The Vortex of Stupidity, also known as Washington, DC

I sometimes think that there has to be a crest to the levels of stoopid coming out of Washington, DC but obviously, I am wrong. Just the past two days, Dean Baker at his blog Beat the Press refuted three different pieces of so-called "conventional wisdom" by different members of the Beltway Village Idiots Pundits, Press, and Politicians in good standing.

First up was his having to counter a column from Steven Pearlstein of the Washington Post. Pearlstein says:

Europe is a different story. The bubble years allowed much of Europe to avoid making the kind of structural changes necessary to put its social welfare system on a sustainable fiscal path and reform its labor and product markets. The euro crisis — which is both a banking crisis and a sovereign debt crisis — has forced Europeans to begin addressing those issues.

Baker points out however:

Of course this is completely wrong. The countries with the well developed welfare states, Germany, Denmark, Sweden, the Netherlands are doing fine. The countries that are in crisis, Spain, Greece, Portugal, Ireland, have the least developed welfare states among the older EU countries.

Next up we have a WaPo0 opinion piece decrying the "looming short fall in public pensions." Baker points out here:

The pensions are underfunded in part because policymakers would not take seriously those of us who warned that pensions were making overly optimistic assumptions about stock returns before the market crashed. Returns have been well below expectations in the dozen years since the peak of the stock bubble in 2000.

The other reason is that some politicians, like New Jersey Governor Chris Christie, think it is really cute to not make the state's required contribution to the pension fund. Not surprisingly, if states get into the habit of not contributing to their pension fund, as has been the case in some states, then pension funds will be underfunded.

However it is more than a bit bizarre that we should therefore ripoff the workers who are counting on these pensions. Suppose state and local governments contract with construction companies for road work or hospitals to treat poor people. If the governments don't put aside the money to pay these contracts would we then think it makes sense to tell the contractors and hospitals to get lost?

Finally, today Baker goes after NPR and Nariman Behravesh, the chief economist of the forecasting firm IHS Global Insight, who thinks that the biggest problem we face is "the deficit":

Wow, isn't that impressive. So Europe, China and the rest of the world will be really impressed if the United States throws even more people out of work as long as it reduces its budget deficit! That's interesting, had it not been for NPR I never would have known people in the rest of the world thought this way.

As one of the 25 Million plus long term un and underemployed Baker mentions in his post, I would like to quote the inimitable Mr Pierce, "Fck the deficit. People got no jobs. People got no money.

David Dayen at FDL News today (Monday, October 22) covered a survey on the wage gap between federal workers and their private industry counterparts. Not so surprisingly, the public sector workers are paid far less than private sector jobs requiring comparable levels of skills and education:

If you compare organized federal employees, many of whom have college degrees, to unorganized service-sector and retail workers, then yes, you will find higher wages in the public sector. But if you do an apples-to-apples comparison between public employees and their private-sector counterparts in related fields, you will find that the public sector is significantly undervalued.

...snip...

You cannot lump together those who clean up the National Mall and those who work on scientific breakthroughs at the National Institute of Health, compare them to the “average worker,” and come up with a legitimate pay scale for federal employees. You have to go sector by sector and find the appropriate comparison in the private sector. And when you do that work, you see that federal employees are underpaid. This has an impact on millions of hard-working Americans, who are forced to take less than their skills would bring them back in the open market, because of a foolish tendency toward austerity and the demonizing of public workers.

Over these past few years, we've all seen many articles decrying the "generous pensions and salaries" of public sector workers, whether teachers, fire fighters, EMTs, or police at local levels or scientists at the NIH, NASA, JPL, EPA, or any other federal agency you wish to name.

My question is why?

One of the themes to emerge from this year's presidential race has been Mitt Romeny's "infamous" speech at a private fund raiser last May, calling 47% of the US basically moochers and freeloaders because they don't pay federal income taxes or they receive some level of federal benefits be it Social Security, VA or the Earned Income Tax Credit (EITC) among others.

But why is it so fashionable to trash people who have earned pensions, earned veterans benefits or Social Security or have used the EITC because of low wages? Shouldn't we be asking why there are so many people earning such low wages that they don't even pay a minimum federal income tax? I know for myself, I would dearly love to be earning a salary that would have me paying federal income taxes. Reuters offered this analysis on Friday (October 19):

The number of Americans not owing federal income taxes has been growing since the mid-1980s, and the increase largely stems from expansion of these two tax credits - championed by Republicans from conservative economist Milton Friedman to former President Ronald Reagan.

I want to work in my chosen field, earn a decent wage with benefits and pay my fair share of taxes. Instead, we see the "champions of industry" threatening employees with lay offs should President Obama be re-elected.

Right now, I'm a bit surprised we don't see more news articles like this one from the AP last Sunday (October 14) about a man attempting to rob a bank of $1 so he could be sent to a Federal Prison. How bad must it be to want to rob a bank so that you can get sent to prison. My guess is the three hots and a cot and health care sounded mighty appealing if the option was starving on the street.

And because I can:

George McGovern, RIP (A Personal Reflection on a Political Hero)

George McGovern, a political hero of my early adult years has passed away at age 90. It was obvious from news reports early last week of McGovern being admitted to hospice and being unresponsive that this was only a matter of time. Yet there is a pain to this.

I first became aware of Senator McGovern in 1968 when he entered the Democratic presidential race after the assassination of Bobby Kennedy in an attempt to assure that Kennedy's legacy was kept in the light. By the time 1972 came around, I had been following Senator McGovern's career closely. I forget the exact circumstance but as far as I can remember, I had signed up as a volunteer for McGovern at some point early in my sophomore year at Western Kentucky University. The information was shared with McGovern people around the state and one night in April '72, I got a call from my mother. She had received a call from Steve Slade, a junior high classmate of mine who was attending Eastern Kentucky and was the McGovern coordinator for our home county of Harrison Co. Steve asked her if I would be willing to be a delegate on the McGovern slate at the county caucuses that weekend. She took his number and called me and passed along the request. I called Steve and said yes but that I would not be able to attend. Harrison Co was allotted 10 delegates to the District Convention but Steve and I were the only McGovern delegates running. The then governor of Kentucky (future Senator) Wendell Ford was a traditional Democrat and was supporting an "uncommitted" slate as part of the party apparatus moves to block McGovern. I was told later that I was matched against the wife of the local state senator and received 10 votes to her 30. Steve also lost by the same numbers. Steve appealed his loss to the District convention the next weekend and was eventually seated since he had received more than 20% of the vote (the threshold to trigger proportional representation that year). I elected to not appeal. My father had not been aware that I was on the McGovern slate and was a bit perturbed when he got to the caucus that Saturday morning to discover my name. As he was a state employee, he didn't want to annoy the powers that be so left without voting but he let me know later his annoyance at not voting and not wanting to upset him further, I chose not to push the issue further.

While this was going on, I was volunteering at the McGovern offices at WKU while most of the rest of the folks were at the Warren County caucuses. IIRC, the McGovern slate in Warren Co took the majority of the caucus votes and delegates to the District convention so it balanced.

That fall, I continued to volunteer with the McGovern campaign doing some door-to-door canvassing. At the time, I was also a member of the WKU ROTC department, on an ROTC scholarship so that made for some interesting discussions in and out of the classes. Election day that year was a cold, rainy day in Bowling Green and I stood outside a voting location from 7AM until 4PM (polls were open 6AM to 6PM local time). I remember this one young woman campaigning with me who stated that she and her parents were all voting for McGovern because "Nixon had gone communist" by visiting "Red" China (as it was commonly known in those days). By 5PM, I was at the McGovern headquarters in Bowling Green and watched the networks call Kentucky for Nixon at 5:01 local (Central Standard) time when we still had an hour of voting. About the only election consolation we had was in the US Senate race, Democrat Dee Huddleston defeated former Governor Louie B. Nunn by nearly the same margin in the state that Nixon had defeated McGovern. Small comfort that as I wound up getting drunk that evening.

While George McGovern lost the Presidential race in 1972, his career encompassed so much more. One of the "pre-obits" I read this past week when his condition was first announced stated that he was one of the last of the "Prairie Populists." He was a war hero, having been awarded a Distinguished Flying Cross during WWII, who championed peace. I was and am proud that I cast my first presidential vote for Senator McGovern.

Godspeed Senator. RIP

Oh Noes! Wall Street Might Not Get Their Bonuses!

So I was doing my standard web surfing this AM after I had checked the (non-existent) jobs listings when I saw this from Bloomberg with the title, "Half of Wall Street Employees Expect Bigger Bonuses":

Almost half of Wall Street employees expect their year-end bonuses to be higher this year than they were a year ago, according to an eFinancialCareers.com survey.

Of the 911 U.S. financial professionals who responded to the e-mailed survey, 48 percent anticipate a higher payout, up from 41 percent in a similar survey last year, the job-search website said today in a statement. Employees of hedge funds and other asset managers were more optimistic than those at banks and broker-dealers, according the statement. Of the respondents, 82 percent work for U.S.-based companies.

Well imagine my surprise this afternoon when I see this one from Bloomberg titled "Wall Street Bonus Pool Seen Shrinking for Second Straight Year":

Wall Street’s cash bonus pool is likely to fall for a second straight year as the financial industry grapples with market turmoil, economic weakness and new rules, New York state Comptroller Thomas DiNapoli said.

Revenue and compensation trends have “edged downward” since February, when DiNapoli estimated that the 2011 pool for Wall Street declined by 13.5 percent to $19.7 billion, the comptroller said today in a report.

The New York Times presented it this way this afternoon:

It still pays to be on Wall Street.

Even as the financial industry in New York has slashed jobs by the thousands, the average worker who remains is collecting a near-record paycheck.

In a report released on Tuesday, the New York State Comptroller, Thomas P. DiNapoli, said that the average pay package of securities industry employees grew slightly last year and was up 16.6 percent over the past two years, to $362,950. Wall Street’s total compensation rose 4 percent last year to more than $60 billion.

CNBC appears to be trying to split the differences with this report titled "Wall Street Expects Bigger Bonuses But May Not Get Them" as they report on the same survey that Bloomberg covered in the first link:

Revenue is down on Wall Street but expectations for bonuses are up — at least for some workers who have seen their pay shrink since the financial crisis explosion.

A survey from eFinancial Careers shows 48 percent of workers on the Street are looking for higher bonuses than 2011. Expectations are high even as investment banking revenue is down 11 percent for the same period last year while the securities industry overall saw revenue fall 7 percent in the first half.

At the same time, some of the larger firms have been doing better as the headwinds from the European debt crisis subside and hopes grow that the industry will close the year out strongly.

Meanwhile as Wall Street whines its way along, our (not-so-favorite) Masters of the Universe, Lloyd Blankfein and Jamie Dimon are once again daring to spout their nonsense. Jon Walker at FDL Action presents this:

What I find most ironic about these CEO deficit hawks complaining about the “uncertainty” that is hurting the economy is that they are the ones responsible for helping to create said uncertainty to begin with. The deficit obsession created the uncertainty about raising the debt ceiling. Similarly, they constantly pushed for a big deficit deal resulting in the creation of the sequesters, which are seen as a big source of the fiscal uncertainty at the moment. The main “uncertainty” about government policy right now is how the government will clean up the mess created by past efforts to force a deficit deal.

But hey, MotU never have to be accountable for destroying the economy. After all, they deserve those millions dollars of bonuses right? Destroying the global economy is hard ass work so they must be compensated for it.

Meanwhile, CNN actually touches base with the real world with this article on part time jobs being the new normal in employment. Notice how much attention is paid to the ravings of Blankfein and Dimon and the Wall St WATB versus the attention paid to the rest of us in the real world?

And because I can:
Happy Birthday John. RIP

Final Pre-election Jobs Reports

This week has seen the final jobs reports that will be available to make a possibly measurable impact prior to November 6. Wednesday's report from ADP had 162K new private sector jobs. Yesterday's (Thursday, October 4) Jobless claims report had a slight increase to 367K new jobless claims and 4 week rolling average of 375K new claims. Finally, today's (Friday, October 5) Bureau of Labor Statistics report has an increase of 114,000 jobs for September and the jobless rate falling to 7.8%.

It seems the fall in the overall unemployment rate has some folks on the right, led by Neutron Jack Welch, claiming the numbers have been cooked. David Dayen at FDL News puts it this way:

Because data is just fungible to the political leanings of whoever confronts it, we predictably saw a number of conservatives question today’s jobs report, suggesting that the Bureau of Labor Statistics fudged the data to help the President’s re-election campaign. Leading this charge was former GE CEO Jack Welch on Twitter. I think the government should make a deal with Welch – they’ll admit to massaging the data if he cleans up all the PCBs in the Hudson River personally.

On a more serious note, this is really pretty outrageous, and Labor Secretary Hilda Solis, whose department includes the BLS, is right to be insulted. The BLS is a civil service agency that until recently was still run by a Bush appointee. It now has a career bureaucrat in charge. The political team plays no role whatsoever in the derivation of or announcement of the jobs data. And if, despite all this, BLS cooked the books, they’re terrible at it, because they shifted the data in the household survey without corresponding in the establishment survey.

My WAG on this is that the adjustment of the number of jobs for July and August probably had as much affect on the September jobless rate as the actual numbers for September. As far as I can see, this opinion piece from Jay Schalin at Fox News pretty much covers the basic point of the "unemployment" figures:

One thing the current economic slump has made painfully clear is that the unemployment rate is an imperfect tool for gauging the health of the economy. Washington should replace it with a more meaningful and useful benchmark: the labor-force participation rate.

The widely publicized unemployment rate, eagerly awaited each month by pundits and policy wonks, has become little more than a shell game in which officials keep the public guessing about the real state of the economy.

Please do go and read the entire piece, he makes some excellent points.

One item that I find still glaringly obvious is that for the most part, most of the people in charge or talking about jobs and the economy have no more clue about what is happening than they do about what the surface of the moon feels like. Just the past few days, I have seen these headlines as I have surfed the toobz (links embedded in headlines):

"Fiscal cliff" fears may impede faster job growth (Reuters October 2)

'Discouraged' workers face tough road back to employment (NBC News, October 4)

S&P 500 on verge of 5-year high day ahead of jobs data (Reuters October 4)

S&P 500 dips after four days of gains; earnings eyed (Reuters October 5)

I think the bottom line point here is any attempt to tie jobs reports, favorable or unfavorable, to the stock market is attempting so much witch craft. There IS no connection or the stock market would not be trading. As Reuters reported back in August, the market is up for the Obama administration by 74% since he took office January 2009:

At 1,400, the S&P 500 on Friday was closing in on a four-year high and was up 74 percent since January 20, 2009, the day Obama took office. Not since Dwight Eisenhower's first term has a president had such a strong run for their first term.

As most folks reading this know, I am and have been among the long term un/underemployed. The reality for me and many millions of others is, we want to work in decent paying jobs, preferably in our chosen career fields. The dithering in DeeCee from both sides of the aisle, the constant calls for cuts to the budget, "Grand Bargains" to "save" Social Security, Medicare, and Medicaid (especially the non-existent "Bowles-Simpson" plan since there was no formal report and plan adopted by their namesake committee) personally drives me nuckin' futz. As Mr Pierce often says, "Fck the deficit. People got no jobs. People got no money."

It really is a simple concept. People want to work. We want to work at decent paying jobs with half way decent benefits and contribute to the overall commonweal of the nation. Working two or three part time barely above minimum wage jobs does NOT fit this definition.

And because I can:

Domestic Violence Awareness

Well, here we are in October once again. There are two big "awareness" campaigns in October, Breast Cancer Awareness and Domestic Violence Awareness. I have written of both in previous years (here and here) but as I did in '09, I am going to concentrate this year on Domestic Violence Awareness. As personal as Breast Cancer Awareness is to me because of my sister, the 'pink ribbon' stories are fairly ubiquitous this time of year while it seems the purple ribbon of Domestic Violence Awareness is rarely seen.

I'm not sure why Domestic Violence bothers me so much. It, along with child abuse (especially sexual abuse) and rape, are the crimes that upset me more than just about anything. It may be because in each crime, the victim is often not believed or is blamed for some how "letting" these things happen. We as a society are supposed to believe that crimes do not happen where the perpetrator and the victim are within the same family or are neighbors.

I have in the past few years been slowly getting to know a bunch of cousins from my mother's side of the family where I have been told of one who was killed by her husband in 1975. I actually have memories of meeting this cousin at her grandmother's funeral when I was 13 and I think she was 16. After her death, her parent's adopted her son and daughter and raised them. But far too frequently, this type of violence is only spoken of in soft tones after the fact.

Connecticut and Maryland each had revisions to their Domestic Violence laws take effect yesterday (October 1, 2012). Florida and NY State have each also strengthened their Domestic Violence laws this year while in New Jersey, the courts have strengthened in ways but weakened in other ways.

On a federal level, The Violence Against Women Act has not been renewed. The House and Senate have each passed versions but not the same. It appears the House is balking at Senate provisions that extended coverage under the act to:

...women who are undocumented immigrants, Native Americans, LGBT, or students on campuses.

If you or someone you know is a victim of Domestic Violence:

National Coalition Against Domestic Violence

NCADV Domestic Violence Fact Sheet (pdf)

National Criminal Justice Referral System, Domestic Violence

Office for Justice Programs, Office for Victims of Crimes (Domestic and Family Violence)

National Domestic Violence Hotline 1-800-799-SAFE (7233)