At 8:30 on the morning of the first Friday in December, the Bureau of Labor Statistics (BLS) reported that the unemployment rate had fallen to 10% in November from 10.2% the month before. Hooray! Headlines heralded the unexpected drop. Stock prices surged. Enthused White House press secretary Robert Gibbs: "We're moving in the right direction."
By late morning, though, stocks were slumping. Commentators began to focus on concerns with the numbers. By the following Monday, Federal Reserve Chairman Ben Bernanke was warning that "we still have some way to go before we can be assured that the recovery will be self-sustaining."
PREMATURE OPTIMISM
So much for that fall in unemployment, huh? It was a telling reaction, indicative of the still gloomy national mood, the perceived fickleness of monthly economic indicators — and the diminished status of the unemployment rate as a statistic. Once the indispensable, largely unquestioned measure of the state of the job market, it is now treated with suspicion and disdain. With good reason, because the unemployment rate fails to accurately reflect just how bad things are out there.
Each month, interviewers contact 60,000 households — most by phone, some in person — and ask about the employment status of household members age 16 and over. Those who don't have jobs but have looked in the past four weeks are classified as unemployed. After some statistical adjustments to extrapolate the data from those 60,000 households to the total U.S. population, the number of unemployed is divided by the size of the labor force (employed plus unemployed), and there's your rate. Measured that way, unemployment still isn't as bad as it was at the lowest point of the 1981-82 recession, when it hit 10.8%. And it's nowhere near what it was in 1933, when the rate peaked somewhere around 25%.
This method of calculating unemployment was pioneered by the head of the Massachusetts Bureau of Statistics of Labor in 1878, and it has its merits. It's simple. It's straightforward. And it provides a pretty accurate count of those who really, really want jobs. But it also misses millions of people who may not be actively looking for a job but would happily take one if offered. Those ranks surely swell in a deep recession or during a time of economic turmoil that destroys entire job categories (like autoworker). The government's statisticians are aware of this, and since the 1970s the BLS has published broader measures of unemployment that include at least some of these people. In 1994 the broadest measure — which counts as unemployed those who have looked for work in the past year but not the past four weeks, plus part-time workers who would rather be working full time — was dubbed U-6 unemployment. During this recession, it has gotten far more attention than ever before. U-6 unemployment was at 17.2% in November, down from 17.5% the month before and up from 8.4% two years ago. These figures aren't strictly comparable with those from before 1994, but the New York Times has taken a stab at recalculating the earlier numbers — with help from the BLS — and estimates that U-6 unemployment peaked in December 1982 at 17.1%. Meaning this recession is worse.
FIGURES STILL NOT COMPLETE
Even these figures leave out people who say they want a job but haven't looked in the past year. Economist and gadfly John Williams, whose online newsletter Shadow Government Statistics has gained a big following lately, adds them in, makes a few tweaks and gets to 21.8% unemployment in November, down from 22.1% in October.
Such measures still rely on people's own assessment of whether they want to work. A BLS study a decade ago found that these self-assessments aren't all that reliable. So how about the simplest possible job-market measure, the employment-to-population ratio? Among Americans ages 25 to 54, it was at 75.1% in November, down from 80.3% in early 2007 and — with the exception of October's 75% — the lowest it's been since 1984. Because of the entry of women into the workforce, the ratio trended upward from the 1960s through the 1990s. If you look just at men ages 25 to 54, the picture is much more dire. Their employment-to-population ratio of 80.6% in November is the lowest since the BLS began keeping track in 1948. It's 4 percentage points lower than it was in the depths of the early-1980s downturn.
There are certainly other factors at play here besides just a tough job market — more stay-at-home dads, more rich loafers, more prison inmates. But it also may be a sign that these are in fact the worst times for American workers since the 1930s. Which helps explain why there was so little excitement about that drop in the unemployment rate to 10%.
While Republicans should have more loudly sounded the alarm, clearly, it is Democrats who led the way for irresponsible loans and lack of regulation. As this clip clearly shows Democrats advocate, in their own words.
Liberals who bemoan discrimination, intolerance, restraint of Constitutional freedoms, and promotion of hatred toward various abberant minorities, have absolutely no problem with discriminating against, being intolerant of, restricting Constitutional freedoms of, and directing hate-filled scapegoat rhetoric against conservatives.
EXACTLY what they accuse Republicans/conservatives of doing, is EXACTLY what liberals/Democrats do themselves, to those who oppose their beliefs.
2004, Republicans pushing for regulation, Democrats calling them mean, racist, and unconcerned with the poor (the signature liberal slanders for their opposition) and advocating continued funding of Fannie Mae/Freddie Mac, without regulation or reforms:
AIG Bailout Secrecy Could Mean Geithner Testifies: Lawmakers are preparing to investigate revelations that the Federal Reserve Bank of New York, led at the time by Timothy Geithner, pushed for greater secrecy on controversial bailout decisions.
Ten months into President Barack Obama's first economic stimulus plan, a surge in spending on roads and bridges has had no effect on local unemployment and only barely helped the beleaguered construction industry, an Associated Press analysis has found.
Spend a lot or spend nothing at all, it didn't matter, the AP analysis showed: Local unemployment rates rose and fell regardless of how much stimulus money Washington poured out for transportation, raising questions about Obama's argument that more road money would address an "urgent need to accelerate job growth."
Obama wants a second stimulus bill from Congress that relies in part on more road and bridge spending, projects the president said are "at the heart of our effort to accelerate job growth."
Construction spending would be a key part of the Jobs for Main Street Act, a $75 billion second stimulus to revive the nation's lethargic unemployment rate and improve the dismal job market for construction workers. The House approved the bill 217-212 last month after House Speaker Nancy Pelosi, D-Calif., worked the floor for an hour; the Senate is expected to consider it later in January.
AP's analysis, which was reviewed by independent economists at five universities, showed that strategy hasn't affected unemployment rates so far. And there's concern it won't work the second time. For its analysis, the AP examined the effects of road and bridge spending in communities on local unemployment; it did not try to measure results of the broader aid that also was in the first stimulus like tax cuts, unemployment benefits or money for states.
"My bottom line is, I'd be skeptical about putting too much more money into a second stimulus until we've seen broader effects from the first stimulus," said Aaron Jackson, a Bentley University economist who reviewed AP's analysis.
Even within the construction industry, which stood to benefit most from transportation money, the AP's analysis found there was nearly no connection between stimulus money and the number of construction workers hired or fired since Congress passed the recovery program. The effect was so small, one economist compared it to trying to move the Empire State Building by pushing against it.
"As a policy tool for creating jobs, this doesn't seem to have much bite," said Emory University economist Thomas Smith, who supported the stimulus and reviewed AP's analysis. "In terms of creating jobs, it doesn't seem like it's created very many. It may well be employing lots of people but those two things are very different."
Transportation spending is too small of a pebble to quickly create waves in the nation's $14 trillion economy. And starting a road project, even one considered "shovel ready," can take many months, meaning any modest effects of a second burst of transportation spending are unlikely to be felt for some time.
"It would be unlikely that even $20 billion spent all at once would be enough to move the needle of the huge decline we've seen, even in construction, much less the economy. The job destruction is way too big," said Kenneth D. Simonson, chief economist for the Associated General Contractors of America.
Few counties, for example, received more road money per capita than Marshall County, Tenn., about 90 minutes south of Nashville.
Obama's stimulus is paying the salaries of dozens of workers, but local officials said the unemployment rate continues to rise and is expected to top 20 percent soon. The new money for road projects isn't enough to offset the thousands of local jobs lost from the closing of manufacturing plants and automotive parts suppliers.
"The stimulus has not benefited the working-class people of Marshall County at all," said Isaac Zimmerle, a local contractor who has seen his construction business slowly dry up since 2008. That year, he built 30 homes. But prospects this year look grim.
Construction contractors like Zimmerle would seem to be in line to benefit from the stimulus spending. But money for road construction offers little relief to most contractors who don't work on transportation projects, a niche that requires expensive, heavy equipment that most residential and commercial builders don't own. Residential and commercial building make up the bulk of the nation's construction industry.
"The problem we're seeing is, unfortunately, when they put those projects out to bid, there are only a handful of companies able to compete for it," Zimmerle said.
The Obama administration has argued that it's unfair to count construction jobs in any one county because workers travel between counties for jobs. So, the AP looked at a much larger universe: The more than 700 counties that got the most stimulus money per capita for road construction, and the more than 700 counties that received no money at all.
For its analysis, the AP reviewed Transportation Department data on more than $21 billion in stimulus projects in every state and Washington, D.C., and the Labor Department's monthly unemployment data. Working with economists and statisticians, the AP performed statistical tests to gauge the effect of transportation spending on employment activity.
There was no difference in unemployment trends between the group of counties that received the most stimulus money and the group that received none, the analysis found.
Despite the disconnect, Congress is moving quickly to give Obama the road money he requested. The Senate will soon consider a proposal that would direct nearly $28 billion more on roads and bridges, programs that are popular with politicians, lobbyists and voters. The overall price tag on the bill, which also would pay for water projects, school repairs and jobs for teachers, firefighters and police officers, would be $75 billion.
"We have a ton of need for repairing our national infrastructure and a ton of unemployed workers to do it. Marrying those two concepts strikes me as good stimulus and good policy," White House economic adviser Jared Bernstein said. "When you invest in this kind of infrastructure, you're creating good jobs for people who need them."
Highway projects have been the public face of the president's recovery efforts, providing the backdrop for news conferences with workers who owe their paychecks to the stimulus. But those anecdotes have not added up to a national trend and have not markedly improved the country's broad employment picture.
The stimulus has produced jobs. A growing body of economic evidence suggests that government programs, including a $700 billion bank bailout program and the $787 billion stimulus, have helped ease the recession. A Rutgers University study on Friday, for instance, found that all stimulus efforts have slowed the rise in unemployment in many states.
But the 400-page stimulus law contains so many provisions — tax cuts, unemployment benefits, food stamps, state aid, military spending — economists agree that it's nearly impossible to determine what worked best and replicate it. It's also impossible to quantify exactly what effect the stimulus has had on job creation, although Obama points to estimates that credit the recovery program for creating or saving 1.6 million jobs.
Politically, singling out transportation for another round of spending is an easier sell than many of the other programs in the stimulus. The money can be spent quickly and provides a tangible payoff. Even some Republicans who have criticized the stimulus have said they want more transportation spending.
Spending money on roads also ripples through the economy better than other spending because it improves the nation's infrastructure, said Bernstein, the White House economist.
But that's a policy argument, not a stimulus argument, said Daniel Seiver, an economist at San Diego State University who reviewed AP's analysis.
"Infrastructure spending does have a long-term payoff, but in terms of an immediate impact on construction jobs it doesn't seem to be showing up," Seiver said. "A program like this may be justified but it's not going to have an immediate effect of putting people back to work."
whomod said: I generally don't like it when people decide to play by the rules against people who don't play by the rules. It tends to put you immediately at a disadvantage and IMO is a sign of true weakness. This is true both in politics and on the internet."
1.) this administration is so utterly incompetent that one marvels at the level of media spin required to get it into office in the first place. everything it touches turns to shit and it cannot be trusted to get anything right.
2.) the ongoing economic collapse is being carefully choreographed by this administration as part of a chain of events that will bring about an atmosphere in which they can enact as many sweeping societal changes as they like relatively unopposed. depressions and recessions have historically been followed by sweeping changes many times in the past (e.g. 1930s germany) and this one is just what needs to happen to take this country down to its foundations and rebuild it in barry's image.
The White House has abandoned its controversial method of counting jobs under President Barack Obama's economic stimulus, making it impossible to track the number of jobs saved or created with the $787 billion in recovery money.
Despite mounting a vigorous defense of its earlier count of more than 640,000 jobs credited to the stimulus, even after numerous errors were identified, the Obama administration now is making it easier to give the stimulus credit for hiring. It's no longer about counting a job as saved or created; now it's a matter of counting jobs funded by the stimulus.
That means that any stimulus money used to cover payroll will be included in the jobs credited to the program, including pay raises for existing employees and pay for people who never were in jeopardy of losing their positions.
The new rules, quietly published last month in a memorandum to federal agencies, mark the White House's latest response to criticism about the way it counts jobs credited to the stimulus. When The Associated Press first reported flaws in the job counts in October, the White House said errors were being corrected and future counts would provide a full and correct accounting of just how many stimulus jobs were saved or created.
Numbers published last month identified more than 640,000 jobs linked to stimulus projects around the country. The White House said the public could have confidence in those new numbers, which officials argued proved the administration was on track to keep Obama's promise that the stimulus would save or create 3.5 million jobs by the end of this year.
But more errors were found, with tens of thousands of problems documented in corrected counts, from the substantive to the clerical. Republicans have used those flaws to attack what so far is the signature domestic policy approved during Obama's presidency.
The new rules are intended to streamline the process, said Tom Gavin, spokesman for the White House's Office of Management and Budget. They came in response to grant recipients who complained the reporting was too complicated, from lawmakers who complained the job counts were inconsistent and from watchdog groups who complained the information was unreliable, Gavin said.
"We're trying to make this as consistent and as uniform as we possibly can," he said.
The new stimulus job reports will continue to offer details about jobs and projects. But they were never expected to be the public accounting of Obama's goal to save or create 3.5 million jobs, Gavin said.
The quarterly job reports posted on the Web site for the Recovery Accountability and Transparency Board reflect only a fraction of the jobs created under the program and can't account for job creation stemming from other stimulus programs such as tax rebates and other federal aid, the spokesman said.
But the result of the new rules will be that future claims of job creation from the stimulus will be even more misleading, said Rep. Darrell Issa, the ranking Republican on the House Oversight and Government Reform Committee.
"It is troubling that the administration is changing the rules and further inflating the Recovery Act's impact and masking the failure of the stimulus to produce sustainable economic growth or real job creation," Issa said in a letter sent last week to the government board monitoring stimulus spending.
Recipients of recovery money no longer have to show that a job would have been lost without the stimulus help, and they no longer are required to keep an ongoing tally of jobs saved or created. The new rules allow stimulus recipients to limit the job tally to quarterly reports, making it impossible to avoid double-counting a job that was created in one quarter and continued into the next.
Issa wants the Recovery Board, the government's independent oversight panel, to change how it identifies the count of stimulus jobs and to add a note on its Recovery.gov Web site explaining that there is now a different definition for what constitutes a job under the stimulus.
whomod said: I generally don't like it when people decide to play by the rules against people who don't play by the rules. It tends to put you immediately at a disadvantage and IMO is a sign of true weakness. This is true both in politics and on the internet."
Unfortunately it seems like their "solution" is even more misleading than the original formula:
the new guidance counts every jobs that is funded using stimulus money - even if it existed before the Recovery Act, and was not in any danger of being eliminated - as ‘created or saved.' This definition ignores the plain meanings of the words ‘created' and ‘saved' and makes Recovery.gov's ‘ ‘JOBS CREATED/SAVED' label a falsehood...
ABC quotes an OMB spokesperson spinning the change in language as recommended by the Government Accountability Office, but it's hard not to notice that it will further inflate the already grossly exaggerated "created or saved" numbers.
You do realize that the article already posted pointed that fact out, don't you?
whomod said: I generally don't like it when people decide to play by the rules against people who don't play by the rules. It tends to put you immediately at a disadvantage and IMO is a sign of true weakness. This is true both in politics and on the internet."
If a business needs to be kicked in the nuts to get it on track, then I say let it be kicked in the nuts. I have no problem with our government coming over with an ice pack afterwards to help the business stop the swelling and pain. I don't think that the government should give the business a cup to prevent it from feeling the swift kick to begin with. The government gave the S&L's a cup in the late 80's and early 90's. That didn't stop the same thing that happened then from happening now. As a matter of fact, it let the problem become even worse.
The $700 billion taxpayer bailout will leave a legacy in financial markets, which may now be convinced the government will rescue financial institutions considered too big to fail, according to a new report by the Congressional Oversight Panel.
That expectation gives big banks and other institutions an advantage in raising capital that smaller ones don't enjoy and encourages a "moral hazard" for the big banks to take risks again, the report released Thursday said.
whomod said: I generally don't like it when people decide to play by the rules against people who don't play by the rules. It tends to put you immediately at a disadvantage and IMO is a sign of true weakness. This is true both in politics and on the internet."
AIG Bailout Secrecy Could Mean Geithner Testifies: Lawmakers are preparing to investigate revelations that the Federal Reserve Bank of New York, led at the time by Timothy Geithner, pushed for greater secrecy on controversial bailout decisions.
Treasury Secretary Timothy Geithner is set to testify before a House probe into his role in deals that sent billions of bailout dollars to Goldman Sachs Group Inc. and other big banks.
Staffers for the House Committee on Oversight and Government Reform say Geithner is confirmed to appear at a hearing Jan. 27 on the bailout of American International Group Inc.
The committee wants to know why the Federal Reserve Bank of New York paid banks to cancel their contracts with AIG and didn't demand concessions. The deals might have cost taxpayers billions more than necessary.
An earlier watchdog report said Geithner approved the decisions as president of the New York Fed.
The staffers spoke anonymously because they are not authorized to discuss Geithner's plans.
whomod said: I generally don't like it when people decide to play by the rules against people who don't play by the rules. It tends to put you immediately at a disadvantage and IMO is a sign of true weakness. This is true both in politics and on the internet."
American International Group Inc. is set to pay out about $100 million in a fresh round of bonuses to employees of its financial products division, the unit whose risky bets helped sink the company leading to a $180 billion government bailout, according to reports published Tuesday.
AIG agreed to cut the retention bonuses by $20 million but will still hand out $100 million Wednesday, The New York Times reported, citing people with knowledge of the negotiations.
The Washington Post, also citing people familiar with the situation, said the retention payments are for employees at the division who agreed to accept 10 to 20 percent less than AIG had initially promised them two years ago. In return, they are getting their money more than a month ahead of schedule.
AIG is still due to pay out tens of millions of dollars more in March, mostly to former employees who did not agree to the concessions, the Post reported.
whomod said: I generally don't like it when people decide to play by the rules against people who don't play by the rules. It tends to put you immediately at a disadvantage and IMO is a sign of true weakness. This is true both in politics and on the internet."
