America's True Form of Government

July Unemployment Update

The official figure for July's unemployment rate was 9.4%. This is good news of sorts because it is down from the previous month of 9.5%. My forecast over shot the current figures and to be honest I'm surprised that the unemployment rate dropped; however, gladly surprised.

Though surprising, the fall in the numbers can be explained. First, the auto sector added 28,200 to the industry payrolls and secondly the federal government hired 12,000 workers in July (after laying-off close to 60,000 in May and June). In short, when looking at the top line figures, they encompassed approximately 100,000 intermittent payroll jobs.

And looking at the employment situation more broadly, the labor force again declined,

and the employment-population ratio continues to fall.


In short, I wouldn’t suggest using today's numbers as a baseline trend to extrapolate from as I think we will soon see an uptick, once again, in the unemployment rate.

On another note, it is obvious that the administration will now run with the idea that it was their intervention and enactment of stimulus funds that has brought the economy back from the brink of disaster. In turn, I would ask them how is that possible given that only 9% of the $787 billion in stimulus has actually been spent in the name of stimulating the economy. That in and of itself may be the answer...had they been able to spend more up to this point we would more than likely be in a lot worse shape than we are, though you won't hear that from them. Hopefully Congress and the administration will reverse the rest of the earmarked and obligated stimulus monies and return it to the tax payers, although I wouldn't hold your breath.

July Unemployment Rate?

My call for tomorrow's unemployment rate is 9.76% (9.7%-9.8%).

Anyone else have a forecast?

Crazy Conservative Mobs: Let the Pictures do the Talking

So with all of this talk lately about crazy, conservative mobs, I just thought I'd post some pictures so that we can all see how fanatical the conservatives are compared to those patriotic liberals who exercise their right to free speech.

So here are those conservative wack-jobs:

Now that we've taken a good look at the loons on the right, let's take a gander at the always classy, bastions of free speech,at least that's how they are described by the media:







Need I say more?

Single Payer Health Care: In His Own Words

Cash for Clunkers...Can Someone Help Me Understand?

Cash for clunkers…how about cash for a good idea?

So with this “successful” (tongue in cheek) government sponsored program, those who turn in their clunkers can get up to $4,500 in a government rebate for trading in their “clunker” and purchasing a newer, more efficient car. Now some of these clunkers are quite nice. Given how the program language is written, this could be considered a clunker:

The kicker of the program is that the clunkers can not be resold. Some of the parts may be recycled and reused, but the drive train and engines must be destroyed. Destroyed? That makes no sense. What is good about the voluntary destruction of productive, physical capital? If it were good, why not give a 100 percent rebate to everyone in the country for each qualifying auto owned thereby destroying and replacing most of the stock of cars currently in the U.S.? Demand for autos would surely rise resulting in factories being reopened and all those folks in Detroit would be put back to work in order to build the cars needed to fulfill demand. Happy days! --insert sarcasm here--

Proponents of the program are pointing to the fact that the program ran out of cash in less than a week as an indicator of how successful the program is. It is said to be helping the environment, the auto makers and auto dealers as well as the consumers. To me it suggests that the government is still incapable of planning and budgeting for anything, but I won’t get into that.

Well, if cash for clunkers is in fact a success, why not, in the name of efficiency and economic stimulus, burn down all of the housing stock in the U.S. while at the same time providing subsidies to homeowners to buy a new houses. This would be good, right? We could call it “Cash for Crap Shacks.” Just like the auto industry, home builders would see demand ramp up as previous home owners, whose homes were burned down, shop around for new houses. The housing market would be fixed, the environmentalists would happy, GDP would soar and unemployment would come down as the construction and housing industry come back to life. And to boot, everyone would be living in a new home; it’s a win, win.

Any rational human being would see how ridiculous the “Cash for Crap Shacks” program sounds, but it is no different than the “Cash for Clunkers” program. All of this is reminiscent of FDR’s New Deal where he actually provided subsidies to farmers to burn and destroy their crops and livestock. The rationale behind this brain buster was that the reduction in supply would prop up sagging agricultural prices. I’m sure all those starving during the Depression thought destroying “food” was a great idea.

Well, I’m sure those who can’t afford new cars think it’s a great idea to destroy perfectly good used cars. But even better, I’m sure they are excited at the fact that the prices for existing used cars and used car parts, in the aggregate, has to go up given the destruction of the existing capital stock of used cars and parts.

I’ve got an idea, if excessive leverage got us into this economic mess, why don’t we provide incentives to those who own their cars to destroy them in order to take on a car payment they can’t afford. I smell a Nobel Prize for somebody in the administration.

Let me briefly note that the Cash for Clunkers program is not real stimulus. It is simply changing individuals rate of time preference and accelerating future consumption into the present. Not only that, it is taking money out of the right pocket and putting into the left in order to pay for the "clunker" rebates. This is crackpot economics at its best!

Obama Care Would Outlaw Private Insurance

Here is an article in Investor's Business Daily where they point out a provision on page 16 of the House's "Health Care for all Americans" bill that would effectively make private health insurance illegal. See link below:

Investor's Business Daily Article: It's Not an Option

Oh, Now it Makes Sense

If you're wondering how universal health care would work, just check out the flow-chart below. I'm glad they cleared it up.