Business & Economics: January 2010 Archives
I just want to go on the record and say that I expect more job losses. When the media reports yet more "unexpected" job losses, the question to ask is: unexpected by whom?
SHOCKER: JOBLESS CLAIMS RISE “UNEXPECTEDLY” — AGAIN! And yet, every time it happens, it’s “unexpected.” Maybe it’s time to adjust the expectations. . . ?But how can it be “unexpected” if it’s just due to an administrative backlog?
The jump was due to an “administrative” accumulation from late December and early January holidays, and did not reflect “economic” reasons, a Labor Department spokesman said.Wouldn’t you know about these things piling up? I mean, the holidays come around every year, and you ought to know that if you’re doing your job and tracking data and stuff. . . .
I guess that if the Obama Administration said "yeah, we expect to lose bazillions of jobs every month for a while" there would be even more backlash against their nonsensical socialist agenda.
This piece about Obama's "Colossal Miscalculation On Health Care" by Charlie Cook contains two insightful factoids that I was not previously aware of. First, with regards to unemployment, most people know that the official unemployment numbers do not count people who have given up looking for work. One of the effects of this omission is that the unemployment rate can actually improve without the creation of new jobs if people get so discouraged that they begin giving up in droves. However, I hadn't fully grasped the counterpoint: just because new jobs are created doesn't mean the unemployment rate will go down!
A number of economists expect that unemployment will get worse before it gets better. Even if that prediction is wrong, some analysts estimate that Labor's household employment survey would have to show a net increase of 150,000 jobs a month for 48 straight months for the unemployment rate to drop to just 9 percent. ...Even before December's negative jobs report, economist Robert Reich, who was Labor secretary in the Clinton administration, wrote on talkingpointsmemo.com that "the chances of unemployment being 10 percent next November are overwhelmingly high." The number of newly created jobs will be offset by discouraged workers beginning to once again seek employment, Reich predicted, resulting in little change in the overall unemployment rate.
No wonder the unemployment rate is a trailing indicator of the economy!
Second, presidents never get more popular during their second year in office.
As political analyst and data-cruncher extraordinaire Rhodes Cook noted in the December issue of The Rhodes Cook Letter, no other president in the past half-century has seen his Gallup job-approval rating drop as far as Obama's has in his first year (down 21 points), and no president in that same half-century has seen his approval rating go up, even as much as 1 point, between the end of his first year and the eve of his first midterm election.
I think Obama and the Democrats are in trouble.
Startling (to me) new evidence demonstrates that the government and the financial industry colluded together against American taxpayers.
The Federal Reserve Bank of New York, then led by Timothy Geithner, told American International Group Inc. to withhold details from the public about the bailed-out insurer’s payments to banks during the depths of the financial crisis, e-mails between the company and its regulator show.AIG said in a draft of a regulatory filing that the insurer paid banks, which included Goldman Sachs Group Inc. and Societe Generale SA, 100 cents on the dollar for credit-default swaps they bought from the firm. The New York Fed crossed out the reference, according to the e-mails, and AIG excluded the language when the filing was made public on Dec. 24, 2008. The e-mails were obtained by Representative Darrell Issa, ranking member of the House Oversight and Government Reform Committee.
The New York Fed took over negotiations between AIG and the banks in November 2008 as losses on the swaps, which were contracts tied to subprime home loans, threatened to swamp the insurer weeks after its taxpayer-funded rescue. The regulator decided that Goldman Sachs and more than a dozen banks would be fully repaid for $62.1 billion of the swaps, prompting lawmakers to call the AIG rescue a “backdoor bailout” of financial firms.
I'm a die-hard capitalist, but this sort of collusion is not capitalistic and completely undermines the ideals of the a free market economy -- both in perception and in reality. In order for a free market to function successfully, every participant must have access to accurate information and no one can be allowed to secretly benefit from government intervention on their behalf. Everyone involved in this atrocity should be tarred, feathered, and exiled to North Korea, where the economic society may be more to their liking.
(HT: MM.)
