Another positive jobs statistic

In a further sign that the economy is improving, the Department of Labor today reported that first-time Unemployment Insurance claims reached a four-year low on a seasonally-adjusted basis.

An estimated 339,000 initial claims were filed during the week that ended October 6--the lowest seasonally-adjusted figure since February 16, 2008, shortly after the start of the recession.

Weekly unemployment claims estimates bounce around a lot, are subject to revision, and can be hard to seasonally adjust. Still, the low figure is consistent with other positive estimates about the job situation.

Romney etch-a-sketch: "no tax cut that adds to the deficit"

You might recall former Massachusetts Governor Mitt Romney making this solemn pledge during last Wednesday's debate.

My number-one principle is, there will be no tax cut that adds to the deficit. I want to underline that: no tax cut that adds to the deficit.

Well, barely a week has gone by, and Gov. Romney has summarily dispatched his "number-one principle" (underlined no less) down the memory hole.

Gov. Romney had pledged to reform taxes by lowering tax rates, which reduces revenues, but also by "broadening the base," which raises revenues. Specifically, his tax plan calls for lowering marginal rates on individuals and corporations; eliminating taxes on interest, dividends, and capital gains for households with incomes below $200,000; eliminating the tax on multi-million dollar inheritances, and eliminating the Alternative Minimum Tax. At the same time, he also said during the debate that he would "lower deductions and credits and exemptions, so that we keep taking in the same money."

Lower taxes for some; higher taxes for others. The net effect on the Treasury would be a wash.

Now, in a new ad, Gov. Romney is singing a different tune, saying "I'm not going to raise taxes on anyone."


Simple math tells you that if you lower taxes for some people but don't raise anyone else's taxes, total revenues have to go down.

Tax cuts for some with no tax increases for anyone are a net tax cut, which directly contradicts Gov. Romney's "number-one principle."

That is, it contracts his "principle," until Gov. Romney changes his tune again.

U.S. awash in debt? Hardly

In last Wednesday's debate, former Massachusetts Gov. Mitt Romney railed against the level of U.S. debt.

I think it's, frankly, not moral for my generation to keep spending massively more than we take in, knowing those burdens are going to be passed on to the next generation and they're going to be paying the interest and the principal all their lives.

And the amount of debt we're adding, at a trillion a year, is simply not moral.

He went on to propose a "test" for cutting programs, including Obamacare (which actually saves money but nevermind) and the subsidy for PBS.

Is the program so critical it's worth borrowing money from China to pay for it? And if not, I'll get rid of it.

Well, under Gov. Romney's criteria, Big Bird and Obamacare should be safe.

An analysis by Bloomberg shows that total U.S. indebtedness, as a share of the economy, has declined sharply since the start of President Obama's administration.

U.S. debt has shrunk to a six-year low relative to the size of the economy as homeowners, cities and companies cut borrowing, undermining rating companies’ downgrading of the nation’s credit rating.

Total indebtedness including that of federal and state governments and consumers has fallen to 3.29 times gross domestic product, the least since 2006, from a peak of 3.59 four years ago, according to data compiled by Bloomberg. Private- sector borrowing is down by $4 trillion to $40.2 trillion.

While it's true that federal government borrowing has increased over the Obama presidency, state, local, and private borrowing have fallen much, much more.

As a practical matter, the next generation seems much more likely to be concerned about its total amount of debt service and not the entity--bank, Wall Street investor, or Chinese sovereign wealth fund--to which that debt is owed. A dollar taken out the next generation's pocket to service federal debts is the same as a dollar taken out to service school bond debts, housing debts, college borrowing, road construction, etc. A dollar of debt is a dollar of debt.

By the yardstick of what the next generation will owe, the Obama administration has been far more moral than the profligate Bush administration, which not only increased the total amount of indebtedness but did so in the context of a calamitous bubble that brought the economy to its knees (i.e., reduced our ability to pay).

And in terms of Gov. Romney's China syndrome, Americans are in a far better position to pay off their own debts and less reliant on the Chinese than they were four years ago.

Indeed, no less an authority than Fox News reported in September, "China has actually decreased its holdings of U.S. debt over the past year, dropping from $1.31 trillion in June 2011 to $1.16 trillion a year later."

You would think that someone with Gov. Romney's business experience would know how to add things. Maybe he should ask Big Bird.

Gov. Romney joins the "unemployment truthers"

Former Mass. Governor, Mitt Romney, has cast his lot with the tin-foil-hat Republican crowd that sees a conspiracy in the positive jobs figures that were released on Friday.

Speaking at a rally in Florida, Gov. Romney said, "If we calculated, by the way, our unemployment rate in a way that was consistent with the way it was calculated when he came into office, it would be a different number."

Gov. Romney's allegation that the Bureau of Labor Statistics (BLS) has altered the definition of unemployment is ludicrous. As a key economic adviser to President George W. Bush said, "The numbers are put together by trained professionals and in a process that keeps politicians from interfering...Any sort of suggestion to the contrary is wrong."

The allegation is also insulting, as it questions the integrity of the career staff at the BLS.

The allegation's absurdity notwithstanding, it is the sort of wild, baseless smear that Gov. Romney has made repeatedly. Gov. Romney's detachment from the truth seems grow greater by the day.

Besides being wrong, Gov. Romney's stance is hypocritical. He had no criticisms of the statistic when he cited the unemployment rate over and over in stump speeches and in Wednesday's debate ("We've had 43 straight months with unemployment above 8 percent")."Straight months" does seem to imply a certain consistency to the statistic. Now that he can't use the 8-percent line, the statistic is called into question--not the underlying economic message.

As Greg Sargent has written, unemployment trutherism ultimately hurts the Romney campaign. The campaign's argument is built around an underperforming economy--any good economic news is bad news for the Romney candidacy. By harping on the figures, Gov. Romney and the truthers simply keep Friday's strong economic report in the news cycle and show the panic that has set in.

More from the House Science? Committee

Apparently, it takes a special kind of crazy to earn a Republican seat on the House Science Committee.

Previously, we were treated to Rep. Todd Akin's (R-MO and indefatigable Senate candidate) ruminations on women's magical abilities to ward off pregnancy when "legitimately" raped--"The female body has ways to try and shut that whole thing down."

Now we hear from Rep. Paul Broun (R-GA and a doctor no less), who sees the hand of Satan in the theory of evolution. TPM reports Rep. Broun sermonizing

All that stuff I was taught about evolution and embryology and Big Bang theory, all that is lies straight from the pit of hell. And it's lies to try to keep me and all the folks who are taught that from understanding that they need a savior.

You see, there are a lot of scientific data that I’ve found out as a scientist that actually show that this is really a young Earth. I don’t believe that the Earth’s but about 9,000 years old. I believe it was created in six days as we know them. That’s what the Bible says.

Another colleague, Rep. Sandy Allen (R-FL), also discounts evolution in favor of "biblical terms of how we came about," while another, Rep. Dana Rohrabacker (R-CA) has mused about "clearing the rainforests in order for some countries to eliminate that production of greenhouse gases."

It's hard to imagine a stronger refutation of the notion of intelligent design than these four.

September jobs report unequivocally good

The headline news from the September jobs report is that the national unemployment rate fell to 7.8 percent on a seasonally-adjusted basis, the lowest that it's been since January 2009.

Unlike some previous months in which unemployment fell because of people leaving the labor force, this month's figure was the result of a huge increase in the number of people who reported that they were working. The figure was also accompanied by a strong increase in the number of people in the labor force. Another unambiguous sign of labor market improvement is the the percentage of people who are working is the highest that it has been in two years.

Estimates from the employer survey indicate that 114,000 non-farm jobs were added on a seasonally-adjusted basis last month. Taken by itself, that would be a so-so figure, but the report also revised employment growth from July and August upwards by an additional 86,000 jobs. The Department of Labor also reported last week that the year's employment figures will likely by revised upward by another 300,000 to 400,000 jobs beyond that.

Yes, out-of-work millionaires should collect unemployment benefits

Bloomberg reports on a Congressional Research Service (CRS) study about millionaires who collected unemployment insurance (UI) benefits in 2009.

Almost 2,400 people who received unemployment insurance in 2009 lived in households with annual incomes of $1 million or more, according to the Congressional Research Service.

The report was released after about 1.1 million people exhausted their jobless benefits during the second quarter of 2012, when more than 4.6 million filed initial unemployment claims. Eliminating those payments to high earners is one idea being considered as U.S. lawmakers struggle to curb a projected $1.1 trillion deficit for the fiscal year that ended Sept. 30, with the nationwide jobless rate at 8.1 percent.

“Sending millionaires unemployment checks is a case study in out-of-control spending,” U.S. Senator Tom Coburn, an Oklahoma Republican, said in an e-mail. “Providing welfare to the wealthy undermines the program for those who need it most while burdening future generations with senseless debt.”

The Bloomberg article and CRS report note that approximately $20 million could be saved in federal contributions to UI over the next decade if benefits to millionaires were blocked from receiving UI benefits.

$20 million in savings sounds great, but that wouldn't be the bottom impact on the federal budget. In order to recoup that money, the federal or state governments would have to check income sources of UI recipients. That checking would cost money--quite possibly more money than goes out in UI benefits.

The CRS believes that the least costly approach would be to collect the payments through the income tax system. A 100 percent tax could be placed on UI benefits for households with incomes above one million dollars. Although cost-effective, this approach is far from costless. Tax forms would become more complicated making them harder to complete and harder to check.

Any other system to prevent millionaires from getting benefits is likely to be far more costly and less effective. The state agencies that administer the UI system only have access to some income information. Besides having to conduct additional checks against the available information, the agencies would have to make guesses about whether a household's total income worked out to one million dollars. The checks would be especially difficult for married couple households and for households that receive unearned income. Any such system would also likely impose additional reporting burdens on the broader set of unemployed households.

In the end, a policy of trying to keep benefits from going to a handful of millionaire households is likely to cost the treasury more than it saves. If the goal really is to reduce the burden on future generations, we should keep sending out those checks.

BLS adds 386,000 jobs to the economy

The economy may be doing better than we initially thought.

This morning, the Bureau of Labor Statistics (BLS) released its preliminary revision of the March 2012 jobs tally. The BLS expects that when the revised estimates are released next year, the figures will show that the U.S. had 386,000 more jobs in March 2012 than were initially reported.

Revisions to the jobs figures are necessary because the initial estimates are based on a survey with some sampling noise and with an imperfect sampling frame. Some months after the initial estimates are made, the BLS is able to compare and benchmark them to nearly complete data gathered from payroll tax records. Estimates throughout the year are then readjusted to this benchmark.

When the economy was declining in 2008 and 2009, the BLS initially under-estimated the job losses by 902,000 positions, and we didn't find out how truly awful the employment situation was until a year or so after the actual decline. When the Obama administration famously forecast that its stimulus package would hold unemployment to 8 percent, no one realized that the U.S. was actually nearly a million jobs further in the hole. Everyone knew things were bad--we just didn't know that things were that bad.

Now that the economy is improving, the BLS appears to have under-estimated job gains by roughly a third of a million.

Why does the BLS keep missing the mark? Part of the reason has to do with the entry and exit of businesses during economic swings. Each month the BLS chooses businesses to survey to get its employment numbers. The sampled businesses are selected from a roster of businesses that provided payroll tax records in a recent quarter. Businesses that were created since the last set of payroll tax records were processed aren't on that roster and can't be part of the frame. Similarly, the BLS misses some of the businesses that stopped operating. The BLS makes statistical adjustments for these issues, but these adjustments are based on historical trends, not the sort of huge swings that we saw during the recession and are now seeing during the recovery. The recent pattern has been for the BLS initially to undercount losses during declines and to undercount gains during upswings.

The revision for 2009 was unusually large--a change of 0.7 percent in the employment figures. The current revision, which works out to 0.3 percent, is right at the edge of the historical 0.1 to 0.3 percent average.

In February when the final numbers are released, we will probably discover that the net number of jobs in the U.S. increased over the course of President Obama's first term. For time being, however, the official estimates indicate that there are fewer jobs in the U.S. than there were in January 2009.

Carrying wood pellets to Newcastle?

Well, Selby actually.

Bloomberg reports on an astounding and historic energy development--the U.K.'s largest coal-fired power plant (and largest carbon producers) will shortly be refitted to burn biomass and theoretically be carbon neutral.

The change is astounding and historic because of its location in Northern England, not far from the rich coal fields that fed the U.K.'s (and initially the world's) industrial revolution.

If "King Coal" is threatened by renewable energy projects near its original throne, it's threatened everywhere.

Coal's loss may be the environment's gain. The refitted biomass units will emit significantly less carbon than the existing coal units. Also, the biomass is renewable. Biomass releases carbon when it is burned but takes an equivalent amount of carbon in as it is regrown.

However, the potential benefits come with a giant asterisk, involving a huge and uncertain now versus later proposition. The carbon is released almost instantaneously and takes years to recapture. Also, the units will require an enormous amount of biomass--about 7.5 million tons or 3 million acres of trees each year, according to the article.

Some of the biomass can be supplied through waste materials from other lumbering operations, but much more would still be required.

These requirements might mean an valuable jobs and export opportunity for commercial foresters in North Carolina and throughout North America.

Class warfare -- Romney style

What does former Massachusetts Governor Mitt Romney really think of Americans?

Mother Jones has some damning video of him speaking to supporters when he thought he was unrecorded. The worst of it is a nasty piece of class crass warfare.

There are 47 percent of the people who will vote for the president no matter what. All right, there are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it. That that's an entitlement. And the government should give it to them. And they will vote for this president no matter what…These are people who pay no income tax. 

When he's through belittling the incompetents who support the President, he turns his fire on the half-witted independents that he needs to win over.

We speak with voters across the country about their perceptions. Those people I told you—the 5 to 6 or 7 percent that we have to bring onto our side—they all voted for Barack Obama four years ago. So, and by the way, when you say to them, "Do you think Barack Obama is a failure?" they overwhelmingly say no. They like him. But when you say, "Are you disappointed that his policies haven't worked?" they say yes. And because they voted for him, they don't want to be told that they were wrong, that he's a bad guy, that he did bad things, that he's corrupt. Those people that we have to get, they want to believe they did the right thing, but he just wasn't up to the task. They love the phrase that he's "over his head." But if we're—but we, but you see, you and I, we spend our day with Republicans. We spend our days with people who agree with us. And these people are people who voted for him and don't agree with us. And so the things that animate us are not the things that animate them. And the best success I have at speaking with those people is saying, you know, the president has been a disappointment. He told you he'd keep unemployment below 8 percent. Hasn't been below eight percent since. Fifty percent of kids coming out of school can't get a job. Fifty percent. Fifty percent of the kids in high school in our 50 largest cities won't graduate from high school. What're they gonna do? These are the kinds of things that I can say to that audience that they nod their head and say, "Yeah, I think you're right."

Finally, Gov. Romney offers another way that he could appeal to voters. With respect to his father's background, he says, "Had he been born of Mexican parents, I'd have a better shot of winning this."

We should all take some satisfaction in Gov. Romney shedding his soulless, robot image. Too bad, though, that he's adopted a soulless jerk persona instead.

Weak jobs report

The Bureau of Labor Statistics reported this morning that the U.S. added a piddling 96,000 non-farm payroll jobs on a seasonally-adjusted basis in August. The seasonally-adjusted unemployment rate slipped down from 8.3 to 8.1 percent, but the decline was entirely an artifact of U.S. adults leaving the labor force. Compounding the disappointment, job growth numbers from June and July were also revised downwards. Average hourly and weekly earnings for those who were employed also fell.

A line from the second page of the report tells you most of what you need to know. "Since the beginning of this year, employment growth has averaged 139,000 per month, compared with an average monthly gain of
153,000 in 2011." The U.S. needs to add about 150,000 jobs per month to keep up with the growth of the adult population.

Last year we were treading water; this year we are slowly sinking.

Reprehensible comments by DNC delegate

Earlier this week, Julia Rodriquez, a DNC delegate from New York, told a reporter at the Democratic convention in Charlotte that if she saw Gov. Mitt Romney, "she would like to kill him."

Her reprehensible comments have (appropriately) drawn the attention of the Secret Service.

The comments were beyond the pale and have no place in the country's political discourse. It's not clear what steps the DNC can take to censure Ms. Rodriquez, but she has no place in the Democratic party.

Are you as well off as 4 years ago? The S&P 500 thinks so

U.S. stock markets opened much higher this morning. Bloomberg reports

The Standard & Poor’s 500 Index (SPX) climbed above the highest closing level since 2008 as the European Central Bank announced specifics of its bond-buying plan and data boosted optimism in the labor market.

You would think that this would carry some weight with the "pro-business" Republican party.

It would be nice to be reporting lots of additional positive economic news, but today's stock market post sure beats the one from nearly four years ago.

Smart growth and the police state

The Washington Post has a fascinating article this morning about how development planning advice from police experts can lead to safer neighborhoods and attractions.

The concept of police working with developers is not unique to Washington, but experts say Lanier’s department is ahead of many of its peers. While some offer a stock list of design recommendations, D.C. police make specific suggestions about safety measures as blueprints are being drawn, well before the first buckets of concrete are poured.

Hmm, planning to increase safety and reduce the need for expensive security measures later. Sounds like smart growth.

No mention though of Agenda 21 or blue helmets.

Thurston and Lovey are at it again

ABC News has two stories today that show how insensitive Gov. and Mrs. Romney (Thurston and Lovey) are to people's concerns.

The day started with the Romney campaign off-shoring a party for top donors by holding it on a foreign-registered yacht.

Gov. Mitt Romney's campaign toasted its top donors Wednesday aboard a 150-foot yacht flying the flag of the Cayman Islands.

The floating party, hosted by a Florida developer on his yacht "Cracker Bay," was one of a dozen exclusive events meant to nurture those who have raised more than $1 million for Romney's bid.

"I think it's ironic they do this aboard a yacht that doesn't even pay its taxes," said a woman who lives aboard a much smaller boat moored at the St. Petersburg Municipal Marina. 

Later, keenly identifying the big obstacle to Hispanic economic and social progress, Mrs. Romney told Hispanics that they need to "get past some of their biases." Really.

Among her other condescending remarks, Mrs. Romney praised the Puerto Rican Governor and First Lady, saying what they "are doing on that little island is quite remarkable" and "I had the most rocking time in Puerto Rico at a political rally than I’ve ever had in my entire life...You people really know how to party."

Sticking with the diminutives, she also offered that her trip to Puerto Rico let her "peak into a culture and a vibrancy and energy, a passion that I saw from that little island that really what represents the best in America."

Outrage over Gov. Romney's birther joke

The Obama campaign is beside itself with indignation that Gov. Romney dared to make a joke today about birth certificates, harrumphing

...Governor Romney’s decision to directly enlist himself in the birther movement should give pause to any rational voter across America.

Pause, indeed. Gov. Romney's comments are beyond the pale. The President's U.S. nationality has been firmly established, and jokes about the President's origins have no place--no place whatsoever--in our political discourse.

As it turns out, the joke was captured on video, so everyone can see how mean-spirited and divisive it was.



Oops, I meant this mean-spirited and divisive joke.



Harrumph!

4-year-old struck by bullet in Raleigh

The News-Observer reports on another innocent victim of gun violence.

A 4-year-old child was hit by a bullet fired outside his house in East Raleigh last night, according to police.

The boy was shot on Melvid Court, off Peyton Street near Poe Elementary School, around 11:30 p.m., police said. The bullet was intended to hit someone else, police said, and no arrests have been made.

The NRA and other gun apologists are sure to appear shortly to explain how this wouldn't have happened if the 4-year-old had been "packing."

Republicans' phony, bogus, and artificial outrage

The list of Republicans pompously bellowing for Missouri Rep. Todd Akin to withdraw from his state's U.S. senate race keeps growing and growing, with NC Senator Richard Burr joining the list.

You can tell that these Republicans are really, really serious because they don't just use one adjective to condemn Rep. Akins remarks, but three!

Sen. Brown: "I found Todd Akin’s comments about women and rape outrageous, inappropriate, and wrong."

Gov. Romney: "Congressman’s Akin comments on rape are insulting, inexcusable, and, frankly, wrong."

Sen. Cornyn: "Congressman Akin's statements were wrong, offensive, and indefensible."

Sen. Burr: "Congressman Akin’s comments about rape were outrageous, offensive, and, simply put, wrong."

In the weird math of Republican politics, three adjectives appear to equal one category-5 shit-storm.

The Republicans seem to be saying that Rep. Akin, by his remarks, is unfit, unsuited, and ill-equipped for public office (hey, I can read a thesaurus too).

However, if they are actually concerned with Rep. Akin's fitness to serve, why aren't any of them calling on him to immediately resign his House seat?

BTW, double bonus points for phony outrage go to Sen. Claire McCaskill for her complaint that national Republicans were trying to "dictate" to Missouri's primary voters.

Read more here: http://projects.newsobserver.com/under_the_dome/burr_calls_for_akin_to_exit_race#storylink=cpy

Another disarming gun story

Another story to file in the "guns make us safer" drawer. The News-Observer reports

A gun dealer shot himself in the hand just before a gun show in northern Charlotte Sunday morning.

Police haven’t released the name of the man, but said he was a dealer at the Dixie Gun & Knife Classic, which was held this weekend at the Metrolina Expo on Statesville Road.

“He was taking the gun out to display it and pulled the trigger and it went off,” said Charlotte-Mecklenburg Police Capt. William Boger.

I'm sure the unnamed gun dealer is just as competent in running background checks and completing ATF paperwork.

Did Rep. Ryan use inside information to dump bank stocks? The answer is no

Matthew Yglesias cites the Richmonder blog's accusation about Rep. Ryan's inside trading during the early days of the financial crisis.

From the Richmonder

Ryan attended a closed meeting with congressional leaders, Bush's Treasury Secretary Henry Paulson, and Federal Reserve Chairman Ben Bernanke on September 18, 2008. The purpose of the meeting was to disclose the coming economic meltdown and beg Congress to pass legislation to help collapsing banks.

Instead of doing anything to help, Ryan left the meeting and on that very same day Paul Ryan sold shares of stock he owned in several troubled banks and reinvested the proceeds in Goldman Sachs, a bank that the meeting had disclosed was not in trouble. 

As Yglesias writes, "it's about as clear an example of a public official trying to use his office to obtain personal benefits as you're likely to find."

The Business Insider investigates further. Although the transactions are reported to have occurred on the same day as the Paulson/Bernanke meeting, they may have happened just prior to the meeting.The Business Insider was also not able to obtain confirmation of who attended the meeting.

Given the miraculous timing of the transactions, it seems the Rep. Ryan has some 'splaining to do.

Update (5:16): Yglesias has walked back his story, saying the Richmonder doesn't "have the goods" to make its case. He cites Brad DeLong's analysis of all of Rep. Ryan's trades in 2008 which include numerous other instances of trading bank stocks.

Also, Rep. Ryan's office has offered an explanation that indicates that the timing was a coincidence.