Friday, August 7, 2009

Actually, it's been bad for some 10 years

While folks are bemoaning the current economic crisis, the Bureau of Labor Statistics has been reporting information for some 10 years that show it hasn't been good for at least 10 years!

In short, jobs in the private sector have been decreasing since shortly after the start of the Bush administration. All this "private enterprise" and "ownership society" crap, and jobs were declining constantly in the private sector. The only saving grace was that "THE ENEMY", government was hiring. But every right winger I know will tell me that the voodoo economics they espouse builds wealth and creates jobs.

WASF, and deserve it!



  1. I'd wager a lot of us feel like a cosmic voodoo doll is out there somewhere.

    I used to think Libertarians had something going for them.

    They've been consumed by their ideology, even the poor ones.

    I suppose that there are some who have eyes to see that trickle down is nothing more than pee on me.


  2. Absolutely, Al. The raw data are correct. However, there is a deeper story in all of this, and that's the growing divide between the educated and the uneducated, specifically between college degree holders and those who don't have degrees.

    To begin with, for many years, our immigration policies—for both legal and illegal immigrants—have favored people, who, although they may be great manual laborers and may sometimes even be skilled workers, have little formal education. We see these folks all around us, working on our yards, building our houses and serving us in restaurants. When the economy dips, they're the first to go, because people don't buy new houses, decide to do their own yard work and don't go out to dinner as often.

    And, with respect to the immigrants, many do not understand or value education, which means they do not infuse their children with that burning desire to better themselves. I grew up in a family where each generation was expected to do better than those preceding; this is not the case with too many immigrants, or, for that matter, native born people as well. During my brief foray into teaching at the HS level, I used to hammer kids about how being literate and well-spoken could open new vistas. Most did not care; worse, their parents didn't either.

    Conversely, the labor market for college grads has always been pretty stable. For years, the unemployment rate for grads used to be hover around 1-2%; I think it's now about 4%, a figure that makes the true employment figures for non-grads and immigrants even bleaker. To make it even worse for the uneducated, some college grads are now having to settle for lower-level jobs (not much market for English Lit majors), and with their resumes, they can snatch up jobs that used to go to bright, uneducated folks.

    Young American men are also confounding educators. Women now outnumber men at a number of colleges. Many of our young men, have, for whatever reason, decided to opt out of higher education, a decision we all know will haunt them for the rest of their lives. Frankly, from what I've seen, the women are doing a much better job in focusing their lives. And, from the war story archives, I grew up in a blue collar environment, and I can't tell you how many of the people I went to high school with have told me how much they envy me. Family members, too.

    My daughter is a college graduate (with graduate degree) and she's done very well, better than I did, which pleasures me greatly. She's not in danger of losing her job, but even if that were to happen, she's prepared. She's frugal, and she's good with money. Plus—and this is critical—she's got a network all over the country and has standing job offers. And there's another benefit of higher education: life skills and the ability to network.

    To me, it's all education, although ironically, if "No Child Left Behind" were to be a resounding success, the gulf between grads and non-grads would diminish and college grads wouldn't get so much favorable treatment. But, IMO, there's no danger of that happening. The majority of Americans have seemingly opted out of the American dream; it seems they still think huge numbers of great blue collar jobs will somehow be magically available for their kids.

    Our world has changed dramatically and too many of our people haven't kept up. It necessarily follows that I think we're sitting on a powder keg of major future social unrest.

  3. To be frank, Publius, I have come to the conclusion that there are a lot of people who want to be, or need to be just plain stupid. I offer the following exchange that popped up on a discussion of a marketing exercise that Piaggo conducted in NY. The discussion was focused solely on the marketing technique in use, not tax policy, carnon emissions or the like. I will leave out the person's initial comments about how "Cap and Trade" was going to undermine any effort at increasing sales.

    At it's heart the Carbon Tax is an economics issue. It is a tax on the emission of carbon which will raise the cost of every single thing that is produced in the United States.

    Example: Joe the Baker knows that it costs X amount of energy to produce a loaf of bread. The Carbon Tax increases his monthly power bill by 20%, because the power company passes along their increased costs to him.

    Joe the Baker must either:

    Charge 20% more for a loaf of bread.

    Charge the same, and lay off employees to cut costs to his bottom line.

    That is a simple economics argument. No politics involved.

    I responded:

    In order to need to charge 20% more for the loaf of bread to cover costs, the electric bill would have to represent 100% of the cost of producing the bread. Thus, this baker would be getting his flour, water, yeast, salt, sewage, equipment, telephone, employees and physical plant for free. I have left out numerous other costs of business for the sake of brevity.

    If he is getting all of that for free, his costs are probably 90-95% lower than his competition, who pays for all those items, and if he's selling his bread at market prices, he's making a fortune.

  4. PART II

    In defense of his statement he offers:

    No, I did not say that was the entire cost of the bread, I merely said that if he had to pay 20% more in energy to produce that bread (one factor), he would either have to pass that along to his customers, or fire staff.

    I could also factor in the extra money it would cost for the delivery of the raw ingredients for the bread from their various locations, since the carbon tax affects everything that moves, and then add in the extra cost of delivering the bread too.

    I told this story as a hypothetical, but it is based on real life, and was all over the news recently.

    I chose this example, because CNBC actually had a man on who owned a bakery called McArthur's Bakery in Missouri that employed about 120 workers, and he explained exactly how the carbon tax would leave him with hard choices to make, either raise prices, or fire employees.

    To which I reply:

    If electricity represents 5% of the cost of a loaf of bread, a 20% increase in electricity cost would raise the cost of bread production 1%. If the cost of electricity is passed on directly to the consumer, Joe must raise his bread price 1%, not 20%. No matter where the story came from, the math in the example as quoted above is simply wrong. The price of every cost element involved in the production of the bread would have to increase by 20% for the example being made to hold true.

    But he "proves me wrong" with:

    The math was not meant to be calculated out, as it was a hypothetical to illustrate a theory. I have no idea how much energy a loaf of bread costs to make, and you pobably don't either, so your 5% number is as arbitrary as mine. What counts is the principle that every single thing we produce or transport in America will go up in price, that price will then either get passed on to the consumer, or small businesses will have to fire people to maintain their bottom line. There is no way around that fact.

    In the example of the bread maker in Missouri, he said (on CNBC) his electric bill would increase by 10% under cap and trade. You can easily get to another 10% in cost increase by transportation costs of raw goods going in the door, and bread going out the door.

    The absolute lack of logic and total obliviousness to the mathematics is overwhelming. Cap & Trade is bad, and the numbers do not have to obey the rules of mathematics. And hypotheticals do not have to conform to the rules of mathematics!

    They are out there in droves and actually earning a living and spawning!


  5. Once had an older real estate broker tell in all seriousness that while prices and fees for everybody else had gone up over the years, real estate broker fees were still stuck at seven per cent.

    Walter Olin

  6. I think it's worth remembering that this doesn't represent some sort of dramatic dumbing of the American mind. I'd argue that most people, everywhere, either can't or won't use 90% of their intellectual horsepower.

    I DO think that the difference we're seeing relates to a couple of trends over the past 20 years. One is the virtual disappearance of blue collar and craft-type jobs. The sort of mill work, farm work and craft work (masonry, finish carpentry, metalwork) that used to absorb the young men from the working class has almost vanished. That throws these guys either into the mixer with the upper class kids who are FAR better prepared for college-level academic work and college-skill type jobs. Or they end up sinking into the marginal world of part-time employment.

    And I think there's also something to Publius' observation of the effect of a real diminution of expectations. I went to public school in the 1960s, when we were expected to maintain a middle class standard of dress, deportment, literacy and speech. I was corrected in math class for using "ain't" and in English class for not understanding the difference between median and mean. My experience in public schoolteaching in the past decade showed me that this level of acculturation is past.

    But I think that the rise of the New Know-Nothingism is a huge factor here, too. The GOP, in particular, has celebrated the sort of "Joe The Plumber" stupidity and raised it to a cultural norm for their 27%. It serves a dual purpose: as an attempt to disenfranchise the non-white and non-conservative, and, especially, it serves the economic and political elites who run the GOP by preventing their legions of white dumbasses from questioning why corporate profits soared in the past thirty years and yet the income of the bottom three quintiles barely moved.

    What do they say about a fool and his money..?

  7. Publius has several good points but there are at least two other factors that he hasn't mentioned.

    The population generates about 200,000 new potential employees per month (2.5 million per year). The economy needs to generate at least that number per year in order to keep things in balance.

    Starting in 1985 the federal government started changing the way they calculated statistics on unemployment and decided not to count people whom they considered to be "discouraged workers." I can see the justice of both sides of the argument.

    I've got a friend who dropped out of the work-force to become a househusband. He milked the system as long as he could be eventually fell out and now depends solely on his wife's income. The government's decision is good in his case.

    I've got another friend who worked for a very long time in a very obscure field and was eventually downsized. He's had a difficult time adjusting and has learned new job skills just as they are about to become obsolete. So he has had brief periods of employment followed by year+ stints of unemployment where he falls out of the system.

    The net result of this is that even though the population is still expanding, the government's official pool of workers has been declining. This means that there are more and more people falling through the cracks of government assistance programs. Although these people are officially citizens of the US, they officially don't count for anything work-related and are beginning to fall through the cracks of the government social systems.

    Now you throw in much higher unemployment in the official pool of potential employees and the situation becomes even grimmer. tries to count the official "discouraged workers" in their numbers and claim that the unemployment rate is actually somewhere around 22%. Yikes!

  8. Pluto: I've been worried about this for a long time.

    One of the basic principles this nation was founded on was the notion that Americans would take an impassioned interest in their government because of the stake they had in its actions. The Founders had a vision of Americans as fiercely independent smallholders, merchants, sailors and artisans who would be beholden to nothing and no one. Thus their participation in the governing of the nation would be driven purely by "enlightened self-interest".

    Part of their fear was the influence of the "mob", what the Romans called the capti censi, the wage-slaves and layabouts who lived off the dole and were swayed by whoever promised them the most largesse.

    Well, between our tax policies and our economic policies were are rapidly becoming a nation of the very wealthy and the entrepreneurs, a middle level of cubicle rats and a vast puddle of capti censi unemployed, underemployed, immigrant service workers and marginally criminal, gray-economy plebs at the bottom.

    That can't be good for us as a nation.

  9. I was very glad when my nephew apprenticed to become a plumber.

    As long as people are around, they will need plumbers and because it is kind of icky technical work, they are fairly well paid.

    It is also relatively hard to off shore the work.

    I was surprised that so few of his peers considered going into trade school.

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