This ain't Hell, but you can see it from here

Category: Economy

  • Yeah, Those “Good Times” Are Really Rolling . . . .

    Remember, the economy is recovering.  Good times are here!  Economic problems are a thing of the past.

    Well, maybe not.  Seems like in real terms (e.g., inflation-adjusted dollars), men working full-time today make less than they did 40 years ago.

    What about women working full-time, you ask?  Well, that peak was years ago, too – in 2007, to be precise.

    So tell me:  how’s that “wonderful economic recovery” coming for you, folks?  From my perspective, it doesn’t really look all that good.  But maybe that’s just me.

    But not to worry, my friends.  The current Administration says they’re not to blame, and that if we just do what they say things will straighten out “real soon now”.

    Problem is, we’ve been hearing pretty much that same “song and dance” from them for 5+ years now.  And I don’t know about you, but from my perspective things are no better off now than they were 5 years ago. Instead, they kinda look worse.

    Fewer people are working (percentage wise) than they were in early 2009.  More are on foodstamps.  More are drawing “disability” instead of working.  Hell, we’re short well over 5 million full-time jobs just to get back to the same proportion of the population working regularly as we had in early 2009 – let alone make any real progress.

    Don’t even get me started on the deficit.  We’ve added over 64% to the US Federal debt in just over 5 1/4 years.  And the current budget proposals from the current Administration add nearly $1.1 trillion to the Federal debt in the next two years alone.

    And don’t forget that “success story of the Century” – the introduction of that wonder-of-wonders, ObamaCare.  It’s rear-loaded, cost-wise – but it’s already screwing up things by the numbers.  When the real cost of ObamaCare actually starts coming due in about 5 years, well – Katie bar the door.

    Whatever this Administration is doing – it ain’t working.  Except maybe to improve a few folks’ golf games.

    Oh, that ain’t working
    That’s the way we do it 
    Get our money for nothing
    Get golf trips for free . . . .

  • To Support Our Patriots–Privatize the Military

    It occurred to me in the last blog I put together, “Why So Few Choose to Serve,” that the government has a distinct advantage over American patriots, and because we have a Sergeant Major of the Marine Corps talking about why marines should be paid less. The reason for this is that the US government, and ultimately most world governments, have what is called a monopsony. A monopsony is where there is only one buyer in the market. American patriots want to serve their country–or in this situation, sell their labor. However, there is only one buyer of that labor, putting the Patriot at a distinct disadvantage. What is one simple way to reduce the problems caused by this? Bring more buyers into the market by privatizing the military.

    Do I completely believe in privatization of the military? No, but for the sake of healthy debate, I’m going to argue that it is to the benefit of the American patriot to privatize the military because it will allow them to be properly compensated for their service.

    I am going to start out with some very simple assumptions:

    1. The government is the only purchaser of a patriot’s labor.
    2. The only motivation for patriots to supply their labor is to serve their country. No other form of compensation, initially, affects their decision to serve.
    3. The wage provided by the government is unrelated to services provided or productivity of the patriot.

    I have also chosen for the simplicity of this conversation to ignore the following:

    1. The efficiency benefits of a privatized military.
    2. The potential evils of allowing greed driven decisions to be attached to military power.

    With these assumptions in place, we can look at the ways that the government takes advantage of the patriot. The first being wage. Wage is the collection of all financial benefits paid: paycheck, insurance, and retirement benefits.  The Government, employing laborers who are only motivated by patriotism, can set the wage wherever they desire, which is why pay is considered to be so low. In a situation like this, the only factor driving the decision for what to pay a patriot would be a minimum livable wage. There are also pay raises to account for changes in family structure, but not because of a caring for the patriots’ families. It’s merely because, without these pay increases the patriots would no longer be able to supply their labor.  If the military wanted you to have a family, they would have issued you one, hopefully in better condition than the gear I have already been issued.

    The additional wage requirements for patriots with families,, and the cost of more mature patriots, is one of the many reasons that recruitment targets the younger patriots with the glitz and glamour of the job, not the wage, as in other civilian fields of employment. Young people join for the experience and the opportunities, not the financial return, or as it applied to me at seventeen years old, I wanted to blow shit up.

    Now, with these wages intentionally kept low, this is a method of controlling enlistment numbers for more senior individuals–those with the additional responsibilities that a person gains while they get older and are no longer able to remain within the military because the cost to maintain their household requirements no longer matches with the pay and benefits they receive from the military. This leaves only those who are willing to sacrifice pay to continue to provide service to their country.

    I was told by my Battalion Commander, “The Marine Corps gives you everything money can’t buy.” Fellow service members have also looked down upon me when I pointed out that one of the driving factors to remain within the military is my educational benefits.  The culture of the military pushes out those mercenary thoughts, while promoting patriotic service for its own sake.

    Why would a privatized military support the patriot? By providing the patriot, who is willing to supply their labor, regardless of wage, additional options as for whom to provide their labor. For example, Company A and Company B have both been contracted out to perform military operations to support America. The missions being equal, and the pay being the only difference, the patriot will have the option to choose the higher paying company.

    Is this mentality mercenary, yes, but it is a means of compensating our patriots with more than a slap on the ass and a thank you for your service.

    Now, the final question remains: Why do patriots deserve a higher pay? In the civilian market, a person is paid based upon the services they provide. A factory line worker is paid an hourly wage based upon their value to the company. If only ten widgets are created an hour by that worker, then their impact is ten widgets per hour. If a musician puts on a concert for twenty thousand people, their impact is the entertainment of twenty thousand people.

    The patriot provides security, either through defensive or offensive operations, to three hundred and seventeen million people, producing a collective GDP of $16.8 trillion against violent threats. That responsibility is spread among the 2.3 million patriots who have decided to serve. That is the impact of the patriot’s service.

    The American patriot is going to provide their service regardless of their pay, but with such a high level of impact, why not compensate them in a similar manner as we do so many others? By allowing the patriot the option to provide their patriotic service to the highest paying organization, we recognize their impact upon our nation.

  • Inflation: It’s Not Just for Beef Any More

    The other day, I wrote about the rise in beef prices.  Beef is at a 27 year high.

    Here are a few other things found in many people’s grocery basket (well, in normal people’s grocery basket; PETA members might not have them in theirs):  pork, shrimp, eggs.  How have they fared since Feb 2009, you ask?

    Well, hello inflation:  it’s not just for beef any more.

    Here are the numbers, courtesy of zerohedge.com:

    • Pork:  Feb 2009, ~110; end Mar 2014, 152.50; % change, 38.6%
    • Shrimp:  Feb 2009, ~80; end Mar 2014, 162; %change, 102%
    • Eggs:  Feb 2009, ~1.85; end Mar 2014, 2.061; %change, 11.4%

    For comparison: beef was at ~225 in Feb 2009; at the end of March 2014, 289+  –  a %change of 28.4%.

    According to the BLS, CPI inflation during roughly the same period (since 2008, presumably since the end of that year) has been less than 10% – 9.75%, to be precise

    Of the four food items listed above, only eggs have risen in price at a rate even close to the same rate as inflation.  The other items have risen at a higher rate than inflation – all by more than double inflation, and by 10+ times as much in the case of shrimp.

    Yes, other factors – drought, illness in pigs – has contributed to the price rises.  And yes, food costs are traditionally volatile.  Still:  when food costs are rising seemingly across the board faster than inflation, you do have to wonder.

    Yeah, that economic recovery is really working;  people are certainly better off today.  The Administration tells us so!

    What’s next  –  “Let them eat cake”?

  • More Evidence of Economic “Recovery”

    The price of beef has risen to a 27-year high.

    That must be good news.  Because of course wages have kept pace, right?

    Hey, they must have.  The current administration keeps telling us their economic policies are sound, and that good times are “just around the corner”.

    Isn’t that what they keep telling us?

    Sheesh.  GBAFB.

  • All Hail the Economic “Recovery”

    The current Administration keeps telling us that the economy is recovering, or has recovered.  So it must be true.

    Even if for only the second year in our history more people are receiving SNAP (formerly food stamps) than there are women working full-time today.  Data covers 1969-2012, as the Census Bureau’s report for 2013 containing the applicable data isn’t due out until September.

    The linked article has a graphic comparing the number of women working full-time vs the number of people receiving food stamps/SNAP.  Even during the Carter-era economic doldrums (1975-1981), the number of women working full-time appears to have equaled or exceeded the number of people receiving food stamps.  As the linked article notes (emphasis added):

    So far, 2011 and 2012 are the only back-to-back years on record when the number of Americans taking food stamps outnumbered the women working full-time year-round.

    But remember – under our current Administration, the economic recovery continues!  “Happy days are here again!”

    Yeah, right.  If we had competent leadership that knew a damn thing about business and economics, we’d have had a real recovery by now.

     

  • Excellent WSJ Article

    The Wall Street Journal has an excellent – if longish – article discussing why our economy is still in the toilet despite a falling unemployment rate.  It specifically addresses the issue of our current low labor participation rate.

    Highly recommended.  Grabbing a cup of coffee and taking a few minutes (well, 15-20, maybe) to read and think about it is IMO worth your while.

  • The Economics of Veteran Unemployment

    Veteran unemployment rates are 9.2% for those serving after 9/11. That statistic is from the Bureau of Labor Statistics as of February 2014. Last year at the same time it was 9.4%. Comparatively, the unemployment rate for non-veterans is 6.9%, and was 7.9% the previous year. For veterans of other eras, their unemployment rate is 6.3% and was 6.9%.
    It is a startling statistic–as well as deeply disturbing. Why do our veterans leave the military, only to find themselves less employable than their civilian counterparts, especially our newest generation?
    The problem was glaringly obvious to me when I returned home from my third tour to Afghanistan and I found myself working at a food court serving pizza. I was happy for the opportunity and glad that someone was willing to hire me. I worked hard and tried to reduce the impact of my National Guard obligations on them as best I could–even if it was just a cashier position. But it burned. Six months prior I was managing repair and installation projects for cellular and data networks. I was a Staff Sergeant during my drill weekends, managing a platoon of combat medics, who supported a cavalry squadron. And then I took off my uniform, grabbed my visor and apron and always made sure to ask if the customer wanted a caesar salad with their order.
    My situation wasn’t unique, and it wasn’t until I connected two very important lessons that either the veterans need to accept or civilian employers need to educate themselves about. (Sadly, my guess is that capitalism will win and Veterans will need to accept their fate.) First, was when a friend, who had never served and had worked in the civilian market in an executive position, made this casually ignorant comment about military leadership. “Your experience doesn’t translate. You just tell your guys what to do and they do it. Things don’t work like that in the civilian world.”
    I wish. I wish it were that easy, but he didn’t know any better.
    Second, was when I was studying my Labor Economics textbook. It discussed the amount of experience that a person gains while working in a position, and how that experience makes them more valuable. This experience is only applicable to that position, however.
    That is the problem. That is the barrier that we can’t overcome: the combination of the belief that our experience doesn’t translate, and the simple fact that we don’t have experience in the civilian market. Many of our skills can be translated, but a civilian employer doesn’t know which ones. In addition, we are simply entry level employees in the eyes of those organizations seeking qualified applicants. There is no doubt that we have gained skills and experience, but rarely in the fields of employment we are attempting to gain access to, which is why so many of us must behave like someone freshly entering the market, with no job skills, because that is what we are–at least in the eyes of the hiring managers.
    The hard part for us is that we know we do have skills, the kind of skills that civilian employers are demanding. I can see it, as I push through college. I’m forced to take classes dedicated to speaking in front of a group, writing professional correspondence, and simply working in a team. That was three separate courses–summarized, two 100 level courses, and a 400 level course. Taking these courses, is to simply prove to my future civilian employer that I am capable of functioning and communicating in a professional environment. All of these were things I learned in the military: teaching classes to my peers and subordinates, briefing my superiors, and working in a team.
    Many of the issues have to do with our pride. Every veteran I know complains about attending college with these “kids.” It is a perfectly understandable frustration. We now operate under completely different frames of reference than most of America. Why should we have to stand in line with all these kids, people who didn’t serve, and be treated as their equals? We shouldn’t, but then again, in the eyes of the greater capitalist machine–those firms that would hire us–we are viewed simply for what production value we can offer. The hiring manager as a human being appreciates and perhaps, even sympathizes with our plight, but they have a job to do, and that job is to hire as many qualified applicants as they can for the lowest cost.
    To do this, they have pre-established requirements that an applicant must meet, simple easy to assess criteria to determine what our production value is to the hiring firm. Veterans are not easily assessed. We don’t have the same certifications, and our experience doesn’t translate well onto paper to fill in their check boxes. As a result, we aren’t hired.
    Why doesn’t the military simply support us with these civilian certifications? We do the same jobs right? Two reasons: cost and retention. Many certifications require training that goes beyond the scope of the job that the military requires of the veterans. Why would they train us, so that we could leave? Training is expensive, and it would be a waste of taxpayer money to train us then let us go. It sucks, but it is reality.
    So there we are: the veterans of foreign wars, combat proven individuals capable of thinking critically and performing under the kind of stress that the civilian market can’t reproduce. This, my generation of veterans, is the same experience as those veterans who came before us. But none of that matters. What we need to do is gain the credentials which the civilian market has established to ease the burden on their hiring managers. Then, once we have entered those positions, we, as human beings, can be evaluated more closely. Our productivity can be measured and our experience can be really put to the test against our civilian counterparts. That is where we will show the value of our experience and our productive capabilities.

  • “Happy Days Are Here Again”, Economy-Wise? Don’t Think So

    We’ve all seen the recent “unemployment” figures, purporting to show improvement in the US economy.

    Yeah, right.  And aren’t ye all a wee bit auld to be a’ believin’ in Leprechauns?

    A couple of Wall Street advisers say that those figures are, to be kind, grossly misleading.  Some might even say that they’re deliberately understated.

    The actual unemployment rate, including discouraged workers who have quit looking for work, is well over 10%.  Hell, the U6 unemployment rate – which includes both underemployed and discouraged workers – is still over 13%, and has been for over 5 years (since Dec 2008).  (For the record:  during the Bush (43) Administration, U6 was above 13% in precisely one month – Dec 2008 – and was 11% or higher only 4 months:  Sep-Dec 2008.)  Finally:  the labor participation rate – which measures, oh, the actual percentage of US residents who actually have a job, full- or part-time – in Dec 2013 was 62.8%.

    Participation rate-wise, that’s “welcome to Carter Country” territory.

    There’s one more little nugget of “good news”.  If you’re old enough, you may remember something called a “misery index”.  It was popular in the 1970s and 1980s as a way to measure the combined effect of inflation and unemployment.

    Calculated using today’s suspect “official” methodology, it comes out at around 7.5%.  However, the method of calculation has changed since the 1980s.  Inflation is now calculated “differently” (e.g., using a method that comes out with a far lower rate).  And the unemployment rate used doesn’t include discouraged workers – you know, those folks who want to work but have been unsuccessfully looking for a job for so long that they’ve simply quit looking.

    If the misery index were calculated today using the same inflation methodology used during the 1970s and 1980s and including discouraged workers, it would be 14.7%.  That’s higher than it was during the Ford Administration.

    Yeah, I don’t think we should be singing “Happy Days Are Here Again” just yet.