Sunday, October 30, 2011

Betty McCollum’s Tricky Chart on Jobs

Betty McCollum’s Tricky Chart on Jobs

At a recent town hall on Jobs, Betty McCollum made a presentation showing yet another “tricky” chart.  This was a creation from the office of Nancy Pelosi that has become a favorite for attempting to portray the Obama administration as having successfully handled jobs and the economy.  But does it reflect where we really are for jobs?

First lets look at reproducing the chart from public data at the Bureau of Labor Statistics( The information, and the charts included below (titles added, when obtained from the BLS site it is comes across as a table of data with a crude chart), come from the BLS website, and go back a little further to look at some more historical context in the Clinton and Bush years.  This will look at the dot com bubble, the 9/11 strike, and the home mortgage bubble bursts,  and the recovery aftermath.

Table 1 includes the spike for the census temporary work hiring in early 2010.

The trickiness involved is that this represents a differential change (first derivative, for those who remember calculus) chart. In addition Betty McCollum’s (Pelosi/Obama) chart is also somewhat smoothed to try to try to make the impact stronger. So to get the correct understanding of what the unemployment situation is we need to do an accumulated sum (integration) of the data.  Or we can simply request the real unemployment data from BLS. The chosen statistic was the monthly change in the number of employed persons, so the corresponding chart will be the number of unemployed persons.

This chart 2, above, is unadjusted for population growth and thus has an intrinsic increase built in. Though for relatively short periods you can make reasonable comparisons.  So we will switch to looking at the unemployment percentage/rate to normalize for population.  The major two peaks that stand out are the Carter and the Obama years.

Looking at the more recent times, we can see that the unemployment rate has leveled off, isn’t getting any worse, as Betty McCollum’s tricky chart shows.  But, we still are at historically high levels of unemployment, which her tricky chart belies. 

So what does this all mean for trying to assess the current state of recovery?
The analysis at this site shows that we need to have a job growth rate per month, under different scenarios, of between 224000 to 391,000 to lower the unemployment rate to a still objectionable 8.2% in a year.  Unfortunately a far cry from our current levels shown in Betty McCollum’s chart.  It is further complicated by the participation rate, those who are still trying to find work or are employed, vs those who have given up looking for now.  The methods for reporting unemployment numbers were changed during the Carter administration, and probably tweaked a little in every administration since.  So the “real” unemployment is much higher when we include these other “categories” of people who want to be employed, but are discouraged.

ParticipationRate Drops to a Fresh 25 Year Low
1/7/2011 Assuming a reversion to the mean in the long-term average participation rate back to 66%, means that the civilian labor force, which in December came at 153,690, a drop of 260,000 from November, is in reality 157.6 million, a delta of 3.91 million currently unaccounted for.
Why The Decline In The Headline Unemployment Rate Is Actually Terrible News
Business Insider Jan 7, 2011,The participation rate has fallen sharply from 66% at the start of the recession to 64.3% in December [2010]. That is almost 4 million workers who are no longer in the labor force and not counted as unemployed in U-3, although most are included as "discouraged workers" or "Marginally Attached to Labor Force" in U-6.
A decline in the unemployment rate mostly due to a decline in the participation rate is not good employment news.

So how does unemployment in this recession compare to others in the modern era (last 64 years)?  The following chart tracks unemployment from the last date of the maximum employment, typically cited as the “start” of the recession.

There are many factors that affect the depth of the unemployment and the length of time to restore employment levels. The one major category that is within our national control are the governmental policies put in place.  Are they beneficial to the economy or are they a drag ending up prolonging the period before “full” recovery can occur.

Perhaps Betty McCollum, Nancy Pelosi, and Barack Obama might want to consider this rendition (see footnote) of the data before answering that question.

I found the Political Math Blog in the final stage of writing this article.  He emphasizes the techniques to create a misleading chart and how he created the somewhat equally misleading chart above as part of his critique of the McCollum/Pelosi/Obama chart.  I included it as a “tongue in cheek” addition to emphasize the point that misleading the American people, from either ideological point, does not help to resolve the very real problems that we face. And is a disservice to us all.  Both charts are accurate values, just misleading in conclusions.
Both charts use jobs data taken from the same place, displayed the same way, stripped of context and used to push an ideological point using an implicit "correlation mean causation" line of argumentation.
He is well worth the read.

Saturday, October 8, 2011

Bi-Partisan Rejection of the Jobs Bill

The President has been flying around the country trying to lift support for his latest stimulus (although I understand that word has been banned from the lexicon political speech by Nancy Pelosi) bill titled “The American Jobs Act”.  He has been saying “pass this bill, pass it right now” before he had even submitted it.  Using manipulative lines like: "If you love me, you've got to help me pass this bill!" 

LA Times Blog: Obama's urgent jobs plan:
So, as of right now, "right now" uttered on Sept. 8 really means sometime at least one month later.
Good thing the president's own Democratic party controls the Senate. Because, otherwise, there might be some kind of silly, unnecessary delays in deliberating Obama's urgent jobs bill that he says will surely help the nation's unemployed millions if only those Republicans don't connive to slow things down.

Pass this bill (later)! Reid blocks Obama jobs bill vote
“Twelve times the president has asked us over the last few weeks to vote on what he calls his jobs bill now,” McConnell said. “I don’t think the president is saying here he wants an extensive debate on it. I think he’s saying he wants a vote on it. And I want to disabuse him of the notion that we’re not willing to vote on it.”
But as shown in the video, it is Harry Reid who denies the vote and delays until later.

So why has it been so delayed if it would be as productive as Rep Betty McCollum said in her recent townhall
Zandi went on to say that if the plan was fully implemented, "It would increase real GDP growth in 2012 by 2 percentage points, add 1.9 million jobs, and reduce the unemployment rate by a full percentage point, compared with current fiscal policy...". 

The Republicans are stalling on the American Jobs Act because they think it will work, the economy will improve, and President Obama's support will increase.

The delay hasn’t tamped down the demagogic rhetoric any, but the reality of why the delay has been stated by Dick Durbin in a recent interview on WLS Radio, and its not the Republicans.
The oil-producing state senators don’t like reducing  or eliminating the subsidy for oil companies, you know that’s that’s an example.  There are some senators who are up for election who say I’m never gonna vote for a tax increase while I’m up for elections, even on the wealthiest people.  So we’re not gonna have 100% Democratic Senators.  That’s why it needs to be bi-partisan, and I hope we can find some Republicans who will join us to make it happen.

This quote also reveals the fraudulent view that its only considered bi-partisan when Republicans ignore principles, and vote with the Democrat majority plan.

Dick Durbin states, and an article in the New York Times concurs , that there are not enough Democrat Senators in the Senate that will support the bill.
President Obama anticipated Republican resistance to his jobs program, but he is now meeting increasing pushback from his own party. Many Congressional Democrats, smarting from the fallout over the 2009 stimulus bill, say there is little chance they will be able to support the bill as a single entity, citing an array of elements they cannot abide. 
Another interpretation is that these Senators know its not the right bill/plan to help improve the climate for job creation. 

So when they scream invectives and say that the Republicans will not compromise, they really are really saying “its our way or the highway”, its only bi-partisan when its our way.  However here we have a case of real and honest bi-partisan rejection of this badly conceived bill.

Tuesday, October 4, 2011

The Penalty of Regulations

At a recent Oakdale City Council meeting a wonderfully informative story about the issue of Federal Regulations was related.  The City was facing the mandated requirement to change street signs to conform to federal regulations about-retro reflective signage.

In a report from the Oakdale City Engineer Staff:
Federal Regulations have established national standards for the use of traffic control and guide signs in the Manual of Traffic Control Devices (MUTCD).
As part of our annual reconstruction program we, in effect, replace three (3) percent of our signs. In addition, we typically replace another two (2) percent due to fading or knock downs. Therefore, we average $20,000 per year in sign replacement expenditures. The FHWA didn’t provide funding for the sign replacement program; however they allowed for the multiyear phase-in period.
This program will require us to replace 25% of our signs each year over the next four (4) years so that we have 100% compliance by January 1, 2015. Which results in an anticipated expenditure of $200,000/year over the next four (4) years.
Street Name Signs:
1) Specifications for nine inch Street Name Signs:
a) Sign should be nine inches in height.
b) Signs should be a minimum of 18” in length and a maximum of 60” in length.
This regulatory instance shows several of the issues with Federal Regulations versus local control.  Ultimately cities bear the burden of many regulations. Costs increase, in this case from $20,000/yr to $200,000/yr, budget plans go awry, inescapable increased taxes are created. The impact of this regulation would have more than erased the hard work done by the council and city staff in reducing the budget, to keep the city portion of taxes from increasing next year, as seen in this article from the Oakdale Patch.  This is the outcome that we the people do not want, and the City Council and City Staff have been working hard to prevent.

If timetable and planning are left to the City Council and City Staff to implement, then significant cost savings can be achieved.  This is greatly to the benefit of the people.  Balancing the City Budget can be made much more difficult or impossible by mandates from State and Federal Regulations that remove flexibility needed to adapt and make the best decisions.  The arbitrary deadlines and one size fits all rules increase costs, wasting city resources and ultimately citizen pocket books, and frustrates the best efforts of the City Council and City Staff.

Senate GOP looks to ease federal mandate on reflective road signs
06/20/11 “Tennessee Republican Senators Bob Corker and Lamar Alexander last week introduced legislation that would waive the requirement that all states install more reflective road signs by 2018....”Obviously, everyone wants our roads to be as safe as possible, but the arbitrary deadlines assigned by Washington amount to an unfunded mandate on local governments at a time when they can least afford it," Corker said. "Instead of asking local governments to shell out $50 million, it seems like a much more reasonable approach to replace road signs when they need to be replaced instead of an arbitrary deadline assigned by some Washington bureaucrat."
In January President Obama had called for a government-wide review of regulations already on the books. The purpose was to identify rules that needed to be changed or removed because they were unnecessary, out-of-date, excessively burdensome or overly costly.  Fortunately this was one of the regulations that the Obama administration has recently rescinded

U. S. Department of Transportation Proposes to Eliminate Deadlines for Replacing Traffic Signs
August 30, 2011 U.S. Transportation Secretary Ray LaHood today announced that the Obama Administration is eliminating dozens of burdensome regulations on traffic signs which cash-strapped state and local governments expect will save them millions of dollars.
So when the federal government follows through and gets it right, they deserve to get plaudits.  Now, can we consider a few more...please?

Monday, October 3, 2011

A New Malaise Speech?

At about the same time in his Presidency as Barack Obama is now, Jimmy Carter gave his Malaise Speech.  Interestingly enough it was a young Bill Clinton, though uncredited, who had told then President Carter: “Mr. President, you are not leading this Nation— you're just managing the Government”. Though he never used the word malaise, he spoke of the crisis in confidence and essentially told the American people they were at fault.  Entire text here

Carter's Crisis Speech
On the evening of July 15, 1979, millions of Americans tuned in to hear Jimmy Carter give the most important speech of his presidency. After sharing some of the criticism he had heard at Camp David -- including an unattributed quote from the young governor of Arkansas, Bill Clinton -- Carter put his own spin on Caddell's argument. "The solution of our energy crisis can also help us to conquer the crisis of the spirit in our country," the president said, asking Americans to join him in adapting to a new age of limits.
But he also admonished them, "In a nation that was proud of hard work, strong families, close-knit communities and our faith in God, too many of us now tend to worship self-indulgence and consumption. Human identity is no longer defined by what one does but by what one owns." Hendrik Hertzberg, who worked on the speech, admits that it "was more like a sermon than a political speech. It had the themes of confession, redemption, and sacrifice. He was bringing the American people into this spiritual process that he had been through, and presenting them with an opportunity for redemption as well as redeeming himself." Though he never used the word -- Caddell had in his memo -- it became known as Carter's "malaise" speech.

And now President Obama may have given his own version of the malaise speech in a recent interview with Jim Payne at WESH-TV in Orlando.  His diminutive view of the United States continues to be the source for his “strive for mediocrity” approach to the US economy and our future place in the World. (see here   here  and here  )

“The way I think about it is, this is a great, great country that had gotten a little soft and we didn’t have that same competitive edge that we needed over the last couple of decades,” he said. “We need to get back on track.”

You can watch the entire interview and hear how President Obama dances around the shutdown at NASA, trying to say "we are in a period of transition". We are going to spend a decade not doing any space flights, as we plan for "improvements". And, we aren’t going to lose our edge.

Krauthammer on Obama's America's "getting soft" comment:
"[Obama is] compounding condescension, incompetence and narcissism all in one sentence".

Newt Gingrich recalls the Carter malaise speech and compares to Obama’s “Americans soft” moment. 
"We don't have a problem with the American people being too soft, we have a problem with Barack Obama just being plain wrong!".

PBS describes the results for Carter as
The op-ed pieces started spinning out, 'Why don't you fix something? There's nothing wrong with the American people. We're a great people. Maybe the problem's in the White House, maybe we need new leadership to guide us.'" Historian Roger Wilkins concurs: "When your leadership is demonstrably weaker than it should be, you don't then point at the people and say, 'It's your problem.' If you want the people to move, you move them the way Roosevelt moved them, or you exhort them the way Kennedy or Johnson exhorted them. You don't say, 'It's your fault.'"

I doubt that the media that is so strongly supportive of President Obama will act as the independent fourth estate and follow through as they did when Jimmy Carter was President.  They are too invested in his Presidency and his agenda. So this will probably never be seen on the front page of the New York Times, or the Strib.

The parallels between the presentations are remarkable and stark.  The theme that its America's fault rides in both.  Can we depend on the leadership and move forward with a misguided President who has such a low opinion of the American people?