Tuesday, April 13, 2010

Wall Street Fictions

One thing you have to do, is hand it to the most reactionary op-ed pages in the country for coming up with ever new malarkey and propaganda. The wheels never cease churning, especially since Rupert Murdoch took over The Wall Street Journal - whose opinion page has now become his mouthpiece for bloviated bunkum.

Today's lead editorial, 'Incentives not to work' continues the tradition of earlier bald nonsense, including how "Obamacare" is really socialism, and that the rising DOW shows the economy and stock market are on a genuine rebound (Not!).

The basic aim of the editorial is clearly political, to excoriate the Democrats for wanting to extend jobless benefits to more than 14 million unemployed as part of a current benefits package. According to the Journal - which has the unmiitigated gall to cite a paper by Lawrence Summers on Unemployment in defense of its stance, this will only create a further incentive not to work. As the editors frame it (after citing a paper by Alan Krueger of the Treasury Dept. - to the effect that "job searches increase sharply in the weeks prior to benefit exhaustion"):

"And sure enough, the share of unemployed workers who don't have a job for more than 26 weeks has steadily increased to a record 44.1% in March"

Going on to note:

"The average spell of unemployment is now 31 weeks"

But why all the pissing and moaning, not to mention the niggardly attitude? Especially when German workers get TWO years paid jobless benefits, and at 80% of their regular incomes! (Interestingly, the WSJ ran a story last year comparing an American and German unemployed worker. While the American was out pounding the pavements in a futile search for a new job and after getting only 45% of his full salary, the German was on holiday to Sardinia!)

But then, Germany doesn't go all around the world starting wars of choice and bleeding down their reserves to the extent nothing is left for domestic priorities!

The fact is, the jobless benefits tossed as a sop to American workers are pathetic! The normal six month duration is a freaking travesty, especially after a monster Recession (now being called the "Great Recession") which devoured some 15-16 million jobs in 7 months! And which at least one analyst for The Financial Times has predicted will take at least seven to ten more years to even get back to parity (the level of jobs at the beginning of the recession)!

The fact that unemployment benefits are actually taxed makes it even more of a travesty, plus insult. So, what exactly does the Journal expect workers to do when their benefits are exhausted? Go pound sand, or maybe eat sand?

Actually, the woolly-brained ignoramuses ensconced in the ivory towers on Wall Street don't see any problems. For example, after citing the "31 weeks of average unemployment" duration stat earlier, they go on to add "even though the economy is once again creating more jobs than it is losing"

But this is a bold face lie or at least a gross (very gross!) misrepresentation. Let's look at some facts here, before taking this horse pockey at face value. Accordng to the BLS March jobs report, there were 162,000 jobs added. Now hold strain! Some 50,000 of those were not in any genuine or permanent framework but rather TEMPORARY (4-6 weeks) jobs for GOVERNMENT census workers. So, subtract them right away: 112,000 left.

BUT, there 100,000 new job searchers enter the market per month (according to the FT analyst's stats) - coming out of colleges, schools, etc. - so given this as a constant corrective input it actually has to be subtracted from the total: 112,000 - 100,000 = 12,000 new jobs.

Now, that is 12,000 new jobs for let us say (lowballing the unemployment figure given earlier) 12 million workers. Let's even be generous and allow that 12,000 truly NEW jobs (above the 100k/ month input threshold) have been added for the past YEAR - this leaves a total of 144,000 + 12,000 = 156,000 jobs for 12 million workers. That is about 77 jobs per unemployed person - not counting the "discouraged workers" - who number an additional ten million.

This means that, assuming all other factors are equal, the odds are about 77 to 1 against any given person gaining a job. (And again, lest I didn't make myself clear earlier, given 100,000 new seekers are interjected each month, it means that a minimum of 100,000 jobs must be added per month just to tread water or keep the unemployment rate from increasing).

In other words, the illustrious mavens at the Journal just expect that despite odds of 77 to 1 against, all the unemployed will simply find a job and cease needing jobless benefits.

Why have those jobless for longer than 26 weeks increased? Well, DUH! Because the recession has gone on at least that long, taking jobs with it- even while 100,000 NEW job seekers have entered the job market each month! Despite the influx, companies are still in no more mood to hire than they were in December, 2008 or January, 2009 - but try to get the pie eyed morons at the Journal to see that. (So blinded are they by their Simon Legree capitalist, rentier-speculator ideology)

Why, according to Mr. Krueger's paper, do job searches spike just before benefits are exhausted? Again, a big DUH! Because the unemployed worker realizes this may be his last gasp and the cruel capitalist farce of a nation of which he is a nominal "citizen" will soon disown him and relieve him and his family of their means of survival. But, of course, fat satiated pigs who wallow at the trough of public rewards and corporate welfare wouldn't see that. Not at all!

But hey! I guess Mr. Blankenship and the boss men of the Massey Mines in Montcoal, WVa will soon be needing new workers to replace the ones killed - because the owners were too cheap to install ventilation systems for the methane gas. Maybe the Journal would finally be satisfied then! Getting some of those lazy, shiftless, irresponsible "something for nothing" unemployed to work endless shifts in mines that lack even the basics for protection. Better dead than have jobless benefits extended, eh Journal?

The Journal's resident idiots also make another specious claim, that the prolonged unemployment insurance benefits are contributing to an increase in the unemployment rate of 9.7%. First, let's get it straight this rate is already low-balled, and should be around 17%. (Counting actual unemployed people- no fancy gimmicks dropping people of rolls after 6 months to relbale them 'discouraged'.) The error the Wall Streeters make is in not reckoning that the extra 10 million (discouraged) workers are not counted at all, nor do they receive any benefits.

So, it is farcical to blame those receiving unemployment insurance for spiking the rate to 9.7%. Or to blame the Democrats for wanting to spike it higher! The truth is, they are having virtually no effect at all, None. BUT, if the discouraged workers all return to look for jobs anew, they WILL spike the rate. If all ten million discouraged workers return to search actively, in addition to the current 12 million looking, the actual jobless rate will reach 16.8%.

If only 5 million of the discouraged return to the job market, the jobless rate will spike to 13.7%. If any rate spikes in unemployment occur in the next two months, a logical mind shoud attribute them to an influx of discouraged workers back into the job market. Probably prompted by the overly rosy March jobs report! The basic point: the increasing number of discouraged workers – who leave the job market and don’t return- is actually deflating the unemployment rate. Conversely, any uptick in unemployment rate is incepted by the reverse- discouraged workers coming back to look anew.

On the face of it, it seems to be that the actual game of the nattering nabobs at the Journal is to remove jobless benefits and toss all those workers into the catchall of the “permanently discouraged” so they are forced to live off other family members’ incomes as opposed to the government’s tax income. Then, the Journal and its capitalist ideologues can continue to inhabit the fantasy land of a nation with maybe 6-8% unemployment tops.

The problem is that the benefits denied via unemployment insurance will be taken elsewhere. Those citizens aren’t just going to roll into a ditch and die so irrationally exuberant speculators can see a 'happy face' jobs report, to make the DOW go to 12,000. Those younger than 62 will get it by signing onto welfare, Medicaid and food stamps programs. Those 62 or older, will simply apply for early Social Security.

All of us stand to lose, in other words, because some selfish Shylock-based scribes can’t see it in themselves to justify a simple helping hand to fellow citizens in need.

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