Friday, September 6, 2013
Random ruminations from your resident curmudgeon...
The non-farm payroll numbers were released this morning, and the initial reading was that the economy created 168,000 jobs in July and that the unemployment rate stayed steady at 7.3%. Don't get caught up in the first reading of these numbers. The Bureau of Labor Statistics (BLS) that compiles the data goes back and reviews and refines the numbers for accuracy. The July employment numbers were revised downward from 162,000 jobs created to 104,000 jobs. Keep in mind that to move the unemployment rate downward, our economy must be adding a minimum of 180,000 new jobs per month. As you can see by the numbers, job creation is falling woefully short of that number. Being the astute reader that you are, you just read that last sentence and said, "but wait, the unemployment numbers have fallen since the first of the year." And you are exactly right. How has that happened? Through the fact that the labor force participation rate (the number of working age individuals that are actually working or seeking work) has fallen to 63.2%. This number is the lowest participation rate in this country since 1978. In fact, in August, a whopping 516,000 people dropped out of the labor force. With a smaller base, it makes the unemployment numbers look better, but the reality is that there are a number of working age Americans that have exited the labor force. And the corollary is that there are fewer working Americans that are paying taxes to support the glut of government programs. This, my friends, is not a long term formula for economic growth and financial stability for our country.
I have finally found a diet plan that works. It's called "the cost of food."
Remember when socialized medicine, a.k.a. "Obamacare", was being rammed down our throats? Big labor was given unprecedented access into the crafting of this debacle, and many of the provisions were written with their best interest in mind. And we all recall when Nancy Pelosi told reporters that "we (Congress) have to pass this bill so we can find out what is in it." Well, now that big labor has found out what is actually in the bill, and they are wanting out from under this onerous piece of garbage. The AFL-CIO just lost 40,000 union members, those in the International Longshore and Warehouse Union. ILWU President Donald McEllrath, in a letter to AFL-CIO President Richard Trumka, said, "President Obama ran on a platform that he would not tax medical plans and at the 2009 AFL-CIO convention you (Trumka) would not stand for a tax on our benefits." Labor unions blindly supported Obamacare before they knew what was in it, and their very generous medical plans have been in the crosshairs of the program and will be subject to extensive taxes. Now the unions want out. Trumka has now gone on record as saying that "mistakes" were made in drafting the legislation and that Obamacare needs to be "tweaked". Mr Trumka, the mistake that was made was foisting socialized medicine on people that neither wanted or needed it. Now that the labor unions have seen how awful this program is, they either want out or they want special exemptions. I ask you, dear reader, if you are not a part of big labor, who is representing you views and interests when this program gets "tweaked"?
The rumors have finally stopped flying around my office. They cannot get through airport security.
We all hear about inflation as measured by the Consumer Price Index (CPI), but what does it really mean and what comprises that index? I'm glad you asked. You can go here to see the composition of the index. While the number for August was up.2% keep in mind that the BLS excludes food and energy from the calculation, because their price movements are considered to be too volatile. Yet, outside of housing, the three largest expenditures for most households are- you guessed it- food, energy, and medical. Those cost have been rising consistently and substantially. So the next time you hear from a talking head that inflation is "benign" take a look at your check book and see if you agree.
My wife asked me how I can make so many mistakes each day. I told her I get up early.
And that, my friends, is my view.