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Sunday, December 15, 2013

Economic Stories of Relevance in Today's World -- December 15, 2013

More Misleading Official Employment Statistics — Paul Craig Roberts - December 10, 2013 -
The payroll jobs report for November from the Bureau of Labor Statistics says that the US economy created 203,000 jobs in November. As it takes about 130,000 new jobs each month to keep up with population growth, if the payroll report is correct, then most of the new jobs would have been used up keeping the unemployment rate constant for the growth in the population of working age persons, and about 70,000 of the jobs would have slightly reduced the rate of unemployment. Yet, the unemployment rate (U3) fell from 7.3 to 7.0, which is too much for the job gain. It seems that the numbers and the news reports are not conveying correct information.                    As the payroll jobs and unemployment rate reports are released together and are usually covered in the same press report, it is natural to assume that the reports come from the same data. However, the unemployment rate is calculated from the household survey, not from payroll jobs, so there is no statistical relationship between the number of new payroll jobs and the change in the rate of unemployment.                  It is doubtful that the differences in the two data sets can be meaningfully resolved. Consider only the definitional differences. The payroll survey counts a person holding two jobs as if it were two employed persons, while the household survey counts a person holding two jobs as one job. Also the two surveys treated furloughed government workers during the shutdown differently. They were unemployed according to the household survey and employed according to the payroll survey.                   To delve into the meaning of the numbers produced by the two surveys, keep in mind that payroll jobs can increase simply because the birth-death model used to estimate the numbers of unreported business shutdowns and startups can underestimate the former and overestimate the latter.                     The unemployment rate can decline simply because the definition of the work force excludes discouraged workers. Thus, an increase in the number of discouraged workers can lower the measured rate of unemployment.                    Before reviewing this, let’s first assume that the story of 203,000 new payroll jobs in November is correct. Where does the BLS say these jobs are? Are these the long-missing New Economy jobs that we were promised in exchange for giving China our well-paid manufacturing jobs and giving India our well-paid professional service jobs?            Unfortunately, no.

Now That Obama Is Allowing Chicken From China, What Will That Do To The Chicken Industry? - The Economic Collapse Blog - Michael Snyder - December 11th, 2013 -  Do you know what is in your chicken nuggets?  Thanks to Barack Obama, that is going to be a more important question than ever.  At the end of August, the Obama administration quietly decided to start allowing Chinese poultry processors to ship processed chicken into the United States.  For now, the meat must originate either in the United States or in another country where the poultry population has been certified to be safe.  What that means is that chickens from the United States will be shipped all the way over to China, processed in plants over there, and then shipped back across the Pacific Ocean for us to eat.  Only a limited number of companies are expected to take advantage of this, but according to U.S.                     Senator Charles Schumer, a USDA report that Congress has seen indicates that China will likely be allowed to directly import their own chickens into this country "within a year".  What makes all of this even more disturbing is that a country-of-origin label will not be required on any of the chicken that is processed in China.  So in the years ahead you could be eating chicken processed in China and not even know it.                 Each year, U.S. consumers spend about 70 billion dollars on chicken.  That is a tremendous amount of money, and the U.S. chicken industry supports a huge number of jobs.                      So what is going to happen if cheap chicken from China starts flooding the market?                      It shouldn't take too much imagination to figure out what is going to happen.  This is a movie that we have seen too many times before.  Over the past decade, tens of thousands of U.S. businesses and millions of good paying jobs have been lost due to "competition" from communist China.

Why John Boehner And Paul Ryan Should Immediately Resign - The End of the American Dream Blog - By Michael Snyder, on December 11th, 2013 - Thomas Jefferson once said that “the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.”  In other words, he believed that government debt was the equivalent of stealing money from future generations on a massive scale.  Right now, the U.S. government is stealing roughly $100,000,000 from future generations of Americans every single hour of every single day.  And it is being projected that the U.S. national debt will more than double during the 8 years of the Obama administration.  In other words, the federal government will pile more debt on to the backs of our children and our grandchildren during the Obama years than had been accumulated during all of the rest of U.S. history combined.  The federal government is literally destroying the future of America, and what we are doing to our children and our grandchildren is beyond criminal.  If there was one thing that the Republicans in Congress were supposed to do, it was to do something about all of this debt.  These days Republicans can’t seem to agree on much, but the one issue that virtually all “conservatives” were supposed to agree on was the national debt.  The American people gave the Republicans control of the House in 2010 and 2012 for a reason.  Unfortunately, nothing has been done.  Our debt has continued to spiral out of control and now John Boehner and Paul Ryan are pushing a “budget deal” that will essentially give the free-spending Democrats virtually everything that they want for the next 10 years.  That is why John Boehner and Paul Ryan should immediately resign.                      This “budget deal” actually increases the deficit in the short-term.                      Yes, you read that correctly.                             Overall, it is supposed to reduce the federal budget deficit by about 20 billion dollars over the next decade.  But even if the unrealistic assumptions that those numbers are based upon end up working out (which they never do), the “savings” will average just 2 billion dollars a year over the next decade.                   And considering the fact that federal budget deficits will likely average well over a trillion dollars over that time span, that is a complete and total joke.                             It is kind of like spitting into Niagara Falls and thinking that it will actually make a difference.                        Even Paul Ryan is admitting that “this isn’t the greatest agreement of all time”, and in interviews he is complaining that the Democrats wouldn’t allow him to do more.

Fact Check: Paul Ryan Twisted Truth to Sell Budget Deal to House
- Breitbart - Matthew Boyle - December 14, 2013 - House Budget Committee Chairman Rep. Paul Ryan (R-WI) misled his colleagues in the House of Representatives about several major areas of the budget deal he cut with Senate Budget Committee Chairwoman Sen. Patty Murray (D-WA), Breitbart News has learned....

Gerald Celente: Founder & Director of the Trends Research Institute - Gerald gives the King World News audience an exclusive into his amazing “New 2014 Predictions.” Gerald has had a long track record of making some of the most controversial, yet correct calls in terms of global trends and events. In fact, many consider Mr. Celente to be the top trends forecaster in the world. Gerald has been quoted and interviewed in media throughout the world such as, CNBC, Fox, CBS, ABC, NBC, BBC, Time Magazine, The NY Times, The Wall Street Journal, Business Week, FT, U.S. News, World Report, The Economist, L.A. Times, Chicago Tribune, Washington Post and more.
Link to Gerald Celente interview - December 14, 2013

The myth of the American Dream - CNN Money - Steve Hargreaves - December 10, 2013 - The American Dream is supposed to mean that through hard work and perseverance, even the poorest people can make it to middle class or above. But it's actually harder to move up in America than it is in most other advanced nations.                     It's easier to rise above the class you're born into in countries like Japan, Germany, Australia, and the Scandinavian nations, according to research from University of Ottawa economist and current Russell Sage Foundation Fellow Miles Corak.
Among the major developed countries, only in Italy and the United Kingdom is there less economic mobility, according to Corak.                   The research measures "intergenerational earnings elasticity" -- a type of economic mobility that measures the correlation between what your parents make and what you make one generation later -- in a number of different countries around the world.
Most Americans born into the lower class stay in the lower class.
Economists aren't certain exactly why some countries have a greater degree of mobility than others, but they do point to certain similarities.                          Greater current inequality: The more unequal a society is currently, the greater the chance that the children will be stuck in the same sphere. This is because wealthy families are able to provide things like tutors and extracurricular activities -- and the time to pursue them -- that poorer families often cannot.                  Also, education matters a lot more now than it did 100 years ago in terms of getting a good job.
"The rich can pump a lot more money into their kids' future," said Corak.                  This helps explain why counties like China, India and many South American nations also exhibit relatively little economic mobility.                        Families: Having a stable home life is also associated with the ability to climb the economic ladder, said Corak. The United States tends to have higher rates of divorce, single-parent homes, and teenage pregnancy than many other industrialized counties.                        Social policies: Counties that redistribute wealth -- through, say, higher taxes on the rich and more spending on the poor -- tend to have greater social mobility, said Francisco Ferreira, an economist at the World Bank. 

American Dream: R.I.P. - Washington's Blog - December 11, 2013 - Two Thirds of All Americans Think the American Dream Is Dead - We noted in 2010 that the American Dream had moved abroad …  since social mobility between generations is dramatically lower in the U.S. than in many other developed countries.                     We reported last year that both conservatives and liberals are worried about the collapse of social mobility in America.             Income inequality has increased more under Obama than under Bush.  Inequality in America today is worse than it was in Gilded Age America, modern Egypt, Tunisia or Yemen, many banana republics in Latin America, and worse than experienced by slaves in 1774 colonial America. It is twice as bad as in ancient Rome – which was built on slave labor.  Background here and here...

CommScope to shutter Statesville plant, removing 100 jobs from Iredell economy - Charlotte Business Journal - ken Elkins - December 12, 2013 - CommScope Holding Co. Inc. will close a 100-employee plant in Statesville and sell equipment used in the production of metal grounding wire and rods.                             Some of the Statesville employees will be able to find jobs in CommScope facilities in Catawba or Claremont, the Hickory-based company (NASDAQ:COMM) says.                       Michael Smith, executive director of Statesville Regional Development, says he’s “saddened” to learn that the plant is closing.                        “While there is no ‘good’ time to make an announcement of this nature, it is particularly difficult during the holidays, and we extend our heartfelt sympathies to the employees and their families,” Smith states in a news release issued this morning about the closing.                      He promised to quickly fill the plant with another manufacturer, just as the economic-development agency has done in at least six instances in the recent past. Smith says he has two announcements coming about new occupants for two other currently empty production facilities in the Statesville area.                     CommScope's 315,000-square-foot Statesville plant, located at 125 CommScope Way on the northwest side of town, started production in December 1997. Operations in at the plant will slow “almost immediately,” but the transition may take up to a year to complete, CommScope spokesman Joe Depa says.

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