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Is The Government Misrepresenting Unemployment By 32%?
There is an old saying, "when in doubt follow the money." These days investors have lots of doubt about pretty much everything (if not so much money). And with data from the government increasingly bearing the Quality Control stamp of approval of the Beijing Communist Party, there is much doubt in store courtesy of an administration which will stop at nothing in its competition with China as to who can blow the biggest asset bubble the fastest, data integrity be damned. Undoubtedly, of all government released data, the most important is, and continues to be, anything relating to unemployment. This is precisely where the government's propaganda armada is focused. Yet in matters of (un)employment, the ultimate authority is, luckily, the Treasury, and not the Fed. "Luckily," because when it comes to making money "difficult to follow" Tim Geithner's office still has much to learn. Which is why when we looked at the Daily Treasury Statement data we were very surprised: because it indicates that the government could be underrepresenting employment data by up to 32%!
The suddenly very prominent topic of Unemployment Insurance, whether it pertains to Initial Claims or to Emergency Unemployment, has one very useful characteristic: it is based on "money", specifically money outflows from the US treasury which goes to fund the weekly "paychecks" of those that have not been in the workforce for well over a year. And as pointed out earlier, money can be followed. The US Treasury presents a daily in and outflow of all money sources in the Daily Treasury Statement prepared by the Financial Management Service. And in the plethora of data presented here, probably the most relevant and useful data series is the Withdrawals quantified in the form of Unemployment Insurance Benefits.
Compiling the monthly data of Treasury Disbursements for Unemployment Insurance Benefits and then superimposing it with the total number of people receiving Insurance Benefits as disclosed by the Department of Labor is a useful exercise, as the two series have historically correlated with an R2 of well over 0.90. Below is an indexed comparison of UIB outlays and Unemployment Insurance Receivers for Fiscal 2007.
Surely this is logical: the more unemployed collecting benefits from the government, the more the outlays.
Yet what struck us is the when this chart is presented from 2007 until today. Something unusual emerges. An absolute chart of the money spent by the government superimposed with the total insured unemployed is presented below:
Yet the best way to see what this chart indicates is on an indexed basis with a September 2007 baseline.
What becomes obvious is that a correlation which used to be almost 1.000 has diverged massively, and now the relative outlays surpass what the government highlights are the number of people actually collecting benefits by 32%! This implies two things: either the average unemployment monthly paycheck has surged, which is not the case, or there is some gray unemployment area which is not disclosed by the government, and which accounts for a shadow unemployed insurance economy. Because while the DOL indicates there are about 9.5 million total unemployed, for the correlation to return to its near 1.0 trendline the number of unemployed on benefits has to be 14 million. At least this is what the actual cash outlays by the Treasury suggest: the government spent a record $14.7 billion on Unemployment Insurance Benefits as of December 30, a 24% jump sequentially from the $11.8 billion in November. Yet the DOL has disclosed a mere 1.7% increase in those to whom insurance benefits are paid: from 9.4 million to just under 9.6 million. To put the $14.7 billion number in perspective, in December the Federal Government paid a total of $14 billion ($700 million less) in Federal Salaries! A cynic could be temped to say that effectively the number of people employed by the government is double what is disclosed. A yet bigger cynic could claim that America is now the biggest socialist state in the world. Both cynics would not necessarily be wrong.
And some more perspective: in calendar 2009 the government has paid $140 billion in Unemployment Insurance Benefits. This is yet another economic stimulus that nobody in the administration discusses, yet which undoubtedly has the biggest impact on the economy, as all those millions unemployed can moderate their pain courtesy of a passable weekly check from the government which should just about cover the rent and beer. Which is why more than anything, Obama is dead set on extending insurance benefit payments in perpetuity: because if the 10 million official and 14 million unofficial people who are on benefits (not to mention the tens of millions of unemployed unlucky enough to even get their weekly allowance from Uncle Sam) start thinking about their true predicament and their real "employability", then a landslide loss by this administration at the mid-term elections will actually be an upside surprise to what it can objectively expect.
h/t Michael
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Government understating the problem? I am shocked, I tell you. Shocked.
"This is precisely where the government's propaganda armada is focused."
Government propaganda is now a growth industry in the US.
Prolly why D.C. is the only state/territory in the country that has job growth pushing 10% while every other one is contracting.
then a landslide loss by this administration at the mid-term elections will actually be an upside surprise to what it can objectively expect. Degree Program
University Degree
business management degree
32% is really a big number, this is really shocking! Lose Thigh Fat
A third possibility is they are sliding some
extra to certain states via this mechanism.
I wonder if the outlays could be broken
down by state to see if the 32% anomaly
is nicely distributed or if it is focused on
a specific state (or set of states).
That was my thought too -- I expect 2010 to be a year of "loans" made from the Fed to states to help with state budget deficits, when everyone knows these "loans" will be forgiven. Look first to California, then to New York, Arizona, New Jersey, etc. They can rationalize this along the lines of the continuous "extend emergency unemployment benefits" plans that Congress keeps passing.
Regardless, this is a huge catch, Tyler.
Of course we are talking about human tragedies, and we know that this was not the preferred choice by many people. However, this is merely paying people to not work, and it's getting seriously tempting to sit around the house for the next couple years to collect unemployment.
As an expat in 60's UK I fortunately had a front row seat watching the destruction of the human spirit. Unlimited unemployment benefits ("on the dole" as it was called)socialized medicine....you get my drift. Moral hazard writ large at the individual level.
Significant, untractable unemployment annually addressed with stimulus packages and a central bank's politically motivated overly easy monetary policy.
Our very own precursor, a singularly self-evident economic and investment model for the upcoming decade; slow growth high unemployment, large and growing deficits, high inflation, beggar they neighbor currency devaluation.
All from the home of Lord Keynes, himself.
Happy New Year.
I had just started the world of work in 1978 an apprentice in a UK nationalised industry. I lived through the 1980's seeing the insdustry I worked for Privatized (because it was not right the state to be an employer) I also saw the revenue from North Sea oil pay for people to sit at home. Now in the UK, one house hold in five (with people of working age) have no one working. North Sea oil is on the last part of the Hubard Bell curve, and many banks are now Nationalized. Things looked bleak to me in the 1980's. Where on earth are we headed, or will Carbon Trading be the answer to all our prayers. I'm currently taxed at 43%, how much will the gubberment allow me to keep in future?
Perhaps a better place to live though! I would prefer to be your average guy in UK than in the US - at least you can see a bloody doctor. US 'capitalism/socialism' depends on people living close to the edge. Give me the Home of Keynes any day!
Virgin Atlantic 399. so what are you watting for..
Done and done!
what's stopping you from seeing a doctor? All you have to do is GO to one.
Collect pogey and stop paying your mortgage, you could have a very nice life of leisure for a good 18 months - no work, plenty of disposable income to spend. Better yet, have some nice high limit credit cards at the ready to max out.
Sounds like the American Dream to me.
It feels awkward to earn and work hard,in the rain as my fingers get cut from installing sheetmetal around the chimney. I look to the east, towards Wahington where the money I work for is GIVEN away. All around me there is government money for free. Why the hell i still work and give callouses and cuts in exchange for the green paper is beyond me. Time to get off the Roof.
I quit. Never been on dole in my life. It just doesnt make sense to work anymore
I don't think you'll get on the dole if you quit. But go ahead, there are plenty who will gladly take your job.
Actually I am self employed licensed contractor. Went from doing one house every 2 weeks to one per six months. Living on the silver i bought and food stored months ago. Finding great comfort in the garden and thankful i thought ahead. We did a reverse mortgage, so there is no rent. Now its a 2,000.00$
tax bill on the house. I will be fine due to Zero hedge and all you folks who post here. I have been learning from you. Thank you all very, very much!
Oh , yea it took a while but now granny wants to read ZEROHEDGE too.
Ah life is wonderful even in the worst of times.Change is always possible and what if you didnt have this life?
As I see it job one is to awaken the public, cause the machine is bigger than the few awake now, witness the lack of indictments, the cowardice of the regulators.
Those without computers have no idea, tv is very persuasive. We need a one page flier exposing the truth and consequences in a simple but profound way
understandible by all or most. Charts and links would be good too. Distribute this via net, utube, we all volunteer to print and distribute nation wide.
Altho i am truthful , i am not the best communicator. Perhaps we could try a flier competion for making best case simply. First defining what should be included as there is alot of territory to cover.
From gold and silver suppression to outright fraud with ETF shorts, more with tungsten 400 oz bars. Ft knox in doubt , regulators bought,lies in statistics and the dollar in danger. What say you? Shall we do more than talk?
As Mark Twain once said, "People who do not read the newspaper are uninformed. People who read the newpaper are mis-informed.".
Time to turn off the TV and invest in yourself.
In answer to your question, yes.
Doesn't make sense to work for someone else.
Quit and use your time to take care of family and community. Nobody else is doing that and it needs to be done. When the SHTF family and community will be all you have left, and will keep you alive.
The Joe that hired you before will be enjoying the profits from years of your service.
cougar
Sounds like a good plan - that is, if you have the money and resources to take care of family and community. Many have worked under the man for years, and when they lose that, they are pretty much fucked. Maybe it's different where you live, but where I live, the community doesn't give one good shit about me. So I don't expect anyone to help me. Agreed on Joe, but that's the way it is, and always have been, so I'm good with that.
The comments above remind me of things I see too often, IMHO. While there are plenty who take advantage of the system, there are many that don't, but collect UI because they must. Just because someone is taking government cheese in the form of unemployment, doesn't mean they are a lazy dirtbag who doesn't want to work. Besides, if someone (government included) is giving something away, the line to take it will be long. The word FREE will fill any building at any time. People love free shit, and it doesn't matter what their personal balance sheet looks like.
Degrading people who aren't working and collecting unemployment seems to be a common thing to do (not saying you are), but there are many who would love to work given the chance. I think the brush of criticism is too wide. It's tough out here right now for many, for no fault of their own. Life isn't fair, I'm not arguing that, but thinking my community will take care of me is wishful thinking IMHO. When push comes to shove, you lose, in this country it's all about me.
Bottom line; not all want the free handout, they just want a job.
I always look forward to your comments cougar, but this one I'm not sure I can go along with. I do reserve the right to have misinterpreted your comments.
Let me support this with the fucking obvious that everyone seems to miss regarding unemployment compensation:
WE PAID INTO THE SYSTEM, IT IS OUR FUCKING MONEY. THERE SHOULD BE NO SHAME IN COLLECTING ON YOUR INSURANCE WHEN YOU NEED IT BECAUSE THAT IS WHAT IT IS THERE FOR.
EXACTLY RIGHT MsCreant +100.
It's called Unemployment INSURANCE; we PAY for it. Would you skip paying the dentist using your dental insurance because people might call you a freeloader?
The employer pays for it, at least here in California. The amount that is paid into the fund by employers is nowhere close to what is being paid out to recipients. Any funds collected by the state for unemployment claims are long gone. It is simply money being printed up to be given out now.
You are correct, I am wrong. My arguement works if you are collecting welfare and foodstamps, not unemployment. Thanks for saying something.
Just a fine point, but the employer handles the bookkeeping. You pay for the unemployment insurance in lieu of wages (at least that is one way to look at it).
My bottom line, the people on the bottom rung pay for everything.
First, you didn't pay in, your employer did. And only 13 weeks was paid for. The other 86 weeks you've been on welfare. But unlike the poor single mom who has to prove she's needy to collect welfare, you don't have to prove a damn thing. And also unlike the poor single mom, your check is a lot bigger. The unemployment benefit in Massachusetts is twice the welfare benefit.
Getting rid of extended unemployment is a budget balancer which they should pass as soon as possible. People who are unemployed more than 13 weeks need to literally go on welfare instead of unfairly collecting double payout without any demonstrated need.
Give unemployment a try for several weeks you will be screaming for work! You exist on unemployment you don't live on it. I don't know anyone that can live on unemployment. In IL. the Max rate equals 340$ a week. The average in IL. is 220. Be my guest I for one will keep working and carry a saddness for those without work. Shame on all that think most people don't want to work. We are a proud people and soon when all savings is exhausted people will demand work marching on Washington as they have in the past.
Don't you know that you need 1-5 mortgages to be wealthy nowadays?
I know a guy whose son has been collecting longer than his employment history. He still lives at home and uses the EUC as fun money. Obviously, Dad is part of the problem, but EUC should be tightened up in that respect. Breadwinners/family support only. Not every moron who ever held a job and now looks at the UE numbers as being in their favor.
I've lived on $300/mo for 7 years. I've gota get a job. Desided that the job needing doing is to fix the economy. fix - frank . com
I understand where you are coming from. But you;ve got one of those few jobs that can't be sent out ot china so I'd say keep it for a bit longer.
Would $14 billion monthly in new outlays be inflationary?
Considering too that those people will not be able to service much of their debt, they will default (deflationary), BUT the fact that they are not producing any surplus that translates into taxes and will need relief for the long term foreseeable future may mean decrease in money supply in total. But those funds are printed and distributed which is very dilutional.
What about the never-to-be paid back state's loans?
Those too derived from tax revenue or the printing press?
Brave new world gets another nasty turn in a host of hairpin curves.
An additional 5.5M unemployed? We know the annual adjustment in February is to be roughly a 800k to 900k upward revision to the unemployed. Following the line in the post, an even bigger cynic might say that this is the "Household Sector" from the FR Flow of Funds report.
lets not forget the small businessman who is SOL and can't even get any benefits and are NOT be counted at all.
DaDa...I am one whos income has gone from 60K to under 5k IN 18 MONTHS. 19 of 22 stores (our customers) in 9 states closed in that period and all those folks (and their help) out of work too. Count all the small business owners and the unemployment rate is more like 32%!!!
Yet our local school teachers, county employees and police just got RAISES because they exist not because they are doing a better job...just because they exist. They have NO idea that they too are the next in line for a hair cut, and are indifferent to the hair cuts their tax payers are suffering....an indifferent attitude that reaches to DC and Wall Street, and corporate boardrooms.
I'm with you as a small business owner but thankfully I'm doing allright at this time. See this article from Mish's blog:
http://globaleconomicanalysis.blogspot.com/2009/12/police-officer-responds-to-six-figure.html
As the guy says, the small business owner doesn't stand a chance. We all must prepare for what will be a massive dollar collapse that will occur in the next two years. Most POS government employees have been immune to pain and uncertainty thus far, but their existence is owed a printing press running on full and a dollar that still carries value. I don't think the latter will make it to the end of the year. If we are prepared (food, guns, gold), we will be able to watch their world come crashing down with eager anticipation!
Blind faith. Thank you for mentioning us. When i think about giving fair value for the dollar as my back hurts from the days labor , it comes to mind that with a mere phone call thousands, nay millions are made in a moment. My paltry 200.00 per day average earnings ceased months ago. Meanwhile ballplayers are having fun on the court and they too make millions. Its become to easy to make much money for those SPECIAL people.
I have never felt so much like a slave and fool as I do now.
+1
You are not a fool, but in many respects you are a slave, because you have no choice and it is uncertain given the situation in the world that you have any real chance to change your situation. The divide between them as has and them as do not is now too great to hurtle.
Hang in there. You remain a human even when they treat you like an animal. Do not forget that.
There is no shame in any of this. It is imposed from the outside. It is unjust, it is evil, it is a stain in the course of Western culture.
It will all pass in time along with the institutions that created the chasm nobody can cross anymore.
cougar
http://www.larouchepub.com/other/2002/2903lar_3curv_us.html
typical collapse curve
It is cold comfort, but viewing the "typical collapse function" will galvanize your understanding of what is happening in the economy and to you personally.
Those connected to the machine of D.C and Wall Street will garner more and more of printed currency as the gov't desperately (but ultimately futilely) tries to stave off the collapse. Real workers producing real goods and services suffer most because they participate solely in the exponential decline. It leads god-fearing, rule of law respecting people often to revolt.
Consider this. Many of those making the most income would not be able to trade it a corner flea market. No one truly would want them. All the paper markers and promissory notes gather interest only because they slake mankind's greed. They draw money and income only because of a promise of growth or protection.
It is a secret society, and age old system of plunder. This generation has the pleasure of suffering its total consequence. Nuclear devices raining upon your head might actually be preferable.
Babylon iz Burn brother, u r a slave, the sooner u realize it, the sooner you will be able to change it. Do what u feel is right and best for u and urs; but the system u have grown up with is about to implode. Believe it or not, the choice is urs; it will make little difference in the end.
"Welcome to the desert of the real."
Thank you, blindfaith. Right there with you.
Excellent observation, blindfaith. As a multi-decade owner/operator of several small businesses in various locals, I have never witnessed such widespread, deep economic distress as is currently unfolding. I have Fortune 500 companies abruptly very late in paying their invoices ... small mom and pops with increasingly empty shelves, very sparse vehicular traffic in normally congested areas, etc. Meanwhile, Calpers reports my small town (just south of SF) has a municipal retiree receiving $187,000 in benefits and payments in 2008 - almost 4K a week. Good luck in that keeping up in the future.
I am also have a small business....or should I say HAD a small business. Two years ago I had six employess, now its just me -due to the economy. December was my worst month ever...Billed a whole $75-
i do have to say the govt employee friends I know are clueless about how much the rest of us are taking it on the chin and we will have to clue them in...when they started their careers, many of them were making less than private wages but went for the better benes, which at the time were a bit better than private. 20 years later things are so different...regular middle class working in private industry had been gutted but meanwhile govt employees have done well. Their pay is often much better than private, there benes are way way better, the biggest being defined pension benes regardless of how market investment does. A friend who is public defender whose department has experienced no lay-offs was complaining that they might not get a raise this year I had to shut her up and mention that not a single person in private business I knew had gotten a raise in two years and nearly 70 percent of people I knew had gotten wage cuts, furloughs, reduced hours, or reduced earnings from small businesses or sole proprietorships, if not laid off.
The city of Mpls was complaining for the first time they could not afford to hire their fresh class of recruits. But a cop can retire at 90 percent salary under the age of 55 and their salaries are about 4-5 times what a private security professional makes. I have a friend that worked for the state of MN for 7 years at end of career and is getting $700/month pension from state...how much would one have had to save to get $700/month earnings from principal.
I hate to rub salt in the wound, but it is even worse than that in areas. A RI news team followed state labor fraud investigators around, and found four of them filing false itineraries. When they were supposed to be investigating people ripping off the taxpayer, they were instead (wait for it)... ripping off the taxpayer! Shopping, running errands and heading home early all while they swore they were doing the state's business. These are well paid, union protected positions. How protected? All four are on PAID "admin" leave during the internal (CYA) investigation.
http://tinyurl.com/ygaw6s7
Don't count on teachers getting a haircut. The teacher's union in Kansas is suing the state to get back their budget cuts.
Cute. The ‘Household Sector’ is using its unemployment benefits to buy Treasuries! LOLOLOL
Solid B+, I tell you. Solid.
Swami sez: State-by-state data will show a backdoor federal bailout for California and New York.
Simply because there will never, ever be an up-or-down vote on any state bailout.
Michigan? GM/Chrysler workers in Canada?
Could it be that some who are part of the houshold number are also drawing unemployment and when the household surveyor calls they are telling them that they are working and they tell them say 30 hours per week. Part of the underground employment sector that is collecting govt money and working for cash on the side?
I think that is relatively common, and I know a few people in similar situations.
Also known a few people who have ample assets but still collect unemployment simply because they can. An acquaintance is traveling around the world right now enjoying his late 20's while the state of California thinks he is looking for work.
off topic but Medicare Receipts were 1.7 billion and Medicare expenses were 42.5 billion for the month.
Wow.
yes, and Social Security had to, again, borrow from the Treasury because the receipts didn't cover outflows.
I can't tell if the water is up to my knees or I just peed.
Link? I'd love to see some hard evidence of this.
It's listed in the table attached to this post at the top - click for larger image.
The unemployment rate excludes people no longer looking for work. What if the treasury payments were graphed against U6?
The point is to question whether the government's 'reported' unemployment numbers correspond to changes in the actual treasury outflow$. If the BLS unemployment numbers aren't going up at the same rate as the treasury outflow$ then something certainly doesn't seem to add up. Regardless of the reason, the question deserves an answer don't you think?
U6 includes people not receiving benefits due to not looking for work or working part-time. So there isn't the same money trail. However, if you bump it up by the same 1/3, you get about 23%, which is just a wee bit over the 22% that John Williams is reporting at ShadowStats.com
fwiw, texas announced it had run out of unemployment money end of the summer.............they chose too say, we will make it up with increased unemployment taxes 2-3 years from now............now one would imagine texas is not the only one
another possibility is a year end rebates too states that are similar too texas in there unemployment accounts
Brilliant. Why I don't watch CNBC anymore.
Bloomberg TV is just as bad. My New Year's resolution is to switch the TV on the floor to the History Channel, I will learn more.
You'll be sorely disappointed there too. The hist channel is all reality shows now, like ice road truckers. Not very eductational.
Not to mention AGW propagandists...
+1 spot on...
Ice road truckers FTW!
New Year's Resolutions? I thought you'd never ask!
Here's my favorite resolutions from our Nation's Capitol:
http://outsidethe-cardboard-box.tumblr.com/post/310175975/new-years-resolutions-from-the-nations-capitol
Happy New Year!
The "real unemployment rate" is closer to 17+ percent including discouraged workers.
There are eligibility definitions behind all of these stats and I am sure that someone versed in employment stats has a defensible answer.
My guess is that the fed/stat unemployment program definitions of who is eligible for a check and how much varies greatly across states. Perhaps many of those that get a check (again this is a state/fed program) are simply missed by the national , "official" unemployment number.
How about a landslide that effectively removes all congresscritters and lobbyist handlers from office? (except the Doctor from Texas - give him the microphone)
I have a third cynical view of the bailout by a different name: divergence of funds into personal bank accounts. How else do you keep the corruptibles in the intelligence community happy? Imagine all the dirt they have on our bureau-rats.
Man, this is HUGE!!! Good dig Tyler.
This is exactly what I have been thinking that unemployment is much, much worse than we thought, and I have positioned my portfolio accordingly. I expect the economy to tank.
This is a reasoned analysis that assists me in making my financial and investing decisions.
The next fight is going to be the California and New York "bailouts" that the rest of the country is "paying for". I think with the Ben Nelson deal, Mary Landreiu, and Bill Neslon bribes, the general public has not more tolerance for this kind of shenanigan.
I think that State Attorneys General are goint to start sueing the Federal Government for "stealing " tax revenue from "Peter to pay Paul".
Unfortunately, the stock market and the economy remain disconnected so be careful. Keep in mind that this is the only thing government can manipulate and pump up - fixing the structural imbalances that impede a real recovery in America is far too daunting and not in the interest of the elite.
That said I too believe the stock market will definitively tank in the next three months. Remember the "second derivative" argument back in March - all the hoopla because it turned positve? Well, it has turned negative again:
http://www.nytimes.com/2009/12/30/business/economy/30econ.html?_r=2
It is just the December bonus pool for unemployed workers...
I mean you don't think that just because they don't work doesn't mean they shouldn't get a year end bonus...
Nothing to see hear, keep watching the bowl games...
If only thé NFL could last 52 weeks ail would be solved.
+10
140 billion. That's just about what went out through AIG to fund the bonus pool last year for those who earn the minimum wage/Wall Street.
uib is not a stimulus package....what a moronic comment...otherwise the article was very interesting and deserving of follow-up to determine the cause of the discrepancy...
It became one when the added an additional 14 to 20 weeks imo
George W Bush and his dimwit US Labor Secretary Elaine Chao missed their monthly jobs creation target almost every month for 8 years. Send your bills to Elaine Chao THROUGH Mitch McConnell (R-Ky), her husband. These two Republican morons wanted to be the Phil and Wendy Gramm of Washington, DC. Mitch McConnell should receive 32% more mail than everyone else in the Congress. McConnell should be the embarrassment of the US Senate for the amount of mail he receives. Have Steve Liesman go by for a photo op.
In the US, it takes the creation of 130-150K new jobs per month just to absorb new graduates into the workforce (you can bet the Chinese know that baseline number). Bush and Elaine Chao rarely if ever met that target, proof that Republican tax cuts do not work to create jobs. The labor pool available in India and China is way too large.
Your last sentence is idiotic: Democrats are responsible for 8 years of job loss during a Republican administration? Let's have everyone send their bills to Elaine Chao THROUGH Mitch McConnell before we talk about 2010 elections. Stop paying bills. When creditors call, refer them to McConnelll and let him explain why there's no payment. A few months ago, Republicans in Congress were mouthing about "which fund" unemployment benefits should come from. Let the people who've lost jobs tell Republicans in Congress, via McConnell, to sit down and shut up.
Exactly how were those jobs supposed to be created? Raising taxes? Having the government build a bunch of monuments? Build some more roads? Dams? I mean explain how you think jobs are created.
The only thing that government can create are terrible circumstances which they then expect smarter people than themselves to work around so that they can continue to suckle at the tit of those of us who know how to work.
Both republicans and democrats created this shitstorm and the idea that one or the other party is gonna fix it is laughable. I used to believe the Republicans were more responsible with my money but now I know better.
If I could have but one wish from my piece of shit government it would be to stay the fuck out of my way. If they allowed me one more wish I would say HEY I have a great idea why don't you clownfucks go do what you are SUPPOSED to be doing and protect me from assclowns from a corrupt religion that keep trying to blow shit up.
Clownfucks. Now thats one I have not heard yet. Note to self--use clownfucks in a sentence...
Great work Tyler!
If I could have but one wish from my piece of shit government it would be to stay the fuck out of my way
Make it mutual and stay out of theirs unless you want to keep the status quo(save for a change in direction) or bring things back to the 19th century.
Exactly how were those jobs supposed to be created? Raising taxes? Having the government build a bunch of monuments? Build some more roads? Dams? I mean explain how you think jobs are created.
Enforce existing immigration law to the letter, smite individuals/organizations that advise on "technically legal, no US citizens eligible" workarounds for immigration law(read:H1-b), and then cut taxes to a fraction of a percent for the places that want to remove it.
You sound as if you think I am in favor of our country being overrun by folks who supposedly do the jobs Americans won't do...?
The jobs were supposed to be created through tax cuts, which they got, so where are the jobs? Or maybe the tax cut thing doesn't work?
Didn't realize that Jobs were created by raising taxes? Is that what you are implying? You can either raise or lower taxes...which one are you for?
Myself I believe that we dramatically cut spending, eliminate the Dept. of Education, Dept of Housing, Dept of Health and Human Resources...then cut corporate taxes to 0, go to a flat tax where EVERYONE pays something. The idea that nearly 45% of the populace pays nothing is ridiculous. Everyone has to have skin in the game.
Rethink the entire idea of the EPA as it appears to be out of control. Get back to the idea that folks are responsible for their own well being...get everyone off the dole.
None of this will happen until the country collapses and then it won't happen because it will be chaos...we are fucked.
AMEN!
While not the same reason, I'd agree with you by her willingness to send jobs through her connections to Taiwan and the PRC. I wonder if McConnell has the same feelings regarding that subject (or is just as willing to be a Fellow Traveller for the offshoring industry).
She's worse than the cheerleader of the offshoring profession, Carly Fiorina(provided she is defeated in 2010).
Yow, you earned a ton of junk ratings for that one.
Asshole Republicans. They raised the National Debt ceiling 5 times during Bush's two terms, with a cumlitive total of 5.4 TRILLION dollars.
How do you expect people to take your statement or your figures seriously when you can't even be bothered to spell "cumulative" correctly? You weren't even fucking close. But your "5.4 trillion dollar" figure is correct?
In any event, your assertion is "Bush screwed up therefore the Democrats get to screw up?" That's some logic. You must be one of those cretins that put Obama in the White House.
Dear Heroic Couplet:
You're at the wrong site. You meant to tab the Huffington Post. Here we skewer the communists as well as the fascists. Just different sides of the same coin. Get with the program.
Just by the by, Bush did "create jobs" well in excess of the 150,000 every month. Unfortunately, they mostly went to illegals in the construction trades. In a boom they should never have created in the first place. Illegals. Are they surveyed? Were they counted on the way up and on the way down in this cycle. You think they aren't collecting?
Did you catch the NYT on the poor woman who no longer can get free dialysis in Atlanta and had to go back home to Mexico (oops, not covered there). Four years from now (or sooner) you'll be paying for her dialysis thanks to the current crop of critters in DC. Her anchor baby gets a free education and school meals and free medical care. The family gets food stamps and in lots of states can find a way to get some housing help. Blame Mitch McConnell.
Social Security goes bust--blame George Bush. Terrorists nuke New York City--blame Bush's FEMA guy. I get it. You left out a few of the finer points of the mornings propaganda briefing though: Fox News, Glenn Beck, its a shame Rush didn't have the big one, etc.. How about that tool Eisenhower subsidizing the auto industry by building the interstates (at the expense of real green mass transit)? Cheney called off the NORAD scramble on 9/11. Deniers funded by the oil business are going to ruin the planet by blocking carbon legislation. Nationalize the energy companies! I want $00.25/gal gasoline and heating oil! (VIVA Chavez!) To go along with my nationalized Chevy and my FNMA rental housing and my nearly free, subsidized health care.
Comrade Couplet, I propose a temporary, emergency tax surcharge of 100% of all income over $35,000 a year--to immediately balance the budget and pay for the emergency assistance so necessary in this Bush Depression. This will once and for all put to rest the evil lie that tax cuts lead to job creation and economic growth.
+100
Thanks Heroic Couplet, for your clarification. All the right wing assholes on the board (you know who you are) conveniently "forget", in writing, just who was running the country into the ground starting from Jan 20 2001........GWShrubDickheadCheney & co.
BTW, I'm not defending the current administration's actions so far, to the contrary. But I'm also not putting the responsibility for the economic collapse on their shoulders either.
I suspect that most people who try make unemployment stats gloomier than they really are have never had jobs, themselves.
Why exactly should "discouraged" workers be counted as unemployed? How would these people get a job if they aren't looking for one? And, I don't know about you guys, but, I don't have the option of becoming "discouraged." If I'm without an income stream for long enough, I'm on the street.
And how about people who work for cash, off the books? They're really employed, but don't get counted, right?
The unemployment number is a measure of "lost productivity" for society, also implying "future lost ability to consume" for society. So, the change in the number of workers that aren't working (i.e., aren't receiving paychecks) most definately does matter.
The "unemployment" numbers (e.g., U-3 and U-6) are numbers to specifically help us understand that delta. That's their sole job.
You are correct that "cash-off-the-books" workers exist, and their numbers do fluctuate depending on changes in the economy and tax law. However, these unemployment numbers matter for two reasons:
The more these numbers are susceptible to political "tweaks", the more we are obfuscated from (1) understanding what's going on, including understanding the very important correlations between current policies and current results. The less we are able to (2) make reasonable expectations about future economic behavior, the more we accelerate into crashing into a brick wall (e.g., capital mis-allocation, lost societal productivity, exhasperate existing problems, etc.)
These numbers *are* important, and no, I don't trust what's reported. That's a problem, because it essentially means the pilot must fly blind -- businesses cannot plan for what they are going to do in 2010 because we are using faulty (or fraudulent) information regarding what's going on.
exacerbate
good post mikla
Typically off-the-books work tends to be unpredictable, can be risky legally, and technically falls into gray-market (work is legal, but taxes are not paid on income) or black-market (work or transactions are illegal - drugs, guns, porn, etc.) production; I suspect that, especially with the Internet, there's quite a bit of unregulated gray-market work going on and not an insignificant black market as well. Of course, by definition, these are shadowy and difficult to determine to any great precision.
Watch crime stats - drug related incidents, break-ins, auto thefts, other larceny and property thefts. Arrests will likely remain roughly the same, due to shrinking police forces, but incidents are now sky-rocketing. Prostitution is also rising, though usually at the low end - more desperate prostitutes, fewer johns, driving transaction prices down. Washington State is contemplating legalizing marijuana, both as taxable revenue and because it is simply too expensive at this stage to continue to prosecute marijuana possession cases.
The independent contractor is perhaps the one taking it in the shorts most on this - unemployment returns are calculated based upon continuous employment; this means that when you have long stretches with no employment, coupled with occasional 1-2 month jobs, your benefits are essentially non-existent.
Finally, those discouraged workers are not sitting at home with a brewski in their hand watching the latest NFL games. They're looking for work - any work - but aren't necessarily reporting it when they get a six week assignment after five months with nothing.
Great post Tyler..
Tyler, it's possible the numbers are skewed for a couple reasons..
(1) The unemployment benefits have been extended by 20 weeks
(2) The Stimulus package has increased/extended Cobra Payments, so yes in effect the Unemployed have been given raises...
There is no doubt that this is the best period of time in history to be un-employed as the american worker has never had this level of benefits.
20? Try 40, at least in NYS. I recently spoke to someone who has been on unemployment. She told me there's been 3 extensions: 20, 7, and 13 weeks.
In NY, including the recent extension known as Extended Benefits (EB) (14 weeks plus 6 more for a state with unemployment greater than 8.5%) will bring the total a person can collect to 99 weeks. Ergo, regular unemployment is 26 plus EUC of 53 plus EB of 20 equals 99.
from the NYS Dept of Labor site: "
Important Notice About
Unemployment Benefit Extensions
On December 19, 2009, Congress approved legislation to extend the eligibility dates for benefit extensions. As a result, individuals who exhaust regular unemployment benefits by February 21, 2010, or a tier of EUC by February 28, 2010, will be able to move to the next tier. New York State now provides 73 additional weeks of unemployment benefits, as well as the usual 26 weeks of regular benefits. These benefits may be claimed in the usual manner; and it is not necessary to file a new claim unless the individual is advised to do so.
The additional 73 weeks of benefits are currently provided under two separate programs that allow unemployed individuals to continue receiving benefits after running out of their regular state benefits. These programs are:
I thought I read total weeks were now up to 99. IIRC that was federal.
...provided they meet the eligibility requirements.
Some states had their cutoff at the end of the year; so much for anyone who wasn't laid off by September.
I am thinking what you are, benefits were extended the first part of November I believe. Certainly correlates with the spike
If you are lucky enough get a job comparable to the one you lost, it is the best time to be unemployed, but its the worst time to be unemployed in terms of finding a job. I know many friends/former co-workers etc with previously desirable degrees/education like engineering, MBA, accounting, HR etc., personable, hard-working, organized, networked people that cannot find jobs anywhere comparable to the one they lost. But when you have been working for 15-20 years, have kids, house with only partially paid mortgage (say you are 10 yrs in on a 30 year) and don't have much equity anymore, have been saving for retirement and kids college, worked your way up to making 75-100k and then you have a hard time and over a year to find a job for 35-40 k.
Seems like a tough time to be unemployed to me.
Sure getting the max UI of about 20k and cobra subsidy during the year you were looking is way better than half that in UI and no Cobra help.
If you aren't trying to raise a family, aren't trying to stay in a house, can stop renting a place and hole up with better-off friends or family for a year, or your older, have things paid off and can be useful by doing daycare of grandkids etc, maybe its a good time to be unemployed, you can have a 'funemployment" time...but many people are trying to support someone, a elderly parent, children, hard up relatives etc..and being on UI is not at all close to what its like to have a decent job.
Of the people I know on unemployment insurance, 95 percent of them are desperate to get a fulltime job with benes, doing everything they can to find one, doing some minor under table work, and miserable about being on UI, will do just about anything to get off it, including taking jobs for 1/3 their previous salary and way way lower in job status, responsibilties.
Also, I have issues with lots of the govt bailouts, but I would have to put UI benes the lowest of a long list of bailouts as this one goes to people who were working and now are not. Granted, some are free-loaders, but many are just desperate people in a giant pool of workers looking for very few new jobs. So UI is th 85 percent working taxpayers giving money temporarily to 15 percent people without jobs. Yes, a bailout, but a million times better than TARP. UI is spent largely on essentials. Keeps life civilized as noted without UI pitchforks and torches would be out.
And compare the UI costs to that of TARP, AIG bailout, or Soc Sec payments that go out to wealthy people who do not it, cost of wars etc...Again, when you put it in that list, UI is the least wasteful, most helpful use, smalles use of tax dollars.
clever name you got there - Fun to say
Moneymutt is absolutely correct. I've been unemployed for a year! I never imagined this could ever happen to me - I have an MBA from a top 5 b-school, 9 years of finance experience and engineering experience and I can't get anyone to look at my resume. Maybe 'cause it has "securitizations" on it - I don't know. It's humbling and depressing.
Sanitize your resume. Leave out references to things you don't want to admit to. Dumb it down, give yourself lesser-sounding titles, fewer duties, less direct involvement in sins against humanity.
Have a dozen resumes, send them all out, see which ones get any bites at all, use those increasingly.
It's not lying, it's all the truth, it's just refactoring.
It was your job, once. It remains a skill. Use it.
cougar
+1
I can only imagine what seeing "securitizations" would engender in some quarters, but maybe I'm projecting. I'm sure you're likely a competent, caring individual who no longer wants to be Conan the Destroyer.
Sounds almost exactly like me. Top B-School, engineering, 14 years exp, and worked in securitization. Been out of work for 2 years. Lots of junior jobs, but nothing mid-level or senior.
Definitely demoralizing
from what I have seen around me, its been a lot of the luck of the draw where someone happened to be when the music stopped. I know some super competent, qualified types that got spit out with little options, while there are still real losers in fairly decent jobs. Shoot, some securitization guys that are that great are probably doing well, while you guys are suffering. Many businesses are down to their best value, most competent employees, but some businesses have done okay and have not cleared out many. And of course, competency is not always what keeps you the job.
Not to sound like Biden, but unless the rug is pulled out from under you specifically, you don't really get how bad it can be... I think the 85 percent of workers still with jobs don't really feel it...that's why all of DC establishment is totally clueless, no Fed employee is worried about retirement savings or lay-offs, while the rest of us are jobless, ripping thru our 401ks, or even when employed, nervously waiting to be the next one spit out on the street, living on a way too real version of Survivor watching our coworkers get picked-off one-by-one. Hard to feel that if you are a politician, congressional staffer, or Treasury employee....
meanwhile 1099 folks receive precisely "squat".
t'isn't fair...
many were the 1st victims of grinding predatory capitalism...
..the hiring of "consultants" and "contractors" etc....
"what big names you have"
"the easier to fire you with my dear"
Maybe pitchforks and torches are what is needed to wake up the people that have sold this country out? Oh yeah, that is the point of the bread and circuses otherwise known as unemployment insurance.
Thank you anonymous #179838...
You correctly pointed out the weakness in this post.
The reasoning key stone in the post is short, incomplete and flawed:
"This implies two things: either the average unemployment monthly paycheck has surged, which is not the case, or there is some gray unemployment..."
Why does it imply two things?
Would #1 cause a skewing, or just a continuation of the same? Ditto for #2 extensions, as opposed to increases?
Another factor, though my gut feeling is the job losses are probably fairly income heterogenous, is that, perhaps, there has been an average increase in the per-person benefits due to some increase in the incomes of those people being layed off; i.e., bigger income = bigger unemployment benefit. Anyone have any stats of that kind of trend?
states max employment levels are usually reached at fairly low employed salary levels )like if you make median salary, you are already at max level, so someone making 50, 75, or 150 k/yr when laid off will all get same UI amount
Fair enough, but what if there generally are below median wage earners who are laid off, but in the current recession it is median and above median workers who are laid off. The average per capita payment would still go up. This seems the more likely cause in this case
tne money vrs number of unemployed diverengce seems too sudden and too recent to mesh with your conjecture, but I'm just guessing...I think your questions are great, somewhere, with enough questions, we can figure out if there is innocent explanation, if so, govt 'crats should be able to provide it, but if I had to bet....
on the topic of misrepresentation
Bloomberg BS
China Manufacturing Growth Increases to 20-Month High (Bloomberg)
http://www.bloomberg.com/apps/news?pid=20601087&sid=aSzFogU0jP3Y&pos=6
and an excellent article from Pettis
China new year, and one more vote for GDP-adjusted bonds (Michael Pettis)
http://mpettis.com/2010/01/china-new-year-and-one-more-vote-for-gdp-adju...
Oh SHIT! Economy goes down. Definitely down. I think Obama will be another scapegoat of bankers. Normal people are betrayed.
Looks like ZH made a rookie mistake by doing the R2 calc using raw data instead of pct change. But don't let get in the way. Really interesting analysis. I hope all the clever people who mouth off on this site also show ZH some paypal love. I do.
Yes, forgot to say: Great post, Tyler. Thank you.
Bread and circuses...
Empire's Hallmark.
Welcome to the result of "Trickle Down Economics" and "globalization".
The voters deserve what they got.
Trickle Up Poverty
The voters chose "Trickle Down Economics" and "Globalization"?
Clinton started it (NAFTA 1993) and Bush43 finished it.
Meaningful choice was the first thing the elites eliminated.
We had a chance with Perot and Buchanan, and you see where that got us.
How's this....
The Fed is fully of mysteries.....too many of them....
In fact there are just so many of them....it is high time just to get rid of the word Fed....
Here's how....
Place all the power back to the states....
All expenditures will be voted by "local"internet
townsip by township....
Why ????
Obviously management is a lot less mysterious "on a localized level"....
Furthermore....local people democratically vote.....the
direction of the state mandates....
In short....
No more Fed lobbyists....
The Fed mysteries are hereby eliminated....
............................
Look when the current structure allows for the fact that
a hidden $4 Trillion expense can be hidden in a 1200 page
document that nobody reads....
And when the leadership is basically unqualified....and paid for their sway.....
It is time to hit the reset button....
............................
Here's the rest of the story....
If the US wants to be THE USA....it will have to change
its tax structure....as it is currently on a negative path to self emplosion....
10% State 5% Fed proportioned consumption tax should
immediately replace the entire tax structure....
To be collected per township per state....
............................
This change will de-mystify the US Govt. in a very efficient and democratic manner....
Thank God for the Anti-Federalists and their victory to get 10 Amendments to the Constitution.
The 10th happens to be the lynchpin for the whole dealio - each state is still it's own sovereign entity.
http://www.tenthamendmentcenter.com/2009/10/20/they-cant-push-us-around-...
I saw a few clips of some idiot on MSNBC ridiculing "tenther's" by pointing out the General Welfare clause in Article 1, Section 8. What part of Amendment do you not understand!
Exactly. 4400 words in the US Constitution which set strict boundaries and limits on Federal power, yet the phrase "provide for the general welfare" is somehow supposed to mean "do whatever you want"? Rubbish, all of it.
"If Congress can do whatever in their discretion can be done by money, and will promote the general welfare, the government is no longer a limited one possessing enumerated powers, but an indefinite one subject to particular exceptions."
James Madison, Letter to Edmund Pendleton [January 21, 1792]
As least when you give money to people living hand to mouth you know they will spend it into the economy.
By giving to the banks they ensure it will stay tied up and out of the economy, therefore noninflationary.
Giving money to poor people will destroy the world, and they know it.
To avoid hyper-inflation and the destruction of the reserve currency they will happily destroy the US middle-class and push the poor into oblivion and Stone Age subsistence.
Don't ever say they didn't have a plan. Don't ever say they didn't have a reason.
cougar
I see no reason for anyone to junk you Cougar. Your posts are part of my learning experience. Thumbs UP for you and all of us to freely express ourselves, preferably without personal attacks.
To the judging lurker...........feel free it lets us all know Your measure of intelligent discourse
Obie--You got some serious SPLAINING to do!
There is just this tremendous and growing sense in America, that if our own government is giving us this kind of misinformation, things are really rotten underneath!!
Like, can Judge Rakoff just establish a new line of defense for the American people?? We need someone with a sharp Bullshit detector protecting the citizens of this nation, because it is obvious that no one else in DC is.
Follow the state income tax collection money too. It continues to collapse.
By the way, it would be great if someone would make a post analyzing how the 850k adjustment will effect the U3 number.
IIRC, it won't. The 850k adjustment will be to the establishment survey, but U3 is taken from the household survey. The household survey has been reporting higher job losses than the establishment survey all year.
well, in china tyler would have got 11 years in prison
in usa, he just can keep posting, nobody gives a fuck about the truth, except the morons addicted to zerohedge(including me)
I mean, what the fuck, compare sweden, china, soviet under breshnev and obama/bush usa
the truth in the media is just about at the same level.
and the people dont give a fuck about that
sad but true
well, in china tyler would have got 11 years in prison
in usa, he just can keep posting, nobody gives a fuck about the truth, except the morons addicted to zerohedge(including me)
That and/or he would be disappeared or had his organs "donated" to a Party official / multinational executive.
in "free" world, we have free speech only until the point people start listening and acting on what you say, then your free speech stops, just a more sophisticated form of censorship....People can get just about any information as long as it does not go viral. Say all you want, but it will never make it into MSM, you will be ignored, or at the most, ridiculed, made into a MSM punching bag, but if you become effective, then any number of tactics will be used to quiet you.
Just to clarify the "not looking for work:" when collecting unemployment you have to report what jobs you've applied for in order to keep receive unemployment checks.
Once your benefits run out, there's no need to report the jobs you're trying to get, so the gov't in another classic misnomer states "you are no longer looking for work." Of course you are - more desperately than ever because you don't even have the unemployment check now!
The lobbyist armies must be outlawed in 2010!
This is no longer a country for the people--it is corporate facism at its best.
Obama! What happened to the CHANGE you promised?
Change? What you're only now figuring out that Obama is a POS? Most here knew we were fucked when he appointed Larry and Timmy. Game over right there.
+10^100
This answer here is what it always is when the Government is the payer: CORRUPTION.
In this case it is massive corruption at the individual level. The system is being gamed like never before. They know investigation and prosecution are a joke, and states are even getting encouragement from the Federal government now to increase their caseloads.
Here is what is happening. Things like this: 1.Corrupt workers within these state programs getting checks sent to friends and acqaintances for kickbacks, 2. People filing under multiple indentities, 3. Benefits being given to undocumented illegals (again, no policing of the system), and 4. run of the mill general dishonesty involving claiming benefits while getting paid cash for a while in a side deal with a new employer.
People have set up entire cottage industries of gaming the US unemployment insurance system. The average US tax paying citizen would vomit if they new how much cash was bilked from Federal government programs from fraud.
I agree there is so much corruption "[t]he average US tax paying citizen would vomit if they new how much." The problem is that doesn't explain the divergence from the previous correlation between U-3 and total UI payments, unless somehow there is a large upsurge in fraud within the last 2 years. I doubt it, but I can't disprove that hypothesis. My suspicion is the increase in fraud is occurring at a higher level--the Fed, the White House, and the TBTF banks.
if what you say is true, whistleblowing is an option, but a dangerous one. Also, those doing are playing a dangerous game, not all people stealing money from war effort were caught in first few years of Iraq war due to overwhelming burden on contract managment, but eventually many people were caught and sent away for to Fed prison. Same goes with mortgage fraud, some got away with it for 10 years, but still got caught. Like typical embezellers, they get away with it once, at small level, so then they start doing it more, thinking this means they will never get caught.
However, if what you say is true, wouldn't the BLS unemployment stats show these people wrongly receiving unemployment payments as fake unemployed, and wouldn't they increase numbers of unemployed and cost of UI? Instead, ZH stats show opposite, BLS reported number of unemployed is lower than costs show.
Ever think of computer systems with loopholes? For instance, human over ride pays a real benefit, but on the way out the system cannot identify who it went to (an illegal with no docs in the system), so it doesn't count it at all even though money left the system?
yeah, good point, a straight up hack, but that seems like the easiest of all frauds to detect, just one person in system sees a sudden unexplained increase in outlay..
I think the 850k benchmark revision is unlikely to affect U3 much. In fact I believe that was their intention all along. Some of that 850k revision is already beyond the boundary of U3 so it will only add to U6 further out.
I believe this was the goal all along, to fudge the figures until enough time passed that even when they did admit that the calculations were faulty that U3 would not feel the change and hence MSM and the public wouldn't hear of it.
If I'm wrong on this please correct me...thx