THIS
IS A MUST READ......An analysis of unemployment by David Stockman as reported on Rush Limbaugh's show last
week..... it's shocking!
RUSH:
Ladies and gentlemen, the unemployment rate, what is the latest reported
unemployment, 5.5%, is that what it is, 5.3, 5.6? It's in that neighborhood, right? I don't know what the exact number is. Not that this matters to anything
anymore. I mean, the truth is
increasingly irrelevant. The truth is increasingly
meaningless. In fact, there isn't any
truth in way too much of the country.
There is certainly no objective truth.
Anyway,
I have had, as you know if you listen regularly, I've had a lot of doubt about
the accuracy of an unemployment rate of 5.5% when, at the same time, we have
92-93 million Americans NOT in the workforce.
It just hasn't made sense to me.
Now, as you know, the Bureau of Labor Statistics, the government
releases the unemployment numbers every month, and there are different
categories, and the U, letter U-3 is what gets reported. That's the 5.5% now, whatever it is, that's
the U-3 number. The U-3 number -- and,
by the way, it's increasingly obvious that all of this is bogus and meaningless
now as well.
But
the U-3 number only attempts to count people who are out of work and looking
for a job. People who have been out of
work beyond the total length of time that they get unemployment benefits, which
is up to, what is it now, 99 weeks?
(interruption) It's even longer
than that? (interruption) Okay, 99 weeks. So if you're looking for a job and getting
your employment benefits they count you in U-3. But if you stop looking for a
job at any point, you've been out of work two weeks, stop looking, you don't
get counted in the U-3 number. If you've
been out of work for three years and stop looking, then you don't get counted
as unemployed.
I
don't know how they find out who is looking for a job and who isn't, because
this is largely guesswork. There is a
very small interview sample that they take, and then they project nationwide
results from this small, relatively small sample. The U-6 number is much closer to
accurate. The U-6, it never gets
reported. You have to look at websites
dedicated to economics to find out what that number is. The Drive-By Media never reports it.
So
99.9% of the people celebrating Supreme Court rulings last week do not know
what the U-6 unemployment rate is. That
number is reported to be around 11 or 12%.
And that number includes people who are out of work and have given up
trying to find a job or aren't, for whatever reason, looking for work. So it is said to be a more accurate number,
but that has not even worked for me. I
mean, just the simple math, 92-93 million Americans, and from there I said,
"How many adult Americans are there in our country?" To put that 93 million in proper perspective,
93 million Americans not working. And my
always added caveat, they are all eating.
I
find that to be one of the most relevant aspects of that number, and it goes
over people's head as though it doesn't matter.
But if you can eat and have a phone and a big screen or whatever and not
have to work, I mean, what are you more than likely to do if you are a recent
graduate or product of the American education system? You're gonna opt to the path of least
resistance. Particularly now you add to
that what has happened to employment with Obamacare, and that is 30 hours a
week is now considered full time, not 40.
I
mean, folks, the bottom line here is that just observing numbers and just
casually absorbing them -- not even running them; not calculating, just
absorbing them -- it cannot be that we have an unemployment rate of 5.5% or
even 12.2%. The number of people working
is way down. The number of hours worked
is way down. It's because of Obamacare, because the economy. You can maybe talk about trade deals if you
want. Throw it all in. I don't
care. The bottom line is, there's much
less productivity in this economy.
And
then you add to that how much of the economy has been usurped by the federal
government, the economy, the private sector where everybody tries to get their
piece of the pie. That's shrinking. My
gut feeling has been that we are in a dire economic circumstance, far, far
worse than anybody knows. Well, you
might be saying, "What's this got to do with anything?" Well, that's
why I urge you to always hang in there and be tough.
Last
night a friend of mine sent me a link to a blog that is hosted and written by
David Stockman
David
Stockman was the former budget director for Ronaldus Magnus until for some
reason he was taken to the woodshed and fired.
Oh, I know what it was. He
disavowed supply-side, which was his own creation. Anyway, Stockman has run a bunch of numbers
and has been able to put all of this in context and has concluded that the
actual unemployment rate in the United States of America is not 5.5%, and it's
not 12.5% or 13%. It is 42.9%.
I
mean, folks, the bottom line here is that just observing numbers and just
casually absorbing them -- not even running them; not calculating, just
absorbing them -- it cannot be that we have an unemployment rate of 5.5% or
even 12.2%. The number of people working
is way down. The number of hours worked
is way down. It's because of Obamacare, because the economy. You can maybe talk about trade deals if you
want. Throw it all in. I don't
care. The bottom line is, there's much
less productivity in this economy.
And
then you add to that how much of the economy has been usurped by the federal
government, the economy, the private sector where everybody tries to get their
piece of the pie. That's shrinking. My
gut feeling has been that we are in a dire economic circumstance, far, far
worse than anybody knows. Well, you
might be saying, "What's this got to do with anything?" Well, that's
why I urge you to always hang in there and be tough.
It's
a long blog post. I can't... I'm not
even gonna try to summarize most of it.
I'm just gonna get to the meat of it as it relates to this. But it's an all-out assault on Keynesian
economics and the Federal Reserve and the damage that both have done and
continue to do to the US economy. But
here's the focal point on unemployment.
"In fact," he writes, "the Census Bureau survey takers
and the [Bureau of Labor Statistics] numbers crunchers have not the foggiest
idea as to what the real world’s potential labor force computes to, and how
much of it is deployed on any given day, month or quarter."
That's
economics-speak for they don't have any idea how many people are working. The
"world's potential labor force," meaning how many people in the world
have an opportunity to hold a job and go to work at it. Nobody knows.
They have no way to compute it.
And how much of that force is "deployed," that's just military
lingo for how many people getting up and going to work every day. "Accordingly," he writes,
"printing money and pegging interest rates in pursuit of 'full
employment', which is the essence of the Yellen version of monetary central
planning..."
Jessica
Yellen is the chairman of the Fed. "[T]he essence of the Yellen version is
completely nonsensical," and it's political, by the way, getting an
unemployment rate 5.5%. You know what statistically full employment is. This is
why this doesn't make any sense.
Traditionally, statistically full employment has been 4.7%. Everybody involved in economics from the
government on down has agreed that if at any time the US unemployment rate is
4.7% then our economy is roaring.
We
got people working and working overtime, and it's as near to full employment as
it's possible to get. Well, I'm telling
you: If that's true about 4.7%, there's no way we're at 5.5%. This is just my gut reaction to all
this. This is why this is
fascinating. Now, Stockman is ripping
into the money supply people and Obama because they're pegging everything
they're doing to that. They're printing money, giving it to the stock market,
pegging interest rates at near zero in pursuit of full employment.
That
is for Obama's legacy. They want Obama
to be able to leave office claiming that his stimulus worked and that
everything else he did economically, Obamacare, brought back a defunct economy
that he inherited. Key to creating that
perception is the unemployment rate, and that's why it's been creeping down
from where it is. What'd it get, as high as eight? (interruption) At some point. Anyway, down to 5.5%. Now...
"Likewise,
the Fed's current 'soft' target of 5.2% on the U-3 unemployment rate is
downright ridiculous," he says. "When in the year 2015 you have 93
million adults not in the labor force -- of which only half are retired and
receiving Social Security benefits (OASI) -- and a U-3 computational method
that counts as 'employed' anyone who works only a few hour per week -- then what
you have in the resulting fraction is noise, pure and simple. The U-3
unemployment rate as a proxy for full employment does not even make it as
primitive grade school economics."
Here
are the numbers I wondered about: "At the present time, there are 210
million adult Americans between the ages of 16 and 68..." That is the
workforce. Sixteen to 68 is the age
boundaries where you find the potential American workforce. Between 16 and 68, there are 210 million
Americans, and 93 million -- 43% -- of them, are not working. Now, that's probably a much better way of
expressing employment, unemployment, and the real strength, performance, or
lack of, of the US economy.
See the full transcript of this analysis at:
Scary numbers
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