SGS Alternate Unemployment Rate (the measurement you rarely see)

The headline unemployment rate is the U3 measurement which current stands between 8-9%. U3 is argued by many as a political unemployment rate in that the measurement has become an unreliable measurement due to arbitrary adjustments.

U6, also known as the real unemployment rate, stands at 15%. Many people suggest that U6 is a better measurement of unemployment as it includes short-term discouraged workers, marginally-attached workers, and those workers which work part-time as full-time employment is unavailable.

However, in the current economic situation, if one is faced with 5.4 million discouraged workers, an army of discouraged workers, made up of short-term and long-term discouraged, one surely has to consider this standing army of discouraged workers. (1)

Enter the SGS alternate unemployment rate which adds in the long-term discouraged worker. We then find a measured rate of roughly 22.5%. (2)

　

Notes:

(1) http://www.headlightllc.com/avalanchebrief1/

(2)
http://www.shadowstats.com/alternate_data/unemployment-charts

2013 Obama Budget Accounting Vignette: post cards from the alternate universe of accounting -or- when deficit reduction means spending increase.

Around the World on $69 Million in Welfare Funds!

Nitwitery warning: when public sector unions can’t agree on dividing up the spoils

One might be well served to examine the "both sides of the table" phenomena when considering unionized public sector collective bargaining regarding a government monopoly. What is the "both sides of the table" phenomena?

　

(1) if bureaucrat X is negotiating with collective bargaining public sector union Y, exactly what motivation does bureaucrat X have regarding negotiations? The problem goes back to Milton Friedman's fourth category of spending: other people (bureaucrat X), spending other people's money (tax payers money), on other people (recipient class which in this case is a public sector union). Therefore the bureaucrat has little motivation because he/she is spending other people's money not his/her own money,

　

(2) public sector unions have found that they can collect dues through members and funnel dues into political action funds. They then fund the campaigns of politicos that promise them [public sector unions] more compensation. They not only fund certain politicos but actively encourage their union members to campaign for the politico. Once they get their particular candidate elected they have now secured a politico who over sees bureaucrat X.

　

The monopoly [government] through pricing power influence will pass on increased labor compensation costs, the goal/end product of the both sides of the table phenomena, to the end user. In the realm of government, monopoly price is tax and tax is increased to the end user which is the taxpayer aka YOU.

　

Therefore, unionized collective bargaining in the public sector is a collective bargaining scheme against the taxpayer. The collective bargaining scheme has no incentive to reduce costs as cost can be merely passed onto the end user. Moreover, the collective bargaining scheme, in a government monopoly setting, actually has incentives to pass on larger and larger price increases to the end user in the form of price influence and in this case tax increases. Lastly, the end user, the taxpayer aka YOU is not represented at the negotiating table due to the "both sides of the table" phenomena.

　

What happens if the “both sides of the table” phenomena morphs into a tax increase proposal before the spoils are determined? That is, rather than hashing out an agreement regarding pay/benefit increases through public sector collective union bargaining via the both sides of the table phenomena and then the new cost passed on as a tax increase…. what if the tax is proposed first representing specific spoils for certain groups that otherwise would be sitting at the table, the magical table known as the “both sides of the table phenomena“?

Oddly enough the differing collective bargaining public sector unions suddenly feel as if the procedure has aspects of picking winners and losers. That is, if a proposed tax increase, the proceeds thereof, are purposely bestowed upon certain attendees of the “both sides of the table” phenomena yet other seats at the table receive no proceeds, suddenly the collective bargaining public sector unions feel they are being targeted as winners/losers? Odd to say the least as the loser is the taxpayer but the taxpayer is completely out of the picture as the focus is on dividing up the spoils.

And now for a lovely story of spoils:

　

　

　
“California Gov. Jerry Brown likes to proclaim the virtues of democracy. But when it comes to ballot initiatives, the Democrat would rather voters have only one choice: Jerry Brown's.

　

　
Mr. Brown last year proposed a ballot initiative that would "temporarily" raise the state sales tax by half percentage point and income taxes on those earning more than $250,000 by one percentage point, to 10.3%. Individuals with more than $500,000 in income would pay a top rate of 11.3%. The governor has earmarked most of the projected $7 billion or so in additional revenue for K-12 schools, which explains why the California Teachers Association has thrown its support behind him.

The California Nurses Association, however, isn't set to get a cut of the revenue and is miffed. After all, the CNA helped to bankroll the labor campaign against Republican gubernatorial candidate Meg Whitman in 2010. The California Federation of Teachers (not to be confused with the much larger California Teachers Association) is also none too pleased because the governor's proposal doesn't set aside much money for public colleges, which the CFT represents. They also don't like that the initiative's sales tax component would hit poor and middle income members. The CFT and nurses' union thus are partnering to promote their own tax initiative, which would raise rates on millionaires by 3% and those earning more than $2 million by 5%. Their ballot measure would reserve a quarter of new revenues for public colleges and a quarter for children and senior services (e.g., health care). K-12 schools would get about a third.

Complicating matters further is the wealthy civil rights attorney Molly Munger who doesn't trust that either initiative will send enough money back to the classrooms. So she's financing a ballot measure that would raise rates on all earners, be indexed progressively, and mandate that all new revenues be spent in the classroom -- not on administration or increased benefits and salaries. Polls, however, show little public support for broad-based income-tax hikes, and the unions are loathe to support any measure that could limit future pay and benefit increases.

Mr. Brown has been urging Ms. Munger and the unions to suspend their initiative campaigns because he fears that the multiplicity of tax initiatives might kill Democrats' shot at getting any passed. In the past voters have reacted to competing initiatives, such as the five tax measures on the 2006 ballot, by knocking them all down. However, Ms. Munger isn't backing down and the other two unions think Mr. Brown should be the one to call it quits. The nurses and CFT were out en force at last weekend's California Democratic Party convention pitching their "millionaires' tax" to the party's rank and file.

The fact that the governor can't rally Democrats around his tax initiative is a testament to just how little political capital he holds and how much the public unions control the party. Even so, divisions among the public unions over how taxpayer dollars should be spent are emerging and threatening to undermine the solidarity that has made them so formidable. Perhaps they, too, are finally realizing that there's only so much money to go around.”

-- Allysia Finley, California's Competing Ballot Initiatives, Political Diary, The Wall Street Journal, 02/14/2012

“Free Contraceptive”: Upon Further Review the “free contraceptive” problem is merely an indicator of base model failure.

A point that seems to be missed by talking heads, pundits, and media-types regarding the Catholic contraceptive issue is: this is one more episode in a series of endless episodes associated with a central planning scheme known as ObamaCare. Further, it is not Obamacare specifically, its any centrally planned scheme that by design continuously exhibits an endless series of negative episodes also known as unintended consequences.

The centrally planned scheme, as with any scheme, comes with endless tangents. Tangents of the unintended, that then interact into cascading unintended consequences.

When the unintended consequences surface one will most certainly note the classic central planning after-the-fact attempt to address unintended consequences by way of back tracking e.g.: ...oh we really meant this or that, ...oh that doesn't apply to YOU after all, ...oh we will waiver that aspect, and on and on and on it goes.

In the main, its not about Catholics, its not about contraceptives, its about a central planning scheme. Yet another scheme in a long parade of schemes based on "the way things ought to be". Scheme based propositions are never able to sort out the endless tangents.

Those gazillion tangents, that the central planners of the centrally planned scheme were suppose to take into account. Those experts with Omni-present knowledge, with grand supposed abilities, with continuous and dynamic real-time knowledge of each and every mundane aspect, that go onto design a socio-economic system…. with knowledge they do not in fact possess. (1)

Those tangents, which are so conveniently assured to never occur when central plans are sold based on a proposition of “the way things ought to be”. Those tangents that have absolutely no chance of being accounted for, but most assuredly were sold as accounted for when “the way things ought to be“ was a warm and fuzzy politico info-mercial. Yes, those many, varied, and consequential tangents go on to tarry at their haunt and re-visit time and time again.

One needs to consider being ahead of the curve regarding the following propositional arguments that surely will surface regarding the endless tangents of the scheme as it unravels and reveals its many and varied errors: (a) if the plan had been different, (b) if the planners had been different, (c) if circumstances had been different, (d) if we would have had more money, (e) if all of the above, a combination thereof, had been different.

Do centrally planned schemes by “experts” through the use of coercive powers, armed at best with non-real time general knowledge….do such schemes historically sort through items resulting in wonderful outcomes? -Or- do free market based, free people, free people basing decisions on real time mundane knowledge, making free decisions at the point of mutual self interest historically result in the best overall outcome?

Notes:
(1) F.A. Hayek, from the essay The Pretense of Knowledge

Justification of equality: equalitarian ends by unequalitarian means? Great inequality in the right to decide such issues and choose such means?

If one is concerned with equality, then one should also be very, very concerned with equality of power.

Would the power to create equality require inequality of power? Equality is achieved via inequality? Would it be that those with a zest for equality fail to see the inequality of means to achieve such equality? -Or- are those with a zest for equality, in essence, merely transposing inequalities?

　

“The two visions entail very different views of the relationship between members of the existing society. The unconstrained vision has tended historically toward creating more equalized economic and social conditions in society, even if the means chosen imply great inequality in the right to decide such issues and choose such means. Clearly, only very unequal intellectual and moral standing could justify having equality imposed, whether the people want it or not, as Dworkin suggests, and only very unequal power would make it possible. It is consistent for the unconstrained vision to promote equalitarian ends by unequalitarian means, given the great difference between those whom Mill called “wisest and best” and those that have not yet reached that intellectual and moral level.

Conversely, those with the constrained vision have tended to be less concerned with promoting economic and social equality, but more concerned with the dangers of an inequality of power, producing and articulate ruling elite of rationalists. In Hayek’s words:

The most dangerous state in the growth of civilization may well be that in which man has come to regard all these beliefs as superstitions and refuses to accept or to submit to anything which he does not rationally understand. The rationalist whose reason is not sufficient to teach him those limitations of the power of conscious reason, and who despises all the institutions and customs which have not been consciously designed, would thus become the destroyer of the civilization built upon them.” (1) (2)


Which then leads to this observation :


“This way lies charlatanism and worse. To act on the belief that we possess the knowledge and the power which enable us to shape the processes of society entirely to our liking, knowledge which in fact we do not possess, is likely to make us do much harm.

But in the social field the erroneous belief that the exercise of some power would have beneficial consequences is likely to lead to a new power to coerce other men being conferred on some authority. Even if such power is not in itself bad, its exercise is likely to impede the functioning of those spontaneous ordering forces by which, without understanding them, man is in fact so largely assisted in the pursuit of his aims.” - F.A. Hayek, from the essay The Pretense of Knowledge


Which lends itself to this observation:

　

[Paraphrasing] In a consciously planned economy equality of income becomes an income redistribution scheme. Once the centrally planned economy fails, the justification for the continuation of the centrally planned economy becomes equality of income. -Thomas Sowell


Notes:

(1) Thomas Sowell, A Conflict of Visions: Ideological Origins of Political Struggles, 2007 edition, page 55.

(2) F.A. Hayek, The Counter-Revolution of Science: Studies on the Abuses of Reason, 1979, pp, 162-163

Contraceptive Compromise? Betsy McCaughey vs. Igor Volsky

In the video above note that Igor Volsky states the “free” contraceptive is paid as “part of the premium” paid, then reframes his position as “straight from the insurer…out of the reserves of the insurer”. Volsky might want to consider he doesn’t understand the difference between insurance premium and an insurer’s reserve. That Volsky first argues part of the premiums is a cost and hence no free lunch then turns around and argues that an insurance company’s “reserve” pays and hence it is free lunch time.

Later in the video Volsky attempts to frame ObamaCare as the ability to freely choose. First of all if freedom of choice was the overriding concept then there would be no reason for ObamaCare. What Igor Volsky is attempting to frame as free choice is: choice by a central authority [the plans of the few] has authorized as the choice ObamaCare, and then one can choose from a predetermined choice. Hence choice is framed as choice of a predetermined choice which by definition is not choice. It’s an argument of political dupery.