Friday, January 10, 2014
Democracy passes into despotism - Plato, "The Republic"
Given that Plato lived a few hundred years before the "B.C." calendar designation, it is appropriate to add "always" to his quote after "Democracy."
I'm gearing up for this weekend's NFL playoffs, especially the last game on Sunday, so I don't want to make too much of today's non-farm payroll report. Especially since, given that we know the numbers are manipulated to completely distort the truth (change the rules of the game), I hate to reinforce any possible legitimacy of the report by applying rational thought to them (I just marvel how financial media makes millions selling advertising because viewers are glued to watching so-called experts dissect and debate these fraudulent reports - it makes a complete mockery of the truth).
Today's reported number showed 74,000 jobs created in December, well under the 200,000 expected by Wall Street's best and brightest. Since Wall Street missed the mark this badly, you'll hear repeatedly that the numbers were affected by the cold weather. Hmmm...I'm guess if I'm hungry and need to find a job, I'll just wait until next month to start working if it's too cold for me to go outside this month.
Incredibly, the unemployment rated plunged to 6.7%. What a fabulous headline statistic to beat everyone over the head with today and tomorrow when they turn on the news or open a newspaper. Bravo Barack. You've perfected the art of selling crack to children, a skill no doubt refined when you lived on the South Side of Chicago.
6.7% unemployment, down from the 7% reported in November? Wow. If people are having an easy time finding jobs, why is Congress wasting time and money debating whether or not to extend the long-term jobless benefits. Everyone would benefit if those lazy slouches would pick up the newspaper and look for a job - see this: 500 jobs - 1500 wait in line 3 days in freezing weather
But buried in the report is a metric that shows the number of people in this country not in the labor force. In December the report shows that 535,000 people dropped out of the labor force. 91.8 million people in this country - roughly 29% - are not considered part of the labor force. It's the highest percentage since 1978. Recall back then that most households had only one bread-winner and the country was engulfed in economic problems. In other words, despite a weak economy back then, demographically less people worked in total because the June Cleaver's of the world were busy taking care of the brood.
This is how a low "unemployment rate" is manufactured. The metric is calculated by taking the total number people who are counted as being part of the labor force but not working - either just left a job or actively looking for a job - and divides it by the total number of people working + looking. What the "not in labor force" statistic enables the Government math manipulators to do is reduce the numerator in that equation, which definitionally reduces the result - i.e. lowers the unemployment rate. The parameters used to define the "labor force" have been modified over the years in a manner which is beneficial to showing a low unemployment rate.
If you don't like the score, change the rules of the game. Have a great weekend.
Posted by Dave in Denver at 8:04 AM