David Stockman Shock Blog: The Real Unemployment Rate Is 42.9%

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June 30, 2015

BEGIN TRANSCRIPT

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%.

Let me share with you a little bit of how he gets there.

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 — 40% — 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.  But here is where they get in the weeds by computing a bunch of things that…

It’s gonna be hard to follow because you’re not reading it, but I’ll do my best.

“At the present time, there are 210 million adult Americans between the ages of 16 and 68 — to take a plausible measure of the potential work force. That amounts to 420 billion potential labor hours…”  So you have 420 billion hours that people could work in a standard 40-hour week. With all the vacations and the standard benefits thrown in, that’s the number of labor hours potential.  That’s “if we accept the convention that all adults are at least theoretically capable of holding a full-time job (2,000 hours/year),” that’s the calculation, “and pulling their share of society’s need for production and work effort.

“By contrast, during 2014 only 240 billion hours were actually supplied to the US economy, according to the BLS estimates,” actual government numbers. So the workforce is defined as ages 16 to 68, a total of 420 billion potential labor hours, which equals great productivity if that happens.  Last year, only 240 billion hours were actually supplied to the US economy, just a little over half what’s possible.  “Technically, therefore, there were 180 billion unemployed labor hours,” and that is how Stockman arrived at “the real unemployment rate was 42.9%…”

He’s actually computing the number of hours possible to be worked, at what they say is full employment, and then calculates the number of people and the number of hours actually worked, 43%.  Caveats: “Yes, we have to allow for non-working wives, students, the disabled, early retirees and coupon clippers. We also have drifters, grifters, welfare cheats, bums and people between jobs, enrolled in training programs, on sabbaticals and much else.

“But here’s the thing: There are dozens of reasons for 180 billion unemployed labor hours, but whether the Fed is monetizing $80 billion of public debt per month or not, and whether the money market interest rate is 10 bps or 35 bps doesn’t even make the top 25 reasons for unutilized adult labor. What actually drives our current 43% unemployment rate is global economic forces of cheap labor and new productive capacity throughout the EM and dozens of domestic policy and cultural factors that influence the decision to work or not.”

It’s called liberalism!  It’s called socialism!

It’s creating sloth!

It’s creating more and more people that don’t have to work, and they’re not.  And there’s all this productivity left — for lack of a better way to say it — languishing on the factory floor.

BREAK TRANSCRIPT

RUSH: Chase in Daphne, Alabama.  I’m glad you waited, sir.  Great to have you on the big program.  Hello.

CALLER:  Rush Limbaugh, God bless you for all you do.  Mega lifelong dittos, sir.

RUSH:  Well, thank you.  I appreciate that very much.

CALLER:  Yes, sir.  My question for you is I saw on Fox and a couple other sites that the Obama administration is pushing for people making 45,000 or less a year to become eligible for overtime pay.  And as a guy whose only regret is never being able to vote for Ronald Reagan, I kind of want to know what the catch is.

RUSH:  I’m looking.  I’ve got a sound bite on this.  If I can find it, and we can actually hear what Obama said — it is.  Grab audio sound bite — I wonder if we’ve got two.  Hang on just a second.  I’m sorry to waste time trying to find it.  I’ve got 12.  20 and 21?  Let me see if I can find 20 and 21 very quick.  (muttering)  No.  No.  Grab number 12.  This is Chris Cuomo today talking with the White House Domestic Policy Director Cecilia Munoz about Obama’s overtime plan. He says: “You’re doing what the private sector says you shouldn’t do, don’t mess with wages.  Let business decide what the right pay scale is.”

MUNOZ:  In the seventies more than 60% of the salaried workforce was covered by overtime.  We’re going back to a point at which salaried workers can expect those kinds of protections.  Ultimately that’s good for the economy.  If the business community wants to argue that the salary threshold should be set as it is now, at a level which is below the poverty rate for a family of four, I just think it’s really hard to argue that that’s good for the country and good for workers or good for the economy.

RUSH:  I don’t know.  You start talking about trying to recreate what was happening in the seventies, and that’s Jimmy Carter, and that’s stagnation.  But, again, it’s meddling.  I don’t really know what the catch is with this other than government meddling.  Who’s talking overtime?  We’ve got an unemployment rate of 42.5 % in this country.  Anyway, look, Chase, we’ll talk about this more tomorrow ’cause I’m really out of time today, but I’m glad you called.

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Black Civil Rights Icon: The Problem is Blacks Killing Other Blacks, Not the Confederate Flag

Former Mayor who marched alongside MLK: “The problems we face don’t have anything to do with the flag”

by Paul Joseph Watson | June 30, 2015
Black civil rights icon and former Mayor of Atlanta Andrew Young says that debate over the Confederate flag is a divisive non-issue which completely distracts from the real problem – the fact that 93% of blacks are killed by other blacks.

Young is widely recognized as a prominent activist for the African-American civil rights movement, having been a personal friend and supporter of Martin Luther King. Young marched with King in Selma, Alabama and was with King when he was assassinated. He was also instrumental in pushing through the 1964 Civil Rights Act and 1965 Voting Rights Act.

Young, a former Democratic Congressman, was also the United States Ambassador to the United Nations and served as President of the National Council of Churches USA. He cannot be dismissed as an “Uncle Tom” or an apologist for right-wing Republicans.

In an interview with Fox 5 Atlanta, Young skewers the politically correct outrage mob that has targeted the Confederate flag in the aftermath of the Charleston shooting, asserting that the elimination of southern heritage will do nothing to address the problems faced by black people today.

“The challenge for us is not to wipe out our past history but to learn to live together in the future,” said Young.

“I would never trade the flag for a single job,” he added. “The problems we face don’t have anything to do with the flag. The fact is that 93% of black people killed are killed by other black people. So black lives matter. Let us start believing that we matter.”

Young refers to statistics on black crime that people have been lambasted as racists for even mentioning which illustrate that the biggest threat to black people is not police brutality or racist white people, but violence within the black community itself.

Those same statistics show that black people commit over half of homicides despite making up only 13% of the population.

Rather than focusing on a divisive symbol – the Confederate flag – Young urges Americans to rally behind the message of unity and healing that was embraced by the Charleston community in the aftermath of this month’s shooting.

Respondents to Young’s comments were impressed with his message.

“Amen Mr. Young, now if your principles would just rub off on the crazies like Sharpton, Jackson, and Obama,” wrote J.W. Binion.

“The most rational display of opinion I have seen,” added Ken Davis.

“Perhaps due to his stature and the respect he commands some on the left will listen and cooler heads will prevail,” noted Larry Farlow.

*(GENTLE GIANTS AT WALMART)* The New Knockout Game: Nearly 50 Black Teens Raid Wal-Mart, Attack Shopper, Destroy Merchandise

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Disabled shopper thrown from motorized cart and dragged to floor

BY KIT DANIELS

In what’s perhaps the latest version of the “Knockout Game,” a mob of nearly 50 teenagers rushed into a Macon, Ga., Wal-Mart and attacked at least one shopper while destroying merchandise.

The shopper was thrown from his motorized shopping cart and dragged to the floor during the Sunday attack, which caused an estimated $2,000 in damage, according to Bibb County sheriff’s officials.

“The length of the store from front to rear was lined with items which had been shattered, destroyed, turned over and thrown about,” a sheriff’s deputy’s report of the incident stated.

So far only one teenager was arrested, 17-year-old Kharron Nathan Green, after he returned to the store to retrieve his cell phone.

Green, however, declined to identify the other teenagers caught on surveillance cameras.

“Hopefully we can identify the others,” Sheriff David Davis told the Macon Telegraph. “Hopefully it’s not a pattern of behavior.”

The incident brings to mind the racist “knockout game” in which African-American assailants attempted to knock out unsuspecting, non-black victims with a single sucker punch.

The attacks led to severe injuries and several deaths.

“A 70-year-old white man named James Gifford was leaving 7-Eleven at 6:00 a.m.,” World New Daily reported about one such attack. “As Gifford walked across the parking lot, an 18-year-old black male named Romeo Williams punched Gifford with no provocation, knocking him unconscious.”

“But when Gifford fell, he struck his head on the pavement. Four days later, the elderly man died from a brain injury, a diffuse axonal injury, that damaged both the white and gray matter and later caused his heart to stop beating, according to the medical examiner’s office.”

Another man, 46-year-old Hoboken, N.J., resident Ralph Eric Santiago, was found dead with his neck broken after two teenagers stuck his head from behind, causing Santiago to collapse on an iron fence.

As long as the establishment continues to promote racial tension within America, violent racial attacks will continue to happen.

The attacks led to severe injuries and several deaths.

“A 70-year-old white man named James Gifford was leaving 7-Eleven at 6:00 a.m.,” World New Daily reported about one such attack. “As Gifford walked across the parking lot, an 18-year-old black male named Romeo Williams punched Gifford with no provocation, knocking him unconscious.”

“But when Gifford fell, he struck his head on the pavement. Four days later, the elderly man died from a brain injury, a diffuse axonal injury, that damaged both the white and gray matter and later caused his heart to stop beating, according to the medical examiner’s office.”

Another man, 46-year-old Hoboken, N.J., resident Ralph Eric Santiago, was found dead with his neck broken after two teenagers stuck his head from behind, causing Santiago to collapse on an iron fence.

As long as the establishment continues to promote racial tension within America, violent racial attacks will continue to happen.

Major counter-terrorism exercise in London

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Simulation terror attack has been six months in the planning

Police officers, soldiers, emergency services and intelligence officials are taking part in London’s largest counter-terrorism exercise to date.

The simulation of a terror attack has been six months in the planning.

The exercise – codenamed Strong Tower – involves 1,000 police officers at locations across the capital until Wednesday afternoon.

Metropolitan Police Commissioner Sir Bernard Hogan-Howe said it would test responses to extremists using firearms.

It comes days after 38 people were killed by a gunman in Tunisia, the majority of them British holidaymakers.

The Metropolitan Police says this week’s exercise in London is not based on any specific intelligence and is part of a long-term strategy of planning and preparing for all possible types of terror attack.

Loud noises

Scotland Yard began planning the two-day event in January and only a dozen people know the full script to ensure that the officers and other services taking part face the maximum challenge.

Senior officers say that while much of the exercise will be hidden from view, there may be occasions when the public hear loud noises or see areas being cordoned off. Scotland Yard will be posting updates about the exercise to Twitter, using the hashtag #999exercise.

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The exercise was planned in the wake of the Charlie Hebdo attacks in Paris in January
Actors have been drafted in to play injured people for the training exercise

Sir Bernard said the threat level for terrorism had been raised over the last year, making it vital “that we train and we learn”.

He said: “The reason we have exercises like today is because, obviously, we are concerned there are people planning terrorist events. We intend first of all to stop them from getting to attack. But should we not stop the terrorists in their planning, it’s essential we disrupt them in any of the attacks that may take place.”

Ch Supt Paul Rickett told the BBC it was “incredibly important” that the emergency services were prepared for this type of scenario.

“Events have told us around the world that the last thing you can be is complacent, so that is why it is important we continually respond to the emerging threat, change our tactics and we test our capability and readiness to respond,” he said.

Analysis

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Fire and rescue teams have a legal duty, alongside police, to prepare for civil emergencies

By Dominic Casciani, BBC home affairs correspondent

Although the nature of this “live play” exercise sounds similar to the attack in Tunisia, this event has been six months in the planning and is part of a regular programme.

The officers who came on shift this morning knew they were taking part in an exercise – but nothing about what they would be facing. Not even the “gold commander”, the senior officer making the big decisions in the operations room, will know what’s going to happen.

The exercise is influenced by what happened during two incidents: the Charlie Hebdo attack in Paris and the cafe siege in Sydney.

Scotland Yard stresses that whatever happens during this exercise, it doesn’t mean they have specific intelligence that such an event could occur. But they do want to ensure they have planned for every conceivable type of incident in case it should ever come to pass.

How safe is the UK a decade after 7/7?

Deputy Assistant Commissioner Maxine de Brunner, the exercise’s director, said the aim was to test and challenge police and other agencies in an “ambitious multi-site marauding terrorist attack”.

“This exercise will be an on-going fast-paced terrorist situation and we will explore how we as London’s agencies respond,” said DAC de Brunner.

“The exercise is at the extreme end of what might happen.”

Crisis-management skills

Emergency services are under a legal duty to test their preparedness for all manner of crises from terrorism attacks to flooding.

Many counter-terrorism training exercises take place out of view around the country and the last comparable exercise of this nature was in London was in 2012.

In that exercise, the Metropolitan Police and others tested how they would respond to an attack on the London Underground involving a possible radiological or chemical device.

But while Tuesday and Wednesday’s exercise is likely to involve comparable numbers of people, it has been designed to stretch them much further by moving the incident around the city – although nobody other than the directors know exactly what is going to happen.

The agencies involved in the operation include the police, London Fire Brigade, London Ambulance Service, Transport For London, the NHS and a string of government departments who will face tests of their decision-making and crisis-management skills.

US now has more Spanish speakers than Spain – research

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The United States now the world’s second-largest Spanish-speaking community, after Mexico, according to the latest study by the Instituto Cervantes.

A total of 41 million native Spanish speakers live in the US, and there are also 11.6 million other bilingual speakers.
In Colombia and Spain, there are 48 and 46 million native Spanish and bilingual speakers, respectively.

Mexico has roughly as many as all three countries combined, with 121 million Spanish native speakers.

Of the states inside the US, New Mexico has 47 percent native Spanish speakers, while California and Texas both have 38 percent, and Arizona has 30 percent.

In New York, the population is about 18 percent native Spanish-speaking.

It has been predicted that the US will have as many as 128 million Spanish speakers by 2060 – about 30 percent of the population with Spanish as their mother tongue, according to a study by the US Census Office.

Worldwide, almost 470 million people have Spanish as their native language, while potential users (those who speak Spanish as their second language or a foreign language) are about 559 million, the Instituto Cervantes report, titled “Spanish, a living language,” says.

READ MORE: New Mexico Court: Non-English speakers may serve as jurors

The Instituto Cervantes (Cervantes Institute) was founded in 1991 to promote the Spanish language and culture abroad, with 200,000 students registered for their language courses currently.

Globally, 21 million people learn Spanish as a foreign language, with learners in the US totaling about 7.8 million.

The Index of Human Development ranks Spanish it as the world’s second most important language, behind English, but ahead of Mandarin.

It also accounts for about 8 percent of Internet traffic, and is the third most widely used language online. On Facebook, it is the second most used language worldwide.