Taking the Over Bet on the Jobs Report

I might be deleting this post if I'm wrong.

The monthly jobs report is due out in about a half hour. Consensus is calling for a gain of about 100,000 new jobs created in the month of April. Atrios takes over/under bets shortly beforehand just for fun. This month he predicts the report will come in below consensus predictions. Usually that's a safe position, but this month I think I'll take the over bet. Why? Because of an artificial statistical technique the Bureau of Labor Statistics uses called the Birth Death Model.

This model attempts to capture the jobs created by new businesses that haven't filed with their respective state employment agencies yet. I've written about this model and the distortions it creates in our jobs statistics here and here. Long story short, the model assumes for each business that goes kaput, another business in the same area and industry rises from the ashes. From that assumption comes the next assumption that jobs lost by the old business are replaced by the new. Therefore, measuring jobs lost allows you to "impute" (that is "make up" or "imagine") the same number of new jobs in the same areas. The way the BLS describes the math and application of this model suggests that the vast majority of job growth reported under the Bush administration may be totally imaginary.

There's a seasonal quality to this model that's consistent from year to year. For last month's report, an average of 152,000 "imputed" jobs were added to the actual measured statistics in the last three years. For the April report, the model added an average of 234,000 "imputed" jobs in the last 3 years.

This suggests that if the jobs report comes in at 100,000 new jobs as predicted, the actual statistics are pointing to a net loss of some 100-150,000 jobs, papered over by the substantial addition of "imputed" jobs by the Birth-Death model. I don't think we're in that bad a shape, so I'm going to predict that the jobs report will show some number well above 100,000 jobs. This will result in an orgy of optimism that we've "turned the corner" in the anticipated economic slowdown and everyone will imagine nothing but sugar plums and ponies for the US economy from now into the long term. Which, on Wall Street, means sometime after lunch.

Beware irrational exuberance and keep your hands on your wallet at all times.

UPDATE: The jobs report just came out. Atrios wins. This is not good. Not because Atrios won and I lost, but the report shows a net gain of only 88,000 jobs. Not only is that only about half what the economy needs each month to keep up with population growth, but it looks to be much worse than that. The BLS' Birth Death model page shows that 317,000 "imputed" jobs were added by the model, suggesting that the real data measurement of jobs shows a net LOSS of over 220,000 jobs in April. Not good. I'm rarely accused of being too optimistic, but it looks like that's where it is today.

UPDATE 2: The revision to the May jobs report just came out. I win after all. The net gain for last month was revised upwards to 109,000. Still pretty dismal. Just slightly less so.

The "Great Global Warming Swindle" Swindle

The Great Global Warming Swindle

That's the film aired in the UK recently purporting to show that Global Warming was a total fraud perpretated on the public by, er, well, the entire scientific community of a bazillion countries. I urge everyone to look at this video, for it represents the last gasp effort of the global warming deniers to make their case. It has all the tricks, sophistry, straw men and outright falsehoods we have come to expect from the professional denier class.

When you watch the video keep these points in mind:

(1) Of the eighteen 'experts' interviewed in this film, 6 are known in the public record as being majorly funded by the fossil fuels industry, either directly or through right wing think tanks (Ball, Clark, Lindzen, Spencer, Michaels & Singer), 5 are not research scientists in any discipline (Moore, Dreissen, Shikwati, Calder, Corbyn), 4 are scientists in other disciplines removed from climatology (Friis-Christensen, Stott, Shaviv, Reiter). Only three remain on that video that are climatologists doing real research. Of these three, Christy endorses the IPCC report, Akasofu urges action to curb carbon use because of the contribution man makes to warming, and Wunsch has openly protested to the show's producers that he was swindled and misrepresented. Text of Wunsch's letter here

(2) Data was made up. One of the main graphs shown on the film was attributed to NASA, showing temperature changes in the 20th century, did not in fact come from NASA, but from a small outfit called the Oregon Institute for Science and Medicine. This is a one man shop run out of a prefab warehouse in rural Oregon by a protein chemist that splits his time between global warming rants and writing homeschool tracts and post nuclear survivalist pamphlets. His graph used outdated data ending in the 80's. The producer of the film admitted just taking a marker and extending the line to make it appear that the data was current. In other words, he made stuff up.

(3) Other Data cited was found to have serious math errors that, when corrected, eliminated the points the film tried to make. Dr. John Christy was prominently quoted in this film as the co-producer of a dataset of temperatures that showed that the troposphere was not warming, only surface temps were. The implication of this is that a heightened greenhouse effect is not being detected at all. A team of scientists for the US Climate Change Program poured over the Christy-Spencer dataset and found the errors, concluding in it's report that:

"Previously reported discrepancies between the amount of warming near the surface and higher in the atmosphere have been used to challenge the reliability of climate models and the reality of human induced global warming. Specifically, surface data showed substantial global-average warming, while early versions of satellite and radiosonde data showed little or no warming above the surface. This significant discrepancy no longer exists because errors in the satellite and radiosonde data have been identified and corrected. New data sets have also been developed that do not show such discrepancies."

Who wrote that refutation of that entire argument? Dr. Christy himself. He was on that team of scientists that corrected his own data.

(4) Most if not all of the points have been debunked by elementary fact checking. One hilarious example was the supposition that England used to be a warm wine growing region, but now it's too cold to grow wine, showing that temps were hotter in medieval times (and by inference warming is natural and no big deal.) Well someone oughtta clue in these guys that they better stop growing wine in England: http://www.englishwineproducers.com/

For a thorough scientific debunking of virtually every word in the film, check out what real climate scientists have to say, or a handy layman's reference over at Grist Magazine, How to Talk to a Climate Skeptic.

(5) The show's producer quickly came unhinged by criticism. When two prominent scientists wrote them to question the numerous shortcomings of the data presented, the producer replied to them by e-mail : " you are a big daft @#%!" and "go @%$! yourself". The London Times is rarely hilarious, but this article on this weird behavior is a hoot.

Global Warming denial has been a lucrative cottage industry for a small band of marginal scientists willing to take copious amounts of money from the fossil fuel industry directly, or indirectly through fossil fuel industry funded "think tanks". Now that one by one the big company funders are giving up the fight and grudgingly acknowledging the science behind global warming, there's a mad scramble to save their reputations, leading to bogus propaganda pieces like this film. It's threadbare substance shows how little argument there really is about the basic points of global warming.

The Alternate Reality of Hard Right Wingers

Every now and then we run across a column, or post, or letter that is so off the wall, so barking mad crazy as to defy rational response. The cognitive dissonance we feel is usually due to the strength and mass of the opaque mental constructs of the ideologically extreme. Facts do not obscure the right winger's view of these constructs. Neither do written words. No, the hard right winger see what he wants to see, reads what he wants to read, with no fear whatsoever that what is perceived bears little or no correspondence with what actually exists.

For just one small and insignificant example of this phenomenon in action, we can turn to my friend and recently re-employed Jason Williscroft. I'm happy to report he has re-established his blog. I surfed over there tonight to see what mischief he's been up to and I find he's still mumbling to himself about me after all this time.

As I scanned the first sentence or two, where he called me a "cranky old fibber" (totally unfair -- I am not a fibber.) I wondered if this was going to be as good as when he ragged on my observations on unemployment using health insurance policy sales at his small company to refute the unemployment numbers (huh?). Or when he tried to make the argument that fewer Iraqis were being killed after the Iraq War started than before it began (double huh?). Or when his dad argued that the US Post Office would work a whole better if they were funded by user fees (triple huh? The USPS does run on user fees. They're called "stamps".)

I was a little disappointed then to see that he merely missed the whole point of my light hearted post suggesting that out of work Republican congressional aides find employment as CapitalOne barbarians. Oddly, our Jason thought my point was that I "maintain(ed) that the economy is so bad that the average recently unemployed Republican may have to tighten his belt a notch?"

He then proceeded to lecture me on why the economy is so terrific, without regard to the use of messy facts:

• "national unemployment at record lows," Jason says. Sorry friend. December's unemployment rate was 4.5%. Not bad, but not a record low, considering that rate was 3.9% in the December before President Bush was installed. 6.8 million were unemployed by the BLS' definition in December 2006 when Jason penned this claim. 5.6 million were unemployed six years before.
• "gas prices bottoming out" Jason says. Are you kidding? Being grateful for $2 gasoline after it went up to $3 is like being grateful to the guy beating your head with a ball pien hammer simply because he slowed down a bit. Of course, gas prices may be on the march again, so the shelf life of Jason's optimism may be expiring.

Beyond these unreal claims, what's weirder is that he thought I was talking about the economy at all. These right wingers are so hard wired with their preconceived notions of liberals, folks like Jason will see and hear me claim the economy is terrible and the sky is falling, regardless of whether that has anything to do with what I'm really saying or not. This reality-bending phenomenon is hilariously chronicled by Tom Tomorrow in his This Modern World comic here and here.

So, Jason, for the record: no I do not think the sky is falling down. The economy is not in great shape, but it is not in the tank either. Growth rates are down in the Bush era from the Clinton era, but we aren't in a recession at this point. Unemployment is up from the Clinton era, but it is not to depression levels. There are big economic worries out there, like our massive debt both government and consumer, our annual budget deficits, the bursting of the housing bubble and our ridiculous trade imbalance. However recognizing these present risks is not the same as saying the sky is falling down. There is more to the world than black and white absolutes Jason. Not only are there shades of grey, but there's a wonderful array of colors and hues out there.

As for what the economy is like for our Jason? He says of his recent bout of unemployment after his company collapsed: "I had so many offers rolling in that I took an extra month off just to evaluate them and make sure I didn't blow any opportunities."

Yeah, whatever dude. I'm just glad you found a job. Congratulations and best of luck in your new endeavor.

Our "Unnatural Aristocracy"

There's a meme going around today at Kos, TPM and the LA Times raising the spector of an "unnatural aristocracy" should Sen. Hillary Clinton be elected to President for two terms. If that should happen, then a Bush or a Clinton would have been President for 28 years.

What strikes me as odd is why the hubbub now, with 10 of those 28 years the subject of future speculation? Where was the hand wringing all along about our existing "unnatural aristocracy"? After all, the Republicans haven't nominated a national ticket without a Bush or a Dole on board since 1972, 35 years ago.

Just because Bill Clinton had the good fortune to marry a formidable partner named Rodham, we're supposed to believe our unnatural aristocracy is suddenly a bipartisan problem?

Job Hunting Tip for Out of Work Republicans

Now that the Democrats have taken control of Congress, hundreds of GOP Congressional staffers are now in a mad scramble for employment. "The hundreds of Republican staffers — not to mention more than a few Members — who will lose their jobs in the next few weeks are going to face a hostile marketplace on K Street as unemployed Republicans flood the market."

I really feel their pain. Really. That means the uber-patriots from GOP Congressional offices that shut down the Miami vote counting in 2000 below, are getting their pink slips soon.


Judging from that manufactured display of outrage, it's clear that their best career path is to join the CapitalOne credit card marketing team. What's (Left) in YOUR Wallet?



Miss ya already.

Flashback: Rumsfeld's Handshake With Saddam

So Saddam Hussein has been found guilty of genocide against Kurds in 1982. Shock and surprise. How many of the 101st Fighting Keyboarders will now use that as justification for the Iraq War? Never mind that the US had no problem with Saddam's genocide at the time. That famous picture of Donald Rumsfeld shaking Saddam's hand took place about a year later, long after we knew full well what went down.

But what was the context of that picture?

One problem with using the Google to surf the internets is that there's relatively little hard info pre-1990 to be found. That's not too surprising, since few people knew what the internet was in 1990. After a session of cleaning out my basement however, I came across this gem, a Newsweek from January 2, 1984. On the Periscope page is a news snippet describing the meetings leading up to that handshake:

"The Case for a Tilt to Iraq
The United States is definitely "moving to improve relations with Iraq," says one senior administration policymaker. The wave of Iranian-inspired terrorism in the Middle East is strengthening the case of those senior American officials who have been urging a U.S. Tilt toward Iraq. These officials argue that resuming diplomatic relations with Baghdad would serve as a kind of "diplomatic retaliation" against Iran. In addition, it would give Syrian President Hafez Assad "something else to worry about," in the words of one State Department source; Syria and Iraq are bitter rivals. Iraq severed ties with Washington in 1967. On his current stay in Baghdad, special envoy Donald Rumsfeld is sounding out officials on their willingness to resume relations. At the very least, Washington would want assurances that Iraq no longer harbors Abu Nidal and other terrorists. With the resumption of relations, Washington might help Iraq's oil exporting operations."

(Here's a jpg of the actual page for those lacking trust in my transcription skills.)

So we see clearly why Rumsfeld was for Saddam before he was against Saddam. How embarrassing for him, to be this wrong AND inconsistent at the same time. We also see that EVEN THEN it all revolved around oil, despite it being presented in an "oh by the way" tone in Newsweek.

Cheer up! Congress is on the Job!

Take a look at our intrepid House of Representatives Armed Services Committee web page.

They've got a plan for Iraq! In fact, they've got an organized "Victory In Iraq" Caucus all set up and working to ensure our... well... Victory in Iraq!

Scroll down the page a little to the "Victory In Iraq Caucus" link for further details on all the excitement! I don't know about you, but I feel SO much better. Tip of the hat to Atrios for spotting this.

The Iraq War: We Told You So.

All right, I've tried to resist this for a long time. I really didn't want to do it. Well actually, I did. Here goes:

We Told You So. We Were Right. You Were Wrong.

The Iraq War is a devastating, bankrupting, economy destroying disaster. Each time you fill your tank up with $2 to 3+ gasoline, remember that:

We Told You So. We Were Right. You Were Wrong.

You don't remember that we warned you before the Iraq invasion? Well on October 14, 2002, six months before the invasion, the group I've been involved with, Business Leaders for Sensible Priorities, ran a full page ad in the New York Times entitled "They're Selling War. We're Not Buying". The ad spoke of how the war was marketed like a new product, and suggested that warning labels be attached to that product: "Warning: War Will Wreck the Economy"; "Warning: War Will Breed Terrorism"; "Warning: War Will Discredit America in the World's Eyes" and "Warning: War Will Take A Terrible Toll in Human Life".

In March 2003, BLSP marshaled 7 Nobel Prize winning economists and scores of other businesspeople to sign another New York Times full page ad, this time highlighting the economic cost of a war with Iraq. The message:

"Which is smarter? Spending $80 million a year to disarm Iraq peaceably -- or spending a thousand times more on a war? In a time of economic peril, such a crushing "war surcharge" could only be justified by a clear threat to our nation. Iraq presents no such threat."

On March 6, 2003 I had the opportunity to co-sign a letter to President Bush asking to speak with him concerning the economic consequences of war. That letter predicted lower stock prices, higher oil prices, lower consumer confidence, forced cuts in Federal state and local government programs, disrupted transportation, tourism and shipping and a backlash against American brands abroad. Of those predictions, all have come to pass at least somewhat except one: the stock market is higher than it was in 2003, partly fueled by huge gains in the defense and oil industries.

Of course, none of these ads and letters stopped the war from happening. BLSP didn't give up though. In March 2004 I had the privilege of representing BLSP in Washington unveiling a campaign kicked off by an ad in the New York Times signed by over 70 national business leaders titled: "Have you noticed what's happening to Chief Executives who lie?" and observed:

"We now know that the case the President made for his war was built almost entirely out of falsehoods."

Later, after the devastation of Hurricane Katrina and the dysfunctional Federal response became obvious to all, again it was business leaders that connected the dots with the Iraq War's drain on our resources, observing:

"They died because the infrastructure of this great nation has been allowed to go to hell in favor of war in Iraq. They died because the National Guardsmen who could have saved lives were shipped off to that war.

The myopia is mind-boggling. This very year hurricane protection projects around Lake Pontchartrain were slashed by 79%. Flood prevention projects in New Orleans took a 53% hit. The Corps of Engineers leader who complained was ousted. FEMA was gutted. Nothing not shaped like a Pentagon got adequate funding from this administration."

Now we see the result of this war. Cost estimates range in the trillions. Well over 2,600 American soldiers killed, as well as over 100,000 Iraqi civilians. Anti-American fervor is at a fever pitch in the Islamic world. We have lost all trace of respect and political capital in the world. We're generating hundreds of billions of new government debt owed to foreign governments largely as a result of this disaster. Oil is so expensive that when it drops below $70 per barrel, it's treated as good news. Sectarian violence and anarchy rules in Baghdad and elsewhere in Iraq. There were no weapons of mass destruction found, save some leftover spoiled canisters that the Reagan administration sold to Saddam in the 80's.

We Told You So.

If you're a businessperson, go join BLSP so the message can continue. If you're not a businessperson, go join their sister group True Majority. Enough is enough.

If You Want to Cut Pork, Go to the Pentagon

(Here's the post I spoke of in my last entry.)

The Truth Laid Bear wants all good bloggers to support a bill put forth by a handful of conservative Republican Senators called "The Fiscal Watch Team Offset Package", This bill ostensibly offsets the costs of Hurricane Katrina with a bunch of Federal budget cuts to Medicare and a 5% reduction in all domestic spending. This is apparently a litmus test for bloggers and politicians alike. Support the bill with a specific declaration on your blog, and you are a "Porkbuster". Oppose the bill, and you favor profligate government waste. Faithful right-thinking bloggers are then supposed to declare their support on their blogs, to then be highlighted on the TTLB site. Look closer however, and the whole deal appears to be just another right wing attempt to frame opposition to domestic spending as "trimming wasteful pork".

I would like to say "I support the Fiscal Watch Team Offset Package", but I can't. It's a terrible, highly partisan bill that targets all the wrong areas and lets the main sources of government pork go untouched. This "package" would slash domestic spending across the board by 5%, increase Medicare costs and freeze COLA adjustments for non-military personnel. The recent pay hikes for Congressmen are not affected, nor are any military programs. This package is supposed to save $130 billion in 2 years. The fact that the Medicare savings don't accrue to the benefit of the Federal Budget (being an off-budget Trust Fund program) is apparently lost on our intrepid budget cutters.

Well this is just balderdash. Most of the waste in government takes place in the military side of the ledger. In this chart, the red pie slice is the military's portion of all Federal discretionary spending. All, except for one important distinction: the Iraq and Afghanistan operations are funded by off budget emergency appropriations. What you see is the military budget minus our current wars du jour. So when our arch-conservative (and downright loopy) freshman Senator Tom Coburn (R, Mars) exempts all military spending from cuts, he's walking away from the biggest pie slice of all. Of course, that's intentional. The military is the Republicans' third rail, just as domestic spending such as Medicare and Social Security are the Democrats'. This bill therefore is merely a Trojan Horse partisan attack on the Democrats wrapped in anti-pork rhetoric.

If anyone is serious on Capitol Hill about reducing wasteful spending, you have to look at the Pentagon first. Defense Secretary Rumsfeld admitted in 2002 that the Pentagon has lost track of an estimated $2.3 trillion of military transactions. That's $2.3 trillion or over $8,000 for every man woman and child living in the USA. Contrast that with the $77 per person cost of pork identified in the Porkbusters database so far, and the $448 per person that Coburn's bill claims to save. And that before the Iraq War started, before Halliburton snagged those no bid contracts, before those untold billions were unaccounted for in the Iraq reconstruction budget. It's so bad, non-partisan tax watchdog Taxpayers for Common Sense said in 2003:

"DOD is by far the most fiscally mismanaged agency. The GAO has said that overhauling the Pentagon's financial management will be a major challenge "that goes far beyond financial accounting to the very fiber of the department's business operations and management culture." In fact, no major part of DOD has ever passed an audit and the Pentagon readily admits that flawed business systems and practices are common within the agency. They claim it would take decades to get all of the agency books in order."

It's not just accounting incompetence though, it's deliberate policy decisions that waste hundreds of billions of dollars. Dr. Lawrence Korb, Asst Secy of Defense under Ronald Reagan, recently wrote a complete analysis of today's military programs. By targeting wasteful weapons systems designed to fight cold war enemies that no longer exist, he's found over $60 billion per year that could be cut from military budgets that actually would strengthen our national security.

Here's just one example from Korb's Report of the kind of unneeded pork we should cut: the V-22 Osprey program. This dog is a tilt rotor craft that takes off like a helicoptor and then flies like a plane. Or at least that's what it's supposed to do. Originally ordered in the 80's, it was dropped by the Army in the late 80's because of enormous technical problems and field test failures. Then-Sec'y of Defense Dick Cheney canceled the program in 1991. It was revived by Congress however and continued to live on in Pentagon budgets ever since. Several serious accidents in continued testing make the Osprey more deadly for our Armed Forces than the entire Kosovo War. The total cost of this dog is up to $50 billion. A little over $500 million was spent on payments to military contractors in FY2003, spread throughout two dozen different congressional districts. This dog should go before it kills any more Marines.

You want another piece of pork to dispense with? It's called "Operation Iraqi Freedom", an unforgiveable boondoggle that wastes $5.8 billion per month. That's $70 billion per year.

Follow Korb's advice on the traditional budget, and follow Congressman Murtha's advice on Iraq, and we'll have saved $260 billion over the next two years while actually strengthening military preparedness. That's twice what the Senator Coburn's package wants to slash, without snatching Medicare benefits from those who need them and slashing every domestic priority we have bedsides.

Dr. Korb presented the idea of his military cuts in October within days of Sen Coburn's Medicare and domestic cut package. But the TTLM "Porkbusters" effort apparently will have none of that. Only domestic programs are attacked in their database they've set up. Yet just that one Marine-killing Osprey program costs more than all of the pork identified in that database put together. So is "porkbusters" just a right wing framing campaign against domestic spending, or are they serious about actually trimming bigtime wasteful spending? It will be very interesting if Korb's recommendations ever makes it on the "Porkbusters" site.

Putting Porkbusters to the Test

In the aftermath of a wonderful Thanksgiving celebration, I was poking around the blogosphere and came across a growing site called "The Truth Laid Bear", which styles itself as a "fully developed portal to the blogosphere". It's pretty impressive too, with something like 7K visits per day and close to 50,000 blogs registered as part of the "TTLB Ecosystem". OK, so I registered my small blog with the group and was immediately branded an "Insignificant Microbe". Dudes, you might want to check with your publicist on the wisdom of that initial Out of the Box Experience. Subsequent scans by their software promoted me to "Slimy Mollusc". I feel so vindicated.

In any event it looks like a pretty nifty community to bop around in. One part of the site that drew my attention, being the hopeless would-be polysci wonk that I am, was a campaign called "Porkbusters". This brainchild of Instapundit is a great idea. It invites all bloggers to identify some particularly noisome example of government waste or pork and blog about it. We're also asked to pressure our Congresscritters to eliminate said pork forthwith. Porkbusters also promises to post each example on their site so that the whole community can share in the outrage.

Well I'm going to put this to the test. You see, the whole campaign appears to have a decidedly rightward tilt. Looking through the pork cited, all of it comes from domestic non military spending. Yet about 50% of the discretionary budget is devoted to the military, not including the Iraq and Afghanistan operations. My suspicions were confirmed by Porkbusters' highlighting of a right wing attempt to cut social programs, framed as the "Fiscal Watch Team Offset Package", an attempt to offset the expenses of cleaning up after Hurricanes Katrina and Rita.

So my next post will highlight some Pentagon pork. Let's see if the TTLB Ecosystem is up to including that in their efforts.