Category Archives: Economics

Miscellaneous economy stuff

Some Labor Day Questions

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First published in 2012, I’ve updated it for today.  In an ideal world, I’ll be able to update it again next year, with a still more optimistic tone.

The Wall Street Journal asked some questions on Labor Day 2012, and supplied some answers.  Here are some of those questions and answers, which remain as valid this Labor Day.

  • Q: How are America’s workers doing? Not good. Over the past decade, over the ups and downs of the economy, taking inflation into account, the compensation of the typical worker — wages and benefits—basically haven’t risen at all. … The Labor Department recently said that 6.1 million workers in 2009-2011 have lost jobs that they’d had for at least three years. Of those, 45% hadn’t found work as of January 2012. … Federal Reserve Chairman Ben Bernanke said Friday that unemployment is still two percentage points higher than normal….
  • Q: Things ARE getting better, though. The US economy is creating jobs, right? Back in December 2007 when the recession began, there were about two jobless workers for every job opening.  When the economy touched bottom in mid-2009, there were more than six unemployed for every job.  At last count, the BLS says there were 3.4 jobless for every opening.
  • Q: How much of this elevated unemployment is because the unemployed just don’t have the skills that employers are looking for right now?  …the bulk of the evidence is a lot of the unemployment really is the old-fashioned kind: the kind that would go away if the economy was growing at a stronger pace. Mr. Bernanke said as much at the [2012] Jackson Hole conference….

Today, the jobs situation is drastically improved.  The overall unemployment rate is at an historic low, and there are more job openings than there are folks to fill them.  The black unemployment rate is at a record low.  The Hispanic unemployment rate is at a near record low.  The women unemployment rate is at a near record low.  Wages, both real and nominal, are growing.

Happy Labor Day.

In Which the City of New York Might Get One Right

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The city’s Department of Social Services, through a subordinate agency, is proposing a rule that would require those homeless residing free of charge in a city facility to save against a future in which they live in their own home.

The rule would mandate that residents deposit 30% of their earned income into a savings account that the city’s Department of Social Services would manage. Shelters residents would have access to the funds when they move into permanent housing.
“Our goal is to assist New Yorkers with saving in order to more effectively help them plan for the future and get back on their feet,” said a spokesman for the Department of Homeless Services….

It’s possible to quibble over who it is that will manage those saving accounts, but the principle is eminently sound.  Beneficiaries of government welfare should earn their “benefits” and learn to stand on their own.

Of course, this is of a piece with requiring other welfare recipients to get a job, get training for a job, or provide a measure of community service, though, so expect the Left to raise a hue and cry over the unfairness of this proposal, too.

Oh, wait….

Councilman Steven T Levin, a Democrat who chairs of the council’s Committee on General Welfare, questioned the efficacy of the rule.
“It’s really looking at the wrong issue,” he said. “The idea of people having a savings account, that’s not one of the things that needs to happen in order to end the homelessness crisis in New York City.”

He added:

What’s really needed is for us to be very aggressive on our subsidized-housing options upon leaving shelter[.]

He wants more “rental assistance vouchers,” more subsidies—more entrapping handouts, instead of liberating help to escape from welfare.  He does natter on about helping residents consolidate or reduce their existing debts, which would be useful also, but he presents these as alternatives; he doesn’t want them done in addition to the savings accounts.

That’s Not Your Money

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Echoing Progressive-Democratic Party Presidential candidate and New York Mayor Bill de Blasio’s claim that there’s plenty of money, it’s just in the wrong hands, more Progressive-Democrat Presidential candidates are moving toward taxing the mere existence of that money.

For the richest Americans, Democrats want to shift toward taxing their wealth….

After all,

At the end of 2017, US households had $3.8 trillion in unrealized gains in stocks and investment funds, plus more in real estate, private businesses, and artwork[.]

Gimme that money, say the Progressive-Democrats. You didn’t earn that. And besides, whether you did or not is irrelevant. We have better uses because just shut up.

Senator Ron Wyden (D, OR) has given the game away.

The whole tax system is stacked in favor of the tax-avoidance crowd[.]

Because it’s government’s money, not private money.  Never mind that were tax rates not so usuriously high, no one would have to work hard to pay the minimum the law requires (honest efforts that guys like Wyden, in wide-eyed innocence, call “tax avoidance”).

Aside: the article opens with this:

The income tax is the Swiss Army Knife of the US tax system, an all-purpose policy tool for raising revenue, rewarding and punishing activities, and redistributing money between rich and poor.

Which is what I’ve been saying, along with many others, all along. Our tax code is for social engineering not so much for raising revenue for Constitutional purposes.  And that’s a fatal flaw.

Second aside: Progressive-Democrats ignore how much more taxes the Evil Rich pay than the rest of us, as illustrated by this graph from the same article. It’s never going to be enough because you’re still talking—shut up, I said.

There’s BDS

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…and there’s BDS.  As Antonia Tamplin wondered in her Letter to the Editor of The Wall Street Journal,

Regarding Jillian Kay Melchior’s “Dissent Against Beijing Is Becoming a Firing Offense” (op-ed, 19 Aug): Where is the international BDS (Boycott, Divestment and Sanctions) movement against China?

What she said.

Student Loans and Scams

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Folks are growing concerned about the magnitude of, and problems associated with, the massive student loan situation, and the some are even calling it a scam.

Defaults have fallen for most forms of consumer debt as the economic expansion continues. Mortgage delinquencies last quarter hit a historic low. But severely delinquent student loans have soared since 2012 and are now 35% of “severe derogatories”—more than credit cards (23%), auto loans (21%), and mortgages (11%).

This “scam” is laid at the feet of the CBO during the Obama administration.  It’s certainly true that the CBO misread the situation, perhaps even negligently so.

Here’s the short and sweet of it, though.

The student loan overhang is a serious problem.  However, the real scam is that of so many Progressive-Democratic Party Presidential candidates who want to forgive all those loans—transferring the loan problem directly onto the backs of taxpayers, instead of leaving it where it belongs: the responsibility of the students and parents who borrowed so foolishly and of the lenders who so foolishly loaned.