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First, I wish I could vote for the article by Oak more than just one time! Truly excellent!
But about elasticity:
Remember back in the Clinton years when it was noted that people came out of retirement, disability, student or other non-employed status to take jobs? It was quite a surprise to some economists who expected greater upward pressure on wages. Even without the deviltry of legal, quasi-legal and illegal immigration, the number of persons available to take jobs when conditions approach real full employment -- is elastic.
Having said that, I like the 18% number, assuming that survey methodology is solid down to the details. But I can only gauge it against the feel I get in local conditions. It's really one of those averages of averages of averages, when we analyze the national survey down to the fundamentals. Of course, the Oak number is TWICE the official government number, which itself is contested by FAUX and our GOP neighbors because they think all unemployment is a scam until there is no sign anywhere saying "Job Applications Accepted".
I presume that there is nothing wrong with ShadowStats "trying to use methods from before 1994" -- except that when results are compared to results based on methods currently in use, the different bases should be noted.
Current Method
Is the survey truly of a random sample and of what population (how is the population defined operationally)? Is it door-to-door like the Census? Or is it a phone survey?
Almost all surveys these days are phone surveys, but many people and households today have only cell phones and how do we know how many cell phones or phone numbers to a residence, to a family or to a person? If we do know that, how do we adjust our survey for what we think we know. If the calls are based on residential phones, many working or looking-for-work people today (even not limiting this to illegal immigrants) either do not have landline service or are living in non-residential situations that are not necessarily legal (per code enforcement or other law enforcement or per rental agreements).
You can get very different results sometimes just by rephrasing a question asked in a phone survey. What exactly was the wording of the sample question? What questions preceded the survey conversation? Are various wordings tried in each survey and results compared for bias? Was there a follow-up going door to door to audit a sample of the sample? To what extent were individuals counted as employed (or unemployed) actually reported on the basis of information from the person answering the phone call but not the individuals themselves? To what extent, on average, were such reports biased and in what direction?
In 2011, as I understand it, a major problem is that people become homeless and therefor difficult to track. Another problem is the underground economy.
Of course, the entire survey process as well as how the survey data is analyzed -- that's all subject to political influence. Political pressure has been applied through bureaucracies to aggressively move people off UI or other government programs (or not). Such a variable is tricky or impossible to include in any econometric model.
Methods before 1994
In the 70s and 80s, there were index card files worked at the Department of Employment ('Human Resources', 'Economic Development', etc.). The card files were based on people coming in and registering in the section that was operated like an employment agency. The section that took and managed UI claims was separate, but to apply for UI, you had to register in the job-hunting section. Similarly, I believe, (when Food Stamps came into existence) to apply for Food Stamps, you had to register as looking for work and undergo other tests proving availability for work (unless unable to work by reason of disability).
The index card files (this is before ubiquity of personal computers) were worked by employees of the Department of Employment who would make phone calls or send out postcards to see if there really was someone there looking for work (or if there were responses).
Of course, one problem was that most people did not consider the Department of Employment to be a great resource for job hunting and found other ways to look for work, ignoring the Department of Employment job-hunting section unless they were receiving UI. (Of course, if you were in a union hall, you could ignore the Department of Employment job-hunting section, unless maybe that isn't true when you go on UI extensions.) Also, people would not return calls or they moved away or whatever and, unless they were receiving UI, they could easily fall through the cracks.
An Unused 'Survey' Method that Should Be In Use
We need a measure of participation in work programs offered (except that there probably now are no such programs generally or even for targeted groups). The statistical methods could even be sophisticated like those used in mark-and-release wildlife programs. (An early benefit of all this would be some employment for statisticians!)
I think that, in times like this, one measure that should be applied is participation rates in governmental (or non-governmental) work programs. Identify the work and advertise it's availability. It has to be real enough that it includes unemployment insurance and social security. Also, it has to be real enough that at least some of the slackers can be laid off for cause or for failing to show up. Anyway, from that governmental program, just keep it up until you no longer have any takers, or the number of takers is very few and can be dealt with individually. That's called 'full employment'. Of course, a requirement of such a program would have to be that only people legally in the U.S. and not receiving disability income could apply.
There used to be, and maybe still is, a local non-governmental program in Billings, MT, called "Billings Monday." On every Monday, the businesses of Billings would guarantee one day of work for every person who showed up -- not including drunks and not including illegal immigrants (not confusing those two populations!).
I am not saying that such programs would or should become the be-all and end-all of unemployment number-gathering, just that some such programs should be included if we are pursuing a full employment policy. Such programs can be tried experimentally in 'selected markets'. Of course, we know from observation of LBJ's 'war on poverty' that we have to audit and watch out for such phenomena as 'phantom workers', in some geographical areas more than others.
Whatever happened to Full Employment?
Anyone remember the Full Employment Act of 1946? No, I dont suppose ... even though I think it's still in Title 15 (USC) somewhere.
Of course, our government today -- almost all political leaders and the corporate mass media -- are not pursuing or considering a full employment policy. They aren't even considering using the term 'full employment'. The very concept of full employment has been lost from view in the U.S.A. today.
Even here at EP, people sometimes ask what's wrong with the Democratic Party today? The answer to that question, we could start with that most Democrats fail to talk about or target a full-employment policy for the country. They much prefer to talk about unemployment in this, that or the other demographic -- anything but a comprehensive full employment program! (Anything but discussing systemic problems and possible solutions!)
How would a full employment program be paid for? Y'all know my answer to that: 15% Across-the-Board Tariff! I know, I know, price of imported oil would go up and we would all be screwed, beyond what we are already being screwed already. So, how about this: big cuts in military spending?
I'm going to try to write up a new Trade via policy post later, for I heartily agree, and what's more frightening is we have so called Academics, so called Economics PhDs bold faced, claiming we need more bad trade deals which lost jobs.
I'm sorry, what is it with these people that they cannot see, the massive trade deficit statistics!
It's scary because these idiots determine what graduate students get a PhD, so what....if you don't chant the insanity of the free trade church, claiming the emperor is clothed, you do not obtain your degree?
Unbelievable.
I think the computers have had their circuits blown, after all it's something like 73% of all trades are automated flash trades.
Bottom line, the stock market's huge pop up today doesn't make a lot of sense, given yesterday's claim it was about France, SoGen crashing rumor, sovereign debt, Europe and U.S. Macro economics.
Today's trade report almost guarantees Q2 GDP will be almost on life support, that will be 2 quarters in a row and we're cutting the infamous edge on recession definitions, claiming it has to be 2 quarters of negative GDP...
well, well, what a different a few 10ths of a percent make? Come on man, this is not good.
Traders are crazy.
The U.S. trade deficit unexpectedly increased in June to the highest level since October 2008, yet, Obama, Mr. "I'll renegotiate NAFTA", wants Congress to pass yet another one-sided "free" trade agreement with Korea.
Just what we need to solve our trade deficit problems - more "free" trade agreements with Korea and Panama.
Because I cannot find his exact methods. If he's going to challenge the government and act like this is all one big conspiracy theory plot, then he needs to publish, for free, exactly what his methods and assumptions are.
Same is true for ADP. When dealing with large numbers, and IMHO, too small sample sizes, plus we have the never ending refusal to categorize illegal immigrants and guest workers, which in this day and age, due to corporate desired globalized cheap labor supply, one needs statistics on...
assumptions, super sets, subsets plus a civilian non-institutional population that is still derived from a baseline Census of now 11 years ago...
One needs to see exactly what the definitions are, the assumptions, how statistics are derived, their error rate, and so on.
Obviously we've got some serious issues going on here when one can double the unemployment rate by adding in forced part time and those not counted as part of the labor force who report they want a job.
What's the real count? At this point, it seems all one can really say is valid is the rate of change and even that needs to be done really over a 3 month time window.
Yes, we compare on a month to month, but you even get huge yearly revisions now....
Then, between December and January they do a once yearly population adjustment, but not spread out, tacked onto that differential. What a gotcha and many a financial, economic journalist has written complete fiction as a result on that one.
Just like with PCE and GDP and so we could really use a revamp of data collection methods for our statistical government branches.
So, bottom line, there is huge variance and one should publish, make public all assumptions and methods.
You can't just pull some number out of your ass and claim it to be the number, for clearly depending on how one categorizes, assumes and even takes the raw data collection, you can get many different numbers here.
Long time since I have heard that term. Many years ago, when working short hoe in the fields of Central California, 'lumpenproletariat' came to mind when I would hear my Chicano co-workers at lunch break tuning into Paul Harvey's radio program, avidly approving a propaganda line that bore no sane relation to their self or 'class' interests.
I had earlier read Das Kapital and, btw, my literacy and such soon brought me a promotion to driver of the crew bus and, basically, 'front man' for the labor contractor.
It's like in many barber shops and gypo construction sites, a few years back, Rush Limbaugh would be on the radio in the background -- the presumed listening preference of the working man throughout much of White America. More recently, I have often overheard homeless people discussing the latest RNC propaganda (for example, a lot of talk about the corrupt mentality of 'entitlements') at a soup kitchen where I have contributed in a small way.
So, I'm not sure that "we're not quite to the lumpenproletariat yet (Frank T)." I think we've had that for a long time, and it exists today as a substantial percentage of the population, assuming we could nail the concept down for statistical purposes.
I'm not sure that any of Marx's class analysis would apply today. For example, would the lumpenproletariat include people who scam SSI income although actually able to work, except that there is no work? It's unfortunate that Marx's work has become so intertwined with "Marxism" (Stalinism, Maoism, etc.). IMO, if Marx were alive today -- working as a sociologist (as he would be) -- one of the first things he'd do would be to reject Marxism or at least recreate it on the basis of a class analysis rereconstructed from foundation on up.
President Obama has indicated one class that would have to be recognized in any new class analysis -- a class that Obama knows of close-up and personal, namely, the "professional left" (quoting Obama). That is, after all, not a term with no objective meaning, as is proven by the history of professional leftists who 'see the light' and become professional rightists when they see the money. I suppose that a large part of our 'professional lef' is on some government payroll or another and could be accurately included in the broad class category of 'lumpenproletariat'. Nonetheless, some of the 'professional left' might be sincere, worth listening to, and not available to be bought into the 'professional right', however much better the payscale is over there.
Going back before World War II (as I have learned from men I have been fortunate enough to know personally) when labor organizers were communists, by definition, and vice versa -- in the days of pitched battles on the waterfront between Strike Education Committee members and Pinkertons -- the pay of a professional leftist was generally a place to sleep for the night and enough soup kitchen food to eat.
According to Wikipedia article Lumpenproletariat --
"Additionally shadow stats tries to use methods from before 1994."
It seems you object to this. Why?
You mean we get to choose between the pretender and the sock puppet every 4 years, and they get to borrow money in our name? They go to war because they can and because nukes are off the table for now. We nation build abroad while our own infrastructure rots. We get "Deciders in Chief" to tinker with the economy so old folks can get bupkus on their life savings, eat cat food, and work at Wal Mart or bag groceries if they're lucky enough to be still standing. Yes, this is definitely the economy I want -- I feel better off because everyone else has less. We're not quite to the lumpenproletariat yet -- oh wait, I forgot about China, India, and Mexico. Maybe we'll get there just as soon as our leaders cut taxes some more and abolish the minimum wage.
The trouble with GPA is it screws the late bloomers. When I enrolled in college, I was given 38 semester hours transfer credit from the Army -- but they would only do it with a grade of C because they had no metric for grading service schools and their pass/fail testing. I got into grad school only because I had consistently high grades in my major and 99 percentile GRE. But I like the idea of setting cost to reflect national needs -- we could make law school and MBA programs VERY expensive and subsidize nursing and medical programs with a payback provision of national service (such as beginning practice in rural or underserved areas for a set period). For those going on to do residency in pricier areas of medicine, such as anasthesiology or cosmetic surgery, we might have them pay back student loans while discounting payback of those in family practice or pediatrics.
"Mr. Obama in my view is a rather typical Generation Jones pragmatist. He implies certain ideals. But he lives for the main chance, here in the backwash of Baby Boomers." -- Animist Drive-by
Excellent summary of Obama. The question is, Where does pragmatism end and opportunism begin?
Great phrase, "backwash of Baby Boomers"! The best of them are all around watching their pensions and social security shrink, after many years of diligent work.
Anyway, who gives a hoot about the pragmatism/opportunism of politicians? Like sex, the sell-out actually existed before the Baby Boomers discovered it. And, like sex appeal, it's how you use it that counts. George Washington, Abraham Lincoln, Franklin Roosevelt, John Kennedy ... they were all pragmatists-opportunists who pursued and seized the main chance as if their lives depended on it (which in some instances it did).
You were right to vote for Obama for the U.S. Senate. He might have made a great senator, if he had not been chosen to run for President.
Enthralled by the White House and the "most powerful man in the world," we pay too little attention to our Congress, to SCOTUS appointments and to the laws that are enacted in our name. Especially today, in 2011, the message should be clear, written in $$$$$.
We are all hypnotized by our presidential system! We don't elect presidents such as was intended by the Founders. Every four or eight years, we elect a god-king! It's as silly as the idea that big-time corporate CEOs -- or generals or admirals or big-time football 'heros' or (heavens help us) 'talking heads' or Speaker of the House or Chairman of the Board of Governors of the Fed -- are ipso facto admirable people. Of all those, the POTUS is most likely to be criticized publicly, but least likely ever to be held accountable in practical terms.
To paraphrase F. Scott Fitzgerald, "Let me tell you about Presidents. They are different from you and me."
Very good ... "Animist Drive-by" and "New Whirl Odor"!
Yes, they do believe in mass media more than anything else, because it continues to pay off for them. The one thing that George Orwell did not foresee is the system whereby the State doesn't need a spy-eye in every living room as long as they have a "look here for eye-candy, illusions and (self-destructive) delusions" screen in every room.
More and more, I don't divide people according to 'left' or 'right' or 'liberal' or 'conservative'. I know two kinds of people: those who still pay attention to it (corporate news media, including NPR and PBS) regularly ... and those who almost don't watch it at all. These two groups live in different worlds.
The problem is that those who have tuned out, mostly do not vote. Many are convinced that the count is corrupted anyway.
" ... the rest of the state turned out voters in record numbers."
Did they? Or did their voting and vote-counting computers count differently?
Just asking. I don't know the answer.
Michael, you betrayed your own implied principles.
A president should state his principles. Not imply them.
That you delicately covered up for this shows how painful this whole Obama presidency has been, particularly for people who wanted so much to believe in him, and in the principles they believed in. But he only implied.
I do agree that his behavior comes across as valuing nothing other than power. That is why I didn't vote for him, even though I supported his Senate campaign in IL. When the DNC ran him so fast for president, I realized then I'd been suckered into a Money Party scam. All I could do was try not to hurt myself further. Kind of like the first date with a hot new guy, and he does something really obnoxious, and your red flags go up...then when he does it again, even though you told him it's a problem, a wise person with good boundaries cuts their losses and gets outta there.
Right now we have a lot of people waking up to what they gave away, in their zeal to believe in the combination savior and mystery date they projected onto Candidate Obama.
Mr. Obama in my view is a rather typical Generation Jones pragmatist. He implies certain ideals. But he lives for the main chance, here in the backwash of Baby Boomers.
Thanks for reading my thoughts.
Of course Wall Street lobbyists will squish it like a bug, but we really need a transaction tax on some of this. I've wanted a small transaction tax on flash trades for some time.
But our government is insane and corrupt.
People are cashing out in the short term to nail down whatever gains they can.
We should tax this sort of behavior in inverse proportion to the time shares are held, to encourage buy-and-hold investing, which would encourage more research into the companies' fundamentals and less computer investobot casino monopoly.
La partie continue!
Robert points out how both left and right (so called) spent money in the New Whirl Odor of mass spending on shiny media things.
It doesn't appear to have done a goddamn thing. It canceled out each other, to stay in the same place as before.
I'm an expatriate Cheezer and former educator there. The problem in Wisconsin was that the Democrats at both the national and state levels are too caught up in their power games to have made much of a connection with Wisconsinites at the local/community level, and built trust.
Look at how the party treated Russ Feingold all his career; he was just too independent for them. In fact he represented a wide variety of Wisconsinites pretty well, and could have won if Democrats had bothered to vote in the population centers last November.
The "tea party" Republicans, independents, and disaffected Dems motivated their base with a bunch of (frankly silly) memes about Outsiders being more qualified. That, on top of the infusion of $37 million in corporate bling to get Scott Walker elected, worked.
But it probably wouldn't have if Milwaukee County and Dane County (Madison's) hadn't had THE LOWEST VOTER TURNOUT IN AGES…while the rest of the state turned out voters in record numbers.
And consider this: all those youngsters who coursed to the polls to vote for Candidate Obama didn't turn up in November of 2010. Either they were lazy and unmotivated...or they managed to see through his street-mime magic act (nothing passing as real things; political infotainment).
This isn't about politics and it surely isn't about party politics, because there is just one party, the Money Party. It represents those who via numbers games skim the butter that the productive members of society churn, and leave them the whey.
And both of those parties believe in the mass media more than anything else.
Sidebar: some of my old Farm Labor Democrat buddies from the Green Bus (Wellstone) years think that the Democratic party gave the November 2010 elections in Wisconsin a bit of a miss, to engineer a spectacular loss, to spur (in their minds) a spectacular comeback.
I can't say that that's true, though it's a better conspiracy theory than most. But it does attest to a remarkable belief in the conspiratorial might of a party that, in my view, more likely has become so weak and appeasement oriented, so lazy and immersed in Baby Boomer ways of thinking, that it's flailing. (The Republicans are in about the same situation.)
Anyone else see Matt Miller's piece in WaPo today? I don't normally go near the Newspapers of Record; a friend sent me the link.
http://www.washingtonpost.com/opinions/why-im-mad-at-obama/2011/08/10/gI...
I'm not predicting a second Great Depression or a series of 5% drops in ETFs -- or anything else. And I'm not saying that flash trading or NYSE circuit breakers are good, bad or indifferent.
Just reporting and commenting about how NYSE and such markets apparently are functioning these days.
But I have to agree, the measure really has some limitations and there is another one, called "research" plus there is a substitution basket which has been criticized.
That said, it is what it is and a lot of decisions are made from that number.
But in terms of regular people, buying groceries and so forth, boy, I'm not so sure. When you can have 36% yearly increase in gas and claim that core inflation increase is 2%, what's wrong with this picture?
I'm watching CNN and people are absolutely, beyond belief, clearly mathematical deficit and it's so frightening, we just have so few who even know what they are talking about, "leading" the nation.
The ones who are driving the car simply cannot drive and that includes MSM.
Ah yes, 'core inflation'.
Among working people, including retired working people, nobody believes any government inflation figures! I'm pretty sure that even MSM no longer bothers to quote them. That's probably the most prominent effect of the 'core inflation' thing -- to undermine confidence of the American people in the U.S. government and in all U.S. government statistics.
'Core inflation' is like any net -- the question is which net are we talking about and what use are we going to make of it. Of course, all cores like all nets have their uses .... but when you start reading a 'core' into the statutory purposes of the Fed or into the statutory authority of the Treasury (not to mention the constitutional authority of Congress), it gets more than a little fuzzy.
Thing is, sometimes it looks like the big dogs in Treasury and the Fed actually talk themselves into using these things as valid and sane excuses for doing whatever they consider to be politically expedient (or in the interest of important media interests and campaign contributors) rather than just as indicators among thousands of indicators.
(It's like the way that the Supreme Court can always find something somewhere to justify even their most anti-Constitution over-reaching in defiance of all common sense as well as stare decisis.)
Robert Oak for Secretary of Treasury! (Paul Craig Roberts for President!)
Excerpted from moneymentor.com NYSE Historical Clossings webpage --
___________
Weird how gold fever is so intense that gold today is fetching more than platinum. So nothing is certain, maybe not even gold (scarey thought).
How do flash trade computer systems (programs) handle that kind of input? Of course, we'll never know. The code isn't exactly widely published.
On the NYSE, has trading been halted this week? ... yet? Any circuit breakers been triggered? Yes, thousands!
Excerpted for review purposes from Bloomberg (Aug 8, 2011), report by Jeff Kearns, Nina Mehta and Lu Wang -
Now here's a thought. Could this work like the old boiling crabs or lobsters pot on the wharf -- so warm and cozy and nobody notices until ....
5% down, back up, 5% down again, 5% down again, 5% down again, 5% down again, 5% down again, and as far as FAUX or MSM tells the public ... it's all just normal trading activity. What, a stock market crash? Nah! That's like saying the Great Depression of the 1930s was caused by anything but the New Deal!
Any effects you may be experiencing in your life on Main Street -- that's just because of over-regulation.
And don't worry about that. Tea Party politicians will save us!
But, really, shouldn't equity shares be tied to realistic expectation of earnings and shouldn't earnings reflect what it costs us here in the U.S. to buy food and gasoline, medical care and college educations? Well, if you live and work and invest in the U.S.A. and you're not one of the MNIs (multinational individuals) .... and that means you're forever dollar-denominated .... then even if your NYSE ETFs go up, you may only be keeping your head above water .... barely.
Seems Calculated Risk agrees with me. The Fed is going to watch inflation and if there is a deflationary implication, then they might do QE3.
Traders are absolutely going nuts trying to guess on if this is going to happen.
From what I've seen on CPI, well, oil has declined and is also yo-yoing around, due to projections of a global slow down, but China as usual came roaring in a couple of days ago, with fairly high CPI, plus the Fed goes off of core inflation.
Core inflation is not in a deflationary cycle, so I just don't think they are going to do this for awhile.
I stick by my reading between the lines that the Fed punted the ball to Congress and said do something and we all know we have absolutely insane people running the government, so of course they will do things to make it all worse, such as cut discretionary spending.
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