January 2012

60 Minutes Reports Enormous Real Unemployment

by Lee Doren on October 25, 2010

in Economy

After months of hearing that we are in a “jobless recovery,” 60 Minutes decided to report what everyone has been saying for quite some time: The real unemployment numbers are even worse than most people think. When one counts people who have had their hours cut to part-time work, or those who have given up looking for a job, real unemployment is at 17 percent (22 percent in California). See the video below.

What is astonishing about this is that the stimulus was supposed to have kept unemployment below 8%. I think it missed the mark.

Afternoon Links: October 25, 2010

by Nicole Ciandella on October 25, 2010

in Zeitgeist

1. An Australian couple returning home from their honeymoon were asked by Australian border officials if they were carrying any illicit pornography. When the couple admitted that they had taken nude photos of themselves during their honeymoon, officials demanded to see the photos.

2. Dan Mitchell: “Can we trade Obama for Castro?”

3. The mayor of a seaside Italian town wants to ban short skirts, high heels, and football games in public parks.

4. A 12-year-old boy won $3,000 for finding a Mozilla Firefox security flaw.

5. Why might a bad economy be good for female politicians?

William Lind’s Absurd “Conservative Case” for More Transit [Waste]

by Marc Scribner on October 25, 2010

in Mobility

Over at enviro-blog Grist, conservative William Lind is interviewed on the subject of transit. Lind is an anomaly of sorts in the center-right transportation camp in that he backs many of the transit programs championed by leftists. Of course, just like the lefty backers, he gets virtually everything wrong in his diagnosis of what ails the American transportation system.

Lind, who wrote a recent book on the subject with the late Paul Weyrich (both of whom previously authored another error-laden book on the “conservative” case for transit), is a social conservative and has allowed his time spent working on defense issues to color his views about nearly everything. In particular, he regurgitates the myth that petroleum imports pose a serious national security threat:

The fundamental reason conservatives should support public transportation is because traditionally we’ve been strong on national security. The country’s single greatest national security vulnerability is our dependence on imported oil. For at least half of the American population, that dependence is complete; that is to say only half of the population has any public transit available at all. The first conservative virtue, as Russell Kirk argued, is prudence. It strikes us as wildly imprudent to make our mobility hostage to events in unstable parts of the world.

Of course, Lind fails to mention that the Department of Defense is the largest American consumer of fossil fuels. If you take as given his faulty assumption that oil imports fuel violent, anti-American extremists abroad, he should stick to criticizing America’s current interventionist foreign policy.

Next, he throws out some misleading statistics on government revenue and funding of different modes of transportation:

The latest Federal Highway Administration statistics show that user fees, including the gas tax, only cover 58 percent of the direct costs of highways. That’s not even looking at the vast indirect costs. And many rail — not bus, but rail — public transit systems are able to cover 50 percent and more of their expenses out of the fare box. Of course they’re all built with government money, mostly federal, more federal in the highways than transit. Highways get 80 percent federal; normally transit only gets 50 percent.

This is an argument based upon a lie by omission. What Lind fails to mention is that only 80 percent of “highway user fees” go back to actually benefiting those who pay the fees — drivers. The vast majority of the remaining revenue is siphoned off and allocated to wasteful transit systems. Another Lind omission is that the vast majority of Americans place a premium on driving, meaning that there are significant benefits (in terms of more satisfied preferences) from driving that cannot be captured by a simple fiscal accounting analysis. He does, however, identify a problem: too much federal control over America’s highway system. But his cure of more transit is far worse than the disease, and does not propose transferring federal control to the states.

And to get his somewhat rosy-looking transit figures, he lumps in rail and bus transit. Lind vastly prefers rail transit, but the difference between these modes is like night and day. Bus rapid transit (BRT), if properly designed, actually makes sense. But rail transit, outside of a few dense cities, virtually never makes sense. This is due to the facts that BRT is far cheaper and better addresses road congestion — by far the most serious transportation problem in America — while rail transit is more expensive and does not address congestion in any meaningful way. Lind’s main argument against more BRT — and I am not making this up — is that “[t]he population on board will be largely minority; conservatives usually are white or Asian. They’re not going to be comfortable surrounded by blacks and Hispanics.” (Emphasis added.) Seriously? This is the “conservative case” for more wasteful rail transit: too many non-whites ride buses?

He then goes on to repeat the bogus claim that rail transit tends to boost the value of abutting or nearby private property (again, this is the exception, not the rule). But for Lind, the efficiency of the transportation system is secondary. Socially engineering society to fit his unhinged, narrow world view comes first.

Mysteries of the Liberal Mind: Inmate Voting Good, Soldiers Voting Bad

by Hans Bader on October 25, 2010

in International, Legal, Politics as Usual, Sanctimony, Zeitgeist

Liberal judges insist that it’s racist to keep prison inmates from voting, because inmates are disproportionately members of minority groups.  See the dissents of liberal judges Calebresi, Sotomayor, and Katzmann in this appeals court ruling upholding New York’s law prohibiting prison inmates from voting (Hayden v. Pataki).

But some liberals are not very enthusiastic about soldiers voting.  As noted earlier, Illinois officials missed the deadline to mail ballots to U.S. troops overseas, but they hand-delivered ballots to inmates in liberal Cook County, Illinois, and the Obama administration is failing to enforce federal laws that require states to mail ballots to overseas troops in a timely fashion.

Sadly, to a few liberal commenters, the soldiers who protect America are just “right-wing neanderthals” who lack the “intellectual” capacity to “vote intelligently” and fail to appreciate the need for “social change.”

The irony is that soldiers are a bit more likely to be black than the general population (see this graph for the percentages of army recruits by state), so failing to protect the votes of soldiers also has a “racially disparate impact.”  If liberals really care about such “discrimination” — as they claim in arguing that prison inmates should be allowed to vote — why aren’t they defending the voting rights of soldiers, rather than turning a blind eye to violations of their voting rights?

Presumably, the answer is that soldiers aren’t liberal enough for them — the way inmates are perceived as being.

Unemployment Jumps Under Obama, Pelosi, and Reid

by Hans Bader on October 25, 2010 · 1 comment

in Deregulate to Stimulate, Economy, Employment, Stimulus to Nowhere

Unemployment averaged about 5.2 percent under both Clinton and Bush, but rose to an average of 9.43 percent under Obama (the current rate is at least 9.6 percent, and may rise to over 10 percent next year).  See this graph.  The unemployment rate began rising in 2007, after House Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Harry Reid (D-Nev.) took charge of Congress (their control of Congress led to massive increases in federal spending).  It rose further after passage of the $800 billion stimulus package under Obama.  48 out of 50 states have lost jobs since passage of the stimulus package.  The Obama administration mistakenly said the stimulus would keep unemployment under 8 percent.

As noted earlier, the stimulus package contained wasteful “green jobs” funding, 79 percent of which went to foreign firms, effectively sending American jobs overseas.  A recent biofuel program actually wiped out jobs rather than creating them as intended, while costing taxpayers a lot of money.  New EPA rules are expected to wipe out at least 800,000 jobs, and the EPA is considering new ozone rules that could wipe out 7.3 million jobs. The stimulus package contained provisions that wiped out thousands of jobs in America’s export sector.  New laws backed by Obama, and Obama Administration regulations governing employers, have discouraged employers from hiring new employees.

Government Unions Buying More Power

by Vincent Vernuccio on October 25, 2010

in Labor

Yesterday The Washington Examiner showed how public sector unions are buying their power though campaign donations. In their excellent editorial “Public employee unions versus working Americans,” the Examiner contrasts the grassroots movement of the Tea Party with the big money interests of government employee unions. It also shows the hypocrisy of President Obama going after (with false allegations) so called shadowy, unnamed “foreign interests,” while much of the money on the left comes from unions fighting for larger and more expensive government at taxpayers’ expense.

With the 2010 midterm congressional election campaign entering its final week, the fundamental divide in American politics has rarely been defined with more raw clarity than it is now.

On the one side are voters representing a vibrant private sector that creates jobs, builds prosperity and throbs with opportunity. Here are found the Tea Party movement, most congressional Republicans and a few of their Democratic colleagues, millions of independent voters, Main Street and small-business associations, and, increasingly, seniors. The other side is led by government employee unions who take from the private sector to further enrich and empower themselves and their political allies, including President Obama, House Speaker Nancy Pelosi, Senate Majority Leader Harry Reid, and the Democratic majority that has controlled both chambers in Congress since 2007. The unions’ supporting cast includes radical Big Green environmentalists, trial lawyers, most precincts of the mainstream media, and college professors.

Obama and company have been on a demagogic spree in recent weeks, attacking the U.S. Chamber of Commerce and a host of shadowy, unnamed “foreign interests” for allegedly pumping millions of anonymous dollars into U.S. politics to buy the election. The charge is demonstrably false, but that doesn’t prevent its endless repetition. On Friday, however, we learned courtesy of the Wall Street Journal that the biggest political spending in 2010 is by the American Federation of State, County and Municipal Employees. AFSCME will have funneled an estimated $87.5 million into the campaign by Nov. 2, all of it going to Democrats and an amount far exceeding the chamber’s $75 million. More millions are being poured into Democratic campaign coffers by other public-sector unions. On Friday, for example, the National Education Association spent $500,000 on ads aimed at helping Democratic Rep. Joe Sestak defeat former Rep. Pat Toomey, the Republican in the Pennsylvania Senate contest.

But there is a fundamental problem here that FDR understood years ago and that AFSCME President Gerald McEntee inadvertently highlighted when he told the Journal: “We’re spending big. And we’re damn happy it’s big. And our members are damn happy it’s big — it’s their money.” Actually, it’s not simply “their money.” Every dollar paid to a unionized government worker was taxed away from somebody who earned it in the private sector. So when these unions spend millions to elect Democrats who will vote for bigger government, they are literally using money from the productive part of America to enable more government taxing and spending. FDR might well have had this inconvenient fact in mind when he wrote in 1937 that “meticulous attention should be paid to the special relationships and obligations of public servants to the public itself and to the Government … the process of collective bargaining, as usually understood, cannot be transplanted into the public service.”

The interests of government employee unions are inextricably opposed to the public interest. It’s time campaign finance law recognized this truth.

Morning Media Summary

by Lee Doren on October 25, 2010

in Economy, Energy, Environment, International, Regulation, Trade

Tech:

Bees’ tiny brains beat computers, study finds:
“Bees can solve complex mathematical problems which keep computers busy for days, research has shown.”

Google finally admits that its Street View cars DID take emails and passwords from computers:
“Google was accused of spying on households yesterday after it admitted secretly copying passwords and private emails from home computers.”

Google ‘mortified’ that Street View cars scarfed up email, passwords; privacy criticism intensifies:
“It turns out Google’s Street View cars found out more about Internet users than previously acknowledged. Last Friday, the company said the cars, which roam the world taking pictures for its location-based applications, scarfed up e-mail addresses, URLs and passwords from residential Wi-Fi networks they passed by in dozens of countries.”

Facebook ‘accidentally outing gay users’ to outside firms through targeted ads:
“Researchers have discovered that different targeted advertising is being sent to users’ accounts if they have described themselves as gay or straight.

Firefox extension makes social network ID spoofing trivial:
“”When it comes to user privacy, SSL is the elephant in the room,” said Eric Butler, the developer of the extension in question, dubbed Firesheep. By installing and running it, anyone can “sniff out” the unencrypted HTTP sessions currently allowing users on that network segment to access social networks, online services and other website requiring a login, and simply hijack them and impersonate the user.”

Amazon to allow book lending on Kindle:
“One of the oldest customs of book lovers and libraries — lending out favorite titles to friends and patrons — is finally getting recognized in the electronic age, at least in one electronic book reader: Amazon has announced that it plans to allow users of its Kindle book reader to “lend” electronic books to other Kindle users, based on the publisher’s discretion.”

The worlds smallest full HD display eats the Retina display for breakfast:
“Ortustech a joint venture between Casio and Toppan printing has developed the world’s smallest full HD display at 4.8 inches. The panel sports a resolution of 1,920 × 1,080 dots which is achieved by the company’s HAST (Hyper Amorphous Silicon TFT) microfabrication technology. To achieve the high resolution in such a small size the company has managed to squeeze in 458 pixel per inch, the iPhone 4s infamous Retina display packs in 326 pixels. The display sports a viewing angle of 160 degrees and supports 16 million colors. Its applications include HDTV equipment screen monitors and eventually cell phones and video games.”

Global Warming / Environment / Energy:

Israel as Fossil-Fuel Giant: How Many Ways Could this Change the Game?:
“A preliminary geological survey has indicated that there might be about 26 million barrels of recoverable oil a mile under the sand near two kibbutzim in the northern Negev. That would amount to about $2 billion at current prices. There might be 12 million additional barrels further down.”

Massive stretches of weathered oil spotted in Gulf of Mexico:
“Just three days after the U.S. Coast Guard admiral in charge of the BP oil spill cleanup declared little recoverable surface oil remained in the Gulf of Mexico, Louisiana fishers Friday found miles-long strings of weathered oil floating toward fragile marshes on the Mississippi River delta.”

After the Spill:
“The six-month anniversary of the BP oil spill passed quietly last week. The well has been capped, and commerce in the Gulf of Mexico is slowly reviving. Much important work still lies ahead — figuring out how much oil is still out there, cleaning it up, measuring the damage to marine life, compensating victims. And Congress needs to pass an oil-spill bill that will reduce the chances of another drilling debacle.”

Insurance / Gambling:

Mid-Term Elections Looming; Online Gamblers Brace For the Worst:
“The mid-term elections are just over a week away, and that is not good news for the online gambling industry. It is expected that the Republican Party will take control of the House of Representatives in the election, making it unlikely that new regulations are near.”

Health / Safety:


How to Avoid BPA Exposure from Cash Register Receipts (I has come to this):
“It seems there’s no escaping Bisphenol-A (BPA). Another study, published in Green Chemistry Letters and Reviews earlier this summer, and an Environmental Working Group (EWG) research report have shown that measurable levels of BPA are still being found on thermal paper receipts used for cash registers and credit card/debit machines.”

Economics:

Paul Krugman: Falling Into the Chasm:
“The real story of this election, then, is that of an economic policy that failed to deliver. Why? Because it was greatly inadequate to the task.”

Will someone please shut Krugman up:
“Surveys show that only about 20 per cent of Americans are Krugmanesque type liberals. Some 40 per cent count themselves as conservatives and the rest, the disenfranchised middle, reckon on being moderates. Yet as others have observed, if you asked the right questions the great bulk of Americans would say they are both liberal and conservative – socially liberal, that is, but fiscally conservative.”
Key Tax Breaks at Risk as Panel Looks at Cuts:
“Sacrosanct tax breaks, including deductions on mortgage interest, remain on the table just weeks before the deficit commission issues recommendations on policies to pare back with the aim of balancing the budget by 2015.”

Obama likely to focus on deficit in next 2 years:
“Preparing for political life after a bruising election, President Barack Obama will put greater emphasis on fiscal discipline, a nod to a nation sick of spending and to a Congress poised to become more Republican, conservative and determined to stop him.”

McConnell: I’m up for defunding NPR:
“Not that anyone should find this surprising, at least to hear Mitch McConnell tell the story. He has voted consistently to remove federal funding from the Corporation for Public Broadcasting, and won’t have any trouble doing it again:”
60 Minutes Shock Report: Real Unemployment Rate %17.5; California 22%:
“In a sobering report on CBS’ “60 Minutes”, the unemployment picture is shown to be much bleaker than the federal statistics suggest.”
The Great Bailout Backlash:
“Nothing in this election season, no program or party or politician, is less popular than the Troubled Asset Relief Program of 2008 — a k a the Wall Street bailout. No policy has fewer public figures willing to defend it, and fewer Americans who believe it worked. No issue has done more to stoke the fires of populist backlash, and the rage against elites.”

Legal:

Body scanners unveiled at JFK Airport; Homeland Security Sect. Janet Napolitano doesn’t volunteer:
“Airline passengers might want to consider a trip to the gym before heading to the airport now that high-tech body scanners have been unveiled at Kennedy Airport.”

Drug Testing Poses Quandary for Employers:
“The news, delivered in a phone call, left Sue Bates aghast: she was losing her job of 22 years after testing positive for a legally prescribed drug.”

Labor:

‘Teachers Unions Gone Wild’ [Video]:

Transportation/ Land Use:

High-Speed rail tangled in Florida governor’s race:
“Republican Rick Scott has accused Democrat Alex Sink of backing $12.5 billion worth of political promises in the governor’s race.”

New CEI Podcast — October 25, 2010: Regulating Every Room

by Ryan Young on October 25, 2010

in Deregulate to Stimulate, Energy, Regulation

On this episode of the CEI Podcast, “Regulating Every Room,” CEI’s Senior Fellow in Environmental Policy Ben Lieberman explains how new energy regulations affect every room in your house. These new regulations will hit consumers throughout their homes, from the basement to the bathroom to the kitchen and beyond.

Porn Stars Get Behind Personal Choice by Opposing Condom Mandates

by Michelle Minton on October 25, 2010

in Nanny State, Personal Liberty, Precaution & Risk

The most recent case of porn actor testing positive for HIV has renewed calls (or at least media attention to the calls) for a condom mandate in all adult films produced in Los Angeles County.

Last year, activists at the AIDS Healthcare Foundation petitioned California’s Division of Occupational Safety and Health and unsuccessfully sued the county Department of Public Health to put a condom mandate in place claiming that it was an issue of worker safety.

However, the decision should be left up to the production companies and the actors themselves to determine the best way to protect themselves, their companies, and their reputations.

While this latest case has certainly caused some concern among adult performers in California, most of the calls for a condom mandate are coming from outside observers. Furthermore, many actors, such as the renowned adult actress Nina Hartley, have come out against taking away the choice from performers:

“As someone who is still working on the camera myself, I don’t feel any safer with condoms,” she said at a hearing in downtown Los Angeles in June.

Many of the actors in the business oppose the proposed mandate for condom usage. Some even claim that condoms make exposure to HIV and AIDS more likely due to “rubber rash” and friction burns, especially for female performers.

Ernest Greene, a longtime director and Hartley’s partner, explains on his blog:

[A single scene amounts to] over two hours of intercourse in various positions with constant stops and starts during which male performer’s erections rise and fall, condoms frequently tear or unravel and the degree of latex abrasion on the internal membranes of female performers’ vaginas lead to micro-abrasions that make them more vulnerable to all kinds of STIs. Most condom-only female performers eventually abandon condom use, not under pressure from producers, but rather because of the constant rawness and end-on-end bacterial infections produced by countless hours of latex drag.

In addition to problems with enforcement, there’s also the problem of personal choice and freedom of expression. In the end it is the individual actor’s choice to get into the adult entertainment industry and their choice whether or not they wear a condom.

At the same June hearing with Nina Hartley, an adult film actor who goes by the name Jeremy Steele, put it best when he said:

“There is no way to make the industry risk-free. Making things safer does not make it safe. If you’re worried or paranoid, you should not be in this industry.”

Boom and Bust — Different Ideas Why…

by Alex Schibuola on October 22, 2010

in Economy

This is a great post by Lee Doren. He’s spot on pointing out that “the [video producers/Larry White] don’t claim that 100 percent of the disruptions in the market are caused by the Federal Reserve.” After all, boom and bust cycles, or business cycles, existed even before central banks — not that governments didn’t tamper with money before central banks. I wanted to elaborate on this business cycle theme a little by providing a (very brief) outline of some other theories of business cycles.

Essentially, there are two largely different schools: Austrian and neoclassical. When Keynes published his General Theory Employment, Interest, and Money in 1936, this created modern neoclassical macroeconomics. F.A. Hayek had a competing book that was supposed to strengthen Austrian macroeconomics, the Pure Theory of Capital (1941). The book was a dismal mess and Austrian Business Cycle theory became latent (although Austrian macroeconomics appears to be making a comeback 60 years later). I won’t elaborate on the differences between those two schools here, because I want to take a look at the three neoclassical theories on business cycles. One of these shares characteristics similar to Austrian macroeconomics:

(1) New Keynesians assume that prices and wages are “sticky.” Sticky prices and wages indicate that it takes a long time (like 3 months or more, rather than minutes) for prices and wages to adjust to their correct levels. Keeping in mind that the price system exists to coordinate where resources flow to and from, if prices and wages don’t change quickly enough, then resources won’t flow to and from where they need to. This is why New Keynesians argue that government intervention is necessary — in order to push prices and wages up to where the resources could be flowing to and from where they’re needed.

(2) At the polar extreme of New Keynesianism, Real Business Cycle (RBC) theorists believe that business cycles are driven by “real shocks” (or “productivity shocks”). Unlike the New Keynesians, RBC assumes that prices and wages adjust really quickly (i.e., they’re not sticky but flexible) and that central banking policy doesn’t have any real effects on the economy (i.e., so no Austrian-style business cycles). Real shocks include new technological developments (e.g., the Internet), wars, natural disasters, etc. RBC argues that the economy is continuously buffeted by these real shocks. A cluster of positive shocks (e.g., new technology) leads to booms and a cluster of negative shocks (e.g., high oil prices, natural disasters) lead to busts.

(3) New Keynesians and RBC are the two extreme sides of the neoclassical schools. In between the two is the New Classical theory. In the world we live in there are two types of price changes we observe: (1) real changes, where society actually values a particular good more or less and (2) inflationary price changes, where all prices rise because there’s more money being printed by the central bank and it’s not because society changes how it values some goods over others. If a central bank starts printing more money and causes all prices to inflate, businesses might mistake this with a real change in the demand for their goods. So they’ll say, “Oh, the price of my product is rising, I should produce more, because people are demanding more. If all businesses think the same way, they all produce more, and we get a boom. Later on it’s discovered that it was all inflation from the central bank, they’ll cut production and labor, and we end up in a recession.

Most macroeconomists don’t strictly subscribe to one theory or the other. The New Keynesians tend to think markets don’t work well, whereas RBC and New Classical economists have faith in markets. The New Classical School in particular does share many characteristics with the Austrian Business Cycle theory, particularly regarding central banks as the cause of business cycles.

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