Friday, July 12, 2013
Random ruminations from your resident curmudgeon...
Last Friday, the non-farm payroll report was released by the Labor Department, and there were hosannas from the talking heads and various government types when the report showed the economy created 195,000 new jobs in June. Recall that it takes 150,000 new jobs per month to keep the unemployment rate from going up. This is great news, right? Well, as you know, I am here to cut through the spin and present reality to you. While the initial number for new jobs created was good, a closer look reveals some disturbing trends. The UNDER-employment rate jumped 3.6% to 14.3% in June. This number tracks the people that have quit looking for jobs or are working part time jobs even though they want to work on a full time basis. The Gallup Organization now reports that 17.2% of the Americans that have jobs are underemployed. The jobs being produced by the economy now are jobs that are part-time or entry level, and those that have experience and skills that take those jobs join the ranks of the under-employed. The Labor Department also reported that the number of those working part time jobs for economic reasons grew to 29.3% of the work force and the number of discouraged workers that have stopped seeking employment grew by 25% on a year over year basis to 1.027 million people. While the headline numbers get a lot of attention, it is instructive to look into the numbers, and when one does, you see a labor market that is far from healthy and is producing lower wage jobs. The long term effect of this trend is a lower standard of living for those that are working and more people that rely on government assistance. Neither trend is good for our nation.
Cannibals like to meat people.
Digging into the employment numbers provides some even more troubling data. The unemployment rate for African Americans is 23.7%; for Hispanics, it is 13.2%; and 11.6% for women. These numbers point to a growing underclass of unemployed and to the societal divide that it creates. Those that are chronically unemployed have a dependence on the government for their survival. Those that are struggling to make ends meet and working several jobs feel a growing resentment toward the government and those that receive federal assistance. This fracture in our societal structure makes long term solutions more difficult to craft and walls off segments of our society from each other. It is time that we realize that if we as a nation cannot continue on this path. We have saddled future generations with unsustainable levels of debt and poor employment opportunities. Honest discussion about these problems must be conducted. Throwing more money at the problem will not solve it. Until we address the underlying structural issues that have made the job market so weak (and there are many) and our citizens unable to compete effectively in a global marketplace, we will continue to see horrific numbers like these.
I have a friend that is a dentist. He married a manicurist. It wasn't a happy marriage. They fought tooth and nail.
Taxes are skyrocketing and the government wants more. Our national deficits are getting bigger. We cannot control runaway entitlement spending. Underlying these problems is a mindset in government that the supply of money is unlimited and that the leaders in Washington know best how to spend our money. There is a disconnect to fiscal reality in Washington. Don't believe me? Here are some examples from the Federal Register, presented without comment:
U.S. Agency for International Development- $27 million for Moroccan pottery classes
NASA- $947,000 to study what food astronauts could eat on Mars
Department of Energy- $15 million to help the Russian Weapons Institute recruit new scientists
State Department- $402 million to train Iraqi policemen with no formal program/objectives in place
Department of Transportation- 35.6 million to build a street car line in St. Louis that duplicates existing light rail service
Internal Revenue Service- Medicaid providers have unpaid taxes totaling $330 million, yet are allowed to keep their full Medicaid reimbursement from Washington.
And the list goes on and on. And on. Spending other peoples money (read: OUR money) is fun. You can buy a lot of fun things and votes. Our fiscal situation in this country is bad and getting worse, and it is time that we at taxpayers and citizens demand accountability and fiscal restraint from our elected officials. The frivolous spending at the national level is symptomatic of the lack of restraint and appreciation of financial reality by our elected leaders.
I thought I wanted to be a computer salesman, but I lost my drive.
And that, my friends, is my view.