This conservative outrage machine story yesterday and today about Commerce Secretary Raimondo has got to be the dumbest one I've heard in a long time

 She was asked an ignorant question.

Why would the Commerce Secretary have something timely to say about employment revisions released by the Bureau of Labor Statistics at the Labor Department?

It's not her area. I wouldn't expect her to know anything about it, and if I had a brain I wouldn't bother asking her.

Commerce and Labor are two separate cabinet level departments and have been since 1913.

I don't expect the Commerce Secretary to have the latest labor information anymore than I expect the Labor Secretary to be able to respond to the latest GDP report produced by the BEA at the Commerce Dept.

But all the ignorami on the right, but I repeat myself, are up in arms over this. It's embarrassing.

What's really going on here is outrage over the size of the revision, which is the largest since 2009.

Republicans want to say Biden and Harris have been lying about the jobs numbers for a year to make themselves look better.

That's a crock. The initial benchmark revisions occur every year around this time, and their size should be no surprise since the Employment Situation Summary every month contains revisions upon revisions upon revisions of prior months. This happens all the time, and if you know you know that this year the numbers have been particularly susceptible of large revisions, criticism, and expressed suspicions from the FOMC members on down.

But total nonfarm payrolls have always been this way. They are quick and dirty on any day. I gave up following them in favor of other measures precisely because it involves securing jello on a galley plate in high seas, and I have better things to do.

Full time employment, measured with other data, around 50% of population under Joe Biden hasn't been great, and it hasn't been awful either. In my arrogant opinion, following total nonfarm and its endless stream of revisions is a fool's errand.

Even more foolish to get upset about it when plenty of other indicators show that employment up until this summer has been "secularly tight", as one economist likes to put it. Continued claims for unemployment have been steady as she goes since late 2021.

The slight recent elevation in these claims numbers is consistent with a softening of employment, which I have noted elsewhere in regard to full time jobs.

The bloom is off the rose it seems, but the preliminary total nonfarm benchmark revision down 819,000 is a problem with that model, not a sign of a sudden problem with employment. 

 

John Carney: Welcome to Phony Farm Labor Shortage Season

Thread.

Richest Will Benefit From Immigration Bill While Poorest Will Suffer

So says CNBC's John Carney, here:

What the CBO does get right is that return on invested capital is likely to increase under the bill. What this means is that the richest members of the economy will benefit from the bill even as the poorest members suffer. It will act as a sort of anti-Rawlsian law, delivering the greatest benefit to the best-off in society. Inequality will grow under this law, rather than shrink.

CNBC's John Carney Defends The Debt Ceiling

John Carney is a rare voice of reason at CNBC.

Here's the conclusion to his defense of the authority of Congress over appropriations, taxes and borrowing:

The logic of the opponents of the debt ceiling is that Congress implicitly approves borrowing when it votes for spending and taxing laws. By this same logic the President should have the power to tax unilaterally based on spending authorizations and borrowing limits. Likewise, the President should have spending powers based on directions to federal agencies in the absence of legislative appropriations.

This isn't the logic of the Constitution's framers, who built a system in which Congressional mandates do not imply a power to spend, in which appropriations do not imply a power to tax, and in which neither mandates nor appropriations imply a power to borrow. Each requires distinct, specific Congressional authorization. 

The framers built this around a revolutionary idea: that these powers, which had so often been held by kings, should be held by legislatures. Authority that still rests in the hands of the executive branches of government across much of the world is, in the United States, in the hands of legislators. 

This cannot be undone with a bill. It would require a constitutional amendment. And, of course, a rejection of the framers's wisdom about who should have the power to borrow on the credit of the United States.

In a word, the president of the United States isn't a king. The current one just thinks he is.

America's LIBOR Banks' Silence Is Deafening

John Carney for NetNet, here:

I asked Bank of America, Citi, and JP Morgan Chase to provide answer[s] to four sets of questions about their Libor practices.

1. Who makes the Libor submission for your bank? How many people involved? Who does the submitter report to? How high up in management does decision go? Is it reviewed before or after submitted to BBA? Who signs off on changes?

2. How is the submission calculated?

3. Has this procedure changed over time?

4. Is it under review following Barclays scandal?

Not one of the banks would provide the information requested. Bank of America and JPMorgan declined to comment. Citigroup did not return phone calls.

The United States of Moronica

We're even dumber than we look, and our stupid party is the smart one of the two.

From John Carney for NetNet:

"A recent study from the Pew Research Center found that 47 percent of Americans didn’t know which political party supports reducing the size and scope of the federal government. Forty-two percent didn’t know which party usually supports reducing military spending. Thirty-nine percent didn’t know which party generally favors restrictions on abortion. ...

"There’s a substantial ignorant minority on almost every issue. ...

"Forty-four percent of women, for example, did not know Nancy Pelosi is a Democrat (fewer men, 33 percent, got this wrong). Fifty percent of women didn’t know ... John Boehner’s party. ...

"People ages 50 and up are engaged by taxes and partisanship (70 percent correctly identified the party affiliation of Pelosi, 72 percent correctly identified which party is known as the G.O.P.). ..."

Read the rest HERE, if you're smart enough to find the link.

Federal Reserve Loans and Asset Purchases in Excess of $29 Trillion Show Banks Insolvent

From John Carney at NetNet (link):

[T]he need to keep borrowing under what are supposed to be short term facilities shows just how badly financial institutions were faring during the financial crisis.

“The amount of overnight lending reflects how broken our financial system really is. A well capitalized, moderately leveraged system does not require this massive liquidity from a central bank — interbank lending should be sufficient. What the data reveals is that the financial sector remains dangerously under-capitalized and overleveraged,” Barry Ritholz writes at the Big Picture.

Whatever It Is, What We Have Is NOT Free-Market Banking

John Carney is absolutely correct:

In a system of fiat money controlled by a central bank, with fractional reserve banks backed by deposit insurance, characterized by enormous mega-banks that have grown so large primarily because of concentration-inducing regulation, there is no pre-existing free market into which the government can intervene.

Read the rest here.

This is where all the trouble begins: "Our money is your money, we print it for you to use."

It's the only game in town, until it isn't. And until it isn't, we don't have to like it.

A Functioning Economy Most Certainly Did NOT Depend on Passing TARP

So says John Carney, here, for CNBC.com, responding to the batshitcrazytalk coming out of the economic ignoramuses of the regime in The New York Times.

Obama and his people are as stupid as George W. Bush ever was, except without the experience. Heh, heh.

Guarantees Implicit Under Dodd-Frank Hand Big Banks Billions in Borrowing Advantages at Taxpayer Expense

So says John Carney here, calling Bank of America, Citigroup and Wells Fargo, among others, our new Fannie Maes and Freddie Macs.

Corporate Cash Reaches New Record Yet Corporate Borrowing is at Staggering Levels

Corporate cash reached a new record of $1.9 trillion in Q1 according to the Federal Reserve's Flow of Funds report. The figure is referenced in discussions here and here, among other places.

But what rarely seems to get mentioned in these sorts of discussions is the debt side of the equation involving all this corporate cash. To cite the growth in cash as evidence that corporations don't need a tax cut and aren't investing simply misses the larger reality which helps explain the phenomenon.

John Carney here points out among many other important considerations that corporations are behaving out of fear just like individuals had when they increased their savings in the wake of the recent financial crisis. Many businesses experienced first hand just how difficult times can be without sufficient liquidity in a situation where no one is lending. Increasing cash should be viewed in part as insuring against a repetition of a similar lending lock up in future. 

Other more extenuating circumstances should also be considered when evaluating the issue of corporate cash. One is Federal Reserve induced low interest rates.

David Zeiler calls attention here to the fact that the current low cost of borrowing is too attractive for corporations not to lock in before QEII ends and the cost of borrowing inevitably rises:

The amount of debt companies have issued this year is staggering. As of May 18, companies with investment-grade ratings had issued $392 billion of bonds, an increase of 30% over the same period last year.

Another consideration is related also to formal government policy, namely that much corporate cash may simply be too unattractive to use for tax reasons:

"Many tech companies have looked to raise capital in the [U.S. debt] market over the past year, for a multiple of reasons, including acquisitions, the maturing of businesses and the inability to tap offshore cash without tax consequences," Keith Harman, a managing director in debt capital markets at Bank of America Merrill Lynch told Reuters.

The issue of offshore cash is a significant one. For many companies, offshore money accounts for the bulk of their cash. About 46% of Google's cash is overseas; 90% of Cisco's and virtually all of Microsoft's.

Because of a reluctance to pay the 35% U.S. corporate tax on that money, that cash remains offshore and unavailable for many uses, such as stock buybacks and infrastructure investment. (Microsoft used some of its offshore cash to buy Luxembourg-based Skype earlier this month.)

This suggests that repatriating corporate cash should be a fundamental goal of tax reform in the US. That would mean making it more attractive to keep it here by reducing corporate tax rates.

Come to think of it, why stop there? Why not patriate everyone's cash in the world to America as a matter of formal government policy?

The more cash, the better.