Yearly Archives: 2016

Misleading indicators

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unemployment rate genuine

Counting the number of unemployed has always depended on who you include and who you leave out. And to be unemployed you must want a job and be looking for a job. If you are no longer looking even if you would like a job, then you are no longer officially unemployed. Which gets us to the statistic above from this article: It’s Time To Dump The Unemployment Rate. Begin with this:

The July jobs report was a good one, and the unemployment rate held steady at 4.9%, which in the past would have been sure signs of a robust economy. So why is the country in such a bad mood?

An unemployment rate below 5% is a relatively rare thing. Only twice before in the past 40 years has it dropped that low — once in the late 1990s during that economic boom, and again briefly in 2006-2007.

Yet unlike before, there is little joy in Mudville today. Instead of confidence and optimism, there is only malaise.

So look at the “real” unemployment rate in the chart. What is real about it is that it is measured based on a constant participation rate. It adjusts for the fact that people might drop out of the labour force because they have given up hope of finding a job. To quote from the article:

Put simply, what’s happened is that the official unemployment number has grown increasingly useless as a reliable economic indicator, for the simple reason that millions of people have simply quit looking for a job. Since the unemployment rate is based only on those who are actively looking for work, the more people who drop out of the labor force, the lower the unemployment rate becomes.

Up until 2010 that didn’t matter much, since the “labor force participation rate” was relatively steady. But during the Obama “recovery,” that’s changed. As the economy has slogged along for the last seven years, millions of non-elderly workers have given up looking for jobs entirely.

Employment stagnating in just the same way as has GDP. And this is with the supposed stimulus of continuing budget deficits and interest rates at zero. And all economists can think to do is to increase public spending and find some way to contrive to lower interest rates even more.

In the American election, which side do you suppose The Australian takes?

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See if you can guess. The Australian – a Murdoch paper – has a supplement on the American Election. Not all that neutral, as you can see by clicking the link. But in case you cannot be bothered, here is what you see right after the intro:

President Obama said Republican nominee Donald Trump is “unfit” to be president and questioned why top GOP lawmakers continued to endorse Trump for the White House while denouncing his actions.

Which comes with the following video:

The Oz also went for Turnbull which shows you how out to lunch these people are. Really absolute fools.

It would be a lesson to us all if only we knew what the lesson was

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From A Socialist Les Miserables in Venezuela but picked up at Instapundit. It is, of course, virtually never in the media since it exposes the disastrous result of running an economy on socialist “principles”. But what I find far more remarkable is that even where it is reported, the reporters can never explain what has gone wrong. It’s not that they know but won’t say. It is because they literally do not know what has gone wrong.

A mob of starving people advanced on the presidential palace chanting, “We want food”. They were met by soldiers and police dispatched by the tyrant from his lavish palace decorated opulently with a golden sun, giant rock crystal mirrors, sparkling chandeliers and towering oil portraits.

The scene wasn’t 19th century France, but 21st century Venezuela.

And if you are wondering why you haven’t seen it on the news, it’s because Venezuela is a Socialist disaster area that was once being used as a model by the left. Now it’s a place where the vast majority of people can’t afford basic food staples and a third are down to two or fewer meals a day.

Obama laughed and joked with deceased monster Hugo Chavez, who handed him a copy of the anti-American tract, “Open Veins of Latin America” that had even been disavowed by its own author. Obama called the book a “nice gesture”, but Eduardo Galeano, its author, had told an audience that the left “commits grave errors” when in power.

Venezuela, once a wealthy oil state, where the doctors offering “universal health care” have no medicine and starving people loot government stores looking for food, is yet another example. 50 people are dead in the latest food riots. Their graves are yet another “grave error” of the left.

Obama has not appeared too concerned at the meltdown in Venezuela. Unlike Syria, there are no threats of intervention to remove Maduro, Chavez’s successor, and the rest of the leftist regime illegally clinging to power while slaughtering Venezuelans, smuggling drugs and aiding terrorists.

When Hugo Chavez was killed by the wonders of Cuban medicine, a remedy that American leftists recommend to others while they obtain the best private health care for their own ailments, Obama offered a vague statement of support calling Chavez’s passing, “challenging”.

It was certainly that.

But the question remains, what did they do wrong? It will have to remain a mystery, I’m afraid even as something like a quarter of American voters wanted to make Bernie Sanders president.

A free press and an informed public

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hillry climbing stairs

Talking American politics with anyone who does not look at various right-of-centre blogs is a depressing experience. The picture is from this blog: SHOCK PHOTO: Multiple staffers help unstable Hillary up stairs where it was found on Drudge which carries the story further.

And then there’s this: Clinton discussed executed Iranian scientist on email.

Hillary Clinton recklessly discussed, in emails hosted on her private server, an Iranian nuclear scientist who was executed by Iran for treason, Sen. Tom Cotton, R-Ark., said Sunday.

How many other policy disasters have followed from every foreign government having immediate access to everything Hillary illegally wrote as Secretary of State on her private email accounts. Ah well. What you don’t know can’t hurt you, I suppose. Or at least not right away.

He may really be the great negotiator he says he is

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Think of how nicely the ducks are falling into line:

WE ARE FAMILY: Trump endorses House Speaker Paul Ryan…
Expresses support for McCain and Ayotte…
Escalates attacks on HRC…
Plans biggest tax cuts since Reagan…

I still think it will be the debates that settle the issue, one way or the other. But if the Republicans can now all start supporting each other, there is no telling how well this could go. The Facebook ad, by the way, has had more than two million hits in less than 24 hours.

The largest issue remains the phenomenal dishonesty and bias of the American media. An important example here: Pat Caddell on ‘Cooked’ Reuters Poll: ‘Never in My Life Have I Seen a News Organization Do Something So Dishonest’. There is nothing in any mainstream news report you can trust but if the media can do it, they will get Hillary over the line.

Any lie will do

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This is picked up from John Hinderaker at Powerline: ON IRAN, ISRAELIS SAY: OBAMA IS WRONG. This has large implications and will add to the tensions between the US and Israel, but sometimes clarity is more important:

Israel is rejecting remarks by President Barack Obama contending it no longer opposes the nuclear deal that world powers struck with Iran in 2015.

Prime Minister Benjamin Netanyahu said on Friday that “Israel’s view on the Iran deal remains unchanged.”

Israel’s Defense Ministry reportedly compared the deal to the 1938 Munich Pact ahead of World War II, which Britain and France signed with Germany and which averted war at the time but effectively gave then-Czechoslovakia to the Nazis.

The final point made in the post is the right one: “We have entered a bizarro world in which facts seemingly make no difference. Any lie will do, as far as the Obama administration and Hillary Clinton are concerned.” How Israel, or the rest of us for that matter, are going to survive this period of history is now anyone’s guess.

Pathetic and disgusting

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Compare and contrast:

Obama on Iran payment: ‘We do not pay ransom’.

Freed Iranian Hostage: Iranians Told Me They Were Waiting For Another Plane To Arrive Before Letting Us Go.

I wonder who is telling the truth.

On Thursday’s broadcast of the Fox Business Network’s “The Intelligence Report with Trish Regan,” Saeed Abedini, one of the four hostages released from Iran back in January, stated that on the night he was freed, his captors told him they were waiting on another plane to arrive before letting him go.

Abedini said, “I just remember the night that we’d been in a[n] airport, just take hours and hours there. And I asked one of the…police that was with us, that, why are you not letting us to go to the…plane? And he told me we are waiting for another plane, and if that plane take off, then we’re going to let you go.”

He added, “[T]hey told us you’re going to be there for 20 minutes. But it took like hours and hours. We slept at the airport, and when I asked them why you don’t let us go, because the plane was there, pilot was there, everyone was ready that we leave the country, they said we are waiting for another plane, and until that plane doesn’t come, we never let you go.”

Abedini was then asked, “Were they effectively waiting for the money to come in before they then let you take off?” He answered, “Yeah. They didn’t talk about money. They just told us about the — they told me about the plane. … So, the reason that they said you’re here in the airport is — was just because we are waiting for another plane.”

Abedini was also asked if he believed a ransom was paid, to which he stated he was grateful for his freedom, but there are others still left behind in Iran.

AND A BIT MORE ON OBAMA’S CHOSEN SUCCESSOR: From a quite compelling article by Darly McCann at Quadrant Online: The Audacity of Crooked Hillary. From which, but you owe it to yourself to read the whole thing:

The corrupt cabal that currently rules – and betrays – America and the entire West is not going anywhere. Hillary Clinton magnanimously invited the supporters of Sanders to put aside their acrimony and get with the strength. Bernie, who had always been too gentlemanly – or should we say too PC? – to confront Clinton on the meaning of the private server and the deleted 30,000 emails, now meekly submitted. Hillary Clinton has not participated in a proper news conference for over nine months and yet over and over again, during the televised Democratic debates, Bernie Sanders passed up the opportunity to address the record of the woman in the spotlight immediately adjacent to him. His faint-heartedness, we could conclude, amounts to a form of complicity.

Obama paid $400 million ransom to Iran

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How could this be even remotely true? U.S. Sent Cash to Iran as Americans Were Freed: Obama administration insists there was no quid pro quo.

The Obama administration secretly organized an airlift of $400 million worth of cash to Iran that coincided with the January release of four Americans detained in Tehran, according to U.S. and European officials and congressional staff briefed on the operation afterward.

Wooden pallets stacked with euros, Swiss francs and other currencies were flown into Iran on an unmarked cargo plane, according to these officials. The U.S. procured the money from the central banks of the Netherlands and Switzerland, they said.

The money represented the first installment of a $1.7 billion settlement the Obama administration reached with Iran to resolve a decades-old dispute over a failed arms deal signed just before the 1979 fall of Iran’s last monarch, Shah Mohammad Reza Pahlavi.

The settlement, which resolved claims before an international tribunal in The Hague, also coincided with the formal implementation that same weekend of the landmark nuclear agreement reached between Tehran, the U.S. and other global powers the summer before.

“With the nuclear deal done, prisoners released, the time was right to resolve this dispute as well,” President Barack Obama said at the White House on Jan. 17—without disclosing the $400 million cash payment.

It’s not just that they lie to you but that the media never says a word of complaint but just swallows it whole and repeats back whatever a Democrat administration chooses to say.

THE DAILY MAIL VERSION: You won’t get it properly reported in the usual media, but there is still the UK’s Daily Mail: US delivered $400m in CASH stashed inside wooden pallets to Iran on same day as American hostages were freed but the Obama administration DENIES it paid a ransom. Of course they deny it; they always lie.

What if Keynesian macro really is junk science?

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You heard it here first, and since then you have heard it often. The “stimulus” will slow recovery and artificially low interest rates will only make things worse. Since none of this will be explained to you in almost any economics text written anywhere in the past 80 years, it is hard to work out why all this spending and low rates seems to have done nothing of value. But at least there is now some recognition that things are not working out. First this from CBS in the US [!]: Let’s face it — the U.S. economy is going nowhere fast.

They are two of the scariest words in the English language, often heard as the engine room is starting to flood or the parachute fails to deploy: “Don’t panic.” And that was the message among economists trying to make sense of how it is, exactly, that the U.S. could be slowing, when most forecasters had expected it to be speeding up by now.

Time to lower the lifeboats? Not quite. But the economic seas are starting to look ominously rough. Let’s consider why the situation is worrying.

First, it is clear that the economy is much weaker than we thought. As Deutsche Bank economists note, over the past four quarters the non-consumer portion of the economy, notably businesses (you know, the ones that hire people), has grown at a rate of -0.2 percent. That’s recession territory.

A number of economists are now also ratcheting back their forecasts for full-year growth to less than 2 percent, or what many experts think is the economy’s “stall speed.”

Second, history shows that a downturn that starts on the “production” side of the economy [which is where they all start], such as business investment, almost always ends in tears for consumers. Economist Charles Gave of investment advisory firm Gavekal notes that only once since 1958 (in 2012) has the non-consumer part of the economy contracted without that period later being understood to have been part of an official recession.

Meanwhile, here in Australia:

The RBA moved amid worries that there was too much idle ­capacity in business and the labour market, leading to very low inflation and the weakest wage growth on record.

“Given very subdued growth in labour costs and very low cost pressures elsewhere in the world, this is expected to remain the case for some time,” bank governor Glenn Stevens said after yesterday’s meeting.

Keynesian macro is junk science but if you are in government doling out the spending, nothing could be nicer. I have just finished a paper to be delivered at the start of next month which is a critique of modern macro from a classical economic perspective. It never fails to astonish me how the economics of John Stuart Mill and Henry Clay lay everything open, while the Keynes-Samuelson aggregate demand story has never worked on a single occasion.

A BIT OF ADDED COMMON SENSE: I don’t know how such a sensible article ended up on The Conversation, but there you are. It is Phil Lewis discussing Is the concept of ‘helicopter money’ set for a resurgence? It no doubt is since there is a never-ending supply of bad ideas to try before you actually have to do something hard that works. This is from his article:

The various “stimuluses” have been going on now for eight years with little or no discernible effect on economic growth [At least no discernible positive effect – SK]. This is hardly surprising given that growth entails adding value to inputs to produce goods and services people want at prices they are willing to pay.

Value adding is best done by the private sector and cannot arise from wasteful government expenditure, accumulating debt or printing money. Growth (and jobs) can only arise from value adding activities and government policies which facilitate this such as reducing debt, promoting free trade, reducing restrictions on business and labour market reform.

This is hard to do and far more difficult than easy options such as printing money, which explains why neither side of politics appears to have the stomach for real reform.