Today's U.S. Economic News from the BLS

I am encouraged by the accelerating pace of new jobs added in January. The 8.3% unemployment rate is artificially low, though, given the labor force participation rate declined to a level unseen since March 1983 (63.7% of the civilian labor force 16 years of age or older) [Note 1)]. People appear to be pulling themselves out of the job market as seen in the participation rate and U-6, the seasonally adjusted underemployment rate [Note 2)]. U-6 remains high, but declined to 15.1% from 15.2% last month (without seasonal adjustments it increased to 16.2% from December's 15.2%, but is 1.1% less than a year ago). I do not know how much we see is simply the result of demographic changes caused by the retirements of increasingly more baby-boomers. We need to be careful how much we read into the numbers. I do not think the health of our economy is as good or bad as painted in this election year.

Notes

1) There had been a relatively steady increase in labor force participation from the Kennedy through Clinton administrations, initially driven by increasing numbers of women joining the formal labor force. The trend reversed by the first term of the George W. Bush administration, stabilized and improved slightly during most of his second administration. Participation has been declining throughout the Obama administration.

2) Defined as the total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force.

Standard and Poor poignant comments on debt downgrade

S&P said the downgrade "reflects our opinion that the fiscal consolidation plan that Congress and the administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government's medium- term debt dynamics." It also blamed the weakened "effectiveness, stability, and predictability" of U.S. policy making and political institutions at a time when challenges are mounting.

Paletta, Damian, and Matt Phillips. "S&P Downgrades U.S. Debt for First Time." Business News & Financial News. The Wall Street Journal, 06 Aug. 2011. Web. 06 Aug. 2011.
http://online.wsj.com/article/SB10001424053111903366504576491421339802788.html.

The Green President

If you wonder whether the Obama Administration has a green agenda, the answer was obvious at the G20 summit in Seoul, South Korea. Headlines spoke of how other countries view the Administration's economic policies as out of line. Take a look below the headlines. The trade agreement between the U.S. and South Korea remains stalled. The reason is South Korea refuses to relax its emission and mileage standards so U.S. automakers can more easily adapt their cars for the Korean market. Yes, the U.S. asked the Koreans to lower their environmental standards. One could argue the President is willing to compromise on his principles, to account for what the American people conveyed at the polls earlier this month. Without solid economic growth, electoral support for "change" is unlikely, so he had to compromise to be able to sell more American-made cars in Korea. Does anyone believe in the short-term South Korea is going to be a major market for American-made cars and save American jobs? More realistically by keeping the barriers to trade higher than would be the case with a trade agreement, the Administration is hoping to keep more Korean cars from selling in the U.S. and save UAW jobs. Even this is flawed logic because the way around the barriers is to produce the cars in the U.S. at sites likely not to support the UAW.

The Administration's actions appear simply to be political payback for the support from the UAW. Yes, the Obama Administration has a green agenda - keep the green dollars flowing into the political campaign war chests.


References:

Richardson, Alex. "Factbox: Outcome of the Seoul G20 Summit | Reuters." Business; Financial News, Breaking US; International News | Reuters.com. Ed. John Chalmers. Reuters, 12 Nov. 2010. Web. 14 Nov. 2010. http://www.reuters.com/article/idUSTRE6AB1G920101112.

Griswold, Daniel. "President Obama Represents UAW Rather Than U.S. in Korea Trade Talks | Mad About Trade." Mad About Trade | Observations on Trade, Globalization and Immigration. N.p., 12 Nov. 2010. Web. 14 Nov. 2010. http://madabouttrade.wordpress.com/2010/11/12/president-obama-represents-uaw-rather-than-u-s-in-korea-trade-talks/.

Type 3 Lie

This week the Executive Branch of the U.S. federal government claimed the economic stimulus of February 2009 "created or saved" between 2.5 million and 3.6 million jobs and raised GDP by 2.7% to 3.2% through June 30. (The Wall Street Journal) Rather than using established, accepted, non-partisan data on jobs, the Administration created an arbitrary, non-existent scenario against which they are to be evaluated - what would have happened had the stimulus not passed. Because the scenario is fictitious, it is only a matter of conjecture how many jobs may have been saved or loss. The Administration though has set a maximum threshold of 3.6 million. Given the stimulus was $862Billion, that means our government spent a minimum of $239,445 per job saved or created! Even when choosing to make up data, our government seems unable to do a credible job.

There are three kinds of lies: lies, damned lies, and statistics.
Benjamin Disraeli, British politician (1804 - 1881)

References:
The Wall Street Journal. "Three Million Imaginary Jobs - WSJ.com." Business News & Financial News - Opinion. Dow Jones & Company, Inc., 15 July 2010. Web. 17 July 2010. http://online.wsj.com/article/SB10001424052748703394204575367421573463984.html.

"Quote Details: Benjamin Disraeli: There Are Three Kinds... - The Quotations Page." The Quotations Page - Michael Moncur's (Cynical) Quotations. Ed. Michael Moncur. QuotationsPage.com and Michael Moncur. Web. 17 July 2010. http://www.quotationspage.com/quote/487.html.

NASA Mission

It only took a week, and even then the refutation was tepid, but the executive branch of the federal government through White House spokesperson Robert Gibbs has finally acknowledged it is not a task of NASA "to reach out to the Muslim world and engage much more with dominantly Muslim nations to help them feel good about their historic contribution to science, math, and engineering." That is one of three things NASA administrator Charles Bolden stated he was charged to do by President Obama. The other two were to: 1) help re-inspire children to want to get into science and math; and 2) expand our international relationships. Conspicuously missing is anything directly related to aeronautics or space. Thankfully NASA's official mission statement remains straightforward and succinct: To improve life here, to extend life to there, and to find life beyond.

References:

"When I became the NASA Administrator — before I became the NASA Administrator — [Obama] charged me with three things: One was he wanted me to help re-inspire children to want to get into science and math, he wanted me to expand our international relationships, and third, and perhaps foremost, he wanted me to find a way to reach out to the Muslim world and engage much more with dominantly Muslim nations to help them feel good about their historic contribution to science, math, and engineering."

NASA administrator Charles Bolden

York, Byron. "Obama’s New Mission for NASA: Reach out to Muslim World." Beltway Confidential. Washington Examiner, 05 July 2010. Web. 13 July 2010.

Gibbs, at his daily news briefing, was asked why Bolden had made the comment.

"It's an excellent question, and I don't think -- that was not his task, and that's not the task of NASA," Gibbs said

White House spokesman Robert Gibbs

Reuters. "White House Corrects NASA Chief on Muslim Comment | Reuters." Business & Financial News, Breaking US & International News | Reuters.com. Reuters, 12 July 2010. Web. 13 July 2010.

NASA Mission Statement

· To improve life here,

· To extend life to there,

· To find life beyond.

NASA Vision

To understand and protect our home planet, To explore the Universe and search for life, and To inspire the next generation of explorers... as only NASA can.

National Aeronautics and Space Administration. ".: NASA Mission Statement Nasa Information-Nasa Informations-Nasa Info-Nasa Images-Space Shuttle Space Station-Nasa Tv -Nasa News-Space Station Informations." . Nasa Information-Nasa Informations-Nasa Info-Nasa Images-Space Shuttle Space Station-Nasa Tv -Nasa News-Space Station Informations. National Aeronautics and Space Administration. Web. 13 July 2010.