Decline in Christmas Card Traffic Mirrors Unemployment Rate

How do you write the annual Christmas letter, anyway, when you have to write the following: "Gee, we've been out of work for a year now, we're six months behind on the mortgage, they're coming to get the car on Monday, and we're getting heating assistance and food stamps. But other than that, Merry Christmas to you and a Happy New Year!"?

Considering that the U-6 measure of unemployment is around 17%, a similar percentage drop off in Christmas card traffic just about fits.

“A lot of my friends aren’t sending real cards this year,’’ Willingham said. “I suspect every year it will decline, just like the rest of Western civilization.’’

Go here for more on the story from Boston.com.

Marxist Professors Outnumber Conservatives Three to One

And the big joke's on you: your kid goes deep into debt to pay the salaries of the proponents of the god that failed.

Kevin Hassett in "Marxist Professors Are Gift to Climate Skeptics" here for Bloomberg explains the politics of climate science:  

A 2007 survey of more than 1,400 professors by sociologists Neil Gross of Harvard University and Solon Simmons of George Mason University is as damning an indictment of an organization as you are ever likely to see.

The authors compiled the political affiliation and beliefs of the professors, who were asked to identify themselves along a spectrum from very liberal to very conservative. Across all fields, 44 percent identified themselves as liberal or very liberal, while 9.2 percent identified themselves as conservative or very conservative.

Strikingly, the data were even more tilted in the physical and biological sciences. There, 45.2 percent of professors identified themselves as liberal, while only 8 percent said they were conservative.

The authors dug deeper than many previous studies and established some startling findings.

In the social sciences, 24 percent of professors identified themselves as liberal “radicals” and 18 percent as Marxists. Only 4.9 percent of social scientists identified themselves as “conservative.”

So there are almost five times as many self-identified liberal radicals on our faculties, and more than three times as many Marxists as there are conservatives. Last I checked, Marxism has been utterly discredited. Yet there are still Marxists everywhere, poisoning the minds of our children. Conservatives, on the other hand, are a rarity.

While there isn’t enough data to address the question, it is safe to assume that no other profession is so tilted. In a society about evenly split between liberals and conservatives, achieving such a bias requires serious effort. It doesn’t happen by accident.

If you want to run conservatives out, you need to discourage dissertations that might reach conservative conclusions. You need to shun young students if their work questions liberal orthodoxy. You need to control the academic journals, rejecting papers submitted by identifiable conservatives.

You need to celebrate work that supports the political bias of Democrats. If your research shows that higher minimum wages are terrific, an endowed chair is yours for the taking. Question whether a higher minimum wage might cause higher unemployment, and find your place on the bread line.

For years, I have watched the economic community act this way. The hacked East Anglia e-mails confirm that exactly this type of conspiracy is in place. They show climate experts plotting how to keep the lid on research that didn’t support the prevailing view on global warming. In one e-mail, Michael Mann of Penn State University proposed boycotting an academic journal because it had published an article that provided evidence contrary to global warming canon.


There's more at the link.

Jewish Atheist Knows a Tyrant When He Sees One

From John W. Whitehead's December 11, 2009 interview with Nat Hentoff "America Under Barack Obama":

Nat Hentoff has had a life well spent, one chock full of controversy fueled by his passion for the protection of civil liberties and human rights. Hentoff is known as a civil libertarian, free speech activist, anti-death penalty advocate, pro-lifer and not uncommon critic of the ideological left.

At 84, Nat Hentoff is an American classic who has never shied away from an issue. For example, he defended a woman rejected from law school because she was Caucasian; called into a talk show hosted by Oliver North to agree with him on liberal intolerance for free speech; was a friend to the late Malcolm X; and wrote the liner notes for Bob Dylan's second album.

A self-described uncategorizable libertarian, Hentoff adds he is also a “Jewish atheist, civil libertarian, pro-lifer.” Accordingly, he has angered nearly every political faction and remains one of a few who has stuck to his principles through his many years of work, regardless of the trouble it stirred up. For instance, when he announced his opposition to abortion he alienated numerous colleagues, and his outspoken denunciation of President Bill Clinton only increased his isolation in liberal circles (He said that Clinton had "done more harm to the Constitution than any president in American history," and called him "a serial violator of our liberties.").

Born in Boston on June 10, 1925, Hentoff received a B.A. with honors from Northeastern University and did graduate work at Harvard. From 1953 to 1957, he was associate editor of Down Beat magazine. He has written many books on jazz, biographies and novels, including children's books. His articles have appeared in the Wall Street Journal, New York Times, Commonwealth, the New Republic, the Atlantic and the New Yorker, where he was a staff writer for more than 25 years. In 1980, he was awarded a Guggenheim Fellowship in Education and an American Bar Association Silver Gavel Award for his coverage of the law and criminal justice in his columns. In 1985, he was awarded an Honorary Doctorate of Laws by Northeastern University. For 50 years, Hentoff wrote a weekly column for the Village Voice. But that publication announced that he had been terminated on December 31, 2008. In February 2009, Hentoff joined the Cato Institute as a Senior Fellow.

Hentoff's views on the rights of Americans to write, think and speak freely are expressed in his columns. He is also an authority on First Amendment defense, the Bill of Rights, the Supreme Court, students' rights and education. Friends and critics alike describe him as the kind of writer, and citizen, that all should aspire to be—"less interested in 'exclusives' than in 'making a difference.'" Critiquing Hentoff's autobiography, Speaking Freely, Nicholas von Hoffman refers to him as "a trusting man, a gentle man, just and undeviatingly consistent."

Hentoff took to heart the words from his mentor, I. F. "Izzy" Stone, the renowned investigative journalist who died in 1989: "If you're in this business because you want to change the world, get another day job. If you are able to make a difference, it will come incrementally, and you might not even know about it. You have to get the story and keep on it because it has to be told."

Nat Hentoff has earned the well-deserved reputation of being one of our nation's most respected, controversial and uncompromising writers. He began his career at the Village Voice because he wanted a place to write freely on anything he cared about. And his departure from the publication has neither dampened his zeal nor tempered his voice.

Hentoff, whose new book, At the Jazz Band Ball—Sixty Years on the Jazz Scene (University of California Press), is due out in 2010, took some time to speak with me about Barack Obama, the danger of his health care plan, the peril of civil liberties, and a host of other issues.

Nat Hentoff: I try to avoid hyperbole, but I think Obama is possibly the most dangerous and destructive president we have ever had. An example is ObamaCare, which is now embattled in the Senate. If that goes through the way Obama wants, we will have something very much like the British system. If the American people have their health care paid for by the government, depending on their age and their condition, they will be subject to a health commission just like in England which will decide if their lives are worth living much longer.

In terms of the Patriot Act, and all the other things he has pledged he would do, such as transparency in government, Obama has reneged on his promises. He pledged to end torture, but he has continued the CIA renditions where you kidnap people and send them to another country to be interrogated. Why is Obama doing that if he doesn't want torture anymore? Throughout Obama's career, he promised to limit the state secrets doctrine which the Bush-Cheney administration had abused enormously. The Bush administration would go into court on any kind of a case that they thought might embarrass them and would argue that it was a state secret and the case should not be continued. Obama is doing the same thing, even though he promised not to.

So in answer to your question, I am beginning to think that this guy is a phony. Obama seems to have no firm principles that I can discern that he will adhere to. His only principle is his own aggrandizement. This is a very dangerous mindset for a president to have.

JW: Do you consider Obama to be worse than George W. Bush?

NH: Oh, much worse. Bush essentially came in with very little qualifications for presidency, not only in terms of his background but he lacked a certain amount of curiosity, and he depended entirely too much on people like Rumsfeld, Cheney and others. Bush was led astray and we were led astray. However, I never thought that Bush himself was, in any sense, "evil." I am hesitant to say this about Obama. Obama is a bad man in terms of the Constitution. The irony is that Obama was a law professor at the University of Chicago. He would, most of all, know that what he is doing weakens the Constitution.

In fact, we have never had more invasions of privacy than we have now. The Fourth Amendment is on life support and the chief agent of that is the National Security Agency. The NSA has the capacity to keep track of everything we do on the phone and on the internet. Obama has done nothing about that. In fact, he has perpetuated it. He has absolutely no judicial supervision of all of this. So all in all, Obama is a disaster. ...

JW: One of the highest unemployment rates in the country is among African-Americans.

NH: Not only that, the general unemployment rate is going to continue for a long time and for all of us. I have never heard so many heart-wrenching stories of all kinds of people all across the economic spectrum. As usual, the people who are poorest—the blacks, Hispanics and disabled people—are going to suffer more than anyone else under the Obama administration. This is a dishonest administration, because it is becoming clear that the unemployment statistics of the Obama administration are not believable. I can't think of a single area where Obama is not destructive.

JW: A lot of people we represent and I talk to feel that their government does not hear them, that their representatives do not listen to them anymore. As a result, you have these Tea Party protests which the Left has criticized. What do you think of the Tea Party protests?

NH: I spent a lot of time studying our Founders and people like Samuel Adams and the original Tea Party. What Adams and the Sons of Liberty did in Boston was spread the word about the abuses of the British. They had Committees of Correspondence that got the word out to the colonies. We need Committees of Correspondence now, and we are getting them. That is what is happening with the Tea Parties. I wrote a column called "The Second American Revolution" about the fact that people are acting for themselves as it happened with the Sons of Liberty which spread throughout the colonies. That was a very important awakening in this country. A lot of people in the adult population have a very limited idea as to why they are Americans, why we have a First Amendment or a Bill of Rights. ...

JW: You lived through the McCarthy era in the 1950s. Is it worse now than it was then?

NH: McCarthy's regime was ended by Senators who realized that he had gone too far. What we have now may be more insidious. What we have now in America is a surveillance society. We have no idea how much the government knows and how much the CIA even knows about average citizens. The government is not supposed to be doing this in this country. They listen in on our phone calls. I am not exaggerating because I have studied this a long time. You have to be careful about what you do, about what you say, and that is more dangerous than what was happening with McCarthy, but the technology the government now possesses is so much more insidious.

There is much more here. MUST reading.

It's a Depression

From Richard Posner of The Becker-Posner Blog, on Gross Domestic Product:

But it is necessary to emphasize that it is just a starting point. I disagree with economists who say the “recession” ended in the third quarter. The depression (as I think we should call it if only because of its enormous potential political consequences) has caused massive unemployment with all the associated anxieties and hardships, has greatly reduced household wealth, has caused private investment to turn negative, has cost the government trillions of dollars in lost tax revenues and recovery expenditures (TARP, the fiscal stimulus, the mortgage-relief programs, the auto bailouts, etc.), has undermined belief in free markets and altered the line between government and business in favor government, and is threatening a future inflation while deepening our dependence on foreign lenders. To view a change in GDP from negative to positive as signifying the end of a depression (by which criterion the Great Depression ended in 1933 and again in 1938) is to misunderstand the utility of GDP as a measure of economic activity.

Go here for the complete article.

"Obama's Policies Risk Another Depression"

Scott S. Powell and Ron Laurent, in "Obama's Policies Risk Another Depression" for The Detroit News, ask:

Light at the end of the tunnel or an oncoming train wreck?

In the panic following the insolvency of Fannie Mae, Freddie Mac and Lehman Brothers in September 2008, the American taxpayer was stampeded into bailing out AIG and Wall Street. We were told that $700 billion was needed to establish the Troubled Asset Relief Program (TARP) because the country faced nothing less than a collapse of its financial system.

Inexplicably after Congress passed it -- almost like a bait and switch -- TARP was directed at banks rather than troubled assets. A little more than a year later, TARP Inspector Neil Barofsky reports that AIG's $1.5 trillion in credit fault swaps did not, after all, pose systemic risk. So if we were misled about the TARP bailout, it seems appropriate to question other aspects of government intervention since unemployment, foreclosures and bank failures have risen. ...

Scott S. Powell is managing director of AlphaQuest LLC and a visiting fellow at the Hoover Institution. Ron Laurent is the managing partner and chief investment strategist of Veritas Partners LLC.


There's much more at the link.

"The Feds Have No Faith in Recovery"

Penetrating analysis here from the chief economist at Delta Global Advisors.

November 5, 2009

The Feds Have No Faith in Recovery

By Michael Pento

The stock market has enjoyed a significant rally since the end of the first quarter. The Bureau of Economic Analysis reported last week that the economy grew at a 3.5% annual rate in the third quarter--a figure they achieved by that claiming inflation was running at only a 0.8% annual rate, despite a sharp drop in the dollar, a spike in commodity prices and record highs for gold.

The cyclical bull market in stocks and positive print on GDP has caused some on Wall Street and in Washington to claim the recession has ended. Despite all the good economic news, an end to fiscal and monetary stimulus is nowhere in sight, precisely because policymakers know the happy news is artificially derived.

A closer look indicates that neither the administration nor the Federal Reserve believes its own recovery rhetoric. They understand that the economy will not prosper without continued life support.

I believe removing such artificial stimulus is needed so the country can immediately begin de-leveraging and to prevent the accumulation of yet more baneful debt. What is truly amazing is how many people on Wall Street are foolish enough to postulate that our problems have been solved. The stock market will not be so easily fooled for much longer.

The Great Depression Part II was narrowly averted last year by slashing interest rates to near zero. The Fed made money virtually free because the record level of indebtedness ($34 trillion) in the economy required such low rates so that borrowers could service their obligations. Otherwise a cataclysmic domino effect of defaults and bankruptcies would have occurred. To avoid that scenario, the public sector assumed some of the private sector's debt and then subsequently took on a significant amount more. The debt of the nation continues to increase at a 4.9% annual rate. All public debt is ultimately the responsibility of the private sector to pay off--either directly or through future taxes. As a result, the economy has never been more precarious than it is today.

In spite of this, the stock market appears to be doing quite well. We've seen a 57% rally off the March lows in the S&P 500. However, if you measure the market against other assets its performance is much less impressive. Since the beginning of 2000 the S&P is down about 50% measured in terms of a basket of currencies other than the falling U.S. dollar. The index is down nearly 80% against the real inflation hedge--gold!

The sad truth is that this recent market rally has been produced on the back of a weakening dollar and the slashing of corporate overhead. Cutting payrolls and research and product development projects are not a prescription for sustainable growth. As I like to say, you can't burn your furniture to keep your house warm forever. Eventually, top-line revenue growth must emerge or Wall Street's game of beat-the-expectations will be short lived.

It's also worth noting that a country cannot devalue itself to prosperity and that a bull market cannot survive an inflationary environment for long. In the short run, nominal gains in the averages can occur since everything priced in dollars tends to increase in value. However, the rally will be truncated unless the Fed provides consumers and corporations with a stable currency.

The ramifications of a crumbling currency are vastly misunderstood. A strong dollar is the cornerstone of a healthy economy. It is essential for balanced growth and healthy investment to occur. On the other hand a weak currency decimates the middle class and the corporate sector's ability to maintain earnings growth. Inflation lies behind all infirm currencies, and it is inflation that destroys the purchasing power of consumers. The diminished value of their wallets leaves them with the ability to buy only non-discretionary items. As a direct result, unemployment rates soar and economic output plunges.

I believe we will suffer from a protracted period of stagflation. Money supply, as measured by M2, has increased 5% Y.O.Y. Meanwhile the output of goods and services is falling. As long as the money supply is chasing a shrinking GDP pie, there will be upward pressure on prices.

Making the situation even worse is the manner in which the money supply is growing. The quality of growth is very low because the increase in supply is coming from commercial bank purchases of Treasury debt, rather from an issuance of credit to the private sector for capital goods creation. Total Loans and Leases at Commercial banks are down 8.2% from last year. Meanwhile, the amount of Treasuries held at all commercial banks is up 20% year-on-year.

That means money supply growth is emanating from government's misallocation and redirection of capital. It isn't being loaned out to build mines and factories; it is instead being loaned out to increase consumption and build even more consumer debt.

If the Treasury and Federal Reserve truly believed the economy and the stock market were on a sustainable recovery path, talk of extending and increasing the home buyer's tax credit would be off the table. The Fed would already be reducing the size of the monetary base. The truth, however, is that no one in government really believes in this recovery. If they did, they would be hiking interest rates and the deficit would be shrinking.

The government's realization of our precarious economic condition means its largess will continue. Near term, that may ease some pain. So did the artificial stimulus that gave rise to the housing boom. In the end, a protracted period of a near-zero interest rates, along with endless economic stimulus, will spawn another bubble and not a genuine recovery.

Michael Pento is chief economist at Delta Global Advisors and a contributor to greenfaucet.com.

"The First 2.5% of GDP is Fictional"

Good stuff from Mish today on the recent GDP numbers.

He says they are inherently deceptive because they count all spending, including government spending, which is by definition consumptive spending extracted from the productive side of the economy.

He quotes Federal Reserve Chairman Ben Bernanke admitting as much:

"It takes GDP growth of about 2.5 percent to keep the jobless rate constant. But the Fed expects growth of only about 1 percent in the last six months of the year. So that's not enough to bring down the unemployment rate."

About which Mish says:

Inquiring minds might be asking: Why does it take 2.5% growth to keep the jobless rate constant? The answer is the first 2.5%+- of GDP is fictional. When the economy is growing at 2%, it feels like a recession because it probably is, even though no one will admit it.

90 Jobs--10,000 Applicants/99.1% Disappointed

The country needs to create roughly 150,000 new jobs per month just to keep up with first time job seekers, but the inventory of already unemployed Americans just continues to grow. Who's going to have the money to buy the washing machines these lucky 90 are going to make? Certainly not the 15+ million Americans who've lost their jobs.

The news from Kentucky:

October 8, 2009

10,000 apply for 90 factory jobs

By Jere Downs

jdowns@courier-journal.com

In the latest sign of weakness in Louisville-area employment, about 10,000 people applied over three days for 90 jobs building washing machines at General Electric for about $27,000 per year and hefty benefits.

The jobs dangle medical, eye care, prescription and dental benefit packages, as well as pension, disability, tuition assistance and more, said GE spokeswoman Kim Freeman. And despite the recession, no union workers have been laid off from Appliance Park since the company negotiated lower wages with workers in 2005.

“There are no jobs out there paying these kinds of wages that also offer these kind of benefits,” said Jerry Carney, president of IUE-CWA Local 761 at Appliance Park.

Just four years ago, the same jobs paid $19 per hour. But that was before Local 761 approved wage cuts for new workers aimed at preventing the closure of Appliance Park.

“People still value these jobs,” Freeman said.

With the Jefferson County unemployment rate at 10.6 percent in August and more than 38,000 unemployed people looking for work, the opportunity for moderate pay and health care was an attractive lure.

“In this recession, there are lot of people who are just about to run out of unemployment benefits,” said Richard Hurd, a labor relations professor at Cornell University. The national average of time unemployment benefits collected now stands at 26 weeks, Indiana University Southeast Professor of Business Uric Dufrene said.

That’s about a third of the maximum that can currently be collected.

Larissa Roos, 38, never worked in a factory, but was one of the thousands who bid on jobs assembling appliances.

Until she was laid off from Bank of America in February, Roos said she made $18 per hour fielding calls, often from irritated merchants, about credit card glitches. Roos took that job just out of high school. But severance payments end this month, and Roos said she is looking everywhere to try to replace the income.

“I need something so I can live day to day. The job market is horrible,” Roos said Thursday, adding the family relies on her husband’s job as a printer to pay the mortgage on their Fern Creek home as well as utility, fuel and other bills.

With 10,000 vying for GE line jobs, “I am sure my application won’t even get looked at,” she added.

The rush of applicants came as no surprise to Carney, who noted that another recent GE advertisement for 13 maintenance workers, who are paid a union skilled trades rate of $23 hourly, drew 700 job seekers.

Carney credited GE’s reputation for union job security and blue chip benefits as a powerful lure.

GE announced the new jobs last week and started accepting applications through a website Monday. Wednesday was the deadline. The jobs are being added to a new second shift early next month to assemble Energy Star washing machines in Building 1 at the historic Louisville complex.

Roughly 80 percent of applicants report factory experience, Freeman said. That is not surprising, given the recession so far has slashed 8,000 manufacturing jobs from the region’s economy, Dufrene said.

“There is an abundance of potential employees with manufacturing-related skills,” Dufrene said.

The rough profile of applicants, most of them former factory workers, suggests many lack sufficient education to apply for more than minimum wage jobs in the current job market.

Half lacked a high school diploma. Just 5 percent of the applicants said they had a bachelor’s degree or higher. and

GE employs roughly 2,100 hourly and 2,000 white collar workers at Appliance Park. Now, about 440 workers labor on the first shift making washing machines in Building 1.

Applicant Shane Hopkins, 48, hopes his factory experience provides an edge.

Until mid-August, he said he maintained presses at a plastics factory. Now, Hopkins said he picks up occasional work as a flooring contractor for a cousin.

He still pays $300 per month to keep health care benefits for himself and his wife, an independent contractor for a Ford Motor Co. parts supplier at the Louisville Assembly Plant. Hopkins anticipates she’ll be out of work next year, when the plant closes for retooling.

A year from now, “her job ain’t going to be there,” Hopkins said. “I am thinking seriously about going to McDonalds, just for the benefits if nothing else.”

Reporter Jere Downs can be reached at (502) 582-4669.