by ilene - October 24th, 2010 6:49 pm
Courtesy of Mish
The LA Times reports Government job cuts ravage California
Weighed down by a struggling economy, government agencies in California shed 37,300 workers last month — more jobs than were lost in the private sector — as cities and counties made their biggest payroll cutbacks since at least 1990.
What’s more, analysts see more job cuts ahead as California faces an estimated $10-billion shortfall in the state budget that the next governor must address. Cities and counties, meanwhile, are still struggling with tepid sales and property tax revenue.
Cities across the state have taken stringent measures to balance their budgets, said Eva Spiegel, a spokeswoman with the League of California Cities.
Oakland laid off 80 police officers and delayed pothole repairs. Fullerton laid off 14 police officers and three firefighters, cut library hours and closed restrooms at several parks. Oceanside laid off 28 police officers and three firefighters, closed a swimming pool and a recreation center and eliminated the city Bookmobile.
Overall, the state’s unemployment rate remained stuck at 12.4%, one of the highest in the nation. The state lost a net 63,600 jobs in September. Local governments shed 32,400 jobs, according to the monthly report from the state Employment Development Department released Friday.
Taxable sales plummeted 18.5% in California from 2006 to 2009 and are expected to remain relatively flat this year, according to the National University System Institute for Policy Research in La Jolla.
The National League of Cities reported this month that cities across the country were making their sharpest cuts in at least a quarter of a century. Nearly 80% of city finance officers in a survey reported laying off staff, and 87% said their cities were worse off financially this year than last year.
Taxable Sales Down 18%
Those last two paragraphs are the key to understanding one of the things I have been saying, that there is no recovery in sales.
Every month, when retail sales numbers come out, I question them. Here is my article from October 15: Retail Sales Rise More Than Forecast; Once Again I Ask "Really?"
Retail sales may be at their best point in the year, but sales are certainly not within 3% of the all time high [as government data shows]. If they were, tax revenue collection would
by ilene - October 9th, 2010 12:38 pm
Courtesy of Mish
The only genuinely good news in Friday’s jobs report was the much needed shedding of 159,000 government workers of which only 77,000 were temporary census workers.
Shed another million government workers and you have a small start as to what needs to happen. Some don’t see it that way, including Erza Klein at the Washington Post.
Assuming you are able to stomach still more Keynesian claptrap please consider Welcome to the anti-stimulus
The good news: The private sector gained 64,000 jobs in September. The bad news? The public sector lost 159,000.
The government is now impeding an economic recovery. But it’s not for the reasons you often hear. It’s not because of debt or because of taxes. Nor has it scared the private sector into timidity. It’s because, at the state and local level, it’s firing people. There are more than 14 million Americans looking for work right now — to say nothing of the 9.5 million who have been forced into part-time jobs when they want, and need, full-time work — and the government just added 159,000 more to the pool. Consider this: If we only counted private-sector jobs, we’d have had positive jobs reports for the last nine months. As it is, public-sector losses have wiped out private-sector gains for the past four months.
Because the federal government has decided against backing up state and local governments, the bleeding continues, and that scares businesses away from investing in recovery. We create the stimulus that helped the economy survive 2008 and 2009, and we’ve created the anti-stimulus that’s keeping it from recovering in 2010.
Keynesian Claptrap At Its Finest
Then again, countless cities, counties, municipalities and states are bankrupt because of absurd levels of spending.
Isn’t that what wrecked Greece?
Non-Solution #1- Raising taxes
Raising taxes burdens ordinary taxpayers for the sole benefit of government bureaucrats who like most of the rest of the population ought to be thankful they have a job at all.
Non-Solution #2 – Printing money and giving it away
Ezra is clearly a fan of printing money and giving it away to government bureaucrats so the unemployment rate does not drop.
Mort Zuckerman Is Back, Blasting American Socialism; Or How America’s Public Servants Are Now Its Masters
by ilene - September 10th, 2010 1:08 pm
Good article from Zero Hedge making a point I agree with — the conflict between public sector and private sector employees is an artifact of a greater issue – the conflict between the American people and it’s "criminal ruling elite." While government workers came out of the last round a lot better off than the average private sector workers, they are not the source of the core problems in our economic-political system, and focusing on government workers, and Unions, is a distraction from deeper, more pervasive corruptions. – Ilene
Mort Zuckerman Is Back, Blasting American Socialism; Or How America’s Public Servants Are Now Its Masters
Courtesy of Tyler Durden
The man who has rapidly emerged as the most vocal Obama critic, Mort Zuckerman, has just penned his most recent scathing anti-administration missive, this time focusing on the schism in US society between "preferred-status" public and shunned private-sector employees, concluding that "Americans cannot maintain their essential faith in government if there are two Americas, in which the private sector subsidises the disproportionate benefits of this new public sector elite." Is this most recent split in US society being cultivated to take the place of the Wall Street – Main Street dialectic, which even Obama is now forced to realize is a fight he is set to lose (just imagine how anti-Obama Cramer would get if stocks drop by 0.001% during the teleprompter’s next media appearance)? Certainly, in a society that exists simply on the basis of a simple ongoing "us versus them" distraction, while the true crimes continue unabated behind the scenes, this is not an impossible assumption. Here’s a suggestion to Mort and whoever else wishes to peddle more such diversions: how about framing the next conflict where it rightfully belongs: as that between America’s people and its criminal ruling elite?
Full Op-Ed below:
America’s public servants are now its masters, first published in the Financial Times
by Mort Zuckerman
There really are two Americas, but they are not captured by the standard class warfare speeches that dramatise the gulf between the rich and the poor. Of the new divisions, one is the gap between employed and unemployed that President Barack Obama seeks to close with yet another $50bn stimulus programme.…
by ilene - June 2nd, 2010 12:55 pm
Courtesy of The Pragmatic Capitalist
Investors are looking for a big jobs
by ilene - May 25th, 2010 3:51 pm
Surprising numbers, e.g. "a record-low 41.9% of the nation’s personal income came from private wages and salaries in the first quarter." With Orwellian spin: "’It’s the system working as it should,’ Van de Water says. Government is stimulating growth and helping people in need, he says." Oh good, big sigh of relief. Where are the signs again that the stimulus is working? Not here. – Ilene
Paychecks from private business shrank to their smallest share of personal income in U.S. history during the first quarter of this year, a USA TODAY analysis of government data finds.
At the same time, government-provided benefits — from Social Security, unemployment insurance, food stamps and other programs — rose to a record high during the first three months of 2010.
Those records reflect a long-term trend accelerated by the recession and the federal stimulus program to counteract the downturn. The result is a major shift in the source of personal income from private wages to government programs.
The trend is not sustainable, says University of Michigan economist Donald Grimes. Reason: The federal government depends on private wages to generate income taxes to pay for its ever-more-expensive programs. Government-generated income is taxed at lower rates or not at all, he says. "This is really important," Grimes says.
by ilene - May 23rd, 2010 8:23 pm
The New York Times article Padded Pensions Add to New York Fiscal Woes has been making the rounds. At least 20 people sent me the link. Let’s take a look at few snips, then a look at a followup Times article on addressing the problems.
In Yonkers, more than 100 retired police officers and firefighters are collecting pensions greater than their pay when they were working. One of the youngest, Hugo Tassone, retired at 44 with a base pay of about $74,000 a year. His pension is now $101,333 a year.
It’s what the system promised, said Mr. Tassone, now 47, adding that he did nothing wrong by adding lots of overtime to his base pay shortly before retiring. “I don’t understand how the working guy that held up their end of the bargain became the problem,” he said.
According to pension data collected by The New York Times from the city and state, about 3,700 retired public workers in New York are now getting pensions of more than $100,000 a year, exempt from state and local taxes. The data belie official reports that the average state pension is a modest $18,000, or $38,000 for retired police officers and firefighters. (The average is low, in part, because it includes people who worked in government only part time, or just a few years, as well as surviving spouses getting partial benefits.)
Some will receive the big pensions for decades. Thirteen New York City police officers recently retired at age 40 with pensions above $100,000 a year; nine did so in their 30s.
The Times article is 4 pages long so please give it a closer look.
Undoubtedly Mr. Tassone is not as stupid as he sounds. He knows full well he gamed the system, but it was legal.
Tassone argues he held up his end of the bargain. Excuse me for asking what end is that? Public unions are legalized mobs. They coerce votes from corrupt politicians willing to buy there patronage.
There is no "public end" because there is no one working on the public’s behalf. Indeed the public in general has been crucified with never ending tax hikes to support union thugs who pack every school board in the country, and promise Armageddon if police or firefighters get laid off.
The public is
by ilene - April 6th, 2010 5:00 pm
Interview with Rick Davis of the Consumer Metrics Institute
Introduction: Richard Davis is President of the Consumer Metrics Institute (CMI). At the Institute, Rick measures real-time consumer transactions as an objective indicator of consumer demand and the associated health of the US economy. In this interview, we explore the history behind the government-published numbers and the reasons prompting Rick to devise better ways to measure the state of the economy.
Ilene: Rick, what got you interested in measuring economic numbers?
Rick: I first became frustrated with the current state of economic data after learning about the history of the collection process and the government’s continued reliance on 70 year old concepts. The government began collecting economic data during Franklin Delano Roosevelt’s (FDR) second term, around 1937. There was concern that the recovery from the 1937-1938 recession (i.e., a recession nested within the Great Depression) was stalling. The economy had been improving significantly from early 1933 through 1936 before the wheels came off the recovery in mid-1937. FDR’s administration realized it did not have adequate data to monitor the economy and the administration asked the National Bureau of Economic Research (NBER) to look into this problem. Wesley Clair Mitchell set out to find data that would help FDR’s administration address its concerns about the U.S. economy.
Wesley Clair Mitchell was a once-in-a-generation economic genius when it came to data collection. He collected over 500 interesting data sets measuring items such as sales, employment, railcar loadings--items that would allow him to constantly monitor the health of the economy. Most of these things are still measured, and the numbers have evolved into the core reports put out by the Bureau of Economic Analysis (BEA).
What frustrated me was that the data sets measured by Dr. Mitchell were developed in the 1930s and designed to capture those things that were important to the 1930s economy. They are not geared for today’s economy. Things that mattered in the mid-20th century simply cannot completely describe what is happening in the 2010 economy.
by ilene - February 17th, 2010 12:50 pm
Courtesy of JOHN RUBINO of Dollar Collapse
Wall Street Journal columnist Thomas Frank is by far the most interesting part of that paper’s dull gray Op Ed page. Back in January he suggested that the world’s governments smack down those wing-nut gold bugs by selling all the gold in their central bank vaults — a plan that most gold bugs found hilarious, since they doubt that central banks have much gold left to sell.
And last week he explained that our current troubles were due, get this, to a lack of trust in government’s ability to solve our problems. A few excerpts:
Once in office, the strategic thinking went, Democrats could slowly brighten the antigovernment mood by setting up various transparency and accountability programs. And they could turn that frown upside-down simply by doing what Democrats do, namely, by using government to solve big public problems, beginning with the grotesquely expensive health-care system.
But as the drama played out, these clever flanking maneuvers failed. Now it seems unlikely that Democrats will ever get their chance to change the public’s attitude toward government in this indirect way; the antigovernment animus struck first, bringing the health-care debate to an end with a summer of unanswered town-hall protests and a voter revolt in Massachusetts.
Bruised by the backlash, President Barack Obama came before the nation last month to address the problem. “We face a deficit of trust,” Mr. Obama observed in his State of the Union address, “deep and corrosive doubts about how Washington works that have been growing for years.”
But what will the president do to assuage those doubts? In his speech, he mentioned a crackdown on earmarks, implementing government transparency measures, and banning lobbyists from his administration’s high positions. They are all good and necessary reforms, of course. But one suspects they will do little to allay the grandiose fears of the broader antigovernment set.
A more daring course would be finally to confront the antigovernment catechism directly, to attack his opponents where they are strongest. For decades, conservatives have explained every episode of government failure by shrugging: What do you expect? That’s just the way government is. When government fails to do the job—even when it’s a government presided over by conservatives themselves—it automatically reinforces core assumptions of the right.
Although this explanation is hollow and a
by ilene - October 27th, 2009 1:42 am
Courtesy of The Daily Bail
In 2008 the average federal worker earned twice that of his private-industry counterpart in wages and benefits: $120,000 per year versus $60,000.
Check out the difference in slope of the two lines. Yowza. Federal pay and benefits are up 58% since 2000 compared to just 28% in the private sector.
Of course, when you consider the massive productivity advantage government workers enjoy over their private counterparts, it all makes sense. WTF?
Well, it’s all the Democrats fault undoubtedly. Wait, looks like it was Bush.
- The George W. Bush years were very lucrative for federal workers. In 2000, the average compensation (wages and benefits) of federal workers was 66 percent higher than the average compensation in the U.S. private sector. The new data show that average federal compensation is now more than double the average in the private sector.
- If you drive through Northern Virginia, you will find nearly entire neighborhoods of $500,000 to $900,000 homes owned by government workers or contractors. Then you can drive five streets over and find $200,000 to $400,000 homes owned by those who pay the salaries for those government employees. It’s a fascinating distribution of wealth. Most government employees and contractors could not earn more than $60,000 on the free market. Their only chance to make that kind of money comes from having an employer that not only never has to make a profit but can forcibly take money through taxation.
The answer is that both are deeply to blame. Don’t be fooled. There’s nary a difference between Democrats and Republicans when it comes to growth of government. Both parties are completely, sadistically, out of control. There is NO spending restraint on either side of the aisle, just hot air, promises, and purple unicorns. Oh and bubbles.
by ilene - August 11th, 2009 10:59 am
James Turk argues that not only is the economy not a green shoot away from sustained recovery, but that we’re in an actual depression. – Ilene
Courtesy of James Turk at Dollar Collapse
Given all the euphoria after the unemployment number was released on Friday, one would think that the economic contraction had ended. Unfortunately, the euphoria was misguided. The reality is that unemployment continues to worsen. Nonfarm payrolls in July continued the dreadful, protracted decline that began from the peak of employment in November 2007. The only thing that has changed is that the rate of decline has lessened. In other words, the rate at which jobs are being lost is declining, which obviously had to happen sooner or later. The accompanying chart presenting the unemployment rate overlaid on top of recessions is not a pretty picture. Note the width of the gray line of the current economic situation compared to past recessions. We are in the longest economic contraction in the post-war period, which basically means we are in the worst contraction since the Great Depression.
The second chart isn’t much better. It presents the decline in GDP in two ways. The blue line shows the headline rate of contraction. The red line shows the contraction in GDP, excluding the government. There are different ways to interpret the message from this chart.
Clearly, GDP would be contracting at an even greater rate if it weren’t for the government spending so much money. In other words, government spending is keeping the contraction from looking even worse, but that is not necessarily good news. The private sector – which is after all the sector of the economy that creates real wealth through the myriad of goods and services it produces – is contracting at an even greater rate than the numbers appear.
We need to recognize that government spending does not really improve the economic situation. We have to keep in mind that the government is simply taking money from the private sector through taxes and then spending that money how it wants, rather than letting the private sector make that choice. Given the short-term focus and the obvious political orientation of government decisions, it is…