27 May 2012
A Characteristic Obama Administration Callous Act
The Obama administration has callously chosen to cut off the water supply of Tombstone, Arizona. We can add this to a long string of harm-causing actions against Americans in the name of the environment. Read more about how they have prevented Tombstone from repairing their water pipeline here.
Retiring Baby Boomers and the Dropping Labor Force Participation Rate
This is a reconsideration of my post entitled Are Retiring Baby Boomers Causing the Labor Force Participation Rate to Drop? This revised post is the result of some uneasiness I had about my earlier post and the perceptive objection made by a reader, Danny Jeck.
The labor participation rate is the sum of those employed and those actively looking for employment divided by the civilian and non-institutionalized working age population 16 and over. That ratio is usually expressed as a percentage. For some historical perspective, the labor participation rate from 1948 to 2008 is shown below:
The labor participation rate for men has fallen steadily since 1948, while that for women grew from 1948 to about 1996 and from then until 2008 was about constant. The total labor participation rate was quite constant at about 60% from 1948 to 1972. It then rose until about 1990 and then was nearly constant until about 2001. Since then the labor force participation rate has fallen. The fall essentially began with the dot com recession and the labor participation rate never recovered. More recently, the Great Socialist Recession has caused it to fall more rapidly.
There have been plausible suggestions that a part of the reason for the drop in the labor force participation rate is because the leading edge of the Baby Boomer generation has reached retirement age. This is an important issue for many reasons, but one of special significance is how much of the drop in the labor participation rate in this never-ending recession is due to discouraged unemployed people no longer looking for employment versus a large number of Baby Boomer retirees. Let us examine the civilian labor force participation rates provided by the Bureau of Labor Statistics for both young and seasoned workers by age group:
The civilian labor force participation rates for three age groups of young people are shown from 2002 to 2011 for comparison with that for three age groups of seasoned people. That for the entire civilian labor force 16 years old and up is also shown. The entire labor force shows a small decrease in its civilian labor participation rate since 2008.
The leading edge of the Baby Boomers is the lower age portion within the 65 - 69 age group, those 65 and 66. The labor force participation rate for this group has actually been steadily increasing since 2002! That for the age group 60 - 64 has also generally increased, though it dropped slightly in 2011. The age group 55 - 59 has been very slightly higher in participation from 2008 through 2011. If the retirements of Baby Boomers are the cause of the falling civilian labor force participation rates, it is not apparent from the participation rates of the seasoned workers most likely to be retiring.
Examining the youngest 16 - 19 year old worker group, we find a sharp fall in the participation rate since 2006. The labor force participation rate for the 20 - 24 age group has fallen slightly since 2008, while the 25 - 29 age group rate has fallen less since then. Note that the disastrous fall in the labor force participation rate for the 16 - 19 year old workers began before the Great Socialist Recession began in 2008. The federal minimum wage went up from $5.15 to $5.85 on 24 July 2007, so many companies would have hired few starting workers in this age group even earlier that year in anticipation of this increase in their labor costs.
It appears likely that the lower overall labor participation rate is thus due more to younger workers than to older workers and that much of that may be due to the federal minimum wage increases in July of 2007, 2008, and 2009. However, it is still possible that some of the decrease in the labor participation rate is still due to retiring seasoned workers if the per year numbers of Baby Boomers on the leading edge of that generation are in larger numbers than are the young workers entering the labor pipeline. Let us look at the numbers in the population of each group in 2011:
16 - 19 year olds: 16,774,000, a 4-year group with a 5-year group equivalent of 20,967,500
20 - 24 year olds: 21,423,000
25 - 29 year olds: 21,119,000
55 - 59 year olds: 19,670,000
60 - 64 year olds: 17,317,000
65 - 69 year olds: 12,546,000
There are fewer people in the three older age groups per year than there are in the three young age groups. In particular, there are fewer people of any age from 55 to 66, which are Baby Boomer years, than there are in the 16, 17, 18, or up to 29 years old individual years. There are more potential workers entering the employment pipeline than are exiting it. Unfortunately, those who may wish to enter the pipeline are not being hired. The primary cause of the labor participation rate is among these younger people.
As I pointed out, a part of the reason is the minimum wage law, which is not always the federal law. Many states have higher minimum wage rates than the federal rate. 18 states have a higher minimum wage than the federal minimum wage. These minimum wage mandates greatly discourage employers from hiring many young and inexperienced workers who will need extensive on-the-job training, especially when the worker is under-educated or shows evidence of possible work ethic problems.
Still another important reason for not hiring young workers since 2008 is the knowledge that employers will have to provide expensive health care insurance to young workers as ObamaCare kicks in. In the past, many young workers were not covered by company health insurance, which gave them an opportunity in their generally healthy youthful years to gain enough skills that an employer would later provide them with health insurance coverage. Now the expense looms before the knowledge and skill set of the young worker has matured enough to prove his value.
Finally, it costs money, which has to be viewed as an investment, to train a new worker, especially if the worker is young and inexperienced. Most of the young people hired are hired by small companies. These small companies often have cash flow problems even in good times and can be especially vulnerable when they have used many of their limited financial resources to weather an extraordinarily long and deep recession of four years duration that looks likely to stretch into a fifth year.
No business cycle recession lasts so long. Only government knows how to so mangle the economy that our great private sector enterprises cannot recover strongly in much less time. Much as was the case in the Great Depression, government has pursued very wrongheaded socialist visions which have discouraged business investors, whether they be investors in equipment or in newly hired human capital.
How ironic and tragic that young Americans who were so often enthusiastic about the election of Barack Obama in 2008 have now found themselves and their slightly younger brothers and sisters suffering dire delays in establishing their careers. Many have lost out on gaining years of job skills and experience. Obama has betrayed their faith in him on a colossal scale. Though in truth even young people should have known better than to have embraced his socialism despite the government-run school indoctrination programs in favor of socialism and big government generally.
Let us return to estimating the size of the effect of Baby Boomers on the labor participation rate. From April 2011 to April 2012, the population 65 and older grew by 2,003,000 people. As a percentage of the population 16 and over, they went from 16.51% to 17.09%, an increase of 0.58%. The labor participation rate of those 65 and older increased from 18.0 to 18.5% in this time, or by 567,945 people. The total population of those 16 and over increased by 3,638,000 people, so the number of added people in the 16 through 64 population of 1,635,000 people was smaller than those added to the 65 and over population by 368,000 people. This will cause the Baby Boomer generation to begin to have a small effect on the labor participation rate.
Back in April 2002, a pretty decent time for jobs, those 16 - 19 years old had a labor participation rate of about 44.3%. So about that % of the 368,000 additional young people who might want to be labor participants is about 163,000 people. The increase in the number of people 65 and older participating in the labor force in the last year was 567,945 people as mentioned, so the seasoned population actually added 3.5 times as many participants as might have wanted to be new participants in the 16 - 64 age group.
This is all interesting, but we also have to acknowledge that from April 2011 to April 2012, the number of non-participants in the labor force 65 and over increased by 1,435,055 people. This number compared to the total non-institutional civilian population 16 and over is 0.59%. That is not an entirely negligible number in terms of the overall labor participation rate.
In 2007 and 2008, the annual labor participation rate was 66.0%. It fell in 2009 to 65.4%, then fell again in 2010 to 64.7%, and fell still again in 2011 to 64.1%. The decreases in 2009 and 2010 were mostly due to decreases in the labor force participation of young people. See Democrats Eat the Young: Minimum Wage Case in Point. However, the fall from April 2011 to April 2012 in the labor participation rate was from 63.9% to 63.4%, which very nearly matches the 0.59% calculated in the previous paragraph for the effect of the leading edge of Baby Boomers who are now 65 and 66 years old and are not now participating in the labor force. It seems the effect of the young people on a dropping labor participation rate is now over and that the drop in the rate for the last year has been due to that leading edge of the Baby Boom generation.
We have to imagine that more of the 65 and older population would like to have sufficient job prospects that looking for work would make sense. Perhaps their increasing participation rate is not even as great as it would be if the economy were to come around and start getting better. With the drop in home prices and the widespread losses in their retirement investments, many more people of this age would like to work than have in past years. I also know from many anecdotal discussions that many leading age Baby Boomers had children relatively late in life and are still struggling to pay off the debts they incurred sending their children to our very much over-priced colleges and universities. Many such as me have no prospects of stopping work before they are 75 years old.
Clearly, if we assume that Baby Boomers all want to be retired if they are not participating in the labor market, then there is some effect which does not represent a failure of the economy. But I suspect that once one is 65 the market for one's labor starts to look bleak for many, especially when so many people are out of work and many more have dropped out of the labor force. This makes many older people who actually want to work or need to work victims of the poor economy and causes them to drop out in larger numbers than is good for them or for our society. With people living longer and being generally healthier at age 65 than in the past, it is natural to expect that more older people would like to continue working even in the face of many other people's expectations that they should stop working at that age. I do not know how to extract this effect, other than to survey them on the question of whether they would like to be working or not.
It is almost certain that as we get more and more of the Baby Boomers past the age of 65, they will start to have an effect on the labor participation rate. As we have seen, they have had an effect in the last year. The effect this coming year will be greater than that of the last year if the effect is entirely due to people wanting to retire as opposed to an economy that cannot provide them with jobs.
As the Baby Boomers come to reach the age of 65 and if the labor force participation rate continues to fall, it will be harder to grow the economy both due to fewer productive workers and higher Medicare and Social Security cost burdens on workers. Baby Boomers trying to unload the homes they raised children for smaller homes or condominiums, perhaps in warmer climates, in will be driving down the cost of homes. This will make a recovery in home values following the housing bubble much harder. The consequences for our economy will be massive, but we have known this was coming for decades. Knowing that, we still built up our national debt and unfunded liabilities without a care in the world.
Still, there are things that can be done to greatly boost the growth of our economy. We need to reduce business taxes and the higher tax brackets of the income tax. We need to reduce industry killing regulations such as those the Obama administration has put on the coal industry. We sure could use the boost to the economy that allowing more oil and gas drilling on federal land and offshore could provide. We also need to find ways to allow anyone over 65 years old who wants to work to do so. The years ahead are going to be very challenging. To manage them, we had better reign in government by controlling its spending and ending the harm it is doing to our businesses. The problems brought on by an aging population can be minimized if we come again to believe that the business of America is business.
The labor participation rate is the sum of those employed and those actively looking for employment divided by the civilian and non-institutionalized working age population 16 and over. That ratio is usually expressed as a percentage. For some historical perspective, the labor participation rate from 1948 to 2008 is shown below:
There have been plausible suggestions that a part of the reason for the drop in the labor force participation rate is because the leading edge of the Baby Boomer generation has reached retirement age. This is an important issue for many reasons, but one of special significance is how much of the drop in the labor participation rate in this never-ending recession is due to discouraged unemployed people no longer looking for employment versus a large number of Baby Boomer retirees. Let us examine the civilian labor force participation rates provided by the Bureau of Labor Statistics for both young and seasoned workers by age group:
The civilian labor force participation rates for three age groups of young people are shown from 2002 to 2011 for comparison with that for three age groups of seasoned people. That for the entire civilian labor force 16 years old and up is also shown. The entire labor force shows a small decrease in its civilian labor participation rate since 2008.
The leading edge of the Baby Boomers is the lower age portion within the 65 - 69 age group, those 65 and 66. The labor force participation rate for this group has actually been steadily increasing since 2002! That for the age group 60 - 64 has also generally increased, though it dropped slightly in 2011. The age group 55 - 59 has been very slightly higher in participation from 2008 through 2011. If the retirements of Baby Boomers are the cause of the falling civilian labor force participation rates, it is not apparent from the participation rates of the seasoned workers most likely to be retiring.
Examining the youngest 16 - 19 year old worker group, we find a sharp fall in the participation rate since 2006. The labor force participation rate for the 20 - 24 age group has fallen slightly since 2008, while the 25 - 29 age group rate has fallen less since then. Note that the disastrous fall in the labor force participation rate for the 16 - 19 year old workers began before the Great Socialist Recession began in 2008. The federal minimum wage went up from $5.15 to $5.85 on 24 July 2007, so many companies would have hired few starting workers in this age group even earlier that year in anticipation of this increase in their labor costs.
It appears likely that the lower overall labor participation rate is thus due more to younger workers than to older workers and that much of that may be due to the federal minimum wage increases in July of 2007, 2008, and 2009. However, it is still possible that some of the decrease in the labor participation rate is still due to retiring seasoned workers if the per year numbers of Baby Boomers on the leading edge of that generation are in larger numbers than are the young workers entering the labor pipeline. Let us look at the numbers in the population of each group in 2011:
16 - 19 year olds: 16,774,000, a 4-year group with a 5-year group equivalent of 20,967,500
20 - 24 year olds: 21,423,000
25 - 29 year olds: 21,119,000
55 - 59 year olds: 19,670,000
60 - 64 year olds: 17,317,000
65 - 69 year olds: 12,546,000
There are fewer people in the three older age groups per year than there are in the three young age groups. In particular, there are fewer people of any age from 55 to 66, which are Baby Boomer years, than there are in the 16, 17, 18, or up to 29 years old individual years. There are more potential workers entering the employment pipeline than are exiting it. Unfortunately, those who may wish to enter the pipeline are not being hired. The primary cause of the labor participation rate is among these younger people.
As I pointed out, a part of the reason is the minimum wage law, which is not always the federal law. Many states have higher minimum wage rates than the federal rate. 18 states have a higher minimum wage than the federal minimum wage. These minimum wage mandates greatly discourage employers from hiring many young and inexperienced workers who will need extensive on-the-job training, especially when the worker is under-educated or shows evidence of possible work ethic problems.
Still another important reason for not hiring young workers since 2008 is the knowledge that employers will have to provide expensive health care insurance to young workers as ObamaCare kicks in. In the past, many young workers were not covered by company health insurance, which gave them an opportunity in their generally healthy youthful years to gain enough skills that an employer would later provide them with health insurance coverage. Now the expense looms before the knowledge and skill set of the young worker has matured enough to prove his value.
Finally, it costs money, which has to be viewed as an investment, to train a new worker, especially if the worker is young and inexperienced. Most of the young people hired are hired by small companies. These small companies often have cash flow problems even in good times and can be especially vulnerable when they have used many of their limited financial resources to weather an extraordinarily long and deep recession of four years duration that looks likely to stretch into a fifth year.
No business cycle recession lasts so long. Only government knows how to so mangle the economy that our great private sector enterprises cannot recover strongly in much less time. Much as was the case in the Great Depression, government has pursued very wrongheaded socialist visions which have discouraged business investors, whether they be investors in equipment or in newly hired human capital.
How ironic and tragic that young Americans who were so often enthusiastic about the election of Barack Obama in 2008 have now found themselves and their slightly younger brothers and sisters suffering dire delays in establishing their careers. Many have lost out on gaining years of job skills and experience. Obama has betrayed their faith in him on a colossal scale. Though in truth even young people should have known better than to have embraced his socialism despite the government-run school indoctrination programs in favor of socialism and big government generally.
Let us return to estimating the size of the effect of Baby Boomers on the labor participation rate. From April 2011 to April 2012, the population 65 and older grew by 2,003,000 people. As a percentage of the population 16 and over, they went from 16.51% to 17.09%, an increase of 0.58%. The labor participation rate of those 65 and older increased from 18.0 to 18.5% in this time, or by 567,945 people. The total population of those 16 and over increased by 3,638,000 people, so the number of added people in the 16 through 64 population of 1,635,000 people was smaller than those added to the 65 and over population by 368,000 people. This will cause the Baby Boomer generation to begin to have a small effect on the labor participation rate.
Back in April 2002, a pretty decent time for jobs, those 16 - 19 years old had a labor participation rate of about 44.3%. So about that % of the 368,000 additional young people who might want to be labor participants is about 163,000 people. The increase in the number of people 65 and older participating in the labor force in the last year was 567,945 people as mentioned, so the seasoned population actually added 3.5 times as many participants as might have wanted to be new participants in the 16 - 64 age group.
This is all interesting, but we also have to acknowledge that from April 2011 to April 2012, the number of non-participants in the labor force 65 and over increased by 1,435,055 people. This number compared to the total non-institutional civilian population 16 and over is 0.59%. That is not an entirely negligible number in terms of the overall labor participation rate.
In 2007 and 2008, the annual labor participation rate was 66.0%. It fell in 2009 to 65.4%, then fell again in 2010 to 64.7%, and fell still again in 2011 to 64.1%. The decreases in 2009 and 2010 were mostly due to decreases in the labor force participation of young people. See Democrats Eat the Young: Minimum Wage Case in Point. However, the fall from April 2011 to April 2012 in the labor participation rate was from 63.9% to 63.4%, which very nearly matches the 0.59% calculated in the previous paragraph for the effect of the leading edge of Baby Boomers who are now 65 and 66 years old and are not now participating in the labor force. It seems the effect of the young people on a dropping labor participation rate is now over and that the drop in the rate for the last year has been due to that leading edge of the Baby Boom generation.
We have to imagine that more of the 65 and older population would like to have sufficient job prospects that looking for work would make sense. Perhaps their increasing participation rate is not even as great as it would be if the economy were to come around and start getting better. With the drop in home prices and the widespread losses in their retirement investments, many more people of this age would like to work than have in past years. I also know from many anecdotal discussions that many leading age Baby Boomers had children relatively late in life and are still struggling to pay off the debts they incurred sending their children to our very much over-priced colleges and universities. Many such as me have no prospects of stopping work before they are 75 years old.
Clearly, if we assume that Baby Boomers all want to be retired if they are not participating in the labor market, then there is some effect which does not represent a failure of the economy. But I suspect that once one is 65 the market for one's labor starts to look bleak for many, especially when so many people are out of work and many more have dropped out of the labor force. This makes many older people who actually want to work or need to work victims of the poor economy and causes them to drop out in larger numbers than is good for them or for our society. With people living longer and being generally healthier at age 65 than in the past, it is natural to expect that more older people would like to continue working even in the face of many other people's expectations that they should stop working at that age. I do not know how to extract this effect, other than to survey them on the question of whether they would like to be working or not.
It is almost certain that as we get more and more of the Baby Boomers past the age of 65, they will start to have an effect on the labor participation rate. As we have seen, they have had an effect in the last year. The effect this coming year will be greater than that of the last year if the effect is entirely due to people wanting to retire as opposed to an economy that cannot provide them with jobs.
As the Baby Boomers come to reach the age of 65 and if the labor force participation rate continues to fall, it will be harder to grow the economy both due to fewer productive workers and higher Medicare and Social Security cost burdens on workers. Baby Boomers trying to unload the homes they raised children for smaller homes or condominiums, perhaps in warmer climates, in will be driving down the cost of homes. This will make a recovery in home values following the housing bubble much harder. The consequences for our economy will be massive, but we have known this was coming for decades. Knowing that, we still built up our national debt and unfunded liabilities without a care in the world.
Still, there are things that can be done to greatly boost the growth of our economy. We need to reduce business taxes and the higher tax brackets of the income tax. We need to reduce industry killing regulations such as those the Obama administration has put on the coal industry. We sure could use the boost to the economy that allowing more oil and gas drilling on federal land and offshore could provide. We also need to find ways to allow anyone over 65 years old who wants to work to do so. The years ahead are going to be very challenging. To manage them, we had better reign in government by controlling its spending and ending the harm it is doing to our businesses. The problems brought on by an aging population can be minimized if we come again to believe that the business of America is business.
26 May 2012
Obama's Unique Employment Failure
Over the last 25 years, going back to May 1987, every month of the Obama presidency has a worse employment to non-institutionalized working age population percentage than any month of any of the previous Presidents in that period. The worst month any prior President had was George W. Bush in December 2008. Of these awful employment months, the 32 worst months came after the Great Socialist Recession officially ended in June 2009, as pointed out by Jeffrey H. Anderson in this article.
25 May 2012
So Pakistan Admits Harboring Bin Laden
The fact that Pakistan just convicted a doctor of treason and gave him a 32-year prison sentence because he helped to identify Bin Laden to the U.S. is the equivalent of an admission that Pakistan was hiding and harboring Bin Laden.
Does Party Make a Difference in Fiscal Responsibility?
It is very common for libertarians to claim that it makes no difference which party is in power in Congress. The Club for Growth makes an annual evaluation of the actual voting record of members of Congress on matters of fiscal responsibility such as votes for lower spending, lower taxes, and less unnecessary regulation of business activities. Unlike some ratings, this one is based on numerous votes because Congress is constantly voting to spend more money. Let us examine these ratings for the Senate and the House of Representatives for 2011 to see if it makes a difference which party is in control of the House and Senate as far as fiscal responsibility is concerned.
I have combed the Club for Growth ratings for those Republican Senators and Representatives who have percentages below 50%. I have also culled it for those Democrats or Independents who scored 20% or higher. I then created a table with the lower rated worst Republicans and the higher rated best Democrats for the Senate and for the House. It turns out that almost all of the Democrats earned scores below 20%, while the Republicans mostly range from 40% to 100%. One wishes that the Republicans were as clustered between 80% and 100% as the Democrats are between 0% and 20%, but such is not the case. Nonetheless, a Republican with a disappointing 40% rating is still right about twice as often as a Democrat with what for them is a good rating of 20%.
Only three of the 51 Democrat and 2 Independent Senators scored a 20% or higher rating, while only two Republicans were wrong more often than right on their votes on matters of fiscal responsibility. Both Nelson and McCaskill are under some pressure in their states for their poor fiscal voting records. Claire McCaskill of Missouri actually improved her score in 2011 compared to her average score of 18%. Ben Nelson of Nebraska has a lifetime score of 32%, so his 2011 score is very little different. Since he is retiring rather than run for re-election, he avoided the pressure to change his spendthrift attitude. As much as Sanders is an avowed socialist, it came as a surprise to me that his voting record was actually among the best compared to the majority of Democrats and Independents in the Senate. Of course, he is only wrong four times for every time he is right! The worst Republicans, Susan Collins of Maine and Scott Brown of Massachusetts, are both from very leftist states, yet they are right about three times as often as the average Democrat and were better than the best of the Democrats.
The 2011 House of Representatives has 242 Republicans and 193 Democrats. The following table shows that 38 Republicans were wrong more often than right in their voting records, yet only LoBiondo of New Jersey was beaten in the scoring by two Democrats. The best Democrat was Dan Boren, whose 42% score was much better than the next Democrat. Despite that, he matched or beat out only 9 Republicans.
There was another surprise for me here. Charlie Rangel and Maxine Waters are both lunatics, yet their ratings of 20% were exceeded by only 8 of the 193 Democrats in the House. This is a really telling metric of just how otherworldly awful the Democrat Party voting record is with respect to a fiscally responsible and sustainable federal government.
Another surprise was that Allen West of Florida, who talks so impressively about smaller and more limited government, only scored a 64% rating. On the other hand, there were nine Republican heroes with 100% scores:
Amash, Michigan
Chaffetz, Utah
Flake, Arizona
Franks, Arizona
Graves, Georgia
Huelskamp, Kansas
Jordan, Ohio
Labrador, Idaho
Lamborn, Colorado
Generally, the worst of the Republicans are better than the best of the Democrats. The parties are measurably different and the Republicans are clearly the more fiscally responsible party. This is why I will be supporting only Republican candidates in the 2012 election. Some of them fall very short of my own standards, yet they are so much better than the Democrats in these trillion dollar deficit times that it is very important to have Republican majorities in the House and Senate.
I have combed the Club for Growth ratings for those Republican Senators and Representatives who have percentages below 50%. I have also culled it for those Democrats or Independents who scored 20% or higher. I then created a table with the lower rated worst Republicans and the higher rated best Democrats for the Senate and for the House. It turns out that almost all of the Democrats earned scores below 20%, while the Republicans mostly range from 40% to 100%. One wishes that the Republicans were as clustered between 80% and 100% as the Democrats are between 0% and 20%, but such is not the case. Nonetheless, a Republican with a disappointing 40% rating is still right about twice as often as a Democrat with what for them is a good rating of 20%.
The 2011 House of Representatives has 242 Republicans and 193 Democrats. The following table shows that 38 Republicans were wrong more often than right in their voting records, yet only LoBiondo of New Jersey was beaten in the scoring by two Democrats. The best Democrat was Dan Boren, whose 42% score was much better than the next Democrat. Despite that, he matched or beat out only 9 Republicans.
Another surprise was that Allen West of Florida, who talks so impressively about smaller and more limited government, only scored a 64% rating. On the other hand, there were nine Republican heroes with 100% scores:
Amash, Michigan
Chaffetz, Utah
Flake, Arizona
Franks, Arizona
Graves, Georgia
Huelskamp, Kansas
Jordan, Ohio
Labrador, Idaho
Lamborn, Colorado
Generally, the worst of the Republicans are better than the best of the Democrats. The parties are measurably different and the Republicans are clearly the more fiscally responsible party. This is why I will be supporting only Republican candidates in the 2012 election. Some of them fall very short of my own standards, yet they are so much better than the Democrats in these trillion dollar deficit times that it is very important to have Republican majorities in the House and Senate.
23 May 2012
A Reminder of the Scale of Black American Deaths by Other Blacks
Prof. Walter E. Williams just wrote a column reminding us of the scale of the problem Black Americans have with respect to being murdered by other blacks. Let us examine the bare and essential facts:
Those relatively few instances in which a white kills a black are much, much more often discussed in our society than are these black on black violent crimes. Of course such white crimes against blacks are deplorable. But if the life experience of American blacks is to be improved, it is much more important to bring an end to the avalanche of black violent crimes with black victims. Yet we do not talk about it very much. The reason is because too many people are afraid that bringing this critical problem up will be viewed as a criticism of black Americans. These days any criticism is likely to be called evidence of racism.
Unfortunately, when one race or ethnic group consistently exhibits a much greater propensity for violence and establishes a reputation for being dangerous to others, that group will rationally be feared and disdained. This may be a kind of racism alright, but it is not the kind of racism that is morally condemnable. One may very much wish to judge each individual Black American on his individual character and one may do so when the opportunity exists to do so, yet, when walking down a city street at night it may be most reasonable to be especially aware of any members of that racial or ethnic group known for its tendency toward violent crimes.
If many members of the group known for its violent crimes are then uncomfortable with being viewed as potential criminals, this is a sad thing. Yet, the only realistic answer in some circumstances of being free of this fear or doubt is the elimination of the overwhelming fact that their group is violent and known for that fact. In America today, we mostly try to pretend that we can ignore the facts, except when we are walking down that dark city street in a neighborhood with a good number of Black Americans in it. Obama's grandmother may have been only reasonable in having the fear Obama attributed to her in such cases.
We all pay a heavy price for this, but the heaviest price is paid by those Black Americans who do not wish to be among the violent criminals. They become the premier victims of the violence, but also of the doubts of others. Since the white American pointing this out is likely to be called a racist, most especially by blacks, it is hard for them to do much to really address this issue. The issue has to be primarily addressed by black Americans themselves, especially in their own neighborhoods.
In many neighborhoods, black Americans have done little to address this violent crime problem. They have also commonly failed to address the problem that their schools are providing a very poor education to their children. Attempts to blame whites for the violence or the poor schools is really ridiculous and it is clearly used to duck responsibility to improve one's own life and neighborhood in many black communities.
- Blacks lynched by whites between 1882 and 1968 = 3,446
- Blacks killed in the Korean War, the Vietnam War, and the wars since 1980 = 18,515
- Blacks killed in the U.S. by other blacks from 1976 to 2011 = 262,621
Those relatively few instances in which a white kills a black are much, much more often discussed in our society than are these black on black violent crimes. Of course such white crimes against blacks are deplorable. But if the life experience of American blacks is to be improved, it is much more important to bring an end to the avalanche of black violent crimes with black victims. Yet we do not talk about it very much. The reason is because too many people are afraid that bringing this critical problem up will be viewed as a criticism of black Americans. These days any criticism is likely to be called evidence of racism.
Unfortunately, when one race or ethnic group consistently exhibits a much greater propensity for violence and establishes a reputation for being dangerous to others, that group will rationally be feared and disdained. This may be a kind of racism alright, but it is not the kind of racism that is morally condemnable. One may very much wish to judge each individual Black American on his individual character and one may do so when the opportunity exists to do so, yet, when walking down a city street at night it may be most reasonable to be especially aware of any members of that racial or ethnic group known for its tendency toward violent crimes.
If many members of the group known for its violent crimes are then uncomfortable with being viewed as potential criminals, this is a sad thing. Yet, the only realistic answer in some circumstances of being free of this fear or doubt is the elimination of the overwhelming fact that their group is violent and known for that fact. In America today, we mostly try to pretend that we can ignore the facts, except when we are walking down that dark city street in a neighborhood with a good number of Black Americans in it. Obama's grandmother may have been only reasonable in having the fear Obama attributed to her in such cases.
We all pay a heavy price for this, but the heaviest price is paid by those Black Americans who do not wish to be among the violent criminals. They become the premier victims of the violence, but also of the doubts of others. Since the white American pointing this out is likely to be called a racist, most especially by blacks, it is hard for them to do much to really address this issue. The issue has to be primarily addressed by black Americans themselves, especially in their own neighborhoods.
In many neighborhoods, black Americans have done little to address this violent crime problem. They have also commonly failed to address the problem that their schools are providing a very poor education to their children. Attempts to blame whites for the violence or the poor schools is really ridiculous and it is clearly used to duck responsibility to improve one's own life and neighborhood in many black communities.
16 May 2012
Are Retiring Baby Boomers Causing the Labor Force Participation Rate to Drop?
I had reason to re-write this post with a more complete analysis shortly after this was posted. The better analysis is here.
There have been plausible suggestions that a part of the reason for the drop in the labor force participation rate is because the leading edge of the Baby Boomer generation has reached retirement age. This is an important issue for many reasons, but one of special significance is how much of the drop in the labor participation rate in this never-ending recession is due to discouraged unemployed people no longer looking for employment versus a large number of Baby Boomer retirees. Let us examine the civilian labor force participation rates provided by the Bureau of Labor Statistics for both young and seasoned workers by age group:
The civilian labor force participation rates for three age groups of young people is shown from 2002 to 2011 for comparison with that for three age groups of seasoned people. That for the entire civilian labor force 16 years old and up is also shown. The entire labor force shows a small decrease in its civilian labor participation rate since 2008.
The leading edge of the Baby Boomers is the lower age portion within the 65 - 69 age group, those 65 and 66. The labor force participation rate for this group has actually been steadily increasing since 2002! That for the age group 60 - 64 has also generally increased, though it dropped slightly in 2011. The age group 55 - 59 has been very slightly higher in participation from 2008 through 2011. If the retirements of Baby Boomers are the cause of the falling civilian labor force participation rates, it is not apparent from the participation rates of the seasoned workers most likely to be retiring.
Examining the youngest 16 - 19 year old worker group, we find a sharp fall in the participation rate since 2006. The labor force participation rate for the 20 - 24 age group has fallen slightly since 2008, while the 25 - 29 age group rate has fallen less since then. Note that the disastrous fall in the labor force participation rate for the 16 - 19 year old workers began before the Great Socialist Recession began in 2008. The federal minimum wage went up from $5.15 to $5.85 on 24 July 2007, so many companies would have hired few starting workers in this age group even earlier that year in anticipation of this increase in their labor costs.
It appears likely that the lower overall labor participation rate is thus due to younger workers rather than older workers and that much of that may be due to the federal minimum wage increases in July of 2007, 2008, and 2009. However, it is still possible that some of the decrease in the labor participation rate is still due to retiring seasoned workers if the per year numbers of Baby Boomers on the leading edge of that generation are in larger numbers than are the young workers entering the labor pipeline. Let us look at the numbers in the population of each group in 2011:
16 - 19 year olds: 16,774,000, a 4-year group with a 5-year group equivalent of 20,967,500
20 - 24 year olds: 21,423,000
25 - 29 year olds: 21,119,000
55 - 59 year olds: 19,670,000
60 - 64 year olds: 17,317,000
65 - 69 year olds: 12,546,000
There are fewer people in the three older age groups per year than there are in the three young age groups. In particular, there are fewer people of any age from 55 to 66, which are Baby Boomer years, than there are in the 16, 17, 18, or up to 29 years old individual years. So, while the bulge of Baby Boomers is significant in terms of health care costs and Social Security costs, it is not the cause even in part of the drop in the overall population labor participation rate. There are more potential workers entering the employment pipeline than are exiting it. Unfortunately, those who may wish to enter the pipeline are not being hired.
As I pointed out, a part of the reason is the minimum wage law, which is not always the federal law. Many states have higher minimum wage rates than the federal rate. 18 states have a higher minimum wage than the federal minimum wage. These minimum wage mandates greatly discourage employers from hiring many young and inexperienced workers who will need extensive on-the-job training, especially when the worker is under-educated or shows evidence of possible work ethic problems.
Still another important reason for not hiring young workers since 2008 is the knowledge that employers will have to provide expensive health care insurance to young workers as ObamaCare kicks in. In the past, many young workers were not covered by company health insurance, which gave them an opportunity in their generally healthy youthful years to gain enough skills that an employer would later provide them with health insurance coverage. Now the expense looms before the knowledge and skill set of the young worker has matured enough to prove his value.
Finally, it costs money, which has to be viewed as an investment, to train a new worker, especially if the worker is young and inexperienced. Most of the young people hired are hired by small companies. These small companies often have cash flow problems even in good times and can be especially vulnerable when they have used many of their limited financial resources to weather an extraordinarily long and deep recession of four years duration that looks likely to stretch into a fifth year.
No business cycle recession lasts so long. Only government knows how to so mangle the economy that our great private sector enterprises cannot recover strongly in much less time. Much as was the case in the Great Depression, government has pursued very wrongheaded socialist visions which have discouraged business investors, whether they be investors in equipment or in newly hired human capital.
How ironic and tragic that young Americans who were so often enthusiastic about the election of Barack Obama in 2008 have now found themselves and their slightly younger brothers and sisters suffering dire delays in establishing their careers. Many have lost out on gaining years of job skills and experience. Obama has betrayed their faith in him on a colossal scale. Though in truth even young people should have known better than to have embraced his socialism despite the government-run school indoctrination programs in favor of socialism and big government generally.
There have been plausible suggestions that a part of the reason for the drop in the labor force participation rate is because the leading edge of the Baby Boomer generation has reached retirement age. This is an important issue for many reasons, but one of special significance is how much of the drop in the labor participation rate in this never-ending recession is due to discouraged unemployed people no longer looking for employment versus a large number of Baby Boomer retirees. Let us examine the civilian labor force participation rates provided by the Bureau of Labor Statistics for both young and seasoned workers by age group:
The civilian labor force participation rates for three age groups of young people is shown from 2002 to 2011 for comparison with that for three age groups of seasoned people. That for the entire civilian labor force 16 years old and up is also shown. The entire labor force shows a small decrease in its civilian labor participation rate since 2008.
The leading edge of the Baby Boomers is the lower age portion within the 65 - 69 age group, those 65 and 66. The labor force participation rate for this group has actually been steadily increasing since 2002! That for the age group 60 - 64 has also generally increased, though it dropped slightly in 2011. The age group 55 - 59 has been very slightly higher in participation from 2008 through 2011. If the retirements of Baby Boomers are the cause of the falling civilian labor force participation rates, it is not apparent from the participation rates of the seasoned workers most likely to be retiring.
Examining the youngest 16 - 19 year old worker group, we find a sharp fall in the participation rate since 2006. The labor force participation rate for the 20 - 24 age group has fallen slightly since 2008, while the 25 - 29 age group rate has fallen less since then. Note that the disastrous fall in the labor force participation rate for the 16 - 19 year old workers began before the Great Socialist Recession began in 2008. The federal minimum wage went up from $5.15 to $5.85 on 24 July 2007, so many companies would have hired few starting workers in this age group even earlier that year in anticipation of this increase in their labor costs.
It appears likely that the lower overall labor participation rate is thus due to younger workers rather than older workers and that much of that may be due to the federal minimum wage increases in July of 2007, 2008, and 2009. However, it is still possible that some of the decrease in the labor participation rate is still due to retiring seasoned workers if the per year numbers of Baby Boomers on the leading edge of that generation are in larger numbers than are the young workers entering the labor pipeline. Let us look at the numbers in the population of each group in 2011:
16 - 19 year olds: 16,774,000, a 4-year group with a 5-year group equivalent of 20,967,500
20 - 24 year olds: 21,423,000
25 - 29 year olds: 21,119,000
55 - 59 year olds: 19,670,000
60 - 64 year olds: 17,317,000
65 - 69 year olds: 12,546,000
There are fewer people in the three older age groups per year than there are in the three young age groups. In particular, there are fewer people of any age from 55 to 66, which are Baby Boomer years, than there are in the 16, 17, 18, or up to 29 years old individual years. So, while the bulge of Baby Boomers is significant in terms of health care costs and Social Security costs, it is not the cause even in part of the drop in the overall population labor participation rate. There are more potential workers entering the employment pipeline than are exiting it. Unfortunately, those who may wish to enter the pipeline are not being hired.
As I pointed out, a part of the reason is the minimum wage law, which is not always the federal law. Many states have higher minimum wage rates than the federal rate. 18 states have a higher minimum wage than the federal minimum wage. These minimum wage mandates greatly discourage employers from hiring many young and inexperienced workers who will need extensive on-the-job training, especially when the worker is under-educated or shows evidence of possible work ethic problems.
Still another important reason for not hiring young workers since 2008 is the knowledge that employers will have to provide expensive health care insurance to young workers as ObamaCare kicks in. In the past, many young workers were not covered by company health insurance, which gave them an opportunity in their generally healthy youthful years to gain enough skills that an employer would later provide them with health insurance coverage. Now the expense looms before the knowledge and skill set of the young worker has matured enough to prove his value.
Finally, it costs money, which has to be viewed as an investment, to train a new worker, especially if the worker is young and inexperienced. Most of the young people hired are hired by small companies. These small companies often have cash flow problems even in good times and can be especially vulnerable when they have used many of their limited financial resources to weather an extraordinarily long and deep recession of four years duration that looks likely to stretch into a fifth year.
No business cycle recession lasts so long. Only government knows how to so mangle the economy that our great private sector enterprises cannot recover strongly in much less time. Much as was the case in the Great Depression, government has pursued very wrongheaded socialist visions which have discouraged business investors, whether they be investors in equipment or in newly hired human capital.
How ironic and tragic that young Americans who were so often enthusiastic about the election of Barack Obama in 2008 have now found themselves and their slightly younger brothers and sisters suffering dire delays in establishing their careers. Many have lost out on gaining years of job skills and experience. Obama has betrayed their faith in him on a colossal scale. Though in truth even young people should have known better than to have embraced his socialism despite the government-run school indoctrination programs in favor of socialism and big government generally.
12 May 2012
French Austerity
Despite claims of austerity, nominal government spending in France has gone up almost linearly since 2000. Real spending was linear to 2008 and then almost flattened through 2011. Yet, real spending did go up each year slightly since 2008. The share of government spending as a percentage of GDP was:
2000 51.6%
2009 56.8%
2011 55.9%
Such is the French notion of austerity and such was the driver for the election of the Socialist Party leader Francois Hollande. How can anyone imagine that a government that gobbles down more than half of the economy is austere? Yet in France, the median worker not only pays a higher fraction of his own income to taxes than the American worker does, but he also pays a larger fraction of all taxes paid. French socialism is not very kind to the middle class worker.
2000 51.6%
2009 56.8%
2011 55.9%
Such is the French notion of austerity and such was the driver for the election of the Socialist Party leader Francois Hollande. How can anyone imagine that a government that gobbles down more than half of the economy is austere? Yet in France, the median worker not only pays a higher fraction of his own income to taxes than the American worker does, but he also pays a larger fraction of all taxes paid. French socialism is not very kind to the middle class worker.
11 May 2012
Revisiting The French, Socialism, and Suicide
I just received an anonymous comment on a post of 2009 entitled The French, Socialism, and Suicide. Given that the French have decided to dive even more deeply into the socialist
abyss in the last week with the election of a Socialist Party President, Francois Hollande, it is good to bring attention back to this
post. It is about the not surprising relationship between self-control and self-responsibility and depression and a need for escape, hence drug use, including excessive use of alcohol, and suicide. Of course, thinking about these effects is also useful heading into our own election cycle in which the Democrat Socialist Party candidate Obama attempts winning a second term so he can push the United States further down the socialist road.
I also want to share the very typical comment from what is most likely an affronted socialist. The comment was:
The question about the meaning of objective is standard fare for anyone who is an Objectivist. The fact that the comment was anonymous is also most typical. The questioning of my academic credentials is also part of the formula. My response was:
I also want to share the very typical comment from what is most likely an affronted socialist. The comment was:
- Kind of a late response but do you know what objective means?
Also do you really have a Ph.D. or are you a Dr like Dr Pepper is a Dr?
The question about the meaning of objective is standard fare for anyone who is an Objectivist. The fact that the comment was anonymous is also most typical. The questioning of my academic credentials is also part of the formula. My response was:
The French have decided to dive even more deeply into the socialist abyss in the last week, so it is good to bring attention back to this post.
This anonymous comment is very typical of a broad class of comment that I usually get from leftists. One cannot actually tell that this comment is leftist due to its lack of content relevant to my observations and evaluations. It is, however, clearly from someone not happy with my comments and given the nature of those comments, it is most likely to be from a leftist.
Their comments are most often anonymous, probably due to a lack of confidence that they could stand up in a rational discussion. Such a lack of confidence also explains the lack of even a single counterargument. Instead, an attack upon my credentials is very common.
The leftist has a very high respect for academic credentials and is appalled to think that someone might have such a credential and yet have a worldview at odds with his own. Academia is supposed to be in lockstep solidarity with the socialists, so it is an affront if someone actually studied and did research well enough to earn a Ph.D. in some field (physics) and yet did not fall into the lockstep ranks of comrades. Such a person must be expelled from the pool of experts and authorities, so one must assume he is an imposter.
Never mind the fact that the argument from authority is a well-known logical and rhetorical fallacy. The left has a high reverence for authority, so long as the authority is a socialist. This is one of the main reasons why academia as it became so dominantly socialist also has come to be so devoid of creative and rigorously analytical thinking. It is why the universities are losing their value as a training ground for objective and independent-minded thinkers. The left has come to shrink from meaningful confrontation with its enemies because it cannot make its own case.
I give the commenter some credit for humor though. I laughed at his Dr. Pepper analogy, though I have some suspicion this also is a standard format that I just have not experienced before. It is perhaps not an original joke, but I enjoyed that as a twist on the tiresome questioning of my credentials.
Yet, those credentials do nothing to make or break any of the numbers I quoted on suicide or drinking and drug use. The argument is king, even should I be Dr. Pepper. They also do not change the nature of man and the deleterious effects of socialism upon mankind.
08 May 2012
Destructive and Foolish Licensing Laws
The Institute for Justice has just produced a study on the effects and requirements of licensing laws in all 50 states. They have summed up the results in a very good video. I believe you will find it well worth watching.
Jobs Recovery is Still Counterfeit
The seasonally adjusted employment figure released by the Bureau of Labor Statistics for the month of April 2012 for the household survey data shows a loss of 169,000 jobs compared to March 2012! Yet this was reported as a less than expected seasonally adjusted increase of 115,000 jobs by the Saturday/Sunday Wall Street Journal of 5-6 May 2012 which took its numbers from the establishment survey that covers a narrower range of jobs and under-counts the self-employed and very small businesses. In comparison, the household survey with no seasonal adjustment showed a large increase in jobs of 583,000 jobs!
Let us compare the numbers of the unemployed according to the BLS. According to the seasonally adjusted household survey, there are 12,500,000 unemployed. Without the seasonal adjustment there are only 11,910,000 unemployed, or fewer unemployed by 590,000. So given that I will henceforth in this post be discussing the household data without any seasonal adjustment, one would expect that there might actually be much evidence of a jobs recovery due to the 583,000 new jobs in April compared to March. Let us see. The numbers are given in the table below, in which I also calculate the number of missing jobs based on the percentage of the non-institutional working age population in the workforce in January 2000, when good jobs were plentiful. Note that unemployment is at its annual highest in January of each year, so this is a very relaxed standard of the workforce participation in that respect.
The working age population grew by 180,000 people. The number employed increased by 583,000 as noted above and the number of unemployed fell by 994,000 people. Since some of the 180,000 who reached employment age minus those who left due to death took some of the 583,000 jobs, at least 411,000 people had been unemployed so long that they died! Oh, well maybe they just became discouraged and left the workforce. Thanks to the many newly employed and the many who left the workforce in despair of ever finding a job, the standard, but relatively meaningless, unemployment rate fell greatly from 8.36% in March to 7.74% in April. This rate is far below the seasonally adjusted rate of 8.1% commonly discussed in the media. Let us see what happens to the number of missing jobs.
Now since this is not seasonally adjusted data, we have to maintain a long view of it. So, let us compare the number of missing jobs in April 2012 to the number missing in April 2011 and April 2010. There is an increase of 121,000 missing jobs compared with one year earlier. Even over the two years of supposed recovery since April 2010, there is a decrease in the number of missing jobs of only 11,000! Going back to the table above, note that the missing jobs in April 2012 imply a real unemployment rate of 13.34%, which is very slightly lower than the 13.47% unemployment rate of a year earlier and higher than that of April 2010, which was 13.03%. Month after month my comparison of these missing jobs numbers to figures a year ago and two years ago, show no improvement in the real unemployment rate. Basically, the economy is just employing enough additional people to tread water against population growth, but not recovering the jobs lost in the Great Socialist Recession.
In the first quarter, the nominal GDP growth rate was 3.8%, which sounds decent, but was not. It is not the nominal growth rate that matters. We need to know the real GDP growth rate. The government tells us this is 2.2% after subtracting a consumer price index rate of 1.54% from the nominal GDP growth rate. There is a problem here. The core consumer price index rate over the last 12 months, which excludes food and energy, is 2.3%. If one subtracts this from the nominal GDP growth rate of 3.8%, one gets a growth rate of 1.5%. But, the all items CPI rate over the last 12 months was 2.7%. Subtracting that rate from the nominal GDP rate leaves a mere 1.1% growth of GDP. Now, since the population is growing at a rate of 1.0% a year, real per capita GDP does not increase unless real GDP is greater than 1%. So the first quarter of 2012 real per capita GDP grew by about 0.1%. This means that our standard of living is not improving.
Normal real growth rates in a recovery to a recession are actually higher than long term real growth rates. In the present case, the real GDP is falling ever further behind the normal real GDP growth rate. We are experiencing our fourth year of decreasing or stagnant standard of living. No wonder the jobs creation problem is lingering forward, ever forward under the anti-business, especially anti-small business, regime of Obama. There is no real growth in the economy. We are simply in another government induced bubble. This one is clearly one of a flood of printed money. That counterfeit money is creating a counterfeit recovery.
This stagnant standard of living condition is what Obama was aiming for when he decided that energy costs should skyrocket, workers should be forced into labor unions and forced to buy expensive federally mandated health insurance, that a pristine environment was always more important than the standard of living of man, and that central planners should control the financial industry, the medical industry, the insurance industry, and the auto industry. This is the transformation of American which also seeks to soak the rich and the productive. This is Forward, Forward right back to the stagnation of medieval times, which Obama views as so compatible with his environmentalist vision and his belief that man is a catastrophe for the Earth's climate and its resources. Of course, that time was also very compatible for those who would be king, the cement scratching ambition of the young Obama.
Let us compare the numbers of the unemployed according to the BLS. According to the seasonally adjusted household survey, there are 12,500,000 unemployed. Without the seasonal adjustment there are only 11,910,000 unemployed, or fewer unemployed by 590,000. So given that I will henceforth in this post be discussing the household data without any seasonal adjustment, one would expect that there might actually be much evidence of a jobs recovery due to the 583,000 new jobs in April compared to March. Let us see. The numbers are given in the table below, in which I also calculate the number of missing jobs based on the percentage of the non-institutional working age population in the workforce in January 2000, when good jobs were plentiful. Note that unemployment is at its annual highest in January of each year, so this is a very relaxed standard of the workforce participation in that respect.
The working age population grew by 180,000 people. The number employed increased by 583,000 as noted above and the number of unemployed fell by 994,000 people. Since some of the 180,000 who reached employment age minus those who left due to death took some of the 583,000 jobs, at least 411,000 people had been unemployed so long that they died! Oh, well maybe they just became discouraged and left the workforce. Thanks to the many newly employed and the many who left the workforce in despair of ever finding a job, the standard, but relatively meaningless, unemployment rate fell greatly from 8.36% in March to 7.74% in April. This rate is far below the seasonally adjusted rate of 8.1% commonly discussed in the media. Let us see what happens to the number of missing jobs.
Now since this is not seasonally adjusted data, we have to maintain a long view of it. So, let us compare the number of missing jobs in April 2012 to the number missing in April 2011 and April 2010. There is an increase of 121,000 missing jobs compared with one year earlier. Even over the two years of supposed recovery since April 2010, there is a decrease in the number of missing jobs of only 11,000! Going back to the table above, note that the missing jobs in April 2012 imply a real unemployment rate of 13.34%, which is very slightly lower than the 13.47% unemployment rate of a year earlier and higher than that of April 2010, which was 13.03%. Month after month my comparison of these missing jobs numbers to figures a year ago and two years ago, show no improvement in the real unemployment rate. Basically, the economy is just employing enough additional people to tread water against population growth, but not recovering the jobs lost in the Great Socialist Recession.
In the first quarter, the nominal GDP growth rate was 3.8%, which sounds decent, but was not. It is not the nominal growth rate that matters. We need to know the real GDP growth rate. The government tells us this is 2.2% after subtracting a consumer price index rate of 1.54% from the nominal GDP growth rate. There is a problem here. The core consumer price index rate over the last 12 months, which excludes food and energy, is 2.3%. If one subtracts this from the nominal GDP growth rate of 3.8%, one gets a growth rate of 1.5%. But, the all items CPI rate over the last 12 months was 2.7%. Subtracting that rate from the nominal GDP rate leaves a mere 1.1% growth of GDP. Now, since the population is growing at a rate of 1.0% a year, real per capita GDP does not increase unless real GDP is greater than 1%. So the first quarter of 2012 real per capita GDP grew by about 0.1%. This means that our standard of living is not improving.
Normal real growth rates in a recovery to a recession are actually higher than long term real growth rates. In the present case, the real GDP is falling ever further behind the normal real GDP growth rate. We are experiencing our fourth year of decreasing or stagnant standard of living. No wonder the jobs creation problem is lingering forward, ever forward under the anti-business, especially anti-small business, regime of Obama. There is no real growth in the economy. We are simply in another government induced bubble. This one is clearly one of a flood of printed money. That counterfeit money is creating a counterfeit recovery.
This stagnant standard of living condition is what Obama was aiming for when he decided that energy costs should skyrocket, workers should be forced into labor unions and forced to buy expensive federally mandated health insurance, that a pristine environment was always more important than the standard of living of man, and that central planners should control the financial industry, the medical industry, the insurance industry, and the auto industry. This is the transformation of American which also seeks to soak the rich and the productive. This is Forward, Forward right back to the stagnation of medieval times, which Obama views as so compatible with his environmentalist vision and his belief that man is a catastrophe for the Earth's climate and its resources. Of course, that time was also very compatible for those who would be king, the cement scratching ambition of the young Obama.
02 May 2012
The Luddite-Statist Attacks on Amazon by Gen LaGreca
Gen LaGreca is one of my favorite writers and is the author of Noble Vision, which I reviewed here. She has just posted an important article on mounting attacks on self-publishing, e-books, and Amazon. The attackers are calling for government limitations on our personal choices in the markets.
Self-publishing with marketing and distribution via the Internet has opened the door to markets for much larger numbers of authors than ever before. Books can be purchased for far less, authors and readers are freed of the tastes of a few publishing houses, smaller markets can be addressed, and many more ideas can be expressed and vie for attention on the Internet. This has been a boon for independent-minded people and those with highly complex and differentiated individual interests and pleasures. Self-publishing, e-books, and Amazon are great for individuals who love freedom and the rich choices our private sector make available to us when we keep the government from interfering with it.
Please read Gen LaGreca's article. I always love the way she thinks and writes.
George Reisman's Blog on Economics, Politics, Society, and Culture: The Luddite-Statist Attacks on Amazon by Gen LaGreca
Self-publishing with marketing and distribution via the Internet has opened the door to markets for much larger numbers of authors than ever before. Books can be purchased for far less, authors and readers are freed of the tastes of a few publishing houses, smaller markets can be addressed, and many more ideas can be expressed and vie for attention on the Internet. This has been a boon for independent-minded people and those with highly complex and differentiated individual interests and pleasures. Self-publishing, e-books, and Amazon are great for individuals who love freedom and the rich choices our private sector make available to us when we keep the government from interfering with it.
Please read Gen LaGreca's article. I always love the way she thinks and writes.
George Reisman's Blog on Economics, Politics, Society, and Culture: The Luddite-Statist Attacks on Amazon by Gen LaGreca
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