Sunday, June 24, 2012

The Real Jobs Deficit | Moving in the wrong direction.

“Every time in this century we've lowered the tax rates across the board, on employment, on saving, investment and risk-taking in this economy, revenues went up, not down.” ~ Jack Kemp

* By: Larry Walker, Jr. *

A total of 3,514,000 Nonfarm jobs had already been lost by the time President Bush handed the keys over to Barack Obama, yet even though the Great Recession officially ended in June of 2009, an additional 4,889,000 jobs were lost during Obama’s first 11 months in office (see table). By November of 2009 the recession had eliminated an estimated 8,403,000 jobs. It was at this point that Nobel Prize Winning Economist Paul Krugman set forth a reasonable benchmark for a return to more or less full employment within 5 years.

According to Mr. Krugman’s theory, in order to keep up with population growth and recover the number of jobs lost would have required the creation of 300,000 jobs per month, through December of 2014. But, as I pointed out in Obama Jobs Scorecard - Part 3, today we find ourselves more than 5.4 million jobs short of this mark. However, the real jobs deficit is even more dire.

The Real Jobs Deficit

If we return to December of 2007, the month the recession began, and apply the Economic Policy Institute’s estimate — that we need to create a minimum of 127,000 jobs each and every month to keep up with population growth — we find that the real jobs deficit, since the recession began, is currently 11,742,000 (see table). As you can see graphically in the chart below, the jobs deficit hasn’t changed much since Paul Krugman set the benchmark at 300,000 jobs a month. Since then, as shown in the corresponding table, the jobs deficit hasn’t decreased at all, but has rather increased by 291,000.

Real Jobs Deficit

Last month, according to the Bureau of Labor Statistics, the U.S. economy created a mere 69,000 jobs (only 77,000 in the month prior). Since we need to create 127,000 a month just to keep pace with population growth that means lately we’ve been falling even farther behind. In fact, at last month’s rate, the U.S. will find itself another 3,190,000 jobs in arrears after another 4 ½ years of Obama’s economic policies [(127,000 – 69,000) * 55 months]. So we need to keep a close eye on the next official Employment Situation Report, and each subsequent report through Election Day. Anything short of a 127,000 increase in Nonfarm payroll jobs adds to the current jobs deficit, while a greater result means we’re at least moving in the right direction.

The New Jobs Benchmark

If we tweak Paul Krugman’s original jobs benchmark with the revised figures, we discover that to be meaningful, the number of jobs we need to create to return to more or less full employment by December of 2014 is now as follows:

  • In order to keep up with population growth, we would need to create 127,000 jobs times 31 months, or 3,937,000. Add in the need to make up for lost ground and we’re at around 15,679,000 (3,937,000 + 11,742,000) over the next 31 months — or 505,774 jobs a month.

However, if we just simply write-off Barack Obama’s first 3 ½ years as a foolish, but costly experiment, and extend the target date until May of 2017, then we come up with the following:

  • In order to keep up with population growth, we would need to create 127,000 jobs times 60 months, or 7,620,000. Add in the need to make up for lost ground and we’re at around 19,362,000 (7,620,000 + 11,742,000) over the next 60 months — or 322,700 jobs a month.

In other words, we are worse off today than we were 2 ½ years ago. Every month that we create 506,000 jobs or more puts us on track towards full employment within 2 ½ years. Every month we create 320,000 jobs puts us on track towards full employment within 5 years. But every month we create fewer than 127,000 jobs increases the jobs deficit and pushes the goal of full employment farther away.

The Bottom Line: Due to the Great Recession, we already had a jobs deficit of 5,165,000 when Barack Obama was sworn into office, but since then the deficit has increased by an additional 6,577,000 (see table). In other words, we’re NOT moving in the right direction, no matter what Barack Obama says. So who's going to get us out of this ditch — the same guy who just dug a hole twice as deep as the one we were already in — or someone else?

Data Table: Real Jobs Deficit Spreadsheet on Google Docs

Related:

Obama Jobs Scorecard, Part 1 : The Private Sector

Obama Jobs Scorecard, Part 2 : Beyond the Private Sector

Obama Jobs Scorecard, Part 3 : The American Dream

The Private Sector is NOT Doing Fine | How’s the Federal Government Doing?

Adventures in Politicking II : No Shot

Manipulation 401 : U-3 vs Real Unemployment

Wednesday, June 20, 2012

Obama Jobs Scorecard, Part 3 : The American Dream

“53 Percent of All Young College Graduates in America are either Unemployed or Underemployed” ~ The Economic Collapse

* By: Larry Walker, Jr. *

It is a fact that the U.S. economy has lost a total of 4,884,000 Nonfarm jobs since the beginning of the Great Recession. But according to the National Bureau of Economic Research, the recession officially ended three years ago. We would all like to believe that things aren’t so bad, that the glass is half full, but for many the American Dream appears to be fading away. The question we should be asking ourselves, three years into this economic recovery, is whether we are creating a sufficient number of jobs each and every month: (1) to keep pace with population growth, and (2) to recover the number of jobs already lost? Today, we will provide the answer.

The Working-Age Population

The Civilian Non-institutional Population, or as I prefer to call it, the Working-Age Population, includes persons 16 years of age and older residing in the 50 States and the District of Columbia, who are not inmates of institutions (i.e. penal and mental facilities, or homes for the aged), and who are not on active duty in the Armed Forces. According to the Bureau of Labor Statistics, Table A-1, one month before the recession began, the working-age population totaled 232,939,000, and as of May 31, 2012 it had grown to 242,966,000. Thus, the working-age population has increased by 10,027,000 persons since the start of the recession, and by 7,931,000 since they keys were handed to Barack Obama (see chart below).

Since we know that the economy had already lost a total of 3,514,000 jobs during the last 13 month’s of President Bush’s term, that it has shed another 1,370,000 jobs since Barack Obama’s inauguration, and that the working-age population has grown by 10,027,000 persons over the same period, the question is how many jobs must we create each and every month in order to catch-up? And in light of the answer, how does anyone get away with a statement like the following: We've created 4.3 million new jobs over the last 27 months, over 800,000 just this year alone. The private sector is doing fine?

Krugman’s Benchmark

In Paul Krugman’s December 2009 article entitled, The Jobs Deficit, he proposed a rather useful benchmark for the level of jobs the U.S. must create each month to really matter. As of November 2009 we had lost about 8.4 million jobs from the time the recession began. He began with the Economic Policy Institute’s (EPI) estimate that we need to add 127,000 jobs per month just to keep pace with population growth. That very same month, EPI pointed out that when you put together the number of jobs lost since the recession, along with the number required to keep pace with the population, that in order to return to pre-crisis unemployment within two years we needed to add 580,000 jobs a month.

Krugman conceded that there was no way this was going to happen within two years. So he proffered a more modest goal: a return to more or less full employment in 5 years. According to his formula, in order to keep up with population growth over those 7 years (December 2007 to December 2014), “the United States would have had to add 84 times 127,000 or 10.668 million jobs.” Krugman stated, “If that sounds high, bear in mind that we added more than 20 million jobs over the 8 Clinton years.” He continued, “Add in the need to make up lost ground, and we’re at around 18 million jobs over the next five years — or 300,000 a month.”

So using Krugman’s 300,000 jobs per month benchmark beginning in December 2009, I have created the following chart showing where we are today (in red), versus where we would be if we were truly keeping pace with population growth and making up for the jobs lost due to the recession (in blue). As you can see, we are currently more than 5.4 million jobs short of where we need to be.

The Great Recession officially ended in June of 2009 (a fact that many seem to gloss over), and as of November 30, 2009 it had consumed 8,403,000 jobs. A total of 3,514,000 had already been lost when President Bush handed the job off to Barack Obama, but an additional 4,889,000 jobs were lost during Obama’s first 11 months. It was at this point that Paul Krugman set forth this reasonable benchmark. We have needed to create 300,000 jobs per month, since December 2009, to keep up with population growth, and to recover the jobs lost up to that point. However, where we find ourselves today is 5,481,000 jobs short of the mark.

Yet, it was on June 8, 2012 when Barack Obama declared, "We've created 4.3 million new jobs over the last 27 months, over 800,000 just this year alone. The private sector is doing fine." However, what he was talking about was the number private sector jobs recovered since March 2010. What he conveniently forgot to mention is the fact that we also lost 5,135,000 Nonfarm jobs during his first 14 months in office. What about that Mr. President? In fact, had he bothered to include the number of public sector, or government jobs, his statement would have been more accurately stated as follows: ‘We’ve recovered 3,765,000 Nonfarm jobs over the last 27 months, but we lost 5,135,000 during my first 14 months in addition to the 3,514,000 lost under President Bush, so we have a long, long way to go.’

Yes it’s true, we have lost 1,370,000 jobs since Barack Obama was sworn into office, and that’s on top of the 3,514,000 jobs lost from the time the recession began until President Bush handed the keys to Mr. Obama. But the bad news is that not only have we suffered the loss of 4,884,000 Nonfarm jobs since December of 2007, but we must also account for the fact that during the current recovery, we are 5,481,000 jobs short of where we ought to be. At this point we need to not only make up for the 5,481,000 jobs we are short, but we need to do so while creating an additional 300,000 jobs per month by the end of 2014. In other words, if we apply Paul Krugman's benchmark, we now have 31 months left to create 14,781,000 jobs (9,300,000 + 5,481,000). That means we need to seriously up the pace from last month's gain of 69,000 jobs to 476,806 jobs per month.

When Barack Obama stood before a teleprompter this month, and gloated about how well his policies have done over the last 27 months of his 41-month term, he wasn’t being honest with the American people. His dishonesty regarding the economy, among other things, is why he deserves to lose this election by a landslide.

Labor Force Participation Ages 16 to 19

Like many Americans my age, I started working at the age of 16. Although my first job was only a part-time summer job, it was my first, and thus the beginning of my personal quest for the American Dream. My dream at the time was to open a savings account, buy a car (or at least pitch in on the gas), buy my own food and clothing, gain a sense of independence, and learn to be personally responsible.

There are kids who were 12 years old when the recession commenced, who are now 16 and looking forward to their first summer job, but if they can’t find work, they will miss out on some valuable lessons in the quest for the American Dream. There are others who are now 20 years of age who couldn’t find work four and a half years ago, and are still looking today. And there are yet others who were just starting college when the recession hit. We learned this month, that among recent college graduates, 53 percent find themselves either unemployed or underemployed. The dream is fading.

The Labor Force Participation Rate measures the Labor Force as a percentage of the Civilian Noninstitutional Population. According to the Bureau of Labor Statistics, Table A-1, the labor force participation rate for 16 to 19 year olds averaged 54.5% in 1976, when I was 16 years old (see chart above). It stood at 41.5% prior to the recession, but had declined to 38.5% by the time Barack Obama was sworn in. It has since continued in decline to an all time low of 34.2% as of May 31, 2012. So when I was 16, a young person had about a 50/50 shot at finding a job, but for today’s youth the chances are more like 30 out of 100.

The American Dream appears to be fading into the sunset, but according to Barack Obama, the private sector is doing fine. Apparently the economy is doing well enough in his eyes that last Friday was a prefect time for him to singlehandedly grant amnesty to the children of those who have crossed our borders illegally. Oh, give me a break! How does Obama get away with it? He gets away with it because Democrats let him. You all better wake up. You’re either part of the solution, or part of the problem. If you’re so stuck on a political ideology or party brand, that you can’t see the light of day, then God help you. God help us all. If you’re still on the fence, then what are you waiting for? It’s time for a plan that works, not four more years of lecturing, finger pointing and Constitutional violations.

The bottom line: After three and a half years of Barack Obama, we find ourselves 5,481,000 jobs in the hole. At this point we must not only make up this shortfall, but must do so while creating an additional 300,000 jobs per month. In other words, if we apply Paul Krugman's reasonable benchmark, we have 31 months remaining to create 14,781,000 jobs (9,300,000 + 5,481,000). That means we need to seriously up the pace from last month's anemic 69,000 jobs to 476,806 jobs per month. But that's not going to happen until Barack Obama is sent back to Chicago.

Continued from…

Obama Jobs Scorecard, Part 2 : Beyond the Private Sector

Obama Jobs Scorecard, Part 1 : The Private Sector

Related:

The Private Sector is NOT Doing Fine | How’s the Federal Government Doing?

Adventures in Politicking II : No Shot

Manipulation 401 : U-3 vs Real Unemployment

Data:

Spreadsheets

Sunday, June 17, 2012

Obama Jobs Scorecard, Part 2 : Beyond the Private Sector

“He might as well have said that his stimulus plan would provide a temporary fix and a temporary economic recovery, which may have to be repeated over and over again to provide the impression that we are getting somewhere, even if we are really just going broke.”

* By: Larry Walker, Jr. *

The Great Recession lasted for a total of 19 months, beginning in December 2007 and ending in June 2009. So the U.S. economy has technically been in a state of recovery for exactly three years. Yet, other than the federal government, which has realized a net gain of 234,300 non-postal employees, since the recession began, the rest of the economy is worse off today than it was on the day Barack Obama was sworn in.

We addressed the Private Sector in Part 1. Today we’ll examine Total Nonfarm Employment, which includes the Private Sector, the Federal government, and State & Local governments, in order to assess our economic progress, since Barack Obama promised to deliver “a new foundation for our lasting economic growth and prosperity”.

Government Sector

The chart below summarizes the Government employment situation since the start of the Great Recession. The figures come from the Bureau of Labor Statistics, Table B-1 - Establishment Data. The main highlights are outlined below the chart.

  1. The number of Federal government employees has increased by +75,000 from December 2007 through May of 2012. The federal government is the only sector of the economy with a net employment gain since the recession began. (Note: The huge spike represents temporary hiring by the U.S. Census Bureau.)

    1. Federal jobs grew by +33,000 during the last 13 months of President Bush’s term.

    1. Federal jobs have grown by an additional +42,000 during Barack Obama’s 41-month term.

    1. Non-postal workers increased by +234,300 [+82,100 during Bush’s last 13 months, and +152,200 during Obama’s 41-month term to-date].

    1. Postal workers decreased by -158,500 [-48,500 during Bush’s last 13 months, and -110,000 during Obama’s first 41 months].

  1. The number of State government employees has declined by -64,000 since December of 2007.

    1. State government jobs actually grew by +52,000 during the last 13 months of President Bush’s term.

    1. State government jobs have declined by -116,000 during Obama’s 41-month term to-date.

  1. The number of Local government employees has declined by -376,000 since the start of the Great Recession.

    1. Local government jobs continued to increase by +136,000 during the last 13 months of President Bush’s term.

    1. Local government jobs have since declined by -512,000 under the policies of Barack Obama.

Overall, the Government Sector has suffered a net loss of 365,000 jobs since the start of the Great Recession. But it’s important to note that 221,000 jobs were gained during President Bush’s final 13 months in office, while 586,000 jobs have been lost during Barack Obama’s 41-month term to-date. Digging a little deeper, we find that, since the baton was passed to Obama, 628,000 State and Local government jobs have been lost, while 42,000 Federal jobs were gained. Since government employment did not decline during the 19 months comprising the Great Recession, nor during President Bush’s term, who’s to blame for the decline?

You would think that a decline in the number of State & Local government workers is a good thing, but Barack Obama doesn’t think so. He has thus proffered more government borrowing and spending to fix the alleged problem. But as I pointed out previously, and it’s only common sense, even if the Federal government handed State and Local governments $1.0 trillion to rehire all 628,000 workers, whom they can obviously no longer afford, they will find themselves dumbfounded when the taxpayer funded handout expires.

Thus far, all of Barack Obama’s economic proposals have been temporary fixes, one after another. But the barrage of temporary measures hardly lines up with his 2009 rhetorical promise, that his stimulus plan would ‘lay a new foundation for our lasting economic growth and prosperity’. It’s been three and a half years, and he still doesn’t seem to understand that government stimulus is by its very definition, temporary. He might as well have said that his stimulus plan would provide a temporary fix and a temporary economic recovery, which may have to be repeated over and over again to provide the impression that we are getting somewhere, even if we are really just going broke.

Total Nonfarm Jobs

In Part 1, we discovered that a total of 3,735,000 Private Sector jobs were lost during the first 13 months of the Great Recession, and that an additional 784,000 have been lost since Barack Obama promised that his stimulus plan would, save or create more than 3.5 million jobs by January of 2011’. But now, as we factor in the number of government sector jobs gained or lost since the recession began, we discover the following facts.

  1. Total Nonfarm jobs declined by 3,514,000 during the last 13 months of President Bush’s term.

  2. Total Nonfarm jobs have declined by an additional 1,370,000 during Barack Obama’s 41-month term to-date.

Overall, the U.S. economy has lost a total of 4,884,000 nonfarm jobs since December of 2007. Among them, 1,370,000 have been lost since Barack Obama was sworn into office. So his claim, that we have created 4.3 million jobs over the last 27 months, is wishful thinking. In reality, we lost 5,135,000 nonfarm jobs during his first 14 months in office. Do the math. The facts speak for themselves. And although the Federal government has gained 234,300 new non-postal workers, 152,200 of which are attributable to Mr. Obama, we haven’t created a single net job in the last 54 months. The chart above summarizes where we are statically, but as we shall see, the real employment situation is far worse.

That’s the end of Part 2, but it’s still not the end of the story. In Part 3 we’ll discuss how the increase in the Working-Age Population, since December 2007, in conjunction with a decline in the Labor Force Participation Rate, has made the real employment situation far worse than it appears, placing the American Dream in jeopardy.

To be continued… Obama Jobs Scorecard, Part 3 : The American Dream

Continued from… Obama Jobs Scorecard, Part 1 : The Private Sector

Related:

The Private Sector is NOT Doing Fine | How’s the Federal Government Doing?

Adventures in Politicking II : No Shot

Manipulation 401 : U-3 vs Real Unemployment

Wednesday, June 13, 2012

Obama Jobs Scorecard, Part 1 : The Private Sector

According to Barack Obama, "We've created 4.3 million new jobs over the last 27 months, over 800,000 just this year alone. The private sector is doing fine." But what he failed to mention is what any American paying attention already knows, that we lost 5.0 million jobs during the first 14 months of his 41-month term.

* By: Larry Walker, Jr. *

Using simple math, it doesn’t take much for any American to figure out that Mr. Obama has been in office for a total of 41 months. Curiosity leads us to believe that there must be some reason Mr. Obama isn’t saying anything about his first 14 months in office. So here’s what we found. By the time Mr. Obama reached the White House, the private sector had already lost 3.7 million jobs to the Great Recession. Then between January of 2009 and February of 2010, his first 14 months in office, another 5.0 million jobs were lost. And finally, over the last 27 months, 4.3 million jobs were either created or saved. Once again simple math leads us to the conclusion that the private sector is worse off today than before Mr. Obama was sworn in, by roughly 700,000 jobs.

Over George W. Bush’s eight-year term, the economy went through two recessions. The first was much shorter than the second, lasting only nine months, from March of 2001 to November of 2001. But the Great Recession lasted for a period of 19 months, commencing in December of 2007 and not ending until June of 2009, six months into Mr. Obama’s term. However, in the month after the Great Recession began, the number of private sector jobs reached an all-time record high of 115,647,000. In fact, when we summed together all private sector employment gains and losses during Mr. Bush’s time in office, it resulted in a net gain of 3,970,000 jobs through January of 2008. But once the recession heated up, from its beginning until the baton was passed to Barack Obama in January of 2009, a total of 3,735,000 of this net gain had been wiped out. As a result, the number of net jobs gained during the Bush presidency was a paltry 147,000 (see chart above, and table below).

Obama’s First 14 Months

In January of 2009, Barack Obama stepped in to rescue us from the disaster of 2008. His stimulus plan was passed by both houses of Congress on February 14, 2009. At the time, Mr. Obama delivered the following statement. “Congress has passed my economic recovery plan – an ambitious plan at a time we badly need it. It will save or create more than 3.5 million jobs over the next two years, ignite spending by business and consumers alike, and lay a new foundation for our lasting economic growth and prosperity. But the promises he made on that day would soon come back to bite him.

Obama’s economic team calculated that without the stimulus plan, the economy would lose another 1,613,000 jobs over the ensuing two-year period. But with passage of the stimulus bill, they claimed that not only would those 1,613,000 jobs be saved, but an additional 1,887,000 would be created, all by January of 2011. But as you can see in the table below, Mr. Obama’s economic team was way off the mark. By February of 2010, just one year later, an additional 5,051,000 private sector jobs were lost. This brought the total number of jobs lost from the beginning of the Great Recession to 8,786,000. Fortunately, this turned out to be the end of the decline.

Obama’s Broken Promises

By January of 2011 it was time to tally the results of Mr. Obama’s $831 billion stimulus plan. As the next table reveals, instead of saving 1,613,000 jobs and creating another 1,887,000, from the beginning of his term through January of 2011 the private sector had instead lost a net total of 3,617,000 jobs. This brought the total number of private sector jobs lost since the beginning of the Great Recession to 7,352,000.

Since the recession had already wiped out 3,735,000 private sector jobs before Mr. Obama came along, if his plan had worked as promised, then the number of jobs lost to the recession should have been reduced to 1,848,000 by January of 2011. But instead this number rose to 7,352,000. In other words, if 1,613,000 jobs were expected to be lost and saved over his first 25 months, then there should not have been any losses at all. And since we were already 3,735,000 jobs in the red before Mr. Obama’s time, if the private sector had created 1.887,000 jobs as promised, then by his 25th month we should have only been off target by 1,848,000 jobs (3,735,000 minus 1,887,000). Thus, the stimulus plan failed miserably. When Barack Obama was sworn in, he inherited an economy that was 3,735,000 jobs in the hole, but after two years of his policies, and $831 billion tax dollars squandered on his stimulus plan, the private sector lost an additional 3,617,000 jobs.

Are we there yet?

Skipping ahead to May of 2012, we find that since the time of Mr. Obama’s inauguration, the private sector has lost a total of 784,000 private sector jobs, for an average loss of 19,122 jobs per month. This is in addition to the 3,735,000 lost under Mr. Bush, for a cumulative loss of 4,519,000 jobs since the beginning of the Great Recession (see table below). In other words, the private sector is worse off today than it was on the day Barack Obama was sworn into office. And if you will, not only is the private sector worse off than it was three years and five months ago, the Federal government has taken on an additional $5.3 trillion in debt just to get us where we are – nowhere.

The total number of private sector jobs lost, since the beginning of the Great Recession, is shown graphically in the chart below. In spite of his repetitious rhetoric, and no matter how many times he boasts that his policies have “created 4.3 million private sector jobs over the last 27 months,” the truth is that not one private sector job has been created since the beginning of Barack Obama’s 41-month term.

The Bottom Line: No one likes to discuss Mr. Obama’s initial 14 months in office, but it will nevertheless go down in history as a part of his record. The truth is that over his first 14 months the private sector lost 5,051,000 jobs. Then during his last 27 months it recovered 4,267,000 of the jobs lost during his first 14 months. So it was only after suffering far worse job losses under the influence of Mr. Obama than we started with, that the private sector was able to recover 4,267,000 of the 5,051,000 jobs lost during his 41-month term. So where is the private sector today? We are still down by the same 3,735,000 jobs lost to the Great Recession before Mr. Obama arrived, plus an additional 784,000 lost during his 41-month term to-date. Yet, Mr. Obama seems to think that the private sector is doing fine, and that for some reason he deserves a second shot. Sorry pal, but we don’t have another $5.3 trillion to throw away.

That’s the end of Part 1, but it’s not the end of the story. In Part 2 we’ll tack on the total number of Government sector jobs, Federal, State and Local, lost over Mr. Obama’s 41-month term. Then we’ll discuss how the 8.2 million person increase in the Working-Age Population, during Mr. Obama’s term, has made the real employment situation far worse than it appears to a casual observer.

Note: Some economists and pundits will attribute the 839,000 jobs lost in January of 2009, Mr. Obama’s first month in office, to Mr. Bush. If you insist on doing so, then that would mean that the total number of private sector jobs gained over Mr. Obama’s 40-month term would be 55,000 (i.e. 839,000 minus 784,000). However, the number of jobs lost since the beginning of the Great Recession is unchanged, at 4,519,000. But before you start boasting about how Barack Obama added 55,000 private sector jobs over his 40-month term, you might want to consider whether a job creation record averaging just 1,375 jobs per month is worth the effort.

To be continued… Obama Jobs Scorecard, Part 2 : Beyond the Private Sector

Related:

The Private Sector is NOT Doing Fine | How’s the Federal Government Doing?

Adventures in Politicking II : No Shot

Manipulation 401 : U-3 vs Real Unemployment

Sunday, June 10, 2012

The Private Sector is NOT Doing Fine | How’s the Federal Government Doing?

* By: Larry Walker, Jr. *

“The Private Sector is doing fine.” ~ Barack Obama *

A couple days ago, Joe Weisenthal wrote an article, inappropriately entitled, “Here’s What’s Really Happened to the Private Sector Under Obama”, in which he sought to prove why Mr. Obama will be reelected. His premise, like Obama’s, is that the Private Sector is doing fine, but State and Local governments aren’t. There was no mention at all of how the Federal government, the part of the economy Mr. Obama actually influences, is doing (see the chart above). However, what Mr. Weisenthal actually did was highlight the main reasons why Mr. Obama should not be reelected, and should lose by a landslide in November. I hate to burst Mr. Weisenthal’s bubble, but he’s in La-La Land if he thinks his 24 chart presentation will convince even Mr. Obama to defend his own senseless remark.

First of all, Mr. Weisenthal’s article was inappropriately titled because by definition, the “Private Sector” is not “under Obama”, as he so implies. To the contrary, the only part of the economy Mr. Obama presides over is the Federal government, whose $16 trillion debt, $5.3 trillion of which has been added by Obama himself, actually imposes a drag on the private economy. Yet, Mr. Weisenthal supports Mr. Obama’s plea for more Federal borrowing, to be expended at the State and Local level. Secondly, Mr. Weisenthal doesn’t provide any benchmarks. It’s as if he’s comparing the pre-2010 Obama to the post-2009 Obama. That’s all well and good, but if this were baseball, Mr. Obama would be heading back to the Minor Leagues (and so he is).

Here’s a brief summary of Mr. Weisenthal’s main points (in bold type) and my comments. You may view his 24-chart catastrophe here.

  1. ‘Corporate profits after tax are higher than ever.’ - I concur. But this is primarily due to corporate austerity, which has nothing at all to do with Mr. Obama. Although some corporations have been able to increase sales, most all of them have actually improved profitability through reductions in labor and other operating costs. We call this productivity, which is something Mr. Obama could learn from, but not something he practices within his sphere of influence.

  1. Rental Income is higher than ever. - I agree. But, the fact that more than 3.3 million families lost their homes since September of 2008, and are now forced to rent, is hardly anything to boast about. Could there be any other reason for the 125% increase in rental income since the recession began, such as some program implemented by Mr. Obama? The claim that rental income has reached a new record, under the policies of Barack Obama, is more of an admission of failure than anything else.

  1. ‘Gross private domestic investment is coming back nicely.’ - If you consider a rebound to 1999 levels a nice comeback, that’s all fine and well, but I think it’s rather pathetic. By the way, this particular chart has actually moved sideways and to the right since 1999, not upwards. So far in 2012, it looks like most of what should go towards gross private domestic investment is actually being invested into U.S. Treasury’s. After all, someone has to buy all of the newly created Federal debt, and the Federal Reserve appears to be closed for business, at least for the time being.

  1. ‘The private sector has been adding jobs steadily since the end of Obama's first year, and today there are more private sector jobs than there were before Obama took office.’ - Did he say, ‘since the end of his first year’? Of course no good Democrat should ever discuss Obama’s first year in office. It’s as if he took over the reigns in January of 2010, instead of 2009. In reality, the Private Sector lost a total of 5,051,000 jobs between January of 2009 and February of 2010, before things started to turn around. Even still, the Private Sector has only gained 55,000 jobs over the last three years and four months (not including the 839,000 jobs lost in January of 2009). This represents an annual growth rate of just 0.015%, and a total growth rate of a mere 0.050%.

    Meanwhile, the Working Age Population increased by more than 8.2 million over the same period. So let’s see, that’s 55,000 private sector jobs created since Obama took office, for 12.2 million unemployed workers (4.0 million who had already lost their jobs before Obama took office, and another 8.2 million who reached working age during his term). That’s gotta be a record alright, but it’s not exactly the kind of record either Mr. Weisenthal, or Mr. Obama should be ginning up.

  1. ‘It would be great if the [Private] Sector were stronger, but things are going up and to the right in these charts.’ - Yes, and things are going up and to the right in some other charts as well. For example, Federal budget deficits (shown below) are far outpacing any of the statistics above. The fact that a chart is moving upwards and to the right doesn’t mean anything on its own merits. The following questions come to mind. Is this good or bad? What’s the trend? What’s the growth rate? Is it keeping pace with population growth? How is its performance against other benchmarks? Comparing the last two years and five months of Obama to his first year in office, and then drawing conclusions, is like saying that a baseball player with a batting average of .000 in his first year and who is now batting .00015 has improved. Yeah, he’s improved alright, but he won’t be playing in the Majors next year.

  1. ‘Total government employment is far below where it was when Obama started office.’ - This is true, and it’s actually a good thing. Who can afford to pay for more public sector workers when more than 23 million Americans are either unemployed or underemployed? Mr. Weisenthal and Mr. Obama seem to think that more State and Local government hiring will solve our unemployment problem. What they really mean is that the Federal government should take more money from a shrunken private sector labor force to pay others. What planet have they been living on? Apparently neither one of them received the memo issued in November of 2010.

  1. ‘Why is employment going down? Because state and local government spending growth has hit its lowest level ever.’ - The first part of this statement is false; the second part is true. To say that the decline in State and Local government spending is causing the decline in employment may fire the emotions of a few State and Local government workers, but it’s simply untrue. State governments employed a record 5,198,000 workers in January of 2009, versus 5,073,000 today. Local governments employed a record 14,588,000 in January of 2009, versus 14,077,000 today. So State and Local government employment is only off the mark by 636,000 from an all time high in January of 2009. If all 636,000 workers were rehired tomorrow, how would that solve the problem for the 23 million Americans who are either unemployed or underemployed?

    Although it’s true that State and Local government spending has declined, the reason is that revenues have plummeted. Unlike the Federal government, State and Local governments can’t spend money they don’t have. Nor should they borrow what they can’t repay. The decline in revenues is due to the downturn in real estate values, high unemployment, and the need to cover unfunded pension liabilities. With legal requirements to balance their budgets and an inability to print their own currencies, State and Local governments are prohibited from implementing the disastrous borrow-and-spend policies of Washington, DC.

  1. During the crisis, the state & local pain was mitigated by aid from the Federal Government, but that has since dropped off dramatically. - He’s referring to the part of Obama’s $831 billion Stimulus Program that went to State and Local governments in 2009/2010. Remember that? The problem is that it didn’t work then, and it won’t work now. The reason it didn’t work the first time is because it’s not the Federal government’s job to tell State and Local governments what to do. The Federal government is not in charge of State and Local budgets and thus cannot mandate more hiring.

    State and Local governments legislate according to the desire of their residents; they don’t take orders from Washington. State and Local government officials actually have to live under the policies they implement. They are in-touch with their constituents, while Mr. Obama seems to be completely out-of-touch with most of America. Even if the Federal government handed State and Local governments another $1.0 trillion to hire more workers, how would they pay those same workers in subsequent years? And if they have to pay the money back as well, how will they be able to pay the additional workers while repaying the loans? Ideas that make sense to a desperate reelection campaign are not always practical in the real world, or in the best interests of anyone other than the candidate. Think about it.

Monetizing the Debt

Mr. Obama presides over the Federal government, whose $16 trillion national debt imposes a drag on the Private Sector. For example, in 2011 the Federal Reserve monetized 77% of the Federal deficit (see chart below). By the way, that’s the opposite of what it said it would do. Eventually the Fed will have to reduce its Treasury holdings, and as you can see, the last time it did so the economy went straight into recession. Maybe the Fed can afford to sit on piles and piles of low interest Federal debt forever, but that doesn’t mean everyone else can, or will. The question Mr. Weisenthal ought to be asking himself is where will the Federal government get the money to repurchase this debt? It will ultimately come out of the Private Sector, through higher taxes, fees, and fines. The prospects for additional Federal borrowing are growing slim.

Private Sector Employment Benchmarks

Mr. Weisenthal’s charts don’t provide any benchmarks, so I will. Assuming that Private Sector Employment should grow at the same rate as the working age population, approximately 1.0% annually, the chart below compares actual Private Sector jobs growth to a 1.0% benchmark, beginning with the terms of the last 5 presidents.

  • By the end of Ronald Reagan’s first term, Private Sector Employment beat the benchmark by 2,088,000 jobs. He was reelected based on his pro-business policies.

  • By the end of Reagan’s second term, Private Sector Employment had topped the benchmark by 8,248,000 jobs.

  • By the end of George H.W. Bush’s only term, Private Sector Employment fell behind the benchmark by 2,466,000 jobs.

  • By the end of Bill Clinton’s first term, Private Sector Employment beat the benchmark by 6,901,000 jobs. He was reelected based on small government, pro-business policies.

  • By the end of Clinton’s second term, Private Sector Employment had topped the benchmark by 13,291,000 jobs.

  • By the end of George W. Bush’s first term, Private Sector Employment had fallen behind the benchmark by 5,562,000 jobs. He was reelected based upon his strong defense and anti-terrorism policies, not for his economic record. Were it not for the War on Terror, Mr. Bush would have lost his reelection bid.

  • By the end of W’s second term, Private Sector Employment had fallen behind the benchmark by 9,100,000 jobs.

  • After three years and five month’s of Barack Obama, Private Sector Employment has fallen behind the benchmark by 3,801,000 jobs. Short of finding another reason, such as convincing Americans that the killing of thousands of innocent civilians in drone attacks is important to their security, Obama’s anti-business policies should make this his final term.

Federal Government Employment Benchmarks

Who wants more Federal workers? Instead of telling State and Local governments what to do, Barack Obama should spend some time figuring out how to shed the 29,000 Federal positions added under his administration. Assuming that Federal Government Employment should grow at 0.0% or less, the chart below compares actual Federal government jobs growth to a 0.0% benchmark, beginning with the terms of the last 5 presidents.

  • By the end of Ronald Reagan’s first term, Federal Employment exceeded the benchmark by 3,000 jobs.

  • By the end of Reagan’s second term, Federal Employment exceeded the benchmark by 195,000 jobs.

  • By the end of George H.W. Bush’s only term, Federal Employment dropped below the benchmark by 57,000 jobs.

  • By the end of Bill Clinton’s first term, Federal Employment dropped below the benchmark by 253,000 jobs.

  • By the end of Clinton’s second term, Federal Employment was below the benchmark by 347,000 jobs.

  • By the end of George W. Bush’s first term, Federal Employment dropped below the benchmark by 25,000 jobs.

  • By the end of W’s second term, Federal Employment exceeded the benchmark by 24,000 jobs.

  • After three years and five month’s of Barack Obama, Federal Employment has exceeded the benchmark by 29,000 jobs.

State Government Employment Benchmarks

Not that the Federal government has any control, but assuming that State Government Employment should grow at the same rate as the working age population, approximately 1.0% annually, the chart below compares actual State government jobs growth to a 1.0% benchmark, beginning with the terms of the last 5 presidents.

  • By the end of Ronald Reagan’s first term, State Government Employment dropped below the benchmark by 5,000 jobs.

  • By the end of Reagan’s second term, State Government Employment exceeded the benchmark by 183,000 jobs.

  • By the end of George H.W. Bush’s only term, State Government Employment exceeded the benchmark by 149,000 jobs.

  • By the end of Bill Clinton’s first term, State Government Employment dropped below the benchmark by 56,000 jobs.

  • By the end of Clinton’s second term, State Government Employment was below the benchmark by 9,000 jobs.

  • By the end of George W. Bush’s first term, State Government Employment dropped below the benchmark by 6,000 jobs.

  • By the end of W’s second term, State Government Employment was below the benchmark by 16,000 jobs.

  • After three years and five month’s of Barack Obama, State Government Employment has fallen behind the benchmark by 306,000 jobs.

Local Government Employment Benchmarks

The Federal government has no jurisdiction over Local governments, but assuming that Local Government Employment should grow at the same rate as the working age population, approximately 1.0% annually, the chart below compares actual Local government jobs growth to a 1.0% benchmark, beginning with the terms of the last 5 presidents.

  • By the end of Ronald Reagan’s first term, Local Government Employment dropped below the benchmark by 622,000 jobs.

  • By the end of Reagan’s second term, Local Government Employment was below the benchmark by 118,000 jobs.

  • By the end of George H.W. Bush’s only term, Local Government Employment exceeded the benchmark by 416,000 jobs.

  • By the end of Bill Clinton’s first term, Local Government Employment exceeded the benchmark by 334,000 jobs

  • By the end of Clinton’s second term, Local Government Employment was above the benchmark by 943,000 jobs.

  • By the end of George W. Bush’s first term, Local Government Employment exceeded the benchmark by 151,000 jobs.

  • By the end of W’s second term, Local Government Employment was above the benchmark by 207,000 jobs.

  • After three years and five month’s of Barack Obama, Local Government Employment has fallen behind the benchmark by 1,018,000 jobs. This is certainly not due to any lack of Federal spending.

The bottom line:

If the creation of 55,000 net Private Sector jobs, over 40 months, for 23 million unemployed or underemployed Americans, is considered “doing fine”, then Mr. Obama’s prospects for a second term, one in which another 8.0 million plus will reach working-age, should be nipped in the bud right now. Mr. Obama had a fair shot and his policies failed. If he is so concerned about State and Local government employment now, then why didn’t he focus his stimulus plan on this sector back in 2009? Instead he placed the emphasis on extending unemployment benefits, which actually exacerbated the problem. And why did he focus so much of his time on passing Obamacare, instead of worrying about how 23 million unemployed and underemployed Americans would be able to afford it? This isn’t Little League. When you’re batting .00015 in the Major’s, the chances of keeping your job are pretty much nonexistent.

If Barack Obama wants to control State and Local government budgets, then perhaps he should be running for Governor, Mayor, State Senator, County Commissioner, or City Councilman. If he wants to take credit for improvements in the Private Sector, then perhaps he should take a shot at running a corporation, in his next career. But if he wanted to continue as President of the United States, he should have paid more attention to the Federal budget while he had the job. There’s an old saying, “If you want a different result, try something different.” So make up your mind today, do you want more insanity, or something different?

References:

Here's What's Really Happened To the Private Sector Under Obama

U.S. Government Spending

Data: Spreadsheets

Wednesday, June 6, 2012

Obama’s International War on Justice

* Predator Drone and Hellfire Missile *

Fighting Terror with Terror

* By: Larry Walker, Jr. *

“Last week officials in the Obama administration talked to the New York Times about the "Secret Kill List" drawn up for drone assassinations. Democratic strategists in an election year calculate that the article will prove a vote-winner, dispelling any notion that Barack Obama is soft on terror.” ~ Clive Stafford Smith

Unfortunately for Mr. Obama, his not so secret "Kill List" has proven him to be even weaker than most of us already knew. He is clearly a loser on the economy, a near Enemy of the State when it comes to preserving, protecting and defending the Constitution, and now he has abased himself to the level of a cold-blooded murderer, assassin, and international terrorist. He has done irreparable damage to any sense of justice in the World.

Picture this. A friend calls me and says, “Hey, I want you to meet a guy named so and so. He has a few dollars to spend and he wants to hire you to do such and such.” I agree to meet him. I don’t know this guy from Adam. I have no idea that he’s on Obama’s “kill list”. He arrives at my home along with two other guys. I don’t know any of them, or what they are about, I’m simply meeting with them to find out. The doorbell rings. I open the door. Within seconds, 4 hellfire missiles rain down on my house killing me, my family, and the alleged bad guys. The story comes out that my family and I were a group of “suspected militants” meeting with some top commander of some militant group when we were killed by a U.S. drone. You cheer. But an innocent family was just murdered, and for no good reason.

An article appeared on Saturday entitled, We are sleepwalking into the Drone Age, unaware of the consequences.” It was written by Clive Stafford Smith, the founder of Reprieve, a group of international charities dedicated to assisting in the provision of effective legal representation and humanitarian assistance to impoverished people facing the death penalty at the hands of the state. Mr. Smith has spent 25 years working on behalf of defendants facing the death penalty in the USA.

According to Mr. Smith, who visited Pakistan last October, “The CIA is paying bounties to those who will identify "terrorists". Five thousand dollars is an enormous sum for a Waziri informant, translating to perhaps £250,000 in London terms. The informant has a calculation to make: is it safer to place a GPS tag on the car of a truly dangerous terrorist, or to call down death on a Nobody (with the beginnings of a beard), reporting that he is a militant? Too many "militants" are just young men with stubble. At least 174 have been children.”

Whenever I read a news headline, stating that “we” just killed another group of suspected militants, I don’t feel any sense that justice was served, none at all. I think to myself, ‘Great, now we're killing suspects.’ There’s a big difference in my mind between a “suspect” and a “known terrorist”. What are we fighting now, the War on Suspected Militants? Don’t get me wrong, I don’t mind hearing that the CIA took out Abu Yahya al-Libi, al- Qaeda’s second-in-command, in its latest bombing raid. That doesn’t bother me so much, although I would rather he had been captured, interrogated, and tried. But what disturbs me is that 16 other people were killed in the attack, and no one has bothered to mention who they were.

When we read the story from Bloomberg, we learn that the bad guy, Abu Yahya al-Libi, was spotted by a drone, which followed him to a house and killed him. There’s no mention of whose house he went to, or of the other 14 people (aside from his driver and personal bodyguard) who lost their lives. Were the others terrorists, suspects, or just innocent victims who happened to be in the wrong place at the wrong time? The problem is that we may never know.

The Bloomberg story reads, “The U.S. drone that spotted al- Qaeda’s second-in-command getting into a car, followed him to a house in a North Waziristan tribal region and killed him on June 4 dealt another serious blow to the terrorist group’s remaining core in Pakistan, administration officials said.” It just sounds like a drone followed a bad guy and killed him. But when we read the story from the Guardian UK, we learn that actually up to 17 people were killed in the attack.

Four missiles launched by a US drone has killed up to 17 people in north-west Pakistan, according to security sources, in the latest in a series of remote-controlled attacks which are straining relations between Washington and Islamabad… The most recent drone operation targeted a hamlet in North Waziristan on Monday, a tribal area regarded as a hub for al-Qaida and Taliban fighters waging insurgencies on both sides of the porous Afghanistan-Pakistan border. U.S. and Pakistani government sources said Abu Yahya al-Libi, a senior al-Qaida leader who had survived previous drone attacks, was a target of one of the strikes. It was the third such strike in as many days – similar operations over the weekend claimed a dozen lives – and the eighth in two weeks.”

On the previous day, Mail Online reported that 10 people went to a home to console the brother of a suspected militant killed in a drone attack on the previous day. When they arrived at the home, they were killed by hellfire missiles launched from another U.S. drone. Of course, they were all classified as “suspected militants,” although the story reported that the brother was among the dead along with at least two who were believed to be foreigners. Is this the new justice? Kill a suspect, and then when friends of his survivors come to mourn, kill them too?

The story reads, “A U.S. drone strike today killed 10 suspected militants in Pakistan as they 'offered condolences' to the family of a commander who died in an attack 24 hours earlier… Four missiles were fired at the tribal village of Mana Raghzai in South Waziristan near the border with Afghanistan, intelligence officials reported… A strike by the remote-controlled aircraft in the same area killed two suspected militants on Saturday.”

Following a group of people who have gone to a home to offer condolences to the family of someone you murdered yesterday, and then killing them, along with the family of the deceased, is an act of terrorism. Are we following al Qaida’s playbook now? Do we know who we killed? Or more importantly, do we care? Apparently, Barack Obama doesn’t. He just wants to look like he’s doing something, but we must never confuse motion with action. Two wrongs don't make a right.

If this is justice, then I’m living in the wrong country. What really worries me is what’s going to happen in the future, when the bad guys get their own drones, and start targeting U.S. households. We’re not the only ones with drones now, so what makes us think we can control them? Are we controlling them? This reckless Administration has set a dangerous precedent, and it may be too late to reverse. I think we need to revisit the idea of what it means to bring someone to justice.

By using terrorist tactics to assassinate alleged terrorists and suspected militants, without due process, Barack Obama has presumed the role of judge, jury, and executioner, and has single-handedly destroyed any sense of justice in the World. Yet justice must be served. It’s up to the rest of us to right Obama’s wrongs. Step one is his removal from office. Step two is ensuring he stands trial for war crimes. If you are a Democrat, and don’t agree with Obama’s policies, then either jump ship now and help to ensure his defeat, or keep your mouth shut and get out of the way. You have no defense.