In the US, it's all about jobs. So you might think that the rest of the developed world has a jobs problem. It doesn’t.
Let’s take a look. What can we learn from this?
In an earlier sketch (World Order Reversed) we noted that election results in the UK and Europe have moved decidedly right, this after lessons learned the hard way. From that piece: “If you look across Europe, the political center of gravity has clearly moved to the right,’ notes Charles Kupchan, sr fellow at the Council on Foreign Relations, ‘There were deep and broad structural problems of the economy that Europeans had to tackle.” The nearest role model was the UK under Thatcher. “Now that process,” continues Kupchan, “of undoing large state-centered economies is moving to the Continent.”
Europe, the UK and Australia (5.1% unempl.) are already looking to be in reasonable shape after the crisis, at least if measured by joblessness, which is most cases is now at pre-crisis levels. But of course not the US. Why?
From the recent IMF annual meeting, the mood as one headline suggested is that, “ Jobless American threatens to bring us all down.”
My goodness sakes alive folks, they’re looking at us as cripples! The IMF is lecturing the US? This can’t be true! Ah, but yes it is. With policies that look reckless in comparison with the rest of the developed world, why not?
There is nothing new under the sun. Rich Rahn at the Cato Institute: “Mankind seems to be programmed not to remember the reasons for economic success and failure - and these lessons seem to need to be relearned every few years. The normal course of events is for free and prosperous economies ... to move toward less freedom - more government spending, taxation and regulation - until the burden of government brings growth to a halt or near-halt.”
Well Rich ol buddy, maybe not “mankind” but certainly the US left, suffering as they do from amnesia. So like children at the dinner table, making nothing but noise and a mess, they were scolded; they are now being put to their room.
But guess what? The kiddies rarely learn a thing.
This dear readers explains the cycle; this in fact is why progress is retarded, moving only in ratchet fashion yet with slippage along the way. We all suffer for it.
A party controlled by radicals at the national level, gained traction; the rest is history. Using gov’t in the fields of stimulus and health, and with union payoffs BO, Pelosi, Frank and the rest are simply repeating early errors of the UK and Europe (errors now being reversed).
But then we all know that don’t we? Yes indeedee, there must be something else and there is. BO’s gang, being not completely stupid understood that neither health nor stimulus would deliver in the conventional sense anyway. That wasn’t what this was about. It was about leveraging a crisis for a long hibernating statist agenda, an agenda so firmly welded to the far left’s consciousness that many where willing to self destruct - hari kari sytle, off the cliffs - to see to its fruition.
Robert Craven
Tuesday, October 12, 2010
Friday, October 8, 2010
Employment
Today’s Sep Payroll number surprised to the weak side, down 95M. There was another huge decline in census workers, and a large decline in state and local gov’t workers (which can’t be a bad thing!).
Private sector jobs rose a tad (+64M). After falling steadily between Dec/07 and Oct/09, private sector employment has increased modestly every month this year, averaging 95M per month. Translation - sustained but modest increases in these jobs.
Employment is now 7.6MM below the Dec/07 peak level.
The unemployment level was unchanged (9.6%) vs expectations of 9.7%. This was due to a smaller increase in the labor force (+48M) than in household employment (+141), resulting in a decline in unemployment (-93M). There are now 14.8MM people unemployed.
Naturally this release will provide fuel for conservatives in November.
Weakness in job creation simply did not have to be; it was not baked in the cake following 2008 or any other downturn for that matter. Most of us knew that limited gov’t interference, and lower tax burdens both on consumer and business, will do the trick. It worked for JFK and it worked for Reagan.
Finally, some of us knew that it is impossible for gov’t “stimulus” plans to create jobs on a net basis. Most of Obama’s people knew it too. We must ask, have they no decency?
No, none of this had to be. It is such a tragedy.
Robert Craven
Private sector jobs rose a tad (+64M). After falling steadily between Dec/07 and Oct/09, private sector employment has increased modestly every month this year, averaging 95M per month. Translation - sustained but modest increases in these jobs.
Employment is now 7.6MM below the Dec/07 peak level.
The unemployment level was unchanged (9.6%) vs expectations of 9.7%. This was due to a smaller increase in the labor force (+48M) than in household employment (+141), resulting in a decline in unemployment (-93M). There are now 14.8MM people unemployed.
Naturally this release will provide fuel for conservatives in November.
Weakness in job creation simply did not have to be; it was not baked in the cake following 2008 or any other downturn for that matter. Most of us knew that limited gov’t interference, and lower tax burdens both on consumer and business, will do the trick. It worked for JFK and it worked for Reagan.
Finally, some of us knew that it is impossible for gov’t “stimulus” plans to create jobs on a net basis. Most of Obama’s people knew it too. We must ask, have they no decency?
No, none of this had to be. It is such a tragedy.
Robert Craven
Wednesday, October 6, 2010
JOBS
Friday we have the employment report for September. Formally known as the Non-Farm Payroll report, the BLS gives us a monthly read for payroll in all categories except farm, domestic help, general gov’t employees and some non-profit types.
Key concern nowadays - jobs. Thus, this release carries the potential to move voter attitude significantly +/- if the result varies from consensus.
Observers expect a lift in the unemployment rate to 9.7% from August’s 9.6%. Employment is expected to be unchanged after a 54M drop in August.
The length of the average workweek is expected to remain unchanged (34.2 hours); total hours worked are expected to increase 0.1% from an unchanged figure for August.
Finally, hourly earnings are expected to rise by 0.2%, putting the Sep level at just 1.8% above its year ago level, one of the smallest increases of the last 6 years.
“General gov’t employees” could care less what numbers pop up on Friday. For working Americans, and especially for the rest of us who are in markets tagged to discretionary spending we know payroll activity is key - trickle down.
The US economy is firing on 5 or perhaps 6 of 8 cylinders. Wonder why?
That is what the November elections are about. To the extent Obama’s agenda can be reversed and significant uncertainties plaguing the employer can be eliminated, Payroll numbers will trend higher, 2011. It’s that simple.
Most Americans understand that it's critical that we do away with all that a statist president has placed in front of a meaningful recovery - tax & nationalized energy scheme, the health heist, the stimulus tragedy, GM/union bailout, the risk of much higher taxes, corp and individual, the threat of even more gov’t control of even more segments of this economy.
With this dread ahead, no one will hire. You kidding me?
We return to our slogan: First, stop the damage. Next, make repairs.
Robert Craven
Key concern nowadays - jobs. Thus, this release carries the potential to move voter attitude significantly +/- if the result varies from consensus.
Observers expect a lift in the unemployment rate to 9.7% from August’s 9.6%. Employment is expected to be unchanged after a 54M drop in August.
The length of the average workweek is expected to remain unchanged (34.2 hours); total hours worked are expected to increase 0.1% from an unchanged figure for August.
Finally, hourly earnings are expected to rise by 0.2%, putting the Sep level at just 1.8% above its year ago level, one of the smallest increases of the last 6 years.
“General gov’t employees” could care less what numbers pop up on Friday. For working Americans, and especially for the rest of us who are in markets tagged to discretionary spending we know payroll activity is key - trickle down.
The US economy is firing on 5 or perhaps 6 of 8 cylinders. Wonder why?
That is what the November elections are about. To the extent Obama’s agenda can be reversed and significant uncertainties plaguing the employer can be eliminated, Payroll numbers will trend higher, 2011. It’s that simple.
Most Americans understand that it's critical that we do away with all that a statist president has placed in front of a meaningful recovery - tax & nationalized energy scheme, the health heist, the stimulus tragedy, GM/union bailout, the risk of much higher taxes, corp and individual, the threat of even more gov’t control of even more segments of this economy.
With this dread ahead, no one will hire. You kidding me?
We return to our slogan: First, stop the damage. Next, make repairs.
Robert Craven
Friday, October 1, 2010
US Economy Ahead - A Layman's Guide
Let’s expand a tad on the Sep/20 sketch.
In explaining the delayed recovery there’s no need to get tangled up in page-long equations and econ mumbo jumbo. (Others, more qualified, have already done the heavy lifting.)
Observers have highlighted the parallel - this experience and the Depression. Great sums of $ were spent by FDR and Obama. In both cases, the employment situation worsened significantly soon after.
Readers will recall from an earlier sketch that unemployment peaked at 9% two months after the Oct/29 crash, then headed downwards, to 6.3%, June/30. Then came the first federal spending spree. Unemployment hit double digits, Dec/30.
Phil Gramm recounted this experience in today’s WSJ. Gramm also quoted FDR’s treas secty, Henry Morgenthau, just as we did several months ago. Morgenthau summarized as follows when before Way and Means, Apr/39: "Now, gentleman, we have tried spending money. We are spending more than we have ever spent before and it does not work . . . I say after eight years of this administration we have just as much unemployment as when we started . . . and an enormous debt, to boot.”
We called gov’t spending a “tragedy” and noted the exercise would be at best a wash, likely a retardant. It proved to be a retardant.
It never works folks. If you didn’t take our word for it two years ago, do it now. The stimulus deal was a scam. Obama is not entirely stupid. He knows this the same as we do. He just figured he’d take in the masses (who in fact excused FDR but won’t BO, not for this nor the health heist).
The other similarity between the two experiences is that in both cases the presidents refused to cut taxes. We know from Kennedy / Reagan that this works. Since Obama is more concerned with not offending far-left zealots than seeing to the welfare of America, he won’t do that.
And this brings us to Oct/2010. Where now? First, tune out the TV prophets, the ex -spurts.
Next, put your ear to the ground. We did. We listened to major employers. Sure, they are risk takers yet there is just too darn much legislative-driven uncertainty ahead for even them to do anything but sit on their cash. Why? A statist at the helm is a death threat.
What then will provide the spark to potential employers and consumers alike? We all know the answer, not tough at all. First comes Nov/2010 when major harm being inflicted is stopped (with our 40% risk that Dem lame ducks will twist the knife). Next will be the period of resuscitation, that of 2011, when the health heist is reversed, tax cuts ironed in, cap & trade put to bed. By that time the economy - short of a major international wild card event - will be moving along very well.
Our plastic surgeon pal will be doing more lifts. Our nursery pals will be selling more plants. And, the Maui vacation-home market will come alive!
Robert Craven
In explaining the delayed recovery there’s no need to get tangled up in page-long equations and econ mumbo jumbo. (Others, more qualified, have already done the heavy lifting.)
Observers have highlighted the parallel - this experience and the Depression. Great sums of $ were spent by FDR and Obama. In both cases, the employment situation worsened significantly soon after.
Readers will recall from an earlier sketch that unemployment peaked at 9% two months after the Oct/29 crash, then headed downwards, to 6.3%, June/30. Then came the first federal spending spree. Unemployment hit double digits, Dec/30.
Phil Gramm recounted this experience in today’s WSJ. Gramm also quoted FDR’s treas secty, Henry Morgenthau, just as we did several months ago. Morgenthau summarized as follows when before Way and Means, Apr/39: "Now, gentleman, we have tried spending money. We are spending more than we have ever spent before and it does not work . . . I say after eight years of this administration we have just as much unemployment as when we started . . . and an enormous debt, to boot.”
We called gov’t spending a “tragedy” and noted the exercise would be at best a wash, likely a retardant. It proved to be a retardant.
It never works folks. If you didn’t take our word for it two years ago, do it now. The stimulus deal was a scam. Obama is not entirely stupid. He knows this the same as we do. He just figured he’d take in the masses (who in fact excused FDR but won’t BO, not for this nor the health heist).
The other similarity between the two experiences is that in both cases the presidents refused to cut taxes. We know from Kennedy / Reagan that this works. Since Obama is more concerned with not offending far-left zealots than seeing to the welfare of America, he won’t do that.
And this brings us to Oct/2010. Where now? First, tune out the TV prophets, the ex -spurts.
Next, put your ear to the ground. We did. We listened to major employers. Sure, they are risk takers yet there is just too darn much legislative-driven uncertainty ahead for even them to do anything but sit on their cash. Why? A statist at the helm is a death threat.
What then will provide the spark to potential employers and consumers alike? We all know the answer, not tough at all. First comes Nov/2010 when major harm being inflicted is stopped (with our 40% risk that Dem lame ducks will twist the knife). Next will be the period of resuscitation, that of 2011, when the health heist is reversed, tax cuts ironed in, cap & trade put to bed. By that time the economy - short of a major international wild card event - will be moving along very well.
Our plastic surgeon pal will be doing more lifts. Our nursery pals will be selling more plants. And, the Maui vacation-home market will come alive!
Robert Craven
Wednesday, September 22, 2010
World Order Reversed
Background from the Hoover Institution’s Thomas Sowell: “One of the ideas that has proved to be almost impervious to evidence is the idea that wise and far-sighted people need to take control, and plan economic and social policies so that there will be a rational and just order, rather than chaos resulting from things being allowed to take their own course. It sounds so logical and plausible that demanding hard evidence would seem almost like nit-picking.”
Thank you Tom. Indeed, we have all studied control of the violent variety: French, other revolutions. Even of the less violent flavor, the planners are high IQ types; they have all the facts at their disposal and naturally the power of enforcement. And almost everybody has to try it just once.
Friedman and others saw the central flaw. Most charged ahead, which includes of course the USSR in the extreme sense, the UK after WWII and Europe to one degree or another. The US took the other course, with a needed mid-stream correction applied by Ronald Reagan.
The USSR’s experiment folded, Thatcher resuscitated the UK, yet most of Europe continued to surrender decision making to gov’t types. Meanwhile, the US remained a beacon.
Until now. We have witnessed a drastic and rapid reversal of world order. Past two years most of Europe have moved center right, this after years of witnessing the destruction to society effected by planners. It was the crisis of Q4 ‘08 (for which we thank the Democrats) which accelerated the process. As reported in today’s Washington Times, “If you look across Europe, the political center of gravity has clearly moved to the right,’ notes Charles Kupchan, sr fellow at the Council on Foreign Relations, ‘There were deep and broad structural problems of the economy that Europeans had to tackle.” The nearest role model was the UK under Thatcher. “Now that process,” continues Kupchan, “of undoing large state-centered economies is moving to the Continent.”
Thus, as the balance of the free world moves right, embracing personal initiative and personal freedoms, we under BO have moved decidedly left.
Another needed mid-stream correction is soon to be applied.
Robert Craven
Thank you Tom. Indeed, we have all studied control of the violent variety: French, other revolutions. Even of the less violent flavor, the planners are high IQ types; they have all the facts at their disposal and naturally the power of enforcement. And almost everybody has to try it just once.
Friedman and others saw the central flaw. Most charged ahead, which includes of course the USSR in the extreme sense, the UK after WWII and Europe to one degree or another. The US took the other course, with a needed mid-stream correction applied by Ronald Reagan.
The USSR’s experiment folded, Thatcher resuscitated the UK, yet most of Europe continued to surrender decision making to gov’t types. Meanwhile, the US remained a beacon.
Until now. We have witnessed a drastic and rapid reversal of world order. Past two years most of Europe have moved center right, this after years of witnessing the destruction to society effected by planners. It was the crisis of Q4 ‘08 (for which we thank the Democrats) which accelerated the process. As reported in today’s Washington Times, “If you look across Europe, the political center of gravity has clearly moved to the right,’ notes Charles Kupchan, sr fellow at the Council on Foreign Relations, ‘There were deep and broad structural problems of the economy that Europeans had to tackle.” The nearest role model was the UK under Thatcher. “Now that process,” continues Kupchan, “of undoing large state-centered economies is moving to the Continent.”
Thus, as the balance of the free world moves right, embracing personal initiative and personal freedoms, we under BO have moved decidedly left.
Another needed mid-stream correction is soon to be applied.
Robert Craven
Monday, September 20, 2010
Economic Reality Ahead
Let’s review economic reality ahead.
First, a background:
- The Dem’s refusal to reform the twins (in an effort to buy black votes) sparked the crisis of Q4 ‘08. That is, Bush attempts at regulation were thwarted by the likes of Obama, Dodd, Frank and Pelosi, to name a few. This resulted in ground zero.
- Ironically, the crisis along with his being half black got BO elected, even though he had a hand in creating the mess!
Left-wing legislation enacted since has stalled any meaningful recovery.
Now where?
- Voter revulsion after extremists gained traction speaks well for Nov results. The so-called tea party movement represents more than a spark, maybe even a rush for the economy. To the extent these types gain office, economic optimism will grow as uncertainty is put to bed.
We tell our lefty friends - ok, want to continue with a miserable bottom line; fine, vote Democratic. Walk the walk. You were happy before to pay the price of pulling the trigger.
Not so much fun now guys? More interested in your business, and 401K?
Good. First, deep 6 the latest chant fed to you by the DNC. Next, read a book or two. Finally, vote for responsible government come Nov.
This is not partisan, simply reality.
Robert Craven
First, a background:
- The Dem’s refusal to reform the twins (in an effort to buy black votes) sparked the crisis of Q4 ‘08. That is, Bush attempts at regulation were thwarted by the likes of Obama, Dodd, Frank and Pelosi, to name a few. This resulted in ground zero.
- Ironically, the crisis along with his being half black got BO elected, even though he had a hand in creating the mess!
Left-wing legislation enacted since has stalled any meaningful recovery.
Now where?
- Voter revulsion after extremists gained traction speaks well for Nov results. The so-called tea party movement represents more than a spark, maybe even a rush for the economy. To the extent these types gain office, economic optimism will grow as uncertainty is put to bed.
We tell our lefty friends - ok, want to continue with a miserable bottom line; fine, vote Democratic. Walk the walk. You were happy before to pay the price of pulling the trigger.
Not so much fun now guys? More interested in your business, and 401K?
Good. First, deep 6 the latest chant fed to you by the DNC. Next, read a book or two. Finally, vote for responsible government come Nov.
This is not partisan, simply reality.
Robert Craven
Friday, September 17, 2010
Careful Which Hand You Bite
The anointed are having a great time witnessing the explosive energy as Tea Party folk cross country begin something new. To the media, faculty lounge types, tenured elites, it’s entertainment. To our lefty friends who are small business owners, it had better be something more than that.
Our nursery pals for example (the poor guys, they provide a default, and we beat them up almost daily) better leave the derision to the postal workers; they’ve got something on the line; criticizing this movement is the equivalent of bitting the hand that is about to feed them.
Obama is obviously bad news for the economy. His statist agenda won’t cut it. There is no need to explain, or elaborate; we already have. Tea Party types want to do away will all that BO has placed in front of a meaningful recovery - tax & nationalized energy scheme, the health heist, the stimulus tragedy, GM bailout, the risk of much higher taxes, corp and individual, the threat of even more gov’t control of even more segments of this economy. With this dread ahead, no one will hire.
We have known that the Nov elections held some promise for the economy. With recent results providing a propellant to free market ideals, the elections may provide more than promise, maybe an explosion. From Larry Kudlow’s column today quoting a recent WSJ piece, “Raul Labrador, the tea-party-backed House candidate from Idaho, says he opposes all government programs that help one segment of business over another. ‘I’m against all of them,’ he tells the Journal. ‘I don’t think the government should be picking winners and losers. We should have taxes low for everybody, and not just for a particular industry or segment.’”
Now this is about as close to a reincarnation of F.A.Hayek as we’ll get, for it is not only about prosperity, but the gov’t “picking winners and losers,” as Labrador puts it is a direct road to serfdom.
Let's return to Mar/4/1925 and the first US presidential inaugural to be broadcast. Cal Coolidge had this to say that day; working Americans may find some application: “I want the people of America to be able to work less for the government and more for themselves. I want them to have the rewards of their own industry. That is the chief meaning of freedom. Until we can re-establish a condition under which the earning of the people can be kept by the people, we are bound to suffer a very distinct curtailment of our liberty.”
Through BO the chatterers found for the first time in their lives that notions discussed in the abstract are just plain no fun when experienced in the concrete.
The Tea Party may provide an out for these poor souls.
Robert Craven
Our nursery pals for example (the poor guys, they provide a default, and we beat them up almost daily) better leave the derision to the postal workers; they’ve got something on the line; criticizing this movement is the equivalent of bitting the hand that is about to feed them.
Obama is obviously bad news for the economy. His statist agenda won’t cut it. There is no need to explain, or elaborate; we already have. Tea Party types want to do away will all that BO has placed in front of a meaningful recovery - tax & nationalized energy scheme, the health heist, the stimulus tragedy, GM bailout, the risk of much higher taxes, corp and individual, the threat of even more gov’t control of even more segments of this economy. With this dread ahead, no one will hire.
We have known that the Nov elections held some promise for the economy. With recent results providing a propellant to free market ideals, the elections may provide more than promise, maybe an explosion. From Larry Kudlow’s column today quoting a recent WSJ piece, “Raul Labrador, the tea-party-backed House candidate from Idaho, says he opposes all government programs that help one segment of business over another. ‘I’m against all of them,’ he tells the Journal. ‘I don’t think the government should be picking winners and losers. We should have taxes low for everybody, and not just for a particular industry or segment.’”
Now this is about as close to a reincarnation of F.A.Hayek as we’ll get, for it is not only about prosperity, but the gov’t “picking winners and losers,” as Labrador puts it is a direct road to serfdom.
Let's return to Mar/4/1925 and the first US presidential inaugural to be broadcast. Cal Coolidge had this to say that day; working Americans may find some application: “I want the people of America to be able to work less for the government and more for themselves. I want them to have the rewards of their own industry. That is the chief meaning of freedom. Until we can re-establish a condition under which the earning of the people can be kept by the people, we are bound to suffer a very distinct curtailment of our liberty.”
Through BO the chatterers found for the first time in their lives that notions discussed in the abstract are just plain no fun when experienced in the concrete.
The Tea Party may provide an out for these poor souls.
Robert Craven
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