel this cost is extravagant, you have my sincere apologies.
Unfortunately, economic reality is biting my ability to devote the time
necessary for thorough research for a quality product. I have appreciated your
support in the past. I hope to have your support in the future. Thank
you--Mike
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