Time to Put Unemployment Out to Pasture?


A workhorse of economics, journalism, and politics over the past century has been the unemployment rate. It’s a deceptively simple statistic: the number of people who don’t have work but are looking for it divided by the entire labor force.

But what is the labor force? Ah, there's the rub. Last month's unemployment figures (via Drudge) exhibit the vagaries of the labor force:
The unemployment rate soared from 5 percent in April to 5.5 percent in May. That was the biggest one-month jump in the rate since February 1986. The increase left the jobless rate at its highest since October 2004.
Yikes! With a labor force of about 170 million, a half-percentage point rise means that nearly a million people lost their jobs. That's a huge economic crash! But wait, the numbers don't quite line up:
...nervous employers cut 49,000 jobs.
In an economy where millions of jobs are cut and created every month ("churning", we call it), a paltry 49,000 were lost, on net? That's 0.028% of all jobs. So where does a change 18 times that size come from?
The government said the number of unemployed people grew by 861,000 in May... The over-the-month jump in unemployment reflected more workers losing their jobs as well as an increase in those coming into the job market -- especially younger people -- to look for work, the Bureau of Labor Statistics said. [emphasis added]
The headline should read: Labor Force Grows Sharply. Nearly a million non-workers looking for jobs is big news - but it's much different news than nearly a million workers losing jobs. Economists have long known that people move in and out of the labor force freely. If a 20-year-old college student starts looking for a part-time job, he's in the labor force. When he decides it's not worth it, he's out. The young, the recently retired, and married women are the most often switchers - and their participation can be read more than one way.

If young people keep joining the labor force, and jobs never materialize, that's a sign of a weak economy, and the increase in unemployment correctly implies a downturn. However, if wages go up (as they did in May) and more non-workers decide it's a good time to look for a job, it's harder to interpret the increase in unemployment. The new job seekers did not, after all, find jobs, so we're not seeing evidence of a boom. But they did decide that looking for work is better than not looking, so they can't be completely pessimistic about their chances.

The bottom line is that unemployment rate as it's currently measured - like some statistics in baseball and elsewhere - is not a great metric of what it claims to measure. We might want to put this old horse out to pasture and let labor economists fight over a better summary statistic of labor force dynamics.

Posted by Chops at June 6, 2008 2:39 PM
Comments
Comment #254720
We might want to put this old horse out to pasture and let labor economists fight over a better summary statistic of labor force dynamics.
No, unemployment should be measured.

It simply should not be the only statistic in any analysis.

Look at the big picture, and the abuses fueling the deterioration of the last 3+ decades.

Part of the Solution.

  • Posted by: d.a.n at June 6, 2008 3:29 PM
    Comment #254736

    Part time jobs are not counted for unemployment. If you work 3 jobs 80 hours a week, and all of them are part time, sorry, according to the government, you are not part of a labor force. If you have been looking for a job for the last 3 months, and have been on ( or even if you were not on) unemployment, and then gave up looking because the only job out there is McD’s after you lost your 30,000+ salary job, well, now you are not considered part of the labor force. Unemployment is a horrible tool to use.

    Posted by: kujo at June 6, 2008 5:06 PM
    Comment #254739

    Are you suggesting that if you lose a 30,000 a year job you shouldn’t take a job at McDonald’s if you need to to get by?

    If you take it then you are part of the labor force. If you don’t, well then you don’t deserve a job at all, IMO.

    Posted by: Rhinehold at June 6, 2008 5:21 PM
    Comment #254741

    The unemployment rate has not been a very useful measurement for a long time. The best measurement available is non-farm payroll. It has its own drawbacks, such as month-to-month volatility, and it is likely to be revised in the months after it is announced. Still, it gives the best picture of job creation and the employment markets.

    To match the rate of population growth, 150,000 - 175,000 non-farm payroll jobs should be added each month; in other words, to match population growth, the Bush administration to date should have added at least 10 million non-farm payroll jobs over the past seven years.

    What actually has happened is about 5 million non-farm payroll jobs have been added, and half of those are government jobs… Talk about a miserable failure… The non-farm payroll number has been negative for the past five months. It truly is a dreadful performance on the part of the Bush administration, but it tends to get overshadowed by debacles like Iraq, or inaction like in the case of Katrina, or inappropriate action, like the only time Bush responded with alacrity, and that involved that poor braindead Shiavo woman; or the dreadful performance of creating jobs is lost in all the other dismal economic statistics involving national debt, federal budget defiticts, trade deficits, the tanking dollar, oil closing over $138 today for a new record, and so on.

    Posted by: phx8 at June 6, 2008 5:33 PM
    Comment #254749
    … the other dismal economic statistics involving national debt, federal budget defiticts, trade deficits, the tanking dollar, oil closing over $138 today for a new record, and so on.
    The unemployment statistic by itself is not very useful.

    Few economic measurements are very useful by themselves.

    However, taken altogether, it starts to mean something.

    Unfortunately, few Americans follow any of these measurements, much less the causes … at least until failing to do so becomes too painful.

    Unemployment is rising, and it will get worse before it gets better, as will many things for the next few years (or longer).

    If we crap in our own nest long enough, it stands to reason that the nest it all rests upon will finally collapse.

    But it takes a long time for these things to play out in a nation of 305 million people.
    But it’s been going on now for over 30+ years.
    This entire upside-down pyramid-scheme monetary system could collapse at any time, but we will first, most likely, revisit double-digit inflation (as in the 1970s and early 1980s), because the $53 Trillion nation-wide debt is out-of-control, and no one can say where the money will come from to pay only the interest on $53.2 Trillion, much less the money to reduce the principal (e.g. DEBT=PRINCIPAL+INTEREST), when that money does not yet exist.

    At any rate, the voters have the government that the voters elect (and deserve).

    Posted by: d.a.n at June 6, 2008 6:19 PM
    Comment #254756
    and half of those are government jobs… Talk about a miserable failure…

    Yet, Obama wants to personally employ 5,000,000 people, using taxpayer money, and you consider that a success?

    Posted by: Rhinehold at June 6, 2008 7:37 PM
    Comment #254762

    The government is already way too bloated, and taking in 19% of total GDP (GDP=$13.9 Trillion) in tax revenues.
    Where’s the money going to come from to grow the government larger?
    OHHhhhhhh … that’s right … simply create more of it out of thin air.

    The level of bloated government, waste, graft, pork-barrel, and corporate welfare, and welfare for the wealthy is truly ridiculous:

    • (01) subsidies and corporate welfare

    • (02) $57.3 Billion (year 2005; with 4,487 federal employees) for the Dept. of Education (Executive Branch)?
    • (03) $371 Billion (year 2005; with 2 million federal employess) for the (www.defenselink.mil/sites/) Dept. of Defense (Executive Branch)?

    • (04) $40 Billion (year 2005; with 180,000 federal employess) for the Dept. of Homeland Security (Executive Branch)?

    • (05) $66.8 Billion (year 2005; with 67,000 federal employees) for the Dept. of Health and Human Services (includes Medicare and Medicaid) (Executive Branch)?

    • (06) $Billions for subsidies for farms (some owned and operated by corporations) ?

    • (07) $Billions for welfare for foreign nations ?

    • (08) $Billions for the war on drugs?

    • (09) $19.1 Billion (year 2005; with 109,832 federal employees) for the Dept. of Agriculture (Executive Branch)?

    • (10) $5.8 Billion (year 2005; with 40,000 federal employees) for the Dept. of Commerce (Executive Branch)?

    • (11) $31.3 Billion (year 2005; with 16,100 federal employees) for the Dept. of Energy (Executive Branch)?

    • (12) $10.8 Billion (year 2005; with 71,436 federal employees) for the Dept. of the Interior (e.g. land management, Indian arts, park services, minerals, etc.) (Executive Branch)?

    • (13) $22.0 Billion (year 2005; with 109,000 federal employees) for the Dept. of Justice (e.g. FBI, Attorney General, ATF, prisons, Tax Division, etc.) (Executive Branch)?

    • (14) $11.9 Billion (year 2005; with 17,347 federal employees) for the Dept. of Labor (Executive Branch)?

    • (15) $10.3 Billion (year 2005; with 30,266 federal employees) for the Dept. of State (Executive Branch)?

    • (16) $61.6 Billion (year 2005; with 60,100 federal employees) for the Dept. of Transportation (Executive Branch)?

    • (17) $10.8 Billion (year 2005; with 115,897 federal employees) for the Dept. of the Treasury (Executive Branch)?

    • (18) $51.0 Billion (year 2005; with 219,000 federal employees) for the Dept. of Veteran Affairs (Executive Branch)?

    • (19) $Billions for the dysfunctional Judicial Branch (e.g. Supreme Court, Courts, etc.)?

    • (20) $Billions for the dysfunctional Legislative Branch (e.g. Senate, House of Representatives, President of the Senate, etc.) ?

    • (21) $Billions for the hundreds of Independent Agencies (e.g. National Science Foundation, NASA, Federal Reserve System, etc.)?

    • (22) $Billions for the dozens of quasi-official Agencies (e.g. Smithsonian, Technology Reinvestment Project, National Consortium for High Performance Computing, etc.) ?

    • (23) $Billions for the dozens of Federal Boards, Commissions, and Committees (e.g. Appalachian Regional Commission, Commission of Fine Arts, U.S. Institute of Peace, etc.) ?

    • (24) $Billions for the hundreds of Tangential Non-Government Agencies (e.g. Energetic Materials Research and Testing Center, The Food and Drug Law Institute, CSPAN, ) ?

    • (25) $Billions for the for these (acuf.org/issues/issue35/050503gov.asp) top 10 ways the federal government wastes money?

    • (26) $Billions for the hundreds of redundant programs:
      • 342 economic development programs;
      • 130 programs serving the disabled;

      • 130 programs serving at-risk youth;

      • 72 federal programs dedicated to assuring safe water;

      • 50 homeless assistance programs;

      • 45 federal agencies conducting federal criminal investigations.

    If the government wants to fund something worthwhile (and possibly provide employment), how about research into alternative energy sources (e.g. another Manhattan type project), mandates for higher fuel efficiencies, and cutting the pork-barrel and bloat, and stopping these 10+ abuses.

    The cuts in bloat and pork-barrel alone could probably finance the whole thing.

    Posted by: d.a.n at June 6, 2008 8:03 PM
    Comment #254767

    Rhinehold,
    The Bush administration and the GOP claimed to favor smaller government, yet they increased its size, with no apparent overall strategy. The government grew in size, but there was no rhyme or reason to most of the growth. The word that comes to mind is ‘bloat.’

    Btw, The Department of Homeland Security accounted for some of the government growth. Democrats badgered Bush and the GOP until they put it in place. My personal opinion is that it is a waste of money, and both sides share some blame for creating that bureaucracy.

    Obama intends to target the growth of government jobs with a strategic goal in mind; by targeting infrastructure and R & D, the return on investment should exceed the cost of the government jobs. Consider the ROI on interstate highways, or weather satellites; the investment in those government jobs has been a spectacular success.

    Here is the page, for anyone seeking more details:

    http://www.barackobama.com/issues/economy/#innovation


    Posted by: phx8 at June 6, 2008 9:58 PM
    Comment #254768
    the investment in those government jobs has been a spectacular success.

    Sorry, pxh8, but it’s just not accurate. Hiring private firms to do the work is always more efficient. They already have the knowledge and streamlined processes to get things done. Simply hiring people to do what the private companies has already done is not efficient, it is wasteful.

    And the things I mentioned are just the tip of the iceburg…

    But, let me ask you this… Is the return on the ‘investement’ going to be greater than the interest we have to carry on the debt required to pay for those things?

    Is Obama going to wait until the Iraq dividend is available before he uses it for hiring 5,000,000 people program?

    You mention republicans, which is nice, but meaningless to me. I could care less how the current crop of Republicans failed us, it doesn’t mean that Obama is the right guy or McCain is the wrong guy. The House, which controls the pursestrings last time I checked, did a great job in the late 90s but a horrible job in the early 00’s. They were Republican both times. The success of the late 90s got them more power in the 00s, which they squandered and paid for in 2006. But the premise that all republicans are X or all democrats are Y is not only a fallacy, but it is also lost on me since I am neither.

    Explain to me how Obama plans to eliminate, or even try, to pay down the debt. The time for tackling this has past, we are officially bankrupt and until we get that mess fixed, embarking on new spending programs and expanding the size of government is a non-starter…

    Posted by: Rhinehold at June 6, 2008 10:28 PM
    Comment #254770

    Chops,

    So - with a record loss of jobs, your response is that perhaps the headlines should have said there was a job growth? You are flabbergastingly out of touch with reality. A mirror for the party you serve.

    Rhinehold,

    For all your claims of being a liberal independent you have a lot of wacky views. McCain is runnning on making the Bush tax cuts for the wealthy permanent. The same cuts that helped lead to this situation. I know you claim you’re a liberal independent, but as far as I’m concerned you’re THE watchblog member consistenly furthest from reality. Your being here brings the dialogue to a childish low, which is why I hardly visit anymore.

    Posted by: Max at June 6, 2008 11:33 PM
    Comment #254771

    Rhinehold-
    No, it is not always more efficient for the government to hire a private firm. Take Blackwater. If we measure efficiency by a purpose served, then Blackwater made the war more inefficient, not to mention doing so at higher cost.

    At the end of the day, it’s purposeful productive behavior that matters. When the government’s work in regulating financial markets make them more stable, the rest of the market becomes more efficient, because the market serves the purpose of encouraging economic, and productive behavior, rather than just being a cash cow for the unscrupulous and the wealthy.

    There’s a difference between government helping a business’s bottom line and government doing good for the economy.

    Posted by: Stephen Daugherty at June 6, 2008 11:46 PM
    Comment #254773

    Rhinehold,
    Here is the link for Obama’s fiscal policy:

    http://www.barackobama.com/issues/fiscal/

    I really think the policy summary linked above gives a better recap than I could provide. Most of the answers are fairly obvious: PAYGO, redistributing the tax burden, and so on.

    “Is the return on the ‘investement’ going to be greater than the interest we have to carry on the debt required to pay for those things?”

    That’s a good question. I think so. Allow me to take a circuitous route on the way to a reply:

    From what I’ve seen & read of Obama, he looks ahead- and perhaps because he’s relatively young and inexperienced and doesn’t realize it never pays to try; or, perhaps because he’s intelligent and innovative and creative- anyway, I think he will demonstrate the flexibility to adapt to changing conditions.

    That is an attribute missing from John McCain.

    And I bring this up, because I think Obama will be faced with a very difficult situation in 2009, and an ability to adapt will be very, very important.

    In my opinion, the economy will force Obama and the hand of the Democrat’s in the next year. It can’t be helped. The debt and deficits, combined with Peak Oil and a tanking dollar, are going to create an extraordinarily difficult situation for all of us. As a result, as much as I agree with the thrust of Obama’s platform, it’s going to be necessary to make some huge changes in a short period of time.

    This is not something America does well.

    It’s going to require extraordinary, inspirational leadership.

    It’s not a military problem. It’s not a problem that can be solved by attacking someone, or killing terrorists. It’s not external, not really- it’s internal. That is the real threat we face as Americans.

    The problem is fundamentally an economic problem. The enormous deficits and debts have driven up the amount of interest we pay by a substantial amount. This amounts to a tax increase on every American, and it is non-negotiable.

    So I think you’re right to focus on the fiscal and economic aspects of Obama’s approach, Rhinehold, because that is critical, and it seems likely the situation will be even worse by November than it is today. If I am right, the particulars of the party platforms will not be nearly as important as the general approach, flexibility, and creativity of the next president. It will require PAYGO, redistributing the tax burden, and investing in stimulative programs such as infrastructure development, because that is what is what it will ultimately take to re-balance the budget, & lay the groundwork for better times.

    Posted by: phx8 at June 7, 2008 12:23 AM
    Comment #254774

    By the way, I also think this will not be a year where voters want a split government. Sometimes people want the Executive Branch to be run by one party, and the Legislative by the other, in order to provide a check, and rein in ideological excesses. But this time, the economy will demand action, and make it attractive to voters for elect Democrats to both branches.

    It’s hard to understate just how bad the economic numbers were today.

    Posted by: phx8 at June 7, 2008 12:56 AM
    Comment #254776
    For all your claims of being a liberal independent you have a lot of wacky views.

    Well, as I have never claimed to be a liberal independent, that might explain the wackiness of my views…

    If you take a look at my profile you’ll see that I am a Libertarian, have been for around 20 years and have ran for office on the Libertarian ticket.

    McCain is runnning on making the Bush tax cuts for the wealthy permanent.

    I guess I’m wealthy then, because I was given a tax break both times. I didn’t realize families making less than 100,000 a year were considered rich these days…

    The same cuts that helped lead to this situation.

    ? You know, that’s one of the wackiest things I’ve heard today. Wasteful spending and an ever-increasing government, moving beyond the bounds of what we can afford is what caused the situation. That we were able to keep some of our tax payments when times were really hard hardly made a dent…

    but as far as I’m concerned you’re THE watchblog member consistenly furthest from reality.

    Really. What exactly is unrealistic about the view that people should be free to live their lives how THEY see fit as long as they don’t violate the rights of others to do the same? That’s my view, btw. Just curious what you find so wacky about that… Apparently you have no problem with people forcing others to live differently than they want?

    Your being here brings the dialogue to a childish low, which is why I hardly visit anymore.

    I didn’t realize there was an add-in installed that forced you to read what I wrote… Probably best to avoid that then. Or did we already establish that you don’t have a problem with being forced to do things you don’t want to do?

    Posted by: Rhinehold at June 7, 2008 1:33 AM
    Comment #254777
    But this time, the economy will demand action, and make it attractive to voters for elect Democrats to both branches.

    Let’s see, that last time one party held both branches of government, we got an ever-increasing debt, a flat economy and an invasion of individual rights. Those were republicans

    The time before that, we had a bad energy policy based on fairness, an even worse economy and our feet held to the fire by terrorists. Those were democrats.

    I’m sorry, but I don’t feel warm and fuzzy about either ideology running rampant. The only positive aspect is that both times the ideology of each party was exposed as the failures they were without having anyone else to blame. Even now, with a majority in congress, the Democrats are STILL blaming the Republicans, reneging on their PAYGO system that they keep saying is needed, etc.

    No, a different direction is needed, I agree. But Obama, being a member of the Democratic party is not going to be changing anything, other than the name of the party behind the office.

    In fact, did you see that he was wearing a lapel pin yesterday? After all of that fuss about not wearing one and how it meant nothing, when he needed it he had no trouble puling it out! In other words, he’s a good politician. yay, rah.

    Posted by: Rhinehold at June 7, 2008 1:40 AM
    Comment #254780

    Yes, I noticed the lapel pin. And while I was a bit disappointed, I really don’t care that much. I would rather have a “good politician” as president than a bad one, or a tone deaf one. You should realize Obama is not running on a Bush/Rove 50 + 1 strategy. Obama is running with the intent to be a president for ALL Americans. Relying on his roots in community activism, Obama is inspiring young people to believe they can go out there and make a difference, and do it, get it done.

    It’s a huge contrast with Bush. When Bush came to my state, Oregon, he went to great lengths to make sure people like me never came anywhere near him. There were ‘Free Speech Zones’ if you can believe that… Only extremely rich donors and carefully screened, syncophantic supporters were ever allowed in the same building. What happened to this country? Anyway, Bush was not my president. He was the Commander in Chief of the Republican Party. He had no intention of including people like me in his vision of America.

    To his credit, McCain is pursuing an inclusive strategy too.

    Posted by: phx8 at June 7, 2008 2:24 AM
    Comment #254781

    BTW, gotta love national healthcare:

    http://www.dailymail.co.uk/health/article-1016262/Grandmother-dies-NHS-cancer-treatment-withdrawn-paid-privately-life-extending-drug.html

    ‘That is appalling. It was stressful enough for Linda having cancer without her having all this stress on top of it. Government guidelines are restrictive and trusts interpret these in different ways. It’s a lottery.’
    Posted by: Rhinehold at June 7, 2008 2:25 AM
    Comment #254786


    Ya also got to love for profit health care to Rhinehold. So whats your point? I havent seen anyone on WB advocating for an English type system have you?

    http://www.youtube.com/watch?v=8BJyyyRYbSk&feature=user

    Posted by: j2t2 at June 7, 2008 5:14 AM
    Comment #254795

    Chops,
    When the so called Labor Economists can prove to “We the People” have a JOB for Every Citizen that pays a Livable Humanly Wage than the Government and Society of Man can come back and ask the Children of that Generation if they may use a better summary statistic of labor force dynamics. At least in My Personal Opinion.

    However, I do understand your concern about how unemployment is created. Yet to the average Human all they know is that they do not have an income required to live as a Civilized Human.

    So if you want to change the problem with labor, the pencil pushers need to start at the top. Because surely a Man making a million dollars a year cannot be as productive as 10 Men making a $100,000.00 a year or 20 Men making $50.000.00 a year in the same line of Labor.

    For wasn’t just in the Late 90’s that employment in America was running somewhere between the 97-98%? Maybe, America needs to put the Consumer Economists in charge to tell the Beast of Nature “We the Corporation” what is needed from the Furnaces of Society instead of the other way around.

    Posted by: Henry Schlatman at June 7, 2008 8:06 AM
    Comment #254798

    Jack, a couple of times I have gone camping and forgot to bring a hammer for my tent stakes. I used a rock instead. It is only a rough approximation of a hammer, but, it got my stakes in the ground, even if it did also break a stake and turn my thumb black and blue in the process.

    Until we find a better, more accurate definition and measure, it is best to keep the one we have. To be without any indication as to whether job seekers are finding jobs or not, is worse than have some trend measure that is inaccurate until later revised by more accurate measures and feedback data.

    One way to improve the accuracy of the measure we have is secure our borders, allowing into the work force seasonally and permanently, only those we document and approve. It would help.

    As you imply, the current statistic is no doubt skewed by a dramatic increase in students seeking employment, a direct result of the middle class squeeze underway caused by inflation outpacing wage gains, debt surpassing equity in homes, and the dramatic increase in young people and students living much longer in their parents homes for lack of ability to afford a place of their own.

    This statistic is also no doubt reading as it does as a result of the growth in illegal alien employment at minimum and illegal wages, removing job availability to young people and students who are citizens here.

    My 17 year old daughter was looking through the want ads and wanted to call about a baby sitter job in situ for two young children 6 and 8 for the Summer, from 8AM to 4PM, 4 to 5 days per week for $100 per week. As one can readily see, this is not even close to minimum wage. Needless to say, her parents were not going to allow her to take illegal substandard wages and participate in this illegal arrangement. Our daughter is fortunate to have parents who can afford to prevent her from taking such a position.

    Slavery has returned to America, thinly veiled as an insoluble illegal immigration problem, which of course is a blatant lie. It is very soluble. There is just a lack of political will to solve it by Republicans or Democrats.

    Oklahomans are in a rage that their legislation passed to halt illegal immigrant employment was overturned by a liberal judge of the Court this week and their Republican supporting corporations and lobbyists fought the public tooth and nail on this legislation. The legislation passed as an overwhelming mandate nonetheless, only to be shot down by the judge.

    The special interests are usurping and undermining this democracy and will of the people, and it has got to stop. But, the only way to stop it, is to vote out a significant number of incumbents putting the fear of the voters back into the hearts of the remaining incumbents and freshman politicians alike. Then the problem will find a solution.

    Posted by: David R. Remer at June 7, 2008 8:54 AM
    Comment #254800

    David

    I didn’t write this post.

    I think we should use the unemployement rate too. It has move up to 5.5% which is still a much better number than for most of my working life. I don’t see how anybody can be upset about such a low number, near full employment.

    I have been arguing FOR this number for years. Many others have told me that 4.5% was meaningless. Now that it has gone up, suddenly we all love that number again?

    Posted by: Jack at June 7, 2008 9:08 AM
    Comment #254801

    Jack, my apology for mistaking the author. Yes, you are right, this statistic is used for all kinds of invalid arguments, due to the fact that it is such a faulty measure except for trend line.

    Many of the criticisms of it however, are valid. It doesn’t have any way of assessing those who have dropped out of the workforce and off government metrics who find themselves unemployable for any of a host of reasons.

    It does include varying percentages of illegal aliens holding jobs, but, by no means, all.

    It doesn’t, and can’t, take into account the vast underground and black market employment.

    And, if I recall correctly, it fails to take into account fulltime workers splitting their work over 2 or more part-time employers.

    Thus, it is a useful statistic for trend, but, not accurate for monthly descriptive purposes of how many are, and are not, employed who want to be.

    And I agree with you, that employment overall is historically high. But, the economy cannot be assessed for health or well being by a highly debatable measure like unemployment. The fact that wages are going up but inflation is going up faster than wages is a measure that contradicts the rosier unemployment statistic, for example.

    Bottom line is, the economy is hurting. It may eek out 1.5% growth this year, sluggish by any historical standards. And Bernanke alluded to the FED’s increasing worries over stagflation, signaling to the markets that rate cuts are done and the bias going forward is toward raising interest rates to fight inflation.

    Stagflation is the one scenario NO FEDERAL RESERVE BOARD wants to face and works to avoid. But, that is now what this FED board now faces. This is a precarious situation. The only two tools they have to work with both exacerbate stagflation in differing ways, making action by the FED compromised.

    If another shoe falls, like a credit card bubble bursting, (there are signs that is possible), the economy would be thrust into a recession, potentially protracted over many quarters if not years.

    The global economy is not in much better shape this year, expected to grow at about 1.75%. And our reserves to fend our way through is in the form of shrinking national debt capacity, marginalized by the $4 trillion added to it in the last 7.5 years.

    With the bias toward higher interest rates, service costs on the national debt will be taking an even bigger chunk out of the annual federal budget, already in deficits for many years to come.

    It’s not a rosy future we are looking at, and economists on the left and right are finally agreeing on this fact. If we the people don’t pressure incumbents out of office over the economy forcing the remaining incumbents and freshman alike to take necessary fiscal measures to improve the future, this country is going to sink just like the ‘unsinkable’ Titanic did.

    Posted by: David R. Remer at June 7, 2008 10:20 AM
    Comment #254806
    David R. Remer wrote: It’s not a rosy future we are looking at, …
    True.
    David R. Remer wrote: … and economists on the left and right are finally agreeing on this fact.
    Maybe.

    You know something is wrong when it has become too difficult to continue cherry-picking a few economic statistics to paint a rosy picture.
    There must be something wrong when some people are desparate to ignore (or retire) the unemployment statistic?

    But when will enough of the incumbent politicians in do-nothing Congress do anything about it (if ever)?
    It’s likely we will simply see a few band-aids here and there; still failing to address the most fundamental abuses hammering most Americans?

    The usual problem with the anything-not-rosy position is being portrayed as a doomsdayer, chicken-little, pessimist.
    It’s a lose-lose problem, which is why politicians avoid it.
    Being FOR something gets more votes (and support) than being AGAINST something.
    Too many voters want happy-talk … at least, until that becomes too painful.
    Thus, the avoidance of addressing problems allows the problems to continue to go ignored, and grow in number and severity.

    It appears that many of your economic predictions are coming true.
    Despite what some may believe, it’s very unlikely that’s what you wanted.
    It’s not all merely for the right to say “I told you so”, since that is a empty and worthless victory.
    You probably weren’t doing yourself any favors, since too many voters prefer happy-talk … especially when there are partisan motivations to trivialize the problems.
    That is, it’s quite simply easier to ignore problems, rather than deal with them … at least, until that becomes too painful.
    And that’s what seems to be occurring.
    But this is quite likely only the tip of the iceberg.
    The next shoe-to-drop will very likely be double-digit inflation (which may take another year or so), due to the $53 Trillion nation-wide debt (which will have world-wide ramifications).
    The following are current debts (not current debt + future interest):

      • (1) Total Domestic Financial Sector Debt = $15.8 Trillion

      • (2) Total Household Debt = $13.88 Trillion

      • (3) Total Business Debt = $10.16 Trillion

      • (4) Total Other Private Sector Foreign Debt = $1.8 Trillion

      • (5) Total Federal Government National Debt = $9.4 Trillion

      • (6) Total State and Local Government Debt = $2.2 Trillion

      • __________________________________________________

      • Total = $53.2 Trillion (that’s 3.81 times the nation’s $13.86 Trillion GDP!)

      • Including the $12.8 Trillion borrowed and spent from Social Security, leaving it pay-as-you-go, with a 77 million baby boomer bubble approaching,
        the total is $66 Trillion! (over $216K per person; that is 4.76 times the $13.86 Trillion GDP!)
      • Younger voters would be wise to wake up and start paying more attention, because it is their future that is being stolen from them.

    So, naturally, we are now hearing much less rosy talk from the anti-anything-not-rosy crowd.
    Heck, as hard as it is to believe, some long-time partisan loyalists are even echoing the “vote out incumbents” (at least, this year anyway).
    Record low approval ratings (11%-to-18%) for do-nothing Congress and G.W. Bush (43) may actually be a meaningful statistic too, afterall?

    Yes, the unemployment statistic is flawed in many ways, which is why that single statistic, by itself, is not very useful.
    But the unemployment statistic shouldn’t be (and won’t be) eliminated.

    • 5.5% unemployment, by itself, doesn’t sound too bad, even if a 0.5% increase is the largest increase in 22 years.

    • 4.0% inflation, by itself, doesn’t sound too bad (though, 4.0% sounds suspiciously low to me with the U.S. Dollar falling drastically since year 1999).

    • $4 dollar gasoline in the U.S. doesn’t sound bad when compared to $8 dollar gasoline in Europe.

    • $9.4 Trillion National Debt relative to GDP, doesn’t sound too bad compared to the levels after World War II.
    But all economic statistics, when combined, are meaningful.

    The problem is the combination of so many problems occurring nearly simultaneously, and several of those problems are long-term problems.

    Ignoring the problems is not going to make them go away.

    David R. Remer wrote: It’s not a rosy future we are looking at, and economists on the left and right are finally agreeing on this fact. If we the people don’t pressure incumbents out of office over the economy forcing the remaining incumbents and freshman alike to take necessary fiscal measures to improve the future, this country is going to sink just like the ‘unsinkable’ Titanic did.
    That’s right (i.e. “pressure incumbents out of office”).

    It’s the first, simple, common-sense, responsible step, and the only thing that will stop the corruption and rampant abuses in a do-nothing, FOR-SALE, look-the-other-way, and incompetent Congress that can no longer police its own ranks.
    It’s the one simple thing voters were supposed to be doing all along.
    And enough voters will do that when failing to do so finally becomes too painful.
    Buy why wait?
    Does the electorate doubt the “not so rosy future”?
    Does the electorate doubt the corruptions and incompetence of Congress?
    Obviously not based on the record-low 11%-to-18% approval ratings for Congress?
    So why wait?
    Why is it so hard for voters to stop repeatedly rewarding irresponsible incumbent politicians with perpetual re-election?
    Why wait until the inevitable pain and misery is already upon us?
    Why wait for pain and misery to finally provide the motivation to oust irresponsible incumbent politicians (as occurred in 1933; see below when voters ousted 206 incumbents from Congress)?
    Why wait another 4 (or more) years for things to get worse (similar to the period between 1927-to-1933 below)?

      • Start_ End _ Congress_ Re-Election_ Party Seat-Retention

      • Year _ Year ___ # ____ Rate ______ Rate

      • 1989 _ 1991 _ 101 ___ 90.1% ______ 99.6%

      • 1991 _ 1993 _ 102 ___ 87.7% ______ 98.3%

      • 1993 _ 1995 _ 103 ___ 73.5% ______ 98.1%

      • 1995 _ 1997 _ 104 ___ 79.8% ______ 88.2%

      • 1997 _ 1999 _ 105 ___ 77.4% ______ 98.7%

      • 1999 _ 2001 _ 106 ___ 89.2% ______ 99.3%

      • 2001 _ 2003 _ 107 ___ 89.2% ______ 98.7%

      • 2003 _ 2005 _ 108 ___ 87.9% ______ 98.1%

      • 2005 _ 2007 _ 109 ___ 88.6% ______ 98.7% (re-election decreasing)

      • 2007 _ 2009 _ 110 ___ 84.9% ______ 93.1% (re-election decreasing)

      • __________ AVERAGE = 84.8% ______ 97.1%


      • During the Great Depression:

      • Start_ End _ Congress_ Re-Election_ Party Seat-Retention

      • Year _ Year ___ # ____ Rate ______ Rate

      • 1927 _ 1929 _ 70 ____ 68.9% ______ 96.4% (re-election decreasing)

      • 1929 _ 1931 _ 71 ____ 79.7% ______ 92.5% (re-election decreasing)

      • 1931 _ 1933 _ 72 ____ 76.8% ______ 88.5% (re-election decreasing)

      • 1933 _ 1935 _ 73 ____ 61.2% _____ 78.7% (re-election decreasing)
    Source: One-Simple-Idea.com/CongessMakeUp_1855_2008.htm

    So why wait?
    At any rate, the voters have the government that the voters elect (and deserve).

    Posted by: d.a.n at June 7, 2008 12:01 PM
    Comment #254817

    Is it possible for this site to ban individuals that insist on using this comments section to covertly promote their own idiot blogs and sites?

    Better yet, if you guys could just block the <a> links that point to the URL’s of the worst offenders, that should do the trick.

    Posted by: Bryan W at June 7, 2008 2:41 PM
    Comment #254820

    Bryan W, your comment is not on the topic of this article and therefore, violates our rules for participation. Please read the rules and follow their prescription for addressing such issues in private email to the managing editor.

    Posted by: Watchblog Managing Editor at June 7, 2008 3:00 PM
    Comment #254840

    Watchblog Managing Editor:

    I tried that, got no response. Perhaps I used the wrong email? If I did, where does one find the correct email?

    Thanks.

    Posted by: womanmarine at June 7, 2008 6:17 PM
    Comment #254859

    Several interesting things happened on Friday: the dollar tanked, oil boomed, and unemployment jumped. What is interesting is that the three are related, and the common denominator is debt.

    The Bush and McCain economic policy involves wealth capture. NOT wealth creation. Wealth capture. It is an economic program which redistributes wealth from the poor and middle, to the rich, through tax cuts, abolition of capital gains taxes, and so on. In a nutshell, the Bush and McCain program- the conservative, Republican program- masquerades under a lot of covers, such as ‘deregulation,’ or ‘free markets,’ but what it really amounts to is class warfare. We’re seeing Grand Theft National Treasury, with the richest 1% pocketing the wealth, and the other 99% assuming the debt.

    Because so much money is being borrowed and pocketed by the rich, with the interest being paid by the consumers of the poor and middle- and remember, this is not wealth creation, but wealth capture!- a huge debt is building up. What to do?

    We have seen, in essence, a “debt bubble.”

    The Bush and McCain, conservative Republican scenario is to keep interest rates low, and outsource jobs in order to keep prices low, consumers buying.

    But… if the poor and middle consumers never see their wages increase, and “right to work” laws destroy labor unions and decent wages, and inflation creeps into the picture by printing money to pay the enormous debt…

    And if foreign investors become unwilling to fund the huge debt, fearing an intentional policy of inflation, and if the foreigners have the option of another currency, the Euro…

    And if the Peak Oil and increased demand drive up oil prices, creating inflation, and redistributing even more wealth from the poor and middle, to Big Oil and the nations of the Middle East & Venezuela…

    Posted by: phx8 at June 7, 2008 7:58 PM
    Comment #254864

    statistics don’t lie but liars do.

    I heard some guy on public radio the other day trying to use statistics to prove we are better off under Carter than Reagan.

    The left is still trying to pretend Carter wasn’t an utter failure.

    Left vs right. Right vs left….and nothing of value gets done but senators become millionaires.

    Posted by: StephenL at June 7, 2008 8:05 PM
    Comment #254869

    StephenL,
    Lol. Carter v Reagan. Let’s see. Carter supported Human Rights. Reagan supported “authoritarian” as opposed to “totalitarian.” Carter supported the development of alternative energies. Reagan supported more drilling for Big Oil.

    Game, set, match.

    This is too easy. In retrospect, in most respects, Reagan has been proved wrong, and Carter right.

    Hey, StephenL, did you know Ronald Reagan increased his personal wealth during his presidency more than any other president in the history of the United States? Bet you didn’t know that. ‘Friends’ in real estate helped him out. Some conservatives got really upset when that was brought up during Reagan’s funeral. Carter was honest as the day is long. But with Reagan, we’re supposed to pretend he was not a corrupt M******F*****.

    But he was.

    Want to talk about Iran-Contra?

    Posted by: phx8 at June 7, 2008 8:25 PM
    Comment #254870

    phx8,

    Here’s a good one for you!

    http://www.telegraph.co.uk/opinion/main.jhtml?xml=/opinion/2008/06/06/do0602.xml

    “Look What Happened to Jimmy Carter”

    Posted by: Rhinehold at June 7, 2008 8:28 PM
    Comment #254874

    Rhinehold,
    Thanks for the link to the article by Con Coughlin, a discredited right wing Neocon. Always good to know what discredited Neocons think of Carter and Iran.

    But who is Coughlin?:

    http://en.wikipedia.org/wiki/Con_Coughlin

    IF wikipedia isn’t good enough, we can get deeper into the matter of discreditng Coughlin, if you like.

    Rhinehold, you’ve been duped before by the right wing Neocons. You know that’s true. How many times will you be duped again?

    Posted by: phx8 at June 7, 2008 8:47 PM
    Comment #254875

    phx8,

    There you go again, stuck on left vs right, right vs left. Meanwhile, nothing of value gets done. Carter remains a rejected failure by the way…but so what? Maybe Obama can have Carter swear him in and call him “great” thus showing the New York City Jews he lied to them when he told them he really does support Israel?

    I have little hope for Obama but I will give you my criteria for greatness. If he can knock say three of these items off the list I will praise him for that. Period.

    1) balanced budget passed in congress and signed by him.
    2) Fix Medicare disaster that is coming.
    3) Fix medicade
    4) Fix social security
    5) Stop Supporting Illegal immigration
    6) Support American business over Europe (make jobs for us not give ours to them)
    7) Support Nuclear Power so we can stop burning fossil fuels and use rechargeable cars. (Really support the environment)
    8) Keep taxes low to support our economy.

    I expect Obama to fail just as the demcoratic congress is failing us, just as the republican congress failed us just as the republican president failed us Just as democrats failed us last time they controlled everything and on and on and on. But they all get Rich don’t they! How interesting.

    Posted by: Stephen at June 7, 2008 8:50 PM
    Comment #254877

    Correction point number 6

    Should read Support American Business over all other foreign business. Its just that the American Progressive left seems to support anything in particular that will damage the US and benefit Europe.

    Posted by: StephenL at June 7, 2008 9:00 PM
    Comment #254886

    StephenL,
    You write: “Carter remains a rejected failure by the way…”

    Who rejects him? Carter deserves criticism for his inability to work with a Democratic congress. It was a pretty corrupt bunch, led by Tip O’Neill, and they did not appreciate an honest, somewhat priggish outsider showing up in Washington DC. As a result, relations between Carter & Congress were very poor; so poor, that a leading Senator of the time, Ted Kennedy, ran against Carter in a bloody, dog-eat-dog primary contest, and greatly harmed Carter’s chances of re-election in the 1980 election.

    I think that’s a pretty good laundry list of goals for Obama, but I’m not sure it’s entirely fair. The problems took far more than four years to develop. Some developed under eight years of BushCo, others go back even further.

    Even given a very difficult situation, I think Obama can deliver on at least three points of that laundry list. Of course, whether he has a supermajority in Congress or not will make a big diffference.

    1) Submitting a balanced budget in four years would be almost impossible.

    2-3) Health care reform seem likely. Will it be the right reform? We’ll see. But I’m sure we all agree, the current situation is untenable, and the Bush/McCain proposal of privatized accounts is silly.

    4) This one’s relatively easy. There are a couple options, including raising the retirement age by a year, to a small increase in the tax.

    5) You might want to narrow this item. Most Americans (but not corporations) oppose illegal immigration. Personally, I favor a nearly open border, and lots and lots of legal immigrants, the more the merrier. I think they represent a huge net gain for us. How does it go? Give us your tired, your hungry, your people yearning to be free!

    6) Amen! This should definitely happen!

    7) I’m not a fan of nuclear power. Personally, I think we should invest huge sums in R & D for solar power, and in the meantime, concentrate on conservation and amendung CAFE standards- kind of a ‘keeping the powder dry’ approach.

    8) I’m pretty sure tax reform will be accomplished in a way that’s acceptable.

    Posted by: phx8 at June 7, 2008 11:13 PM
    Comment #254891
    Submitting a balanced budget in four years would be almost impossible.

    No, it wouldn’t. [Here’s what we have going in, here’s what we have going out. Now make the two numbers balance]. Sorry, but if everyday people are expected to do it, surely our best and brightest can as well.

    McCain proposal of privatized accounts is silly.

    Right, because giving people power is wrong. It should be centeralized in Washington so that ‘we’ can decide how people live. Tax on fat, make fast food illegal, etc…

    Most Americans (but not corporations) oppose illegal immigration.

    Strange comment, considering Obama’s position on this… *shrug*

    Personally, I think we should invest huge sums in R & D for solar power, and in the meantime, concentrate on conservation and amendung CAFE standards- kind of a ‘keeping the powder dry’ approach.

    So, you’re saying ‘forced’ conservation, right? Now, how are we going to put huge sums into R&D when we are already bankrupt *AND* still be able to keep an economy going to generate enough taxes (or increased taxes, as you mention earlier, ignoring the healthcare increases) when we can’t do it now? The economy of today is going to look like a wonderland compared to what will happen if we go down the road you mention…

    BTW, the solar solution is already almost upon us and it came from private industry… Imagine that. http://www.konarka.com/index.php

    Oh, and while I’m at it, why is it that government is the group actually stopping solar plants from being built in the southwest? Something about environmental studies and local people not wanting the eyesores…

    I’m pretty sure tax reform will be accomplished in a way that’s acceptable.

    Meaning not at all?

    Posted by: Rhinehold at June 7, 2008 11:26 PM
    Comment #254893
    phx8 wrote: Several interesting things happened on Friday: the dollar tanked, oil boomed, and unemployment jumped. What is interesting is that the three are related, and the common denominator is debt.
    Yep. $53.2 Trillion nation-wide. Posted by: d.a.n at June 7, 2008 11:30 PM
    Comment #254897

    d.a.n.,
    You might like this relatively short article. It’s a diary from Daily Kos, a rabidly partisan site, but this diary is a terrific analysis of the economy, written by a person who has made seemingly unlikely predictions that have been proven dramtically right by subsequent events:

    http://www.dailykos.com/storyonly/2008/6/7/7755/26112/356/531537

    Rhinehold,
    Balancing a budget in just four years would cause huge dislocations. The pain it would inflict would exceed the gain. The critical piece of legistlation that brought the economy back into line under Clinton, the sexily entitled Omnibus Reconiliation Act of 1993, took years to make itself felt. Tax reform today using similar numbers to the Omnibus Act should help re-establish budgetary equilibrium.

    Are you opposed to Social Security Insurance? Do you believe a laissez-faire government social and economic policy along the lines of Victorian England is appropriate?

    Favoring privatization and deregulation and an absence of government in our lives is worse than impractical, because it leaves individuals, who are now theoretically free, at the mercy of large corporations- what we refer to today as the Military-Industrial Complex. The inevitable result of uncontrolled capitalism is the concentration of capital in the hands of a small number of wealthy people, disparities of wealth, oligopolies and monopolies, and boom/bust economies.

    It’s the achilles heel of libertarianism, Rhinehold, the inability to recognize the value or even existence of the public commons, and the need to take steps to make sure all of the public is included in disucssions of the public commons. In addition, libertarianism is, at its heart, a profoundly pessimistic political philosophy, because it works from the belief that people working together through the agency of government do more harm than good.

    Posted by: phx8 at June 8, 2008 12:11 AM
    Comment #254898

    phx8,

    What crap.

    libertarianism is, at its heart, a profoundly uplifiting political philosophy because it works on the belief that people can, and will, work together outside of the force of government to meet societies needs. That a government is necessary to protect the rights of the individual against the majority and outside forces. It should provide infrastructure paid for by those that use the infrastructure, allowing people to use or not use it as they saw fit depending upon their immediate life circumstances. Something that the current or proposed policies cannot and don’t want to do.

    Libertarianism is not an absence of government. It has nothing to do with ‘Victorian England’. You can get your facts straight or you can hear those you paint with a broad brush call you a communist, because that is the same thing you are doing to libertarins.

    In order for a market to be free, the government must regulate it. It must ensure that those who enter into contracts and agreements meet their ends of those agreements. This cannot be done without government. So your accusation on its face is invalid.

    I am opposed to social security as it stands now. It is a flawed pyramid scheme that is bound to fail (and will fail). Tax deferred retirement plans, with some of the interest going to a pool of funds to take care of those who need it due to disability, etc would make more sense, IMO, because it would not be compulsary.

    But that’s the rub, isn’t it, phx8? For your political policies to work, there must be forced compliance. The state MUST by definition use its ability to force people to comply.

    A government, turning its guns on its citizens for something as arbitrary as economics, is not a free form of government, phx8. For drugs, for economics, for property…

    What is wrong with letting people live their lives as they want to as long as they aren’t depriving anyone else of the same? Is that such an abhorrant way to run a country?

    Posted by: Rhinehold at June 8, 2008 1:11 AM
    Comment #254899

    phx8 Said , “Carter deserves criticism for his inability to work with a Democratic congress. It was a pretty corrupt bunch, led by Tip O’Neill, and they did not appreciate an honest, somewhat priggish outsider showing up in Washington DC. As a result, relations between Carter & Congress were very poor; so poor, that a leading Senator of the time, Ted Kennedy, ran against Carter in a bloody, dog-eat-dog primary contest, and greatly harmed Carter’s chances of re-election in the 1980 election” >so you admit the congress then was corrupt wow! Teddy did the right thing carter was as bad or even worse than Bush.

    Posted by: Rodney Brown at June 8, 2008 1:19 AM
    Comment #254902

    Rhinehold,
    “What is wrong with letting people live their lives as they want to as long as they aren’t depriving anyone else of the same? Is that such an abhorrant way to run a country?”

    Not at all. In fact, I don’t see it as a matter of “letting” anyone live their lives. Just the opposite. Government is derived from the people. The government does not “let” people live their lives. The people “let” the government exist. That is why an imperial presidency is so abhorrent.

    And I think it’s a good to keep as much of the nation in as natural of a state as possible. It’s intrinsically valuable in and of itself. In addition, the ability to go off and do the Thoreau thing, go trascendentalist, and escape “the getting and the spending,” should always be an option. I’m tempted to head for the door even as we speak, forget the civilizin’, and light out for the territories…

    But the truth is, most of us opt to live together and voluntarily cooperate. Sometimes that even means “forced compliance,” like obeying laws we disagree with, or paying taxes for stupid wars (and again, Thoreau had some GREAT things to say about this!), or funding infrastructure we may not use. Compromise is inherent in the social contract, just as it is inherent in politics. It’s the price we pay; a surrender of some of our valuable personal freedom in exchange for the benefits that come with living together with others. No one argues that it should not be a choice. The option to opt out must be maintained. Meanwhile, the conflict comes in how much we surrender our personal freedoms, and in what we receive in exchange.

    So I’m not blind to the attractions of Libertarianism, and obviously I am also attracted by the Greens. But the only way to maximize our potential as a society, a civilization, a group, is through traditional liberal philosophy. It’s not a philosophy that offers a free ride, in terms of personal freedom. But in return for participating in a government of “we the people,” it ensures the best chance for a fair distribution of the public commons, the creation of infrastructure, and so on.

    Hey, pardon the ramble…

    Posted by: phx8 at June 8, 2008 1:56 AM
    Comment #254903

    But as a certain rock group once sang, “ramble on…”

    If you wanted to see a national movement arise which represents “the people,” and which rejects top-down governance and corporatism, what do you think it would look like? Where would it come from?

    First, it would originate with an intelligent, inspiring, charismatic leader. Backed by a youth movement, primarily from colleges, universities, and urban environments, the charismatic leader would seek to overthrow corporatist influences, and take over one of the major party machines….

    In other words, it’s happening right now. This is probably as good of a chance as “we the people” will get in our lifetimes to see government brought back into the hands of the majority of Americans.

    It’s tough. We’re pessimistic and full of fear. The gist of the message of a major candidate is all about top-down governance: “Be afraid! You need a strong leader! Militarism is the key!”

    But the great thing about young people is that they don’t feel afraid. They’re optimistic. The still believe ‘we can.’

    Much to its own astonishment, the Democratic party has been taken over by liberals and the young. For the first time in memory, people are excited about what America can be…

    Posted by: Phx8 at June 8, 2008 2:17 AM
    Comment #254904

    phx8,

    First,’traditional liberal philosophy’ is what libertarianism is. In fact, it is often called ‘classical liberalism’ because of that. It was when someone decided that using the force of government to ensure the desires of the majority were forced upon the minority that the split between the classic liberal and the progressive liberal starts.

    No one is suggesting that with libertarianism we can’t ‘live together’, or whatever nonsense people use to try to say that libertarianism is about ‘mountain man’ mentalities. If we were to a live on 100 acres of land and almost never see each other, why would we need a list of rights that shouldn’t be violated? Why would we need liberty, it would just exist.

    The defense if liberty comes when people attempt to force others to live a life that they choose for them. Don’t like people smoking alone in their own homes? Pass a law. Don’t like gay people having sex? Pass a law. Don’t like someone eating a bigmac? Pass a law. These things aren’t here now, but they are coming. Most likely once we are now responsible for everyone’s healthcare…

    The simple fact is that if the majority want to get together and do something, they can. There is no need for government to be invovled then, the people just come together and do it. BUT, when they want the minority to do that as well, well, that’s when a law is needed.

    Now, some laws are good and some government is necessary. We have a law against theft. Great law! Taking someone else’s property is a violation of letting them lives their lives as they see fit. Same with murder. Rape, confinement, assault, etc.

    However, when we start saying that the guy down the street, who we may or may not have ever met, has to take care of the guy across the street who is having a hard time, and if he doesn’t we’ll put him in jail… well, that’s a different animal, isn’t it? That guy SHOULD help, but we may not know his circumstances. He may just be a prick. When has that become a crime?

    Libertarians think that inheritely people are good. As Harry Chapin said in a song that I dearly love (What Made America Famous) and recommend everyone listen to. Seriously, stop what you are doing now and listen to that song to get a glimpse of what my view on society is…

    It was the scene that made America famous. If not the love that made America great. You see we spent the rest of that night in the home of a man I’d never known before. It’s funny when you get that close it’s kind of hard to hate.

    I went to sleep with the hope that made America famous.
    I had the kind of a dream that maybe they’re still trying to teach in school.
    Of the America that made America famous…

    and of the people who just might understand
    That how together yes we can
    Create a country better than
    The one we have made of this land,
    We have a choice to make each man
    who dares to dream, reaching out his hand
    A prophet or just a crazy God damn
    Dreamer of a fool - yes a crazy fool

    There’s something burning somewhere.
    Does anybody care?
    Is anybody there

    Posted by: Rhinehold at June 8, 2008 2:19 AM
    Comment #254937

    But the great thing about young people is that they don’t feel afraid. They’re optimistic. The still believe ‘we can.’

    Much to its own astonishment, the Democratic party has been taken over by liberals and the young. For the first time in memory, people are excited about what America can be…
    Posted by: Phx8 at June 8, 2008 02:17 AM

    Sorry Phx8, but when I listen to Obama I hear him saying “ask what American can give you that belongs to someone else.” Growing government is not an example of a “we can” attitude unless one means we can demand a handout from someone who has more than we do.

    This is appealing to many folks. Something for nothing and the idea that someone owes me is hardly a recipe for success. In my opinion Obama is just a talented political pick-pocket.

    I know many young people of college age and for the most part, I would trust few of them to change a lightbulb, much less the government.

    Posted by: Jim M at June 8, 2008 1:43 PM
    Comment #254938


    “That is why an imperial presidensy is so abhorrent.”

    Phx8: I have never witnessed a time when we haven’t had an imperialist president. McCain and Obama are competing to see who will be the next imperial president. What do they do when they take the stage? They give a generality speech about all the thhings they are going to do if they are elected. Of course, the devil is in the details, but they aren’t going to address the details.

    Do you think McCain is going to say, my healthcare plan will still leave 40 million americans without healthcare and the prices still going to rise at triple or quadruple the inflation rate? Will Obama say that my universal health care plan will leave 16 million Americans uncovered and prices will still rise more than the inflation rate?

    Let’s say that Obama is going to give a speech in a large stadium that is crammed with over 100,000 Americans. A few of those are wealthy, many are college educated, and the majority are working class Americans. Obama walks onto the stage, puts his speech back in his pocket and addresses the crowd in this manner. I am here because I want to be your servant, your representative, your leader in the government and I am here to ask you what you want me to do. So, let us begin. You in third row, what issue would you like me to address? Ok, how about the rest of you? Do you think I should do what this fine lady wants me to do?

    It doesn’t work that way, does it? Because that woman might say, I want you to arrest the employers of illegal immigrants and I want you to begin sending the illegals back to where they come from. Obama wouldn’t have to ask the audience for a response, because the cheers would drive the boos right out of the ball park.

    Obama is going to give a pretty speech about what he will do in extreme generalities with a lot of retoric about restoring the good old days before the Republicans had control. He is rather good at doing that, better than most of the politicians, 26 or 27 percent of the people are going to elect him president and then he and the Congress are going to do what they want to do and tell us it is for our own good. That is the imperial way, what has become the American way.

    A large majority of the American people want something along the lines that I wrote reguarding illigal immigration. However that would be bad for the illegals, bad for liberal and conservative business owners, bad for the corporations and profits. They would not take that sitting down. They might even shut the whole economy down.

    There are immigrants that Obama and the Democrats aren’t about to let into this country. The corporations want to import many college educated english speaking professionals into the country, perhaps as many as a few million. Obama and the Congress isn’t going to allow that are they?

    It’s is great for the economy if they bring in 30 million unskilled workers in, driving down wages and forcing Americans to compete for those jobs and government assistance (which is going to half to go way up). If that is good for the economy, then a few million professionals would be to. However, the liberal professionals would have a God awful hissy fit if Obama even considered doing that. They would probably caucaus his ass right out of the Whitehouse in four years or demand that he be impeached if he did what is best for the economy.

    Posted by: jlw at June 8, 2008 1:48 PM
    Comment #254943

    What was funny was I was doing some cleaning and ran across an old Doonsbury book I have. I hadn’t looked at it in years and flipped open to a section that just happened to be discussing Jimmy Carter and his run for the presidency…

    Man, was I reminded of where I had heard all of Obama’s rhetoric before. It was as if it was being written today.

    One specific one was when asked where hope was the issue, little Jimmy responds “Issues, smissues, I want you to vote for me based on my character…”

    I have to say, and I may go into it more later, but this is like a cycle recreating itself over and over again.

    Posted by: Rhinehold at June 8, 2008 2:24 PM
    Comment #254950

    What really worries me right at the moment is that the economic news on Friday was shockingly bad- the huge jump in the price of oil, the continuihg dramatic fall of the dollar, and the huge jump in the employment rate corroborated by another negative non-farm payroll number- and yet, despite these appalling numbers, the topic is very nearly ignored by both traditional media and non-traditional formats.

    Because what that tells me is that we’re far from done. We’re still on our way down. Worse, it’s a long, long way to fall. There’s no sense of fear or panic or capitulation which characterizes a bottom. Instead, the terrible news is accepted almost with little concern.

    Jlw,
    The last time we did NOT have an imperial president was Jimmy Carter. Nixon, Reagan, and Bush 43# have been the most extreme examples.
    Speaking of Jimmy Carter…

    Rhinehold,
    There are similarities to the candidacies of Carter and Obama. Both were charismatic, relatively unknown outsiders who went from being dark horse candidates to running as the party nominee.

    In addition, the GOP of the early 1970’s was reeling from the corruption of Richard Nixon and the pardon by his hand-picked successor, Gerald Ford. The economy was bad, inflation had been unleashed, the Middle East was highly unstable after the 1973 Yom Kiippur War and the First Oil Shock, and it would not be until the climactic recession early in the Reagan administration before some of the problems were resolved.

    Like Carter, Obama faces being handed a country in pretty bad shape. The economy is bad and getting worse, and the problems are of such a nature that it will probably take more four years to right again. Carter faced the aftermath of Vietnam, and Obama faces the aftermath of losses in Iraq and in Afghanistan and a failed War of Terror.

    Worse is the… spiritual… damage to the country Obama faces. Carter faced an America profoundly disenchanted and distrusting of politicians. Obama now faces the same. Obama faces a country which has been full of fear of foreigners and immigrants, and has lost its confidence, its belief in itself.

    And as corny as it sounds, if there is anything Obama has to offer the country, it is his confidence, an American spirit of “yes we can,” a resumption of pride in what it means to be an American, and that the country has something more to offer its citizens and the world other than a powerful military. “Hope” has been a rare commodity. And we’re going to need it.

    Posted by: phx8 at June 8, 2008 3:11 PM
    Comment #254952

    phx8, actually the news was bad for short term investor markets, commodities excluded. These statistics released on Friday are snapshots of the short term economic picture.

    The longer term economic picture is not good, but can be made better depending upon fiscal, legislative, and foreign policy implemented over the next 4 years.

    I agree with you, that there is no moving forward to a better future without the hope and confidence that we can. That is a prerequisite ingredient toward improving the future. Another is that a fair amount of the change needed toward a better future is going to have to come from a shared responsibility and sacrifice from the bottom up.

    The old see-saw of helping the poor by taking from the rich or vice versa will not move us forward, but, backward. Obama offers a different view, and we know how so many Americans are afraid of anything different.

    Posted by: David R. Remer at June 8, 2008 3:36 PM
    Comment #254953

    David,

    How is Obama offering anything other than more of the same helping the poor by taking from the rich? I’m curious, genuinely, because what I see are the same policies that the Democrats have been trying to get enacted for over a decade. Wrapped in a handsome motivational speaker.

    Posted by: Rhinehold at June 8, 2008 4:08 PM
    Comment #254955

    David,
    And after all the other economic developments, the DJIA fell almost 400 points, and no one has said boo.

    Rhinehold,
    “How is Obama offering anything other than more of the same helping the poor by taking from the rich?”

    Because the current conservative Republican economic policy involves wealth capture. Obama offers a program of wealth creation. These are two very different things.

    An example of wealth capture is eliminating taxes on dividends and capital gains.

    An example of wealth creation is targeted tax cuts, tax increases, and tax credits, targeted to favor the poor and middle, who likely to spend re-invest in the economy, and targeted towards sectors of the economy & R & D which offer higher returns on investment. Another example is the program for investing in infrastructure.

    Posted by: phx8 at June 8, 2008 4:16 PM
    Comment #254963

    phx8, Thanks for the links. Despite the source, there’s a lot of truth in what that article is saying.

    I’m don’t think it is an Anglo disease
    It’s something that will happen in any society, given similar conditions.

    The most fundamental human flaws are at the root of all of our problems: fiscal and moral bankruptcy.
    The evidence of that abounds everywhere.

    While most people want to wallow in the distracting partisan warfare, the nation is falling apart.

    Not long ago, I was considered a chicken-little, the sky-is-falling, dooms-dayer. Likewise for David R. Remer. Funny how those assertions have been subsiding.

    There is little doubt in my mind that most Americans will have to learn the hard way (again).

    Perhaps, when enough Americans are jobless, homeless, and hungry (or worse), they will finally question the wisdom of repeatedly rewarding irresponsible incumbent politicians with perpetual re-election.

    At any rate, the voters have the government that the voters elect (and deserve).

    Posted by: d.a.n at June 8, 2008 7:55 PM
    Comment #254983

    In foreign affairs Ford acted vigorously to maintain U. S. power and prestige after the collapse of Cambodia and South Viet Nam. Preventing a new war in the Middle East remained a major objective; by providing aid to both Israel and Egypt, the Ford Administration helped persuade the two countries to accept an interim truce agreement. Detente with the Soviet Union continued. President Ford and Soviet leader Leonid I. Brezhnev set new limitations upon nuclear weapons

    Posted by: Rodney Brown at June 9, 2008 12:07 AM
    Comment #255029

    Rhinehold, how can Bush’s taking from the poor and giving to the rich be the same as Obama’s “taking from the rich to give to the poor”? Sorry, doesn’t equate. A very different strategy at play here. In a world of finite resources, one must go to where the resources are to obtain them.

    Obama has only begun to lay out the nuts and bolts of his economic plan and agenda. Let’s hear it out, without prejudging it. Give a fair hearing. If it falls short, I will join in you lambasting it. But, the wealth gap must be addressed. It is fomenting fuel for civil unrest if left unchecked.

    Like Warren Buffet says, requiring billionaires to give up a couple percent of earnings does not paupers make of them. Nor does it change their investment behavior. That kind of money will always seek to invest and grow itself for the lending.

    Windfall taxes on corporations achieving record breaking profits while they sit on vast resources for increasing their productivity and revenues will not diminish their economic activity, and stands a good chance of increasing it.

    Let’s wait to hear the nuts and bolts. I am leery of Obama’s economics at this point myself, due to its lack of completion and major pieces, and hard numbers, and assumptions.

    Posted by: David R. Remer at June 9, 2008 5:02 PM
    Comment #255030

    phx8, the Dow’s single day drop only has meaning for investors long and short in the markets. Its the trend that we have to watch, and so far, the markets are stuck in a trading range and unable to break out. In and of itself, that may be a good sign for everyone including long term investors, given the more intractable challenges facing the credit and financial markets and institutions.

    A trading range means the absence of total capitulation acceding to the notion that the economy will not rebound before 2010 or beyond. It also means speculators are powerless to move the markets as they would like to, (commodities markets excepted of course).

    Posted by: David R. Remer at June 9, 2008 5:07 PM
    Comment #255116

    Congress increased the minimum wage about a year ago with more increases to come automatically. As our good friend Rev. Wright would say, “the chickens have come home to roost” as we see unemployment rise. Of course the blind on this blog will cite all the other possible reasons rather than admit the core problem.

    We have congress calling for caps on the wages of executives which they somehow believe is constitutional and to use Obama’s favorite word, “fair”! Is the word “fair” even used in our constitution, I think not. If I am wrong I’m confident I will be corrected.

    We have congress considering a God-awful Cap and Trade bill which is nothing more than an increase in our taxes. In the usual liberal fashion the stinking thinking goes that shrinking demand will create more supply.

    And, we have congress calling for a windfall tax on our oil energy producers. Once again, just another tax passed along to you and me. I read today that Russia has just lowered the tax on their oil industry to encourage more exploration.

    It would seem the Russians have finally learned the lesson that American has know for decades and forgotten. You get less of what you tax and more of what you subsidize. America has proven reserves of oil and natural gas that could make us independent of foreign oil and we refuse to use it. Just more ignorance and silly pandering to the “green” crowd.

    We have been using nuclear power for sixty years with an outstanding safety record in the U.S. and most of the world and yet many obviously prefer cursing the darkness that will come this summer in some areas facing brownouts and blackouts. We’ll have a congressional investigation and more calls for impeachment. And, nothing will change, just more blame-game playing.

    I just love reading these blogs in which many prove time after time that politics and power trumps all. No common sense allowed. To quote Robert Byrd, pity, pity, pity.

    Posted by: Jim M at June 10, 2008 12:27 PM
    Comment #255226

    The federal minimum wage is irrelevant to Illinois and about a dozen states with almost half the population of the country. I would be in favor of lowering or eliminating it, if I though it would get people to leave the states affected by the federal minimum wage, and move to more prosperous places.

    Posted by: ohrealy at June 11, 2008 5:16 PM
    Post a comment