The fall in Unemployment Insurance Claims due to Bureaucratic Incompetence, not Economic Improvement

Posted by PITHOCRATES - October 13th, 2012

Week in Review

No president since FDR has ever won reelection with the unemployment rate about 8%.  Which is a problem for President Obama.  For except January of 2009, unemployment has never been below 8% throughout his presidency.  So you can understand how ecstatic the Obama camp was with the September unemployment rate coming in at 7.8%.  And why many in the Romney camp are wondering about the validity of those unemployment numbers.  Because the other economic news is not that good.  Which has caused some people to wonder if the Obama administration is cooking the numbers with the election coming up next month.  Because no president since FDR has ever won reelection with an unemployment rate about 8% (see What Caused Drop in Unemployment Insurance Claims? by James Sherk posted 10/12/2012 on The Foundry).

The news that new Unemployment Insurance (UI) claims dropped sharply to 339,000 last week has raised eyebrows—and aroused suspicion the Department of Labor had massaged the numbers. In truth, there is both more and less to this story than meets the eye. The numbers are incomplete, but because of bureaucratic incompetence, not a grand conspiracy.

The Department of Labor releases information each week on the number of Americans newly filing for UI benefits. These figures shed light on the state of the economy: anything above 400,000 indicates recession territory, while figures below 330,000 show strong economic growth. Since the start of the year around 370,000 Americans have filed for benefits each week—below recessionary levels but still weak. The reported drop would indicate a sharp improvement in the job market.

Except it does not. As the Department of Labor has explained, today’s figures are incomplete. One large state (identified elsewhere as California) did not get all their numbers into the Labor Department on time…

Next week this process will reverse…

Neither this week’s large drop nor next week’s impending jump in UI claims say anything about the state of the economy. They only show that large government bureaucracy’s often cannot get their act together.

So the drop in Unemployment Insurance (UI) claims is not a drop.  The numbers are just incomplete.  And will be corrected next week.  The inaccuracy is due to bureaucratic incompetence.  And not a conspiracy to make the employment picture look better for an embattled president trying to win reelection.  Of course it begs the following question.  Was there bureaucratic incompetence in the September unemployment rate?  In an effort to get the unemployment rate below 8% to help President Obama’s reelection chances?

Such an incompetency, if it existed in the unemployment rate as it did in the new Unemployment Insurance (UI) claims number, would certainly help his chances of reelection.  Especially when this was the last reported monthly unemployment rate before the presidential election.  How lucky for the president that the one time his Labor Department had made a mistake, if they did in fact make a mistake, it’s a mistake in his favor at the best possible time for a mistake.  For the Labor Department will issue the next monthly unemployment rate about a day or two after the election.  Lucky indeed.

Unlucky in domestic and foreign policy but lucky in bureaucratic incompetence.  Will it be enough to help sway those undecided who would not have voted for President Obama had the unemployment rate not fallen below 8% before the election?  Possibly.  Time will tell.

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President Obama brings Down the Price of Gas by Destroying the Economy with his Economic Policies

Posted by PITHOCRATES - June 2nd, 2012

Week in Review

Remember the movie Monty Python’s Life of Brian?  If you haven’t seen it I highly recommend it.  The politics they lampoon of the Roman occupation?  Funny stuff.  Yes there’s a bit of nudity in it and some may find it a bit blasphemous.  So viewer discretion is recommended.  At the end as Brian was being mistakenly crucified the guy being crucified behind him to his right tried to cheer him up in song.  And told him to Always Look on the Bright Side of Life.  And the people sang.  From atop their crosses.  If these fictional people can see the bright side in their impending long-lasting deaths then we, too, should be able to see the bright side in the continuing bad economic news (see Gas prices are silver lining as economy weakens by Sandy Shore, The Associated Press, posted 6/1/2012 on Economy Watch).

There’s some good news behind the discouraging headlines on the economy: Gas is getting cheaper. At least two states had stations selling gas for $2.99 on Friday and it could fall below $3 in more areas over the weekend.

A plunge in oil prices has knocked more than 30 cents off the price of a gallon of gas in most parts of the U.S. since early April. The national average is now $3.61. Experts predict further decline in the next few weeks.

If Americans spend less filling their tanks, they’ll have more money for discretionary purchases. The downside? Lower oil and gas prices are symptoms of weakening economic conditions in the U.S. and around the globe.

On Friday, oil prices plunged nearly 4 percent as a bleak report on U.S. job growth heightened worries about a slowing global economy and waning oil demand. The unemployment rate rose to 8.2 percent from 8.1 percent. Sobering economic news from China and Europe also contributed to the drop…

Phil Flynn, an analyst for The Price Futures Group, believes falling gas prices could give consumers a psychological boost. But that could evaporate if hiring doesn’t pick up and stock markets keep swooning.

“If you don’t have a job, it doesn’t matter if gasoline prices are $5 or $2 a gallon,” he said.

So President Obama may get his wish after all.  To have low gas prices while he runs for reelection.  And all he had to do to lower gas prices was to destroy the economy with bad economic policy.  Shut down the oil exploration business when oil was in high demand.  Stop the building of a pipeline that would have put hundreds of thousands of jobs into the economic pipeline.  Unleash a wave of new regulations that have stunned small business.  Especially Obamacare.  Leaving them afraid to hire anyone as they fear what the Obama administration will do next to them.  And President Obama’s open attacks on capitalism haven’t assuaged anyone’s fears in the business community that his next policies will only harm them more.  The president has wasted trillions of dollars in stimulus and green energy subsidies that resulted in no net new jobs but in the bankruptcy of the businesses they backed.  And massive new debt that we can’t afford.  The future is bleak indeed.  But gas prices are falling because of it.  So there’s one thing the president can run on.  Things could be worse.  Gas prices could be higher.

It’s the one message President Obama can tell the American people.  That we should, like Brian, Always Look on the Bright Side of Life.  No matter how bad the economic news continues to be.  Because he alone brought down the price of gas.  It’s just a pity so few have a job or feel secure enough in their job to enjoy these low prices.

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President Obama Represents only those Americans who can Help him to Reelection

Posted by PITHOCRATES - December 25th, 2011

Week in Review

President Obama gives up on white working-class voters.  He’d rather just represent poor minorities and the college-educated.  People he likes.  Unlike those white working-class voters.  Apparently (see Obama campaign abandons white working-class voters in favor of minorities and the educated by Daily Mail Reporter posted 11/28/2011 on Mail Online).

President Barack Obama’s 2012 re-election campaign will be the first in modern political history to abandon white working-class voters, strategists claim.

For decades, Democrats have been losing more and more blue collar whites. Their alienation helped lead to the massive Republican wave in 2010, when the GOP wooed 30 percent more of them than the Democrats could.

Democratic strategists say President Obama is focusing his attention, instead, on poor black and Hispanic voters and educated white professionals.

‘All pretense of trying to win a majority of the white working class has been effectively jettisoned in favor of cementing a center-left coalition made up, on the one hand, of voters who have gotten ahead on the basis of educational attainment… and a second, substantial constituency of lower-income voters who are disproportionately African-American and Hispanic,’ longtime political reporter Thomas B. Edsall wrote in an opinion piece in the New York Times.

‘The 2012 approach treats white voters without college degrees as an unattainable cohort,’ he writes later.

LBJ declared war on poverty in the Sixties.  He was going to meet it, fight it and destroy it with his Great Society.  He lost.  For President Obama’s key to reelection is LBJ’s failure.  Poor black and Hispanic voters.  Which means either throwing money at poverty doesn’t work.  Or Democrats keep poor people poor to help them win elections.

White working people are apparently too dumb to know what’s best for them.  Except those in unions.  Because they still vote Democrat.  Which either means white union workers are smarter than white nonunion workers.  Or that white union workers have another reason for voting Democrat.  Such as the political protection they get in exchange for all those union dues that make it into Democrat coffers.

College educated whites?  That means the young and dumb who are in college.  Who don’t know any better and vote Democrat because Democrats are cooler.  They like to party, do drugs and have consequence-free sex.  And the arrogant and condescending.  College professors.  Those in the media.  And crony capitalists.  Those who skate through life not so much on their ability.  But who they know.  And they know well their Democrat friends.  Who can send federal money their way in exchange for all those political contributions that make it into Democrat coffers.

So apparently Barack Obama represents those who can best help him to reelection.  And not all Americans.  Funny.  Because Obama said there were no blue states.  And no red states.  Just purple states.  Which you get when you mix red and blue.  Meaning that he was going to represent all people.  He has either since changed his mind.  Or he was lying.

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Time names Organized Protesters Masquerading as Spontaneous Democracy Person of the Year

Posted by PITHOCRATES - December 17th, 2011

Week in Review

There are two sides to every issue.  Take the Occupy Wall Street movement.  Time Magazine has made these protestors their Person of the Year.  While Investors.com calls these maggot infested hippy, communist-loving, capitalist-hating pond-scum something else (See “Occupy” A Media Creation Unworthy Of Time’s Person Of The Year posted 12/16/2011 on Investors.com).

Occupy Wall Street — the unkempt campout of the same old rent-a-radicals calling for redistribution of wealth — was largely a media-generated phenomenon whose significance ends there.

Unlike the far larger and more politically potent Tea Party movement, which Time often ignored, Occupy is the thin gruel of radicalism writ large by unwarranted media attention.

It has no demands other than socialist utopia, has elected no one, has failed to draw support from middle Americans and has proven itself mainly a public nuisance. Had the media not showered Occupy with attention, it wouldn’t be news at all.

How do we know? Polls show that the public remains intensely opposed to the Occupy media circus. If that’s not clear enough, the Democratic Party did its utmost to distance itself from Occupy once it learned its support would cost them votes.

That’s why Democratic city machines in the political downstream, after weeks of kowtowing to the protesters, shut down their camps all at once. They know a political liability when they see one…

In its Man-of-the-Year edition,Time calls Occupy a mass movement as significant as those of 1848, while ignoring what the public is noticing — the disease, rape, freeloading, filth, depravity, stench and murder rampant in the camps.

Time tried to tie Occupy’s irrelevant protests in with the flash Arab protests that have fueled Islamofascism as well as the tantrums of economically illiterate youth in Spain, Greece and the U.K.

But far from being spontaneous rage, Occupy’s protests were fully planned over the summer by radical groups like MoveOn.org and Adbusters, a Canadian cabal that thrives on attention.

See?  There are two sides to every issue.  In the case of Occupy Wall Street there is the truth.  As reported by Investors.com and other news organizations.  And the propaganda spread by the mainstream media.  Spreading the lie that this political movement organized by radical groups was actually spontaneous democracy.  All to help an unpopular president win reelection.  By spreading the flames of class warfare.  So President Obama can run against the greed of Wall Street instead of his record.  Because his record is not the kind that lets presidents win reelection.

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Barney Frank can’t win Reelection because of Redistricting so he Retires

Posted by PITHOCRATES - December 3rd, 2011

Week in Review

Barney Frank shared something with Nancy Pelosi.  They had congressional districts that were so full of liberals that neither ever had to campaign for reelection.   Which says a lot considering barely 20% of the populace is liberal.  So you know they had some favorable district lines.  But, alas, for poor Barney the slam dunk is over.  The new district lines adds so many conservatives that it almost is representative of the population.  Which is approximately 40% conservative, 20% liberal and about 40% moderate and independents.  And without a stacked deck, there is no way Barney Frank can win an election (see Barney Frank, Top Liberal, Won’t Seek Re-election by ABBY GOODNOUGH posted 11/28/2011 on The New York Times).

Earlier in the day, Mr. Frank announced at a news conference that he had decided to retire at the end of next year after his Massachusetts district was recently redrawn and it became clear that he would have to fight harder than he wanted for re-election.

Even before this redistricting things were already looking down for Frank.  The architect of the subprime mortgage crisis (he and Chris Dodd were responsible for the Congressional oversight of Fannie Mae and Freddie Mac) had to fight last election.  For one of the first times in his life.  And he didn’t like it.  This time around would have been worse.  And he knew it.  He’d lose.  So he decided not to run.  For it’s one thing not having majority power.  Which is no fun.  But it’s a whole other thing to have to fight and scratch your way to the minority power.  Go through all of that for what?  Just to have someone tell you can’t do whatever the hell you want?  No sir.  This congressman will just take his toys and go home.

Now, Mr. Frank said, the notion that wrangling between Democrats and Republicans is “a competition between people of good will with different views on public policy” has vanished. For that, he blames Newt Gingrich, the former House speaker and current Republican presidential candidate with whom he has a tense history.

“Newt’s the single biggest factor in bringing about this change,” Mr. Frank said. “He got to Congress in ’78 and said, ‘We the Republicans are not going to be able to take over unless we demonize the Democrats.’ ”

You see, this is why no one likes Barney Frank.  He’s such an arrogant liar.  Demonize Democrats?  Who was that taking Newt Gingrich out of context, saying that he wanted to take seniors’ Medicare away so they could whither on the vine and die?  That was the Democrats.  Demonizing Newt Gingrich.  And the Republicans.

Bipartisan is a one-way street for Democrats.  When they’re in power there’s no need for bipartisan cooperation.  Because they’ll rule as they please despite any Republican opposition.  Because they won.  And elections have consequences.  But once they fall from majority power how they cry that Republicans aren’t playing nice.  By not letting the Democrats still set the agenda.

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It Ain’t 1996 – Obama’s path to Reelection isn’t Quite the same Road Clinton Traveled

Posted by PITHOCRATES - January 24th, 2011

Obama Doesn’t have the Healthcare and Economic Edge Clinton Had

Clinton was lucky.  Hillarycare (Clinton’s attempt to ‘nationalize’ healthcare) was a disaster.  It crashed and burned.  So it was off the table come reelection time.  And he had a smoking hot economy.  He had both a real estate bubble and a dot-com bubble.  Now, strictly speaking, bubbles aren’t good things.  Because they burst.  And recessions follow the bursting.  But until they burst, you got a smoking hot economy with low unemployment numbers.  Just the kind of things that gets presidents reelected.  REDSTATE has a list of other things, but let’s focus on items 3 & 4 in their list (see Why 2012 Is Not 1996 by Dan McLaughlin posted 1/24/2011 on REDSTATE).

3: Obamacare passed; Hillarycare didn’t: As unpopular as the Clinton Administration’s health care plan was, it wasn’t a major issue in the 1996 campaign because it had failed and, with Republicans controlling both Houses of Congress, it wasn’t coming back…Not so Obamacare, which remains very much a live issue.

4: The Economy: The unemployment rate is the most obvious of numerous economic indicators showing the U.S. economy in bad shape in 2011: unemployment, as low as 4.3% when voters elected the Democrats to control Congress in November 2006, was 6.5% when Obama was elected and 8.5% when he was inaugurated, and he expended much political capital arguing that his “stimulus” package would fix this with federal spending on “shovel-ready” projects; instead it peaked at 10.6% in January 2010, and remains above 9% a year later. These are very high numbers historically; since 1960, the unemployment rate has been above 6% on election day five times, and the only time the party in power wasn’t booted was 1984, when the 7.2% rate was the lowest it had been since before President Reagan took office and had plunged more than three points in two years. By contrast, the unemployment rate in 1996 was 5.4%, down from 7.4% when Bill Clinton was elected. If Obama can’t make the argument that Presidents Reagan and Clinton made – that they were not only making major headway on unemployment but in better shape than they were when elected (in Reagan’s case, the slight drop in unemployment was accompanied by an enormous drop in interest rates and inflation and a stock market boom) – he’ll face an electorate that is much more suspicious of entrusting him with the economy for four more years.

Historically speaking, history will favor who is not Obama in 2012 on these two issues.  And they’re about the biggest issues you can have.  A recession that just keeps on keeping on.  And a massive explosion in new spending.  Which can’t possibly help anything economic.

Old People and Jobs:  One Unpleasant Tradeoff

And there you have the ultimate showdown.  Obamacare versus the economy.  More spending and even more taxes.  Or less spending, less taxes and more jobs.  On one side you have emotional tugs of the heartstring (we have to help those poor uninsured people).  The other you have reality (we can’t raise taxes or borrow anymore without ending up like Greece).   

Obama may go Clinton.  And Clinton scored some big points with Welfare reform.  Obama has a chance to reform Medicare.  It is, after all, a part of Obamacare.  Gutting Medicare.  But Medicare is not welfare.  Those old people are a powerful voting bloc.  Will anyone, especially a Democrat, throw himself onto that ‘third rail’ (see Health care and the contest of credibility by Michael Gerson posted 1/25/2011 on The Washington Post)?

With Jack Lew and Gene Sperling in charge of its economic policy, the administration’s Clintonian direction is clear. It will seek higher revenue, cuts in defense, spending caps and more aggressive health-care price controls. When measuring deficit reduction, the last is the most important. It is the combination of cost inflation, an aging population and expansive health entitlements that push America toward the fate of Greece. Unless this problem is addressed, no tax increase or cut in discretionary spending will cause federal outlays to flatten at a sustainable percentage of the economy.

Higher revenue means higher taxes.  This is why Obamacare ‘reduces’ the deficit.  It has more new taxes than new spending in it.  But it’s a poor way to reduce the deficit.  If you have a problem because you’ve spent too much on your credit cards, what’s the easiest way to fix that problem?  Increase your revenue (i.e., your salary)?  Or cut your spending?  Of the two, you have far more power over spending cuts than you do on increasing your revenue.  So the smart money always goes on spending cuts to cut any deficit.  If you’re spending too much you just stop spending so much.  Pretty simple and straight forward.

But the 800 pound gorilla in the room is spending on old people (Medicare and Social Security).  We’re spending a fortune on increasing the life of the old so they can keep on collecting social security.  You’d have to be an idiot to not see the problem with that in an ‘entitlement-based’ government.

“The fact is,” says Yuval Levin of the Ethics and Public Policy Center, “Medicare is going to crush the government, and if Republicans leave it unreformed then the debt picture is very, very ugly. They might never – literally never – show the budget reaching balance. Not in the 10-year window and not if they take their graphs out a hundred years. Obama could probably show balance just past the budget window in the middle of the next decade because of the massive Medicare cuts he proposes, even if in practice they will never actually happen.”

Incidentally, those “massive Medicare cuts” he proposed was how he got CBO to favorably score Obamacare.  Without those cuts Obamacare would never have gotten any traction because of the massive cost.  Even with the massive tax increases.

So you see the grim picture? 

The Democratic approach to Medicare cuts would give doctors and providers less and less money while expecting them to cover the same services. “In reality,” says Levin, “providers won’t just provide the same care for less money – some will stop taking Medicare patients, some will go out of business, and some will reduce the level of care or amenities. That’s what we see in every system that takes this approach to cost control: waiting lines, dirty, unsafe hospitals with horrible food and amenities.”

And this is nationalized healthcare.  Healthcare for everyone.  All at an equally horrible standard.  Unless you’re in the government, of course.  Or are affluent enough to fly somewhere where there still is quality healthcare.

Pity the Poor Democrat son of a bitch Running in 2016

Obamacare benefits don’t really kick in until after the 2012 elections.  So when rationing kicks in and the ‘death panels’ start thinning the herd, it will be after the 2012 elections.  This may help.  The quality of our healthcare (Medicare and Obamacare) won’t really really suck until later.  However, taxes, regulations and mandates (and waivers) are kicking in before the benefits.  So the economy will still be in the toilet.  There might still be some tricks in the election bag to pull off reelection.  Who knows?  But one thing for sure.  Pity the poor Democrat son of a bitch running in 2016.  Because he or she will have to answer for the unprecedented mess their predecessor gave us.  Perpetual recession.  And horrible healthcare.

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