January 2004 – Shortwoman.com

Two Rants

Rant One, wherein the ShortWoman lambasts Stupid Airliner Tricks

Today we are told that, once again, certain British Airways and Air France flights have been canceled due to security concerns. As you may recall — the CNN article points this out if you do not — similar flights have been canceled in the last five weeks. Indeed, one of the flights in question is the exact same flight number as one of the previously scrutinized flights.

Now then, imagine you have tickets on one of these flights. What do you do? You find another way to get where you need to go. This is true whether you are a businessman, a tourist, or a terrorist. If there is, as U.S. Intelligence claims, a valid threat to these flights, then the answer is improved screening of passengers and cargo on those flights. This appears to have been the case with some other flights. Canceling the flights moves the terrorists to an undisclosed location. Insert Dick Cheney joke here. Indeed, since it would appear that the forces of good are wise to the alleged plot against British Airways Flight #223, a terrorist with any functional brain cells whatsoever would have decided another — almost any other — flight would make an easier target.

According to the Washington Post, the decision to cancel these flights was made by the British and French respectively. United States officials had told them these flights would only be allowed in American airspace if armed marshals were aboard. Europeans have different ideas than Americans about security and firearms in general. Clearly they did not take well to the idea of being told how to run things, told to put men with guns on airplanes. Perhaps they determined that the supposed terrorist threat was less credible than the threat of putting a known gunman aboard, even one with a security clearance.

Speaking of targets, does anyone find it the least bit suspicious that of all the airlines that have Heathrow/Dulles flights, only Air France and British Airways are publicly known to be the subject of such concerns?

If you are planning international travel, you might want to have a couple of alternate arrangements in the back of your mind.

Rant Two, in which Employment Data is once more manipulated

Yesterday, I heard the audio clip of President Bush saying “People are finding work.” Today, Reuters is following up on that claim, and Treasury Secretary John Snow’s assertion that the job creation numbers must simply be wrong.

Today’s theory is that both job creation and employment numbers are undercounted because of the self-employed. In short, the employment numbers look worse than they really are because of all the Amway distributors, people selling furniture they make in the garage, people who “make up to $1000 per week in your spare time on your computer,” and one-person businesses doing everything from home repair to tax preparation. Oh yeah, the numbers are also skewed by all those people who are contractors, a subset of the self-employed whose clients — or all too often, singular client — may be flouting IRS rules in an attempt to avoid paying benefits and to sidestep certain other liabilities. Make no mistake, this is a group of people who may or may not be making a living wage, are unlikely to have health insurance, are unlikely to have anything in the way of retirement savings, are unlikely to ever create jobs and hire employees. A substantial number of self-employed people are a lingering cold away from economic ruin.

This excellent Slate article is perhaps the most comprehensive and best written item I have read recently on employment/unemployment statistics and reality. Here’s a little bit from the middle:

The payroll survey is less likely to capture the self-employed, newly formed businesses, or domestic employees. So it could be that the millions of Americans who have been laid off are busy starting companies, or working full-time as self-employed consultants. All of this entrepreneurial energy would show up in the Household Survey and be good news for the economy.

Alternatively, the millions of Americans who are self-employed could simply be frustrated in their efforts to find full-time, salary-and-benefits-paying work at established companies. In other words… they’re self-employed because they’re unemployed. That would be bad news for the economy, and it probably wouldn’t show up in the Household Survey.

I count myself in the camp that thinks a substantial number of the “self-employed” are that way because it’s better than nothing.

“I’ll gladly pay you in 2007 for a Hamburger Today”

The Congressional Budget Office now predicts record budget deficits. In fact, they are predicting that budget deficits will double the National Debt within 10 years… and they are using very modest assumptions to predict it. This story is big enough to be international news. Not everyone understands why this is a big deal (or even what this is) so let me explain.

Who is this Congressional Budget Office anyway? The CBO is a non-partisan office that provides Congress with financial and economic information they need to put together the Federal Budget each year. For what it’s worth, they are currently hiring for several positions.

How is the National Debt different from the National Budget Deficit? They both mean the Federal Government owes money, right? The budget deficit is just the money the Government will spend that it doesn’t have in one year. The National Debt is the cumulative money owed by the Government for all the years it has spent more than it has taken in, minus what it has paid off, but plus interest. All told, it’s a lot of money.

Alright, who do we owe this money to? The National Debt is owed to the people who hold United States Savings Bonds and Treasury Bills. These instruments are considered very safe because, after all, they are backed by the full faith and credit of the United States of America. Impugn the safety of these investments at risk of being labeled some kind of communist. Even if you don’t have any of these bonds yourself, some of the interest you earn from your bank or brokerage account is probably derived from such bonds.

Let me rephrase that, who owns the bonds? A large hunk of the debt is actually owned by none other than the Federal Government. That doesn’t mean it doesn’t exist, and it doesn’t mean you could slash the debt by invalidating bonds held by the Government. Agencies such as the Social Security Trust buy bonds because they know the day is coming when expenses will outstrip revenues. The next biggest holders are, in order, Japan, China, and the United Kingdom. In 1999, it was estimated that 55% of bonds were held by “private investors” including individuals, fund managers, and corporations.

Why is this such a big deal? I hear the political candidates talk about it, but how does the National Debt affect me? There are lots of ways the National Debt might affect you. Money the Government pays on the National Debt is money that can’t be used to pay for highways, schools, law enforcement, courts, and other important things in your community. Money that banks use to buy United States bonds is money they can’t lend you to buy cars and houses, and that means you will have a harder time getting a loan and you will have to pay more in interest. Money that banks use to buy bonds is also money they can’t lend companies to build new factories and create new jobs for you and your community. This is part of how the economy was able to create so many jobs during the Clinton Administration when there was a budget surplus and the National Debt was going down. Money the Government uses to pay the debt and the interest on the debt must ultimately be paid with taxes you pay. So far, your personal share is over $23,000. It’s a lot of money.

Who says we have to pay it off? Can’t we just keep making bonds? Heck, why not print money to pay off the debt? There is a ceiling on the amount of debt the nation is allowed to have, although Congress can vote to raise it. Besides which, just like your own credit rating, the national credit rating will suffer if we owe “too much.” And when a person or nation has a lousy credit rating, they have to pay higher interest rates (meaning it will cost even more to pay off the debt). Printing money is not a solution because it causes inflation (meaning it will cost even more for you to make ends meet). If that wasn’t reason enough, the standard prescription for inflation is for Agent Greenspan at the Federal Reserve to raise interest rates.

What can we do about this? Start by doing the normal democracy things, like voting and writing your elected officials. This thing is destined to become a political minefield. There’s nothing stopping you from campaigning for a candidate you feel will encourage more fiscal responsibility. In fact, if you meet the requirements, you can run for office yourself. Even if you lose, you will get your opinions out there in a big way.

One last thing. You said this CBO report used “very modest assumptions.” What do you mean? Could this be worse? Yes, there are several key assumptions that even the authors of this report know are unrealistic: that the tax cuts will be allowed to expire under current law with no new tax cuts; that there will not be another recession; and that there will be no large spending initiatives. Oh yeah, and the report does not forecast far enough out to reflect what happens when the Baby Boomers start to retire and collect Social Security.

And there you have the critical things you need to know about the budget deficit and the National Debt. Finally, as primary season is now in full swing, you might want to take a look at this little comparison of the Democratic candidates ideas on health insurance. It’s an interesting read.

Shakeup in Ed’s Department

It seems like school and the children who attend them have gotten a lot of attention lately. Everybody agrees that schools are not as good as they could be. Nobody agrees what to do about it.

Schools in this nation took a long time to get where they are now. They will take some years of diligent retooling to become world class. The educational fad of the month club will not suffice, nor will feel-good strategies with no supporting research. This does not mean we should give up on today’s high school students, but rather recognize that today’s incremental improvements will be most visible when today’s kindergarteners are in high school. We will not know for several years whether current reforms work. Some evidence already suggests that Leave No Child Behind is not as effective as it should be.

Schools will improve, and improve dramatically, but not until we as a nation declare that the number one priority of our schools from grade school to grad school is to educate children. That sounds stupidly simple until you understand that if education is the first priority, then athletics and other extracurriculars and even University level research can at best be second.

Some will argue correctly that it is difficult if not impossible to educate children who are worried about where thier next meal is coming from, or whether one parent is getting drunk/high today yet, or getting home without encountering bullies/gangs/drug dealers. As one young woman interviewed on a Detroit news program said, “It’s hard to concentrate on your papers when part of the ceiling is falling on them.” So of course there must be adequate investment in such areas as facilities, referrals to social services, nutritious school lunches, and age appropriate discipline. However, this does not mean turning schools into million dollar nannyvilles.

Studies have shown that although throwing money at schools improves them, beyond a certain point costs outstrip benefits. Some people have suggested that money mismanagement is rampant in some school districts, and thus more money is very likely to mean more waste if not more outright fraud. Waste and fraud do not educate children.

If we have high school students who cannot read a newspaper or an instruction manual, who cannot do enough math to balance a checkbook or figure out how much X they will need for project Y, who do not understand the Bill of Rights or how we elect Presidents and pass laws, then we cannot give that student a diploma. If they have been getting good grades and still do not know basic stuff every high school graduate should be expected to know, that is the fault of the teacher who gave good grades rather than face reality (and possibly angry parents). Students, Parents, Communities, and Employers all have a vested interest in the High School Diploma representing a basic proficiency in these and several other areas.

All this being said, allow me to offer a few ideas on real Educational Reform. First, recognize that testing is an important way to find out where kids are and what if anything they have learned. However, tests do not teach kids anything. All standardized student testing — state, federal, and everything else throughout the year — should take up no more than one school week. Such tests should keep in mind age/grade appropriate standards and skills. Thus, teaching to the test should be replaced with teaching to and exceeding the standards. “Improvement” is not a sufficient goal: this goal assumes that there are no good schools, that every school is by nature deficient. There needs to be a clear, attainable minimum standard, and the understanding that some schools will exceed them. That’s okay. Excellence is good.

Second, all teachers and school administrators should be encouraged to look at each activity and expense and ask “How does this educate children?” Everything, from the morning announcements on the loudspeaker on up to the last extracurricular at the end of the day should be open to scrutiny. Be honest about actual costs in time and money. Entire programs might be labeled “non-educational” and cut, leaving more money for things that do work. In a related vein, consider whether the costs are worth the benefits. Such analysis may well lead some schools to eschew “free” government money because it simply costs too much. Yeah, that may mean that such schools don’t get “their fair share” of tax dollars, paid from within their district. Encourage parents to vote.

Finally, what if I told you there was one simple thing we could do, particularly in our high schools, that would raise comprehension and achievement levels within a year? There would furthermore probably be incremental improvements for about 5 years before leveling off. Test scores would improve not because of coaching or teaching to the test, but rather because the kids would know and understand more. And what if I were to tell you that this same change would have other beneficial effects? This same change has the potential to reduce crime both by and against teenagers, reduce gang activity and drug/alcohol use, reduce truancy rates, and reduce teen pregnancy.

What is this educational miracle, and why aren’t we doing it already? It is the idea of starting High School no earlier than 8:30 or 9:00 AM, and letting classes run until at least 3:00 PM. Researchers agree that teenager’s brains just flatly aren’t fully awake before then. It should be obvious that kids who are not awake cannot perform as well academically. And you have falsely been told that classes must start by 7:30 and be out by 1:30 because of money. The official reason teenagers are let out of school so early is so they can take care of younger siblings they don’t have, and take part time jobs which are increasingly being taken by grown-ups trying to make ends meet, and to facilitate the school bus schedule which can be changed. The real reason is so student athletes have more time on the playing field before dark. That’s right, the performance of every student has been compromised so the jocks don’t have to use light bulbs.

Honestly, I would have thought academics for everyone were more important than sports practice for a chosen elite.

Raspberry Tort

Last night, the President made his State of the Union speech before both houses of Congress. Among the ideas he put forth were increased money for school drug testing (a pricey logistical nightmare even before considering civil liberties issues), greater Federal student aid for those who take tougher courses (great idea, except for that exacerbating the gap between suburban and inner-city schools which have no advanced programs), and a Federal ban on the use of performance enhancing drugs by professional athletes (never mind that as a part-owner of a baseball team, Mr. Bush knows full well all the leagues have rules which do not require Federal intervention). I will leave it to others to point out the logical and practical issues of these and other issues mentioned by the esteemed Mr. Bush.

I would like to focus your attention on these passages if I may:

Our agenda for jobs and growth must help small business owners and employees with relief from needless federal regulation, and protect them from junk and frivolous lawsuits….

To protect the doctor-patient relationship, and keep good doctors doing good work, we must eliminate wasteful and frivolous medical lawsuits…. By keeping costs under control, expanding access, and helping more Americans afford coverage, we will preserve the system of private medicine that makes America’s health care the best in the world.

It must seem odd that out of all the things said last night, I am focusing on 3 sentences. To be sure, there were intervening paragraphs, but make no mistake: these ideas are one and the same. Do you remember back in the early 90s, when “Health Care Reform” was discussed? Before the conversation went on too long, it was clear that the participants meant “health care insurance reform.” By the mid-90s, they meant little more than “HMO reform.” Another discussion is being fatally limited, as illustrated by the above 3 sentences.

Somehow, politicians and doctors both have gotten it into their heads that “tort reform” and “caps on non-economic damages” are the same thing. They are not. Tort reform is more than damage caps. It is both cynical and disingenuous to propose that a limit on the amount of money a doctor or business can lose in a court case will improve anything for the typical American. How can this be so? Let me count the ways.

1. Such a cap will not, contrary to AMA opinion, bring down liability insurance rates. When the AMA says that caps are “proven” tort reform, they are referring to California’s MICRA statute, which was enacted as part of a more comprehensive plan than a mere cap. Other states where they have enacted liability caps are still facing premium increases of 8-45%. Now, you don’t really think your doctor can afford to not raise prices when one of his largest non-employee expenses is out of control?

Insurance rates are more dependent on the investments of insurance companies than the claims they must pay. With interest rates this low, insurance companies have to raise rates. This is doubly true for publicly held insurance companies who must continually impress Wall Street. If you want lower insurance rates — not just liability, but home, life, health, and even auto insurance — re-mutualize insurance companies and hope Mr. Greenspan has to raise rates sooner rather than later.

2. Damage caps severely limit the rights of average Americans. Anybody can file a lawsuit, and that is truly a double edged sword. As one person put it, “Lawsuits by small people who’ve been injured by big companies is the one thing out there still protecting the little guy.”

Not only will damage caps harm the very people who have been most egregiously hurt through the negligence of others, they limit the ability of such people to obtain legal counsel. As long as lawyers can look forward to a percentage of the final take, there will of course be abuses. That problem is solved by looking at the way lawyers are paid, which is unlikely to happen inasmuch as most legislators are lawyers. Want to cut down truly frivolous lawsuits? Give every judge the authority to declare lawsuits frivolous and compel the plaintiff (or his attorney) to pick up everybody’s legal bill.

3. The much lambasted “mega-verdict” that damage caps seek to eliminate is a tool that juries need, and a tool that businesses need to fear. You don’t honestly think juries return such opinions because they just believe the victim deserves to be a millionaire, do you? They return such verdicts as a punishment to the defendant and a message to the defendant’s competitors: treat people this way and you will be crushed.

Fear of a large verdict actually helps the court system by encouraging out-of-court settlements. Interestingly enough, the poster child for tort reform is asbestos liability. Now, there is no debate that asbestiosis is really bad, but the business world feels that the lawsuits — now against the deepest available pockets — are out of hand. It is of course pure coincidence that Halliburton stands to gain from any tort reform that addresses asbestos.

4. Damage caps would be a boon for large corporations, but would still allow small businesses to be put out of business by lawsuits. Take, for example, the famous McDonalds Coffee Case. A $250,000 million damage cap is little more than a rounding error to a company the size of McDonalds, but it would put almost any corner diner you have ever eaten in out of business. Do you really want to send the message to America’s largest corporations, our largest polluters, our most abusive employers that they can do whatever they want, as long as they pay the $250,000 fine at the end of the trial?

I agree that we must take the Lotto mentality out of our civil courts, but damage caps are not the answer. Instead, make a large percentage of the non-economic damages payable directly to the jurisdiction of the court. The offender gets punished; the windfall is less motivating; and the city or state gets money they badly need. I can’t think of anything not to like about this plan.

Mr. Bush presents you, the voter and taxpayer, with a false “either-or”: either we enact damage caps or costs of everything will spiral out of control. Tort reform isn’t about keeping your family doctor delivering babies. It is about big business covering their assets.

The Right to Remain Silent: It’s a Good Thing

Today, jury selection begins for the trial of domestic deity Martha Stewart. If you haven’t followed the case at all, this timeline provides a minimally adequate summary. If you have been living in Amish country or the Unabomber’s shack, and don’t know who Ms. Stewart is, this short biography says that she is a retired model, retired stockbroker, former caterer, newspaper columnist, author, and all-around expert on all things domestic. As many people love her as love to hate her in this role.

The short version of the saga is this: about 2 years ago, Ms. Stewart was very fortunate to sell almost a quarter million dollars of stock in a biotech company the day before the FDA announced their drug would not be approved. The stock of this company needless to say was down sharply on the news. The immediate question was lucky, or had “insider information.” Being a former stockbroker, she very well knew that insider trading is something that could get you in big trouble. Indeed, the former CEO of that biotech company is in jail for trading on insider information about his company. But Ms. Stewart is not being charged with insider trading; she is charged with “lying to investigators, obstructing justice and securities fraud.”

The real issue is what she said to investigators and to the public. Specifically, she told shareholders in her own company that she had done nothing wrong. Loud statements about how she did nothing wrong are now the ammunition against her in court. In the expert words of Eric Dezenhall, “The way to keep out of jail is to shut your mouth; the way to rescue your brand is to talk. She’s trying to do two things at the same time, and there’s no way you can do both brilliantly.”

You would think some lawyer would have recommended she say nothing more than how she was looking forward to defending herself against “such ludicrous charges.” But the moral of the story — regardless of this media circus at taxpayer expense — is that the Fifth Amendment is good for you, and there is a reason the Miranda warning begins with “You have the right to remain silent.”

Don’t forget, tonight President Bush makes the State of the Union address. Before then, you might want to do some light reading. Try some of these interesting items.

Just a Friendly Reminder

I have spoken often in the last few weeks about the official employment numbers. Today, an authority no less impressive than the President of the United States of America (not these guys, this guy). Today’s official weekly Presidential address, widely seen as a preview to the State of the Union Address, includes this quote:

“Our economy grew at its fastest pace in two decades in the third quarter of 2003. Manufacturers are seeing a rebound in new orders in factory activity. And more than a quarter-million new jobs have been created since August.”

Gosh, a quarter million jobs sounds impressive. But divide that out over September, October, November, and December, and that’s 62,500 jobs per month. Economists say we need 100,000 jobs created each month just to keep up with people entering the workforce, and 200,000 new jobs each month to actually reduce the unemployment rate (please see link in “Lies, Statistics, and Economic Forcasting,” below). In short, Mr. Bush’s number is not impressive, but he is counting on you not doing the math to figure it out. He hopes nobody will start to loudly ask “If there are all these jobs being created, why can’t I find work?”

The more damning question is “If the economy is growing so fast, how come more jobs aren’t being created? If an 8% rise in GDP isn’t enough to create so much as 100,000 new jobs per month, what is it going to take?”

And about those jobs Mr. Bush keeps talking about — the ones Americans don’t want so lets give them to illegal aliens — back in the old days, long about 1998 or 1999, employers who could not find willing workers did things like raise the pay and improve the benefits. Do you remember when Alan Greenspan was worried about “wage inflation”?

Some people are beginning to think that the administration is going to be relying more and more on true-but-not-the-whole-story numbers as the months until the election wear on. I have long preferred to think of the discrepancy as an honest difference of opinion regarding what the numbers really mean. My patience in this regards is wearing thin.

Finally, my deepest sympathies go to the families of the 500 American soldiers who have died in Iraq since last March. You can find out more about them here or here.

Bad Idea? Bank on it!

I hate to sound like Cassandra, but I think it would be a bad idea for the regulatory Powers That Be to allow the recently announced merger of J.P. Morgan and Bank One.

In the plus column, this merger creates America’s second largest financial institution, behind Citigroup (which you may or may not recall was the result of merging Citibank and Travellers, an insurance concern, in a merger only made possible by Phil Gramm ramming through legislation to make it legal). The combined entity will have 90 Million credit cards out there. They would also have about 2300 branches across the nation, combined, serving most areas of the country. The combined company expects to save several billion dollars over the next few years. But the benefits boil down to “bigger is better.” Oh, and lets not forget all the fees the investment bankers will earn on this and the cascade of mergers it is likely to start.

Now the minus column. The combined company will have to figure out how to consolidate 111 mutual funds undoubtedly with overlapping holdings and goals, and wildly divergent fee schedules. They will also have to get two very different management teams to work together — never an easy task. In the end, about 10,000 people will lose their jobs in the consolidation. The local economy in Chicago and New York City may well be adversely effected.

That is to say nothing of the impact on the customers: ordinary people like you and me who have credit cards, bank accounts, and brokerage accounts at Bank One, J.P. Morgan, and the companies they own. We can expect new credit card user agreements, and we cannot expect them to contain more favorable terms. We can also expect higher fees and interest rates, because competition is reduced. The end consumer will probably not benefit at all. Don’t try to bluff by saying how convenient it will be that you can go to “your” bank anywhere in the country. Bank laws vary enough from state to state that if you relocate, you will still be better off shopping for a new bank, unless you like dealing with a 5 day out-of-state check hold on your paycheck.

And frankly, everything I have said depends on things going well and working out as planned. It does not allow for what might happen when your credit card, bank, mortgage, and brokerage information end up in one place. It does not consider what might happen to the J.P. Morgan/Chase/Bank One mortgage portfolio should it turn out there really is a “housing bubble.” It assumes there is no creative accounting at either firm — and do not presume to say that banks are heavily regulated, not only because banks have been known to fail too, but also because energy and telecommunications are heavily regulated too.

Yet somehow you can bet this will be approved. And it won’t turn out as marvelously as everyone expected. Let’s hope it isn’t as bad as it could be.

Colorized for Your Protection

Those of you who have been reading the ShortWoman for a while know what I think of the TSA, airline security, and the War on Terror.

Today we learn that the Government is still wanting to implement their traffic-light inspired traveler coding system. Remember, this system will only designate people for more security, not less. Furthermore, they estimate that as much as 2% of all fliers may be prevented from flying altogether — perhaps 5 or 10 people on each and every 747. Some analysts predict that this will mean the end of online ticket sales.

Airlines are not pleased about this. Their official concerns mirror those of the EFF, and involve issues like privacy, how the information will be used by the Government, and what happens after they are done with the data. Truth be told, they are probably also wary of the cost of the system, both in terms of implementation and lost travel revenues. In fact, they are proposing a “trusted traveler” system, where people can voluntarily submit a bunch of information to the government and get a “not a terrorist” card. It won’t work. Everyone still has to go through the metal detector, and all the luggage needs to be inspected. Besides, can anybody guarantee that William Krar or someone like him could not have gotten such a card? What about Tim McVeigh? Last week’s unknown hijacker, who foolishly tried to get a commuter jet to take him to Australia? How about the soldier who tried to take a land mine on an airplane last week?

I have said it many times: there will never be a “get out of the security line free” card.

The current flagging of travelers for additional scrutiny and the associated “Do Not Fly” list are already problematic. Two new cases illustrate my point. Even more recent than the Air France flight that was in an uproar because of passengers mistaken for international terrorists. The first involves a 6 year old girl who was placed on the CAPPS watchlist, singled out for additional screening, apparently because her mother had an expired drivers license. It remains to be seen whether this is a one time thing, or whether she will have to endure absurd scrutiny every time she flies for as long as the War on Terror takes — which is to say forever.

The second case involves the use of the Do Not Fly list to control members of certain political groups. That shouldn’t happen in the United States. We are not talking about groups like Hamas, or the IRA, or anybody else on the State Department’s official list of terrorist organizations, a list that reads like the Coliseum scene of Monty Python’s Life of Brian. We are talking about a political party that managed to drag down about 3% of the votes in the 2000 Presidential Elections.

Alas, this is not the only place where I feel the authorities have gone wildly overboard in the name of public safety.

New Years Eve was less than 2 weeks ago. I wasn’t the only one who decided to stay in. I was only mildly concerned about actual terrorist activity. After all, security was incredibly tight. In fact, in my mind that was part of the problem. Locally, there was almost a million dollars spent on New Years Eve security measures. That included things like military helicopters, rooftop snipers, and radiation sensors.

What would have happened if somebody made a mistake?

No really, the authorities mistook a 6 year old for a terrorist. Sometimes law enforcement officials and military officers make mistakes; mostly honest, sometimes nefarious. What if one of the snipers had a bad day, or a twitchy finger, or just thought he saw Osama with an almanac? What if one of the military craft decided that a passenger plane into McCarran Airport — practically walking distance from the Strip — had deviated from course too much for the gunner’s taste? What if somebody turned on a microwave too close to the radiation sensors?

I don’t care to live in a police state. I prefer to live someplace where the Bill of Rights is respected.

Lies, Statistics, and Economic Forcasting

I know I briefly mentioned this point earlier in the week, but the matter has gotten worse.

There is seriously bad news on the employment front. First, we had the unemployment report, released yesterday. Because this link only contains the current information, allow me to post the important bits for the benefits of those who might read this in the future. For the week ended January 3, 2004, seasonally adjusted initial claims — the widely reported number — were up 14,000 to 353,000. However, there were actually 546,823 new unemployment claims that week, up 30,431. Now, I don’t know about you, but I think it’s more important to know that there were over half a million people who applied for unemployment checks for the first time, 3,724,660 total claims, and 765,570 making claims under a Federal program for the relatively long term unemployed last week than to harp on “seasonality.”

Now, please scroll down with me to this chart, as taken directly from the DOL link above:

States with an Increase of More than 1,000

AL	+1,043	Layoffs in the textile and electrical equipment industries.
MN	+1,167	Layoffs in the manufacturing industry.
RI	+1,170	Layoffs in the trade and service industries.
VT	+1,630	Layoffs in the manufacturing industry.
IL	+1,919	Layoffs in the construction, service, and manufacturing industries.
ID	+2,351	No comment.
KS	+3,240	Layoffs in the trade, service, real estate, and manufacturing industries.
AR	+3,379	No comment.
CA	+3,781	Layoffs in the motion picture industry.
OH	+3,906	Layoffs in the construction industry.
IN	+3,935	Layoffs in the manufacturing industry.
IA	+3,937	No comment.
WA	+3,958	No comment.
OR	+5,245	No comment.
NJ	+5,930	Layoffs in the transportation, warehousing, food, public administration, and manufacturing industries.
MA	+7,043	No comment.
PA	+13,179	Layoffs in the food, textile, primary and fabricated metals, industrial machinery, transportation, and manufacturing industries.
WI	+16,375	Layoffs in the construction, trade, service, transportation, communications, and public utilities industries, and agriculture.
MI	+20,583	Layoffs in the automobile and transportation equipment industries.

That’s right, the increase in people laid off in Michigan alone was more than the seasonally adjusted rise in first time claims. First time unemployment claims in Michigan rose by a number just short of the entire undergraduate student population at the University of Michigan Ann Arbor campus. The increase in new claims in Wisconsin alone exceeded the seasonally adjusted rise in first time claims, and the Pennsylvania numbers were only slightly better.

There is the first part of the answer to the great economic question: How come the economy looks great on paper, but seems so lousy to me and everybody I know? The stuff on paper is a lie.

But wait, there’s more. It seems that the economy created about 1,000 jobs last month. That falls short of economists’ expectations of 140,000. That is an error of over 99%; an error most of us who still actually have jobs would get fired over. Yes, gaining a thousand jobs is better than losing them — although in a nation of 292 million people, a thousand jobs is a rounding error. But still, a thousand jobs created falls well short of the 100,000 needed just to keep up with additions to the labor force and 200,000 needed to really reduce unemployment.

Hold on, you say, unemployment did drop, from 5.9% to 5.7%. Yes, yes it did. That’s because about 430,000 unemployed people gave up even looking for work. They are now termed “discouraged workers” as opposed to merely “unemployed.”

If enough people get “discouraged,” we’ll have full employment.

Maybe there will be jobs on the Moon.

Now Hiring: Illegal Aliens

Today, President Bush announced an initiative to help illegal alliens get jobs here in the United States. This was announced with rhetoric of “There is an economic need, and it is important that we have an immigration policy that meets those economic needs,” and “So many illegal immigrants are in the country, we need to find a way to resolve that problem in a compassionate and productive way,” and how this proposal would “match willing workers with willing employees.” Or, briefly summarized, “they are here, they are cheap, we may as well make them legal.”

Meanwhile, a research and analysis group released a report concluding that there were 1,236,426 job-cut announcements in 2003. Please remember that these figures do not include all the unannounced job cuts at all the small businesses that do not put out press releases. This same report concluded that there might not be substantial job growth in this country until 2008. It would seem that announced job cuts for 2004 are already off to a roaring start.

Now, please consider last week’s unemployment data as released by the Department of Labor. The data in that url will be replaced with more current figures as time goes by, so please let me point out the relevant numbers for the week ended December 27, 2003. The widely reported number for first time unemployment claims was 339,000. However, this was a seasonally adjusted number.* There were actually 516,501 who followed through on the unpleasant task of walking into the unemployment office and filing a first time claim. Even this figure does not include those who lost part time jobs, professionals who feel small check is not worth the time it takes to fill out the paperwork, and students who might have finished a college degree (and the associated student work placement) in December.

This same Department of Labor is currently trying to finalize rules that would effectively eliminate overtime pay. That’s right, they want to cut the income of our hardest working families, and curtail the creation of new jobs while they are at it: your Lumberghian boss will not hire a new person full time and give them benefits when he can simply make all his existing employees work harder. Your Senator needs to hear from you now.

So let me make sure I understand this correctly. We are in a “jobless recovery,” the Department of Labor is pursuing “reforms” that will thwart job growth, well over a million people were put out of work in “announced layoffs” alone last year, half a million people applied for unemployment benefits in the last week of December, and President Bush wants to normalize the status of illegal aliens working in this country?

That makes less sense than Britney Spears’s ephemeral marriage.

*Much thanks to Seeing the Forest for pointing this out.