The Bureau of Labor Statistics [BLS] jobs situation report of 08/04/2012 showed 163,000 increase in non-farm payrolls in June. Yet the unemployment rate as measured by u3 rose to 8.3% and the u6 measurement rose to 15%. Further, the labor participation rate fell [again] hence the unemployment rate did not rise due to discouraged workers being attracted back to the labor force and hence flooding the denominator of the calculation. Conversely the labor force shrunk [again] by 150,000. Then why the twin reports of more jobs yet more unemployment? (1) (2)
The increased employment and the increased unemployment come from two reports that occasional differ yet generally trend together. The 163,000 comes from a survey of business whereas the 195,000 unemployed comes from the household survey. (3)
However, one report, a snapshot as it were, does not tell the story. It’s not one BLS report or any one report in particular, it’s a series of reports, combining the reports and the synthesis of the over-time reports resulting in a trend. Regarding the BLS of 08/04/2012 and considering the BLS six month trend and for that matter the three year trend, adding in the ongoing Euro zone woes and ECB reports, adding in ongoing Federal Reserve Open Market Committee [FOMC] statements and notes, and finally looking at the trends in ISM manufacturing and ISM services indexes (the former below 50 and the latter hovering around 50 with below 50 an indicator of recession) …..the totality of reports produces a trend or pattern, that Don Luskin CIO of Trend Marco likes to refer to as: The Not So Great Expansion.
This Not So Great Expansion and the continuation thereof is discussed by Dr. Art Laffer in the Wall Street Journal 08/05/2012 as an Op-ed entitled The Real 'Stimulus' Record . Dr. Laffer is channeling Hayek. He is discussing and reporting statistical data that suggests a "V" shaped recession was turned into an elongated "U" shaped recession aka bathtub shaped recession by the deployment of Keynesian policy. That is, Hayek's proposition that Keynesian policy merely extends recessions. (4) (5)
Regarding the economies reported on by Laffer in his statistical table, one needs to note that these economies can't climb the right side of the elongated "U". They can't climbthe right side of the "U" due in part to [or mostly due to] the deployment of Keynesian policy.
Hence one merely ends up bumping along the bathtub bottom. One might call it "economic gloaming". Its a twilight were the sun never quite sets nor does the sun ever quite rise above the horizon.
Ah yes, Jared Bernstein, the non-economist chief economist. Yes, the non-economist chief economist for Vice President Joseph Robinette "Joe" Biden, Jr. Jared, one of the main designers of the 2009 stimulus plan [American Recovery and Reinvestment Act of 2009] also known as the spruce goose of all stimulus plans ever concocted. The one trillion dollar (with interest) social engineering plan times some multiplier of Keynesian foolishness. The stimulus plan that would never allow unemployment to exceed 8%.
In two minutes and twenty seconds of the opening of the above video Jared Bernstein manages to fire off vilification through verbal virtuosity using such trite taking points such as: trickle down economics (a non existent economic theory), slashing spending, hurting most vulnerable people in the economy, Robin Hood in reverse, less jobs and income for the middle class, deregulation hurts finance, etc. Yes, the Dopeler Effect: the tendency of stupid ideas to seem smarter when they come at you rapidly.
Better yet, Jared even manages to refer to himself as an "economist". The Double Bass major from the Manhattan School of Music is an economist? Really? "...graduated from the Manhattan School of Music with Bachelors Degree in Fine Arts where he studied double bass with Orin O'Brien. He earned a Masters Degree in Social Work from the Hunter School of Social Work, and, from Columbia University, he received a Masters Degree in Philosophy and Ph.D. in Social Welfare". (1) Yes, Jared, quite the philosophical, musical, social worker.
Notes:
(1) Education: Bernstein attended Ridgefield High School in Ridgefield, Connecticut,[4] and graduated from the Manhattan School of Music with Bachelors Degree in Fine Arts where he studied double bass with Orin O'Brien. He earned a Masters Degree in Social Work from the Hunter School of Social Work, and, from Columbia University, he received a Masters Degree in Philosophy and Ph.D. in Social Welfare.
