Obama's Latest Stimulus: Handing Out Jobless Benefits To Striking Workers

Tyler Durden's picture

One of the oddities that seemed out of whack in this morning's weekly Unemployment Claims update was the explanation for the spike in this week's receipents of government generosity: apparently it had to do with the BLS handing out weekly benefits checks to striking Verizon workers. We will repeat the key word from that sentence because it bears repeating: "striking." Now, we may be wrong here, but if one is striking, one is not u-n-e-m-p-l-o-y-e-d, and hence the US government should probably not be using taxpayer money to double pay such individuals who have singlehandedly decided to forgo pay in return for making a labor statement. Otherwise, it kinda kills the whole "sacrifice" thing. And, lo and behold, as it turns out, we are not wrong. From JP Morgan: "Striking workers are generally not eligible to receive unemployment insurance benefits, but it looks like about half of the total amount of striking workers filed claims over these two weeks to formally determine their eligibility." Generally... except when the administration is willing to hand out money to anything and everything with a pulse. After all, there is that massive $2.2 trillion Bank of America balance sheet that has to be funded. And with direct reserve funding already failed, as per QE1 and 2, the only other possible way is via deposit increases. Alas, by the time this money could possibly be saved, it has been spent 5 times, the other 4 hitting Bank of America's bad credit card receivables department.

From JP Morgan:

Initial claims increase during week ending August 20, with or without striking workers


Initial claims for the week ending August 20 increased 5,000 to 417,000 from a figure for the prior week that was revised up. The Department of Labor noted that the Verizon worker strike generated about 12,500 claims during the week ending August 13 and about 8,500 claims the week ending August 20 (not seasonally adjusted). Striking workers are generally not eligible to receive unemployment insurance benefits, but it looks like about half of the total amount of striking workers filed claims over these two weeks to formally determine their eligibility. If we remove these striking workers from the claims data to give us a better indication of labor market conditions, claims would have increased about 10,000 to 409,000 between the weeks ending August 13 and August 20; the four-week moving average for claims during these weeks would be around 400,000, showing improvement relative to the July labor market survey week when the four-week moving average was 422,000.


Continuing claims for the week ending August 13 declined 80,000 to 3.641mn. Continuing claims have been basically flat since the end of March, but this was the largest single-week drop reported since mid-February. The insured unemployment rate for the week ending August 13 ticked down from 3.0% to 2.9%, equaling the low for the recovery to date.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
TheTmfreak's picture

I should be suprised but I'm not. Obama is buying votes again.

fonestar's picture

National blow out sale on everything your grandparents built!  Watch for falling prices!!  Why pay more??

spiral_eyes's picture

jobless benefits for striking workers is not enough! what we need is at least five more carriers, two new middle eastern war and a war in the pacific! THAT IS REAL STIMULUS!



MillionDollarBonus_'s picture

Unfortunately this simply isn't enough. Dr Paul Krugman has calculated that we need at least another $ 2 trillion in fiscal stimulus. One of the major barriors to econhomic growth is that most prices are still somewhat determined by market forces. This has proven nothing short of disastrous with asset prices falling dues to lack of consumer spending and credit expansion.Ultimately, I believe it may be necessary to set up a central body to set ALL prices, not just interest rates. This will include setting prices of consumer goods like ice-cream, to setting the prices of captital goods and even financial derivatives.

Ausperity's picture

You are the best troll on this site!  Why aren't you employed at a think tank?

TheTmfreak's picture

So the problem with Krugman's argument is simply... reality and how the world ACTUALLY works? Who knew.

MillionDollarBonus_'s picture

The problem is that market prices are set by the subjective preferences of crazies and doomers. These preferences are simply WRONG. Only professionals should be setting prices, not novices. 

RockyRacoon's picture

Is this The Twilight Zone, Disneyland, or am I actually at ZH?   Somebody really believes that Central Planning works?

Is it crazy in here or is it just me?

Calmyourself's picture

That has got to be sarc..  Or perhaps he has not heard of the USSR..

nmewn's picture

"Only professionals should be setting prices, not novices."


Leo's got a brand new ID...LOL!!!

Rodent Freikorps's picture

Gotta keep the brown shirts loyal.

Kristallnacht is coming. Tea Party and Main St. hardest hit.

midtowng's picture

One thing missing out of this article is: did anyone get approved for unemployment benefits?

Sure, there is no law against someone applying for UI, even if they are working. But without getting approved then all this "Obama stimilus" and "Obama buying votes" means nothing.

faustian bargain's picture

Yes, but who would even think of applying for UE bennies while on strike? With half of the strikers applying, it sure seems like someone might have put the word out there that they could be approved.

Or, maybe they're just idiots who don't understand that being on strike doesn't mean they're unemployed.

Bob Sacamano's picture

Union folks have very narrow, highly defined job descriptions (they actually get in trouble for "doing someone else's job" (like moving a box or something)).  So it is a bit much for them to mentally process why they should not grab money from taxpayers despite having a job.  They just know they are entitled and are a victim.  And they love BHO and he loves them. 

Whats that smell's picture

We need all the profits to go to the top, right Bob? After all CEO's have a rough job keeping the phone cables up. If you have not walked in the shoes STFU

A.W.E.S.O.M.-O 4000's picture

"... why they should not grab money from taxpayers .."


Dude, would you like to apply that statement to any other group(s) of people? Or is Johnny lunchbox the only thing wrong with America?

piceridu's picture


President Obama has just confirmed that the DC earthquake occurred on a rare and obscure fault-line, apparently known as "Bush's Fault". Obama also announced that the Secret Service and Maxine Waters continues an investigation of the quake's suspicious ties to the Tea Party. Conservatives however have proven that it was caused by the founding fathers rolling over in their graves.

FeralSerf's picture

But it is Obama's Fault that Bush and Co. haven't been prosecuted for treason and murder.

sun tzu's picture

Who will prosecute Obama and Co for treason and murder?

ThirdCoastSurfer's picture

Filing a claim every week, whether you're working or not, may be a good way to register dissatisfaction.  Think of it as being able to cast a vote every week whether you have a criminal record, are unregistered or even illegal. 

ArgentDawn's picture

That's it, I'm going on strike!

BlackholeDivestment's picture

...if you have not stopped working your labor has been used to support this failed system, which is devouring the principle of your labor every day. Laboring what is left of the harvest is better than gold, the return will be coming back as The Army your dusty arse better be in. http://bible.cc/luke/21-36.htm


Rodent Freikorps's picture

It is difficult, even for ZH'ers to internalize that the Political Class knows the end has come, and is only maintaining the illusion to prolong the corpse so they can maximize the looting.

They know the US is doomed. They aren't trying to save anything, but themselves.

WonderDawg's picture

This country is going down faster than the ugly girl on the high school cheerleading team.

DefiantSurf's picture

This is bullish right? Because unemployment and foodstamps boost the economy $1.84 for every $1 in benefits right?



StychoKiller's picture

Stay away from Nancy, she be in la-la land!

oklaboy's picture

can somebody say impeachment?

fonestar's picture






.....no sorry, I tried.

serndipity's picture

Three words that guarantee Obama won't be impeached.


President Joe Biden

youngman's picture

not only this which blows my mind......but Michigan cut 35,000 COLLEGE STUDENTS off of its Foodstamp rolls..or so they said...but since when do college stundents get food stamps.....we have so many people on the government teet....it will never end until it does....and it will be hard..very hard...these babies will not live very long without their tweeting or iphones...

baby_BLYTHE's picture

exactly. Without Foodstamps you would see breadlines stretched around every major street corner in this nation which would make the Great Depression look like a mild-Recession.

And people still call this a recovery!

centerline's picture

Digital soup lines.  Sign of the times.

fonestar's picture

Maybe make an app for which soup kitchen has the shortest line-up in town?

Whats that smell's picture

You would also see them in your pantry, garage and bedroom.

pods's picture

When the entitlements stop, you will see just how entitled people have become, and it will not be pretty.


Ausperity's picture

What timeframe do you put on this outcome? just curious...  I agree, but this extend and pretend seems like it could go on for years...

pods's picture

A guy predicted a couple of years ago that the dollar crisis will start in 2012.  He saw debt run ups (check), election swing to austerity promising Reps and then a deflationary spiral followed by raw printing.  So, somewhere around 2013 seems to be about right.  He made that prediction in 2008 when I was calling for the sky to fall.  

I used to think it would collapse due to X,Y,Z but in reality it can go on for a lot longer than most can think.  People, by and large, like the status quo.  Real change sucks.  And collapse really sucks.

I would say that since we have had the austerity push already that we might have to look at mid 2012 for things to get dicey.  Europe is coming unglued, so that might buy us some time here as the fastest horse in the glue factory, but things have become shakey worldwide and the status quo is slipping.  So I would say withing a couple of years at most.



laomei's picture

um, this really has to do with the letter of the law in the state in question.  however seeing as tuition keeps getting hiked, funding is slashed and there are no jobs... yep, no food stamps means not being able to survive through college in some places.  the political response of course was unfounded in reality "they should get a part time job, i did, why cant they?"... um, because there are no fucking jobs anywhere due to your selfish generation fucking over the entire economy?

Argonaught's picture

This is a shining example of the entitlement generation.  Used to be, lo these many years ago, that we didn't get to go off for 4 years of fun and drugs, er, higher education if we couldn't afford it.  WTF are you doing at college if you can't afford to eat?

Sig Sauer's picture

i just got my oldest's first college tuition bill...have you SEEN the cost of the food plans?

baby_BLYTHE's picture

yeah, it is nuts. Plus it seems the food gets shitter every progressing year

I refused a meal plan this year because I am able to cook for myself at my apt. But the Freshman and others that live in dorms buy into these plans naively thinking, and some times not even knowing, they have several options to cut costs and save a substantial amount. At the end of every week the average person always winds up with several extra meals they never ate. Waste