Sunday, December 9, 2012

More Phony Employment Numbers

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Statistician John Williams ( calls the government’s latest jobs and unemployment reports “nonsense numbers.”

There are a number of ongoing problems with the released numbers. For example, the concurrent-seasonal factor adjustments are unstable. The birth-death model adds non-existent jobs each month that are then taken out in the annual downward benchmark revisions. Williams calculates that the job overstatement through November averages 45,000 monthly. In other words, employment gains during 2012 have been overstated by about 500,000 jobs. Another problem is that each month’s jobs number is boosted by downside revision of the previous month’s jobs number. Williams reports that the 146,000 new jobs reported for November “was after a significant downside revision to October’s reporting. Net of prior-period revisions, November’s seasonally-adjusted monthly gain was 97,000.”

Even if we believe the government that 146,000 new jobs materialized during November, that is the amount necessary to stay even with population growth and therefore could not be responsible for reducing the unemployment rate from 7.9% to 7.7%. The reduction is due to how the unemployed are counted.

The 7.7% rate is known as the “headline rate.” It is the rate you hear in the news. Its official designation is U.3.

The Bureau of Labor Statistics has another official unemployment rate known as U.6.
The difference is that U.3 does not include discouraged workers who are not currently actively seeking a job. (A discouraged worker is a person who has given up looking for a job because there are no jobs to be found.) The U.6 measure includes workers who have been discouraged for less than one year. The U.6 rate of unemployment is 14.4%, about double the headline rate.

The U.6 rate does not include long-term discouraged workers, those who have been discouraged for more than one year. John Williams estimates this rate and reports the actual rate of unemployment (known as SGS) in November to be 22.9%.

In other words, the headline rate of unemployment is one-third the actual rate.

The drop in the November headline rate of unemployment from 7.9 to 7.7 is due to a 20.4% increase in the number of short-term discouraged workers in November. In other words, unemployed people rolled out of the U.3 measure into the U.6 measure.
Similarly, a number of short-term discouraged workers roll out of the U.6 measure into John Williams’ measure that includes all of the unemployed. Williams reports that “with the continual rollover, the flow of headline workers continues into the short-term discouraged workers (U.6), and from U.6 into long term discouraged worker status (a measure), at what has been an accelerating pace. The aggregate November data show an increasing rate of individuals dropping out of the headline (U.3) labor force.” In other words, the headline rate of unemployment can drop even though the unemployed are having a harder time finding jobs.

The U.S. government simply lowers the unemployment rate by not counting all of the unemployed. We owe this innovation to the Clinton administration. In 1994 the Clinton administration redefined “discouraged workers” and limited this group to those who are discouraged for less than one year. Those discouraged for more than one year are no longer considered to be in the labor force and ceased to be counted as unemployed.

If the U.S. government will mislead the public about unemployment, it will also
mislead about Syria, Iran, Iraq, Afghanistan, Libya, Somalia, Pakistan, Yemen, Lebanon, Palestine, Russia, China, and 9/11. The government fits its story to its agenda.

A government that wants to cut the social safety net doesn’t want you to know that the unemployment rate is 22.9%. A government that wants to cut the social safety net when between one-fifth and one-fourth of the work force is out of work looks hard-hearted, mean-spirited, and foolish. But if the government reports only one-third of the unemployed and presents that rate as falling, then the government can present its cuts as prudent to avoid falling over a “fiscal cliff.”

If the “free and democratic” Americans cannot even find out what the unemployment rate is, how do they expect to find out about anything?

Dragging Secretive Trade Talks Into the Light: Activists Expose Slow-Motion Corporate Coup

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Inequality and Poverty America Style

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In richness and in health

Irrespective of ones circumstances or stage of life, illness is never welcome, in America if your poor it can prove to be a total catastrophe, ending often in personal bankruptcy. “According to a report published in The American Journal of Medicine, medical bills are a major factor in more than 60% of the personal bankruptcies in the United States.” Health care insurance is an unaffordable luxury for the 15% or 50 million people now living in ‘official’ poverty in America who anxiously rely on good luck and a poor diet to keep sickness at bay.

An average individual's health care insurance costs are around $200 per month. Unbelievable as it may sound to the unfamiliar, this does not automatically cover prescription charges. Having paid around $12,000 into insurance company coffers and made no claim in five years, a friend recently needed hospital care, no charge, antibiotics however, were prescribed and dispensed at $50—‘have a nice day’. My daughter living in New York with family health insurance was charged $100, yes $100, for an ameliorative wonder cream earlier in the year; one can only imagine it was infused with miracle oil and laced with melted gold. The Bureau of Investigative Journalism (BIJ) in a recent documentary stated that the US healthcare industry is the world's largest, with “$300 billion a year spent on prescription drugs alone,” a figure that is rising in tandem with the pharmaceutical companies colossal profits. The top three, according to Fortune Magazine, made  $27,000 millions in 2010. Surprisingly or perhaps not given US politicians relationship with corporate leaders, Noam Chomsky states that the prices set by these companies are protected in law. Unsurprisingly and in keeping with commonsense and codes of social fairness, 80% of the population would support lower rates.

The American Health Care System is a moneymaking machine for the insurance giants and their pharmaceutical bedfellows, which is a major cause of poverty and hardship in the country. It is inefficient and, at approximately twice the cost per capita of comparable countries, extremely expensive.  The fact that the worlds only so called ‘super-power’ does not offer a health care system to all 311 million or so of its citizens based on need and “free at the point of delivery,” reflects the driving political and economic ideological doctrine that underpins all areas of life in America; Capitalism, with its single motive—profit. It is a system that is fuelling economic and social inequalities that are trapping increasing numbers of people into a life of poverty devoid of hope.

Disadvantaged and living in poverty

More people are living in poverty in America now than at any time since 1959 when data was first collected, with around 43 million (August 2012 figures) a 70% increase in five years, are relying on the Supplemental Nutrition Assistance Program—food stamps for their meals. The 15% figure may be an understatement as the income level used by the government to define poverty increases based on the rate of inflation. The threshold established for a family of four in 2011 was $23,021 per annum and extreme poverty, where 21 million Americans live,$11,000. However, accoring to The Economic Collapse report on poverty in America states that “inflation was still calculated the way that it was 30 or 40 years ago, the poverty line would be much, much higher and millions more Americans would be considered to be living in poverty.” Wealth and poverty predictably falls along lines demarcated by race as well as social backgrounds; 27% of Hispanics and Blacks, 31% of single mothers, compared to the 13% of general adults and 11% of families who are living under the demoralizing, dehumanising shadow of poverty.

Since the late 1970s poverty rates and levels of economic equality have been dramatically increasing. Under the presidency of Ronald Reagan and the days of unbridled competition and market forces that was his administration, poverty numbers leapt to a tad below the present figure.  President Reagan famously admitted to having “fought a war on poverty and poverty won.” Those under fire were poorly armed and inadequately preparedas the battle rages more furiously today with inequities and social disadvantages.

Lack of opportunities and a plethora of social difficulties, many of which include overcrowded housing and poor nutrition in school and costly health care, contravene the spirit at least of the Universal Declaration of Human Rights, which states in Article 25/1 that “everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services.” Living in unsafe communities, with perhaps little or no parental support, destroys hope and makes people more susceptible to emotional problems and possible psychological issues including low self-esteem, depression, anxiety and substance/alcohol addiction. Those coming from poor backgrounds living disadvantaged lives in difficult circumstances are outgunned and outmanoeuvred while being slaughtered on the economic battleground.

Unemployment or poorly paid work is regarded by World Hunger as the primary causes of poverty in America, but Frances Stewart, Professor emeritus at Oxford Department of international Development takes a different more just view. She believes that the equitable distribution of resources, “from the privileged to the deprived, would be enough to eliminate poverty in high and middle income countries.” Not simply the redistribution of wealth, but resources more broadly to, as she puts it, “improve the health, the education, the assets and the productivity of the poor so that the improving of their lives can become self sustaining.” The fair and equitable sharing of resources to meet the needs of everyone in society is an economic model rooted from compassion and justice. Beyond ideological constraints of the various political isms of old, sharing as a rational economic principle is an idea whose time has perhaps arrived. It is, of course, foreign to capitalist principles that believe in the wisdom of the market to house, educate, heal and clothe the peoples of the world. At least this is the justifying jargon of the economic and political groups as they promote an unjust system that concentrates wealth and power so effectively in their hands.

World Hunger’s position is that there are three factors causing citizens in the most powerful nation on earth, as U.S. politicians like to exclaim, to be living in poverty and without decent education adequate housing and or appropriate health care; “1. Poverty in the world; 2. The operation of the political and economic system in the United States which has tended to keep people from poor families poor; and 3. Actual physical mental and behavioural issues among some people who are poor." All too often poor health—physiological and psychological—is the consequence of a system and not a major cause of poverty. 

People are trapped into poverty, World Hunger discovered, by an unjust political and economic system in which power rests with the wealthy. Those born into poor circumstances face a mountain of disadvantages and, as BBC4’s documentary “Why Poverty” found that “they almost never escape.” In a society that champions material success and individual achievement above all else and when all time and energy is given to addressing the fundamental requirements of living, life becomes arduous and demoralizing. Tedium by design orchestrated by the ‘Masters of Mankind’ as Adam Smith famously called the rich and powerful, who like nothing more than an exhausted, depressed populace, purged of the necessary energy to revolt, to protest, to demand justice and equality.

 Unjust unrestrained inequality

If you are born into poverty in America, with all the inherent disadvantages, the overwhelming tendency is to remain there. Social mobility is almost unheard of the Economic Mobility Project found and was reported by the Huffington Post that “the United States has lower, not higher, mobility than other wealthy countries… very depressing for those who subscribe to the notion that America is a meritocracy and a "land of opportunity." Economic inequality is a worldwide social poison not just in the US, who lays claim to an often cited, Hollywood fashioned, rarely achieved ‘American dream’ of opportunity and material success. While simultaneously following political and economic and social ideologies, it strengthens inequality and encourage division.

In fact, as "Why Poverty" shows, the 400 richest people in America “control more wealth than the bottom households combined, that’s 150 million people” A staggering shameful statistic in a country overflowing with resources that espouses democratic principles of freedom, equality and justice to all and sundry. A country with 25% of the worlds wealth, according to Noam Chomsky, down from an unprecedented 50% in 1948, while 50 million of its citizens languish in poverty and with a fiscal cliff looming, somehow manages to justify spending $1 trillion on it’s armed forces—more than the military expenditure of the rest of the world combined. To one unfamiliar with the ways of corporate, political life and the complexities of democracy, this sounds like collective, or state madness, does it not?

Since 2009, Bloomberg Feb. 10 report states that “the wealthiest one per-cent, incomes rose 5.5 %.” For the 96 million households in the bottom 80%, which fell an average earning of 1.7 %, “strengthening the acute chasm existing between the wealthy fraction and the rest being the 99%,” as the Occupy Movement termed it. In fact, the greatest concentrations of wealth resides with the “1% of the 1%” as Noam Chomsky said making it clear that ‘The Great Beast’ who must be tamed at all costs, the remaining 99.9%. Economic and social inequality reinforces inherent injustices, which causes deep resentment, anger and despair. And as it has always been true, the single greatest cause of poverty “can be eliminated… what is needed is a significant reduction in the quite obscene levels of inequality that prevail today,”Frances Stewart stated. The rich, as it has been said, must give up what they want so that the poor may have what they need—namely food, a home, access to decent education and health care and the opportunity to live fulfilled, dignified lives.
Money power control, money power money and more money       
In a world where ‘the market’ is believed to be infallible and all knowing, where the golden egg and reason for doing and living, is profit. At all costs, profit, at every aspect of existence in such a socially divisive unjust system, is seen as a commodity and fit to be traded—to be bought at the lowest possible price and sold for the highest amount no matter the human cost and environmental impact. Global climate change, deforestation, water and air pollution and child labor in the Near-East springs readily to mind.

Such a system, World Hunger states, will inevitably “create a significant amount of poverty and a “significant amount of unemployment.” Surely then, the model should be changed, this seems the obvious conclusion to observations that perpetuate inequality and result in such hardship and injustice, as Frances Stewart makes clear is “a result of the way the global economy is organized, inequality is not falling but rising in most countries today.”

Increases in poverty and inequality are of little concern to those pulling the American political and economic strings; the corporate leaders, financial magnates and business tycoons, sitting pretty in the 1% club lounge with all benefits from preferential tax arrangements and access to congressmen, senators, presidents and administration staff. Jeffrey Sachs, Director of the Earth Institute at Columbia University, claims in "Why Poverty" that “there are many bought politicians in Washington.” The present day merchants and traders—the hedge fund managers, brokers, CEO’s of major corporations, such as David and Charles Koch—are bought by the rich. Estimated to be worth $62 billion, they have donated funds to over half the members of the Senate and the House of Representatives and ploughed millions of dollars into 230 university colleges to promote courses, which support their ‘free’ market ideology. A ‘free’ market, in name only, skewed off, which they and their cronies have overwhelming control.

And what do the wealthy expect in exchange for their millions and billions of dollars ‘donated’ to politicians? These are not, after all philanthropic acts from men of social conscience. Access to decision makers is the primary aim in order to exert influence and fashion policy and ensuring the social order is maintained while the economic system remains constructed in such a manner as to benefit them in the fullest possible way. So that the ultra, mega rich and super stinking wealthy become richer and richer. Causing the economic and social inequalities to become wider, the lives of the 99.9% increasingly arduous and painful. More than enough, not enough to satiate the insatiable and so the madness continues unrestrained. Until, and perhaps that day can be sensed in the present fog of greed, uncertainty and injustice; commonsense prevails and principles of goodness begin to govern, in which the needs of all, to live secure, creative, happy lives are met, irrespective of social background or the size of ones bank account.

The 6 Economic Facts of Life in America That Allow the Rich to Run off with Our Wealth

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