Um, Whee? Unemployment at 8.1%

The latest unemployment figures are out for August. They fell a whopping .2% to 8.1%.

I guess it's time to break out the party favors, pour a glass of champagne and celebrate. Happy days are here again! Except for one teeny, tiny little thing: labor force participation is at a new 30-year low. Both the civilian labor force (154.6 million) and the labor force participation rate (63.5 percent) declined in August. The employment-population ratio, at 58.3 percent, was little changed.

The economy saw an increase of 96,000 jobs. Keep this number in mind. Just to keep up with population growth, we need to add around 240,000 jobs per month.

This, gentle reader, is pathetic. It's a direct result of Obamanomics, that curious blend of Soviet-style command and control economics, coupled with far too many regulations and laws that stifle job and wealth creation. In other words, this is the "new normal" we hear so much about. Despite this administration's attempts to cook the books to make these figures appear to be not quite as bad as they look, the results are the worst "recovery" since WWII.

But wait! There's more!

One thing you won't hear on the nightly news from the MSM is that the July figures were revised downward, "unexpectedly."

But job reports for June and July were revised lower. The June count fell from 64,000 to 45,000, while July’s number came in at 141,000 from an originally reported 163,000.
Despite hopes that job creation would be better than expected, the monthly report fell short of economist expectations that 125,000 jobs were added for the month. The government said private payrolls increased by 103,000, about half the 201,000 that ADP reported Thursday.
 

Oh joy.

But take solace that things are proceeding as planned. President Obama said the private sector is "doing fine."

Here's a video to help you understand how Obamanomics works, courtesy of Professor Glen Reynolds...

Economic Illiteracy on Parade - Paul Krugman's NYT's Column

Many days, I wonder just how people rise to the levels they have achieved in life. Today is one of those days. And one of those people is Paul Krugman, the self-admitted Keynesian cheerleader of Obamanomics. He has an article in the New York Times entitled "This Republican Economy." In it, he lamely attempts to place the blame for our economic doldrums squarely at the feet of "the Republican Congress."

How does one speak in such eloquently derisive prose when the premise is false? This incongruity doesn't seem to bother Krugman in the least. The truth that Republicans only control one-half of one house of Congress just doesn't register with Dr. K, but that doesn't dissuade him from building on his absurd claim that Republicans caused this miserable economy.

Here's a taste of, something, I'm not quite sure what it is, but it's certainly not the truth:

So the Republican electoral strategy is, in effect, a gigantic con game: it depends on convincing voters that the bad economy is the result of big-spending policies that President Obama hasn’t followed (in large part because the G.O.P. wouldn’t let him), and that our woes can be cured by pursuing more of the same policies that have already failed.

That's a con, how, exactly, Paul? Obama had a rubber-stamp Congress in his first two years, and he got nearly everything he wanted from that august body: ObamaCare, the Dodd-Frank bill, Cash 4 Clunkers, the Stimulus Package, all of which remains on the government's accounting books to this day. It's no secret that this administration is responsible for a record amount of federal spending that continues to drag on the economy today.

"In large part because the G,O.P. wouldn't let him? If I remember correctly, the Republicans were locked out of any meetings with Dems during that time.

It's also responsible for a record amount of regulation, which I covered yesterday.

Now, let's take a look at this "more of the same policies that have already failed" phrase, shall we?

What caused the housing market crash of 2008, Dr. K? In reference to yesterday's post, Citigroup subtly suggested what we in the real world already knew: it was caused by a specific piece of legislation, namely the Community Redevelopment Act that forced banks to lend money to people who couldn't afford to pay it back. It really is that simple.

This is a classic example of Progressive politics and policy, where instead of making sure the economy is humming along and Americans have the upward economic mobility that characterizes the Promise of the American Dream, meddling politicians decide to short-circuit free market capitalism and force banks to do what is against their best interests for short-term political gain. Politicians can thump their chest and proclaim, "Look what I did for working families!" Never mind what it does to the economy later.

The results were predictable to most except to Paul Krugman and others like him for whom real-world business experience is a mystery.

Paul, go run a business and meet a payroll every week. That's something that would do you some good.

Dr. K continues...

What do I mean by saying that this is already a Republican economy? Look first at total government spending — federal, state and local. Adjusted for population growth and inflation, such spending has recently been falling at a rate not seen since the demobilization that followed the Korean War.

How is that possible? Isn’t Mr. Obama a big spender? Actually, no; there was a brief burst of spending in late 2009 and early 2010 as the stimulus kicked in, but that boost is long behind us. Since then it has been all downhill. Cash-strapped state and local governments have laid off teachers, firefighters and police officers; meanwhile, unemployment benefits have been trailing off even though unemployment remains extremely high.

Dr. K lumps in federal, state, and local spending, which is not how it works. He studiously avoids the fact that states and local municipalities cannot print money as the federal government can, and must balance their books the old-fashioned way by cutting unnecessary expenditures. And he also hits the Progressive Go-To Point that teachers, firefighters and police officers are laid off as a result, instilling just a bit of fear into the discussion of "Why Republicans are Evil Cost Cutters." This ignores the salaries of many officials in local governments, who are paid well above the national private-sector average of $45K per year. Is there no room there for a pay cut for these people? Why are those salaries untouchable, while the rest of us live in daily fear of the "let's talk" talk from their boss?

Here's some more Reality-Avoidance from Paul,

As an aside, I think it’s worth pointing out that although the economy’s performance has been disappointing, to say the least, none of the disasters Republicans predicted have come to pass. Remember all those assertions that budget deficits would lead to soaring interest rates? Well, U.S. borrowing costs have just hit a record low. And remember those dire warnings about inflation and the “debasement” of the dollar? Well, inflation remains low, and the dollar has been stronger than it was in the Bush years.

Um, inflation remains low? Well, according to the Official Obama Numbers, it is. Only that their numbers don't count a couple of things we buy every week like groceries and gasoline, curiously, the two items that have increased in price the most lately. If you figure inflation the old, pre-1988 way, it's running about 11%. That's not low.

Sheesh, are all Keynesian economists this blind to reality? I guess when you're the Official Economic SpokesStooge for this administration, it does require a certain suspension of reality, for the sake of his own mental health.  What you say must make at least some sense to you just to keep from laughing. That's OK when you sit down to read a book, but when you're formulating policies that affect others, you really need to be grounded in Reality. Really.

Or else you wind up looking like Paul Krugman: delusional and out of touch.

Just like this administration. Now that I think about it, he's a perfect fit.

Just not for America.

Economics 103, Courtesy of Amity Shlaes

With the skewing of the economy in favor of an interventionist administration, we're on the brink of forgetting that we once had a free market that was independent of Washington. We once had a free market that was the primary source of income for a majority of Americans, and could be again with the right people in charge.

Naturally, the wrong people seek to make you forget that fact. In their mad quest for ever more power, these people want you to forget all about your old, outdated free market thingy. That's soooo "Twentieth Century", they'll say. Here's a bright shiny new thing called "governmental command and control" that will make sure nobody ever suffers from the natural variations in market forces that we used to plan for. As long as you belong to a union or other "friendly" group, that is. See, you can even have your own automobile manufacturing company!

If you manage to think of yourself as an independent American, you're SOL.

When you're up to your ass in alligators, it's kinda hard to remember that you were originally sent to the store for a loaf of bread. Some things take precedence over others.

That's why I'm glad to allow Amity Shlaes to present today's lesson in economics. Her article in Bloomberg.com entitled "Obama Misreads Message of "Live Free of Die" outlines the tale of two states, New Hampshire and Maine, separated by not by miles, but by light years when it comes to their experiments with government and taxation.

In the face of failed Keynesian economic theory, this short treatise fits right in with the national discussion that we should be having now. After years of a declining economy under a "progressively" controlled Congress, this shouldn't be a long conversation.

After all, there are only a few economic rules that need to be understood. Rule #1 is that the free market is capable of producing all the things that modern life entails all by itself. Free people love to innovate and create new products. It's a way of channeling energy into a productive occupation that also just happens to elevate others in the process. It's a win-win scenario for freedom.

But there are people for whom the freedom of others is anathema. They just can't stand the sight of someone living without their supervision. Necessary to this warped mindset is a large ego. The desire to control others is as old as mankind itself and is the prime mover of discontent and the major cause of strife around the world today. Notice, if you will, that the most self-absorbed among us seek out political office. Now, that there is either a classic Catch-22 or a good Groucho Marx joke: if you want the job, you're automatically disqualified because you'd just misuse your power.

And *waggles a cigar menacingly* we've seen the abuse of power lately.

But again, I digress.

Kindly click on the link above to read a short history of taxation and fiscal growth seen through two very different sets of political eyes. I won't give away the ending, but the results speak for themselves.

Just as it will eventually with the nation.

Oh, and today is election day in many states. Do your civic duty even if it is just a primary.

You'll get warmed up for November.