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Friday, July 08, 2005

More indolent economic analysis... 

As a follow-on to the earlier blog today, this time from the self-proclaimed "Econoclast", James K. Galbraith:

http://www.motherjones.com/commentary/columns/2005/07/fair_not_balanced.html

This is a reasonable article, with some nice (though certainly not novel) points made--for example,

"Reagan’s deficits were a success, delivering a stable recovery and his landslide in 1984. This time it was the Republicans who learned nothing. In 1992, the clueless George H.W. Bush tightened budgets in a recession, breaking his own promise not to raise taxes. Bush’s virtue was greatly praised, but not by the voters."

Galbriath's thesis--that deficits, whether deployed by FDR, JFK, Reagan or Clinton, help pick up a down economy--is neither controversial (nor new). Galbraith, however, doesn't bother noting that these "great" presidents all made deficit spending work because they created new jobs. Lots of new jobs. This is a point that both Galbraith--and more to the point, Bush--seem to have missed.

-Vulf

Economic Numbers Need An Overhaul 

We've long presented evidence here on The Bite that the economic data being presented as "economic indicators" by the Regime in Washington is hogwash. Here's another example:

http://today.reuters.com/news/newsArticle.aspx?type=businessNews&storyID=2005-07-08T150255Z_01_N08374657_RTRIDST_0_BUSINESS-ECONOMY-DC.XML

U.S. employers added 146,000 jobs in June, below Wall Street forecasts, but the unemployment rate fell to its lowest point since September 2001 as few joined the labor force, a government report showed on Friday. June's tepid employment growth fell short of analyst expectations for 188,500 new jobs. But the decline in the unemployment rate to 5.0 percent was a nice surprise, since Wall Street had expected it to hold at 5.1 percent.

Let's see...only 146,000 jobs were created, but the unemployment rate went down?

The drop was mostly due to a paltry 1,000 increase in the work force, which includes those looking for work as well as those who have jobs.

OK, so the work force only increased by 1,000? Wow, that would mean that the US is only growing by 25,000 people/year. So, a century from now, there will only be an additional 2.5 million people in the United States?

Let's look elsewhere for some more information:

In this regard, it is useful to benchmark recent trends to those in the last recovery. The 1990s recovery was also initially "jobless" but by this point in the cycle was posting much better results. Over the past year, payrolls have expanded by an average of 165,000 per month, a growth rate of 1.4%. Over the same period in the last recovery, the average monthly gain was 316,000, and the growth rate was 3.2%, more than twice that of today.

OK, those are real numbers...growth rate of 1.4%. Let's compare that to the population growth rate in the United States, which is remarkably constant at 0.92% over the past 2 years:

http://www.indexmundi.com/g/g.aspx?c=us&v=24

This means the "real" job growth rate is 1.4%-0.92%, or 0.48%. Above zero, so no argument there are jobs being created. Right?

Not quite. Let's look at some statistics on American population growth:

1. The USA's population grows by 3.3 million annually, making it the fastest growing of all the industrialized nations in the world. - U.S. Census Bureau Data, May 2002

2. The U.S. population is now 294 million. If the present growth rate of 1.1% per year (about a 60 year doubling time) continues, the U.S. population will exceed 527 million by 2050 and one billion by 2100. - Population-Environment Balance, 2004 study

3. Of the total 527 million-person increase by 2050, 150 million will be immigrants or their children if current trends continue. - Population-Environment Balance, 2004 study


4. 86.7% of the United States population growth per year (and nearly 100% in California, Maryland, New Jersey, and Illinois) results from mass immigration and children born to immigrants. - Camarota, Steven A., Immigrants in the United States - 2002: A Snapshot of America's Foreign-Born Population, Center For Immigration Studies, Table 2, pg 3. November 2002


5. Well over one million legal immigrants a year (about 1.5 million in 2001) and over 500,000 illegal immigrants settle in the United States annually. - U.S. Census Bureau data. However, recent articles and estimates of the total illegal alien population in the United States indicate that the annual number arriving and intending to stay is much higher.

For the purposes of the economic numbers, (5) is the most salient point above. More than 500,000 illegal immigrants settling in the US annually--that's conservatively 0.2% of the population, of which a high percentage are working...this accounts for another 0.2-0.3% of the job "growth".

At this point, we're at, generously, a job growth rate of 0.25% during the Bush "recovery", the weakest "recovery" in history.

But we're not done yet. How about the median new job income?

Some interesting insights are provided by FactCheck:

http://www.factcheck.org/article249.html

Which shows how household income is down under Bush:

Readers may wonder how household incomes can be down 3.4% under Bush if wages are up 2.5%. That seems contradictory, but it isn't. The wage figures (hourly earnings) cover only about 80% of the private-sector workforce, excluding supervisors, managers and all government employees, self-employed persons and business owners. And even more importantly, the Census figures on household income include not only wages but income from many other sources, including interest and dividends, bonuses, and earnings from self-employment and owner-operated businesses.

Obviously, another cut on this data is that new jobs are paying much less than the median job income...there is some support for this:

Kerry gets some support from Stephen Roach, chief economist for Morgan Stanley. Roach calls the hiring of the past four months "decidedly subpar" and "a decidedly low-quality improvement in the US labor market." But Roach stops well short of proclaiming a $9,000 gap between new and old jobs.

Perhaps the most support for the argument that new jobs pay less than median comes from, of all place, the Cato Institute, in a rant about how other reporters are "incompetent" in their representation of economic data:

But nobody really knows if "new jobs" pay more or less than old jobs, because the data are not collected that way.

Agreed. Because if the data were collected that way, one could see through the obfuscation. Arguing my point, you Catomite, you...

To defend the claim that wages are "down," the AP story says "on a weekly basis, the average wage of $525.84 is at the lowest level since October 2001." Unfortunately, that figure (up from $491.64 in October 2001) is only for "production and nonsupervisory workers" and is diluted by including part-time jobs. Median weekly earnings of full-time wage and salary workers were $639 in the second quarter -- up 3.7 percent from a year earlier. When we include benefits, total compensation in private industry was up 4 percent between the second quarters of 2003 and 2004 -- a larger gain than in any year from 1994 to 1999.

This is the most insidious double standard of all...saying figures are "diluted by including part-time jobs". Hmmm, seems to me the employment figures (including the asinine "5.0%" unemployment rate reported) are "diluted" in exactly the same way:

http://www.bls.gov/news.release/empsit.nr0.htm

I propose that a more important number to provide is how the "Civilian Labor Force" estimates track against population:

See http://www.calmis.ca.gov/FILE/LFHIST/US_HLFAA.xls for more details (and note the nice bulges in unemployment rate under Reagan and the two Bushes, by the way!--see rightmost column). Note that the civilian labor force has increased an average of 0.84% in the past four years, including only 0.61% last year (well below the actual growth rate of the US which is somewhere between 0.92% officially or 1.1% more realistically when illegal immigration is counted).

You can really make employment data look nice when you rig the workforce numbers. A difference of 0.5% (between a true population growth rate of 1.1% and a reported civilian labor force increase of only 0.61%) can turn a 0.25% loss of jobs magically into a 0.25% growth.

There are lies, damned lies, and the Regime's statistics. Be wary.

-Vulf

Monday, July 04, 2005

Afghanistain... 

Hardly surprising this story is released on the 4th of July, hoping the wave of nationalism called patriotism will make people overlook the inescapable...

This was the deadliest year in the "War" in Afghanistan, too...

In the first half of this year, at least 54 Americans lost their lives, compared with 52 in all of last year, according to official statistics reviewed by the Globe.

The number of overall casualties, which saw an upsurge with the shootdown of a US military helicopter and the potential loss of a reconnaissance team in eastern Afghanistan last week, have edged up every year since Operation Enduring Freedom began after the Sept. 11, 2001, terrorist attacks, the figures show.

Many of the recent US deaths have been caused by more deadly improvised explosive devices, the roadside bombs that also have been the weapon of choice for insurgents targeting American troops in Iraq, according to US commanders. Six Americans were killed by such bombs last month alone. Officials and specialists said all indications point to substantial support for the Afghan and foreign fighters from sympathetic tribes and government officials next door in lawless western Pakistan.

Not looking good--on pace for more than 100 deaths in Afghanistan this year...and the improvised exploding devices sound ominously like the neighboring Iraq. Let's face it, beacuse of the lack of UN or other multi-national support, the US troops simply offer a target "too good to be true" to the terrorists/insurgents/freedom fighters.

It's getting a whole lot worse in both countries. Time is running out.

-Vulf

Sunday, July 03, 2005

Read closely... 

Buried in an article about the latest suicide bombings in Iraq is a more sinister (if possible) pair of items:

Also Saturday, the U.S. military promised a full investigation into a June 25 incident in which Iraq's U.N. ambassador, Samir Sumaidaie, said Marines killed his unarmed 21-year-old cousin in "cold blood" in Anbar province.

Sumaidaie said his cousin Mohammed Sumaidaie took Marines doing house-to-house searches to a bedroom to show them where a rifle that had no live ammunition was kept. When the Marines left, he was found in the bedroom with a bullet in his neck, Sumaidaie said.

He called the killing "a betrayal" of the values and aspirations of Iraqis and Americans to defeat the terrorists and build a country based on freedom, democracy, and respect for human rights and the rule of law.

"The events described in the allegations roughly correspond to an incident involving Coalition Forces on that day in that general location; therefore a military inquiry has been initiated," Maj. Gen. Stephen T. Johnson said in a statement.

"We take these allegations seriously and will thoroughly investigate this incident to determine what happened," Johnson said, adding that the investigation could take several weeks.

Swiss authorities, meanwhile, said a dual Swiss-Iraqi national was shot and killed in Iraq. Swiss media reports said the victim, identified only as S.J., was accidentally shot by a U.S. soldier but the Swiss Foreign Ministry would not confirm details of his death.

How many stories like these are out there? This should be the lead to the article.

Nevertheless, they're starting to surface...

http://news.yahoo.com/s/csm/20050630/wl_csm/omidwife

Assessing the damage done by this war is complicated, to say the least.

-Vulf

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