“Soft despotism is a term coined by Alexis de Tocqueville describing the state into which a country overrun by "a network of small complicated rules" might degrade. Soft despotism is different from despotism (also called 'hard despotism') in the sense that it is not obvious to the people."

Friday, April 05, 2013

Where are the jobs?

Weak job gains cast shadow on U.S. economic outlook
(Reuters) - American employers hired at the slowest pace in nine months in March, a sign that Washington's austerity drive could be stealing momentum from the economy.
The economy added just 88,000 jobs last month and the jobless rate ticked a tenth of a point lower to 7.6 percent largely due to people dropping out of the work force, Labor Department data showed on Friday.
Analysts polled by Reuters had expected a gain of 200,000.
The slower pace of growth in payrolls marks a steep reversal of the recent trend in which the labor market appeared to be stepping up its pace of recovery. It also comes after Washington increased taxes in January and just as across-the-board federal budget cuts began in March.
"When you get to numbers below 100,000, you have to start worrying," Paul Dales, an economist at Capital Economics in London, said before the data was released.
The slowdown in job growth could make policymakers at the Federal Reserve more confident about continuing a bond-buying stimulus program. Discussion at the central bank has been growing over whether to dial back the purchases, perhaps as soon as this summer.
Analysts have noted that the federal spending cuts have only just begun and will be a more substantial drag on the economy between April and June, when many government workers begin taking days off work without pay.
Government payrolls fell only 7,000 in March, reversing the 14,000-job gain from February.
Fed Chairman Ben Bernanke, who has said the labor market must show sustained improvement before monetary stimulus is eased, has voiced concern about the spending cuts.
The jobless rate fell as the labor force shrank by 496,000 people. The unemployment rate is derived from a survey of households which is separate from the survey of employer payrolls. The household survey actually showed employment fell by 206,000 in March.
The drop in the labor force sent the share of the population that is either employed or looking for work to 63.3 percent, its lowest since 1979.


  1. The headline number shop be this:

    The jobless rate fell as the labor force shrank by 496,000 people. 496,000 people through in the towel and will be living off government transfer payments.

  2. Why is Obama coming to Costa Rica?

    Posted: Thursday, April 04, 2013 - By Luis Guillermo SolĂ­s
    U.S. President Barack Obama is set to visit Mexico and Costa Rica from May 2-4 to meet with regional presidents.

    U.S. President Barack Obama will visit Central America in early May. Although he only will stay in Costa Rica a few hours, the visit has been categorized as “regional” because Obama also plans to meet with his Central American presidential colleagues.

  3. By 2030, the Department of Defense could be spending as much just to run its military health care system as it spends today on all other military research-and-development programs combined, according to the non-partisan Congressional Budget Office (CBO).

    Estimates in the CBO's report, Long-Term Implications of the 2013 Future Years Defense Program, project that the rapidly increasing use of military health care facilities by active and retired military personnel and their families could drive the cost of the military health care system from $51 billion in 2013 to $90 billion a year by 2030.

    The CBO report projects that running military health plans will cost $123 billion through 2017, or 5% more than estimated by the Department of Defense (DoD).

    1. No need for more F35's, we've got to support our troops.

  4. The government in Britain recently did something interesting.

    It asked everyone receiving an “incapacity benefit” — a disability program slowly being phased out under new reforms — to submit to a medical test to confirm he or she is too disabled to work. A third of recipients (878,000 people) dropped out of the program rather than be examined. Of those tested, more than half (55 percent) were found fit for work, and a quarter were found fit for some work.

    But that’s Britain, where there’s a long tradition of gaming the dole. Americans would never think of taking advantage of the taxpayers or misleading the government. Well, except for the couple dozen people who have pleaded guilty to scamming the Long Island Rail Road’s federal disability system in a $1 billion fraud scheme. A billion bucks would pay for a lot of White House tours.

    Though hardly isolated, the scandal is a a black-and-white case of criminality. The problem resides in a grayer area.

    In 1960, when vastly more Americans were involved in physical labor, 0.65 percent of work-force participants between the ages of 18 and 64 were receiving Social Security disability insurance payments. Fifty years later, in a much healthier America, that number has grown nearly nine-fold, to 5.6 percent.

    In 1960, 134 Americans were working for every officially recognized disabled worker. Five decades later, that ratio fell to roughly 16 to 1.

  5. The Wall Street Journal (WSJ) reported last week that even with improvements in the economy, food stamp participation rates have reached all-time highs.

    Since 2008, enrollment has increased by 70 percent, reaching a record 47.8 million this past December. Funding for the food stamp program—or, as it’s now called the Supplemental Nutrition Assistance Program (SNAP)—has doubled since 2008, hitting nearly $80 billion in fiscal year 2012.

    A significant portion of the increase in enrollment is due to the “sluggish job market and a rising poverty rate,” as WSJ puts it. However, there’s more to the story.
    Under the Clinton Administration, a “broad-based categorical eligibility” rule was put into place. This allowed states to ease income and asset requirements and thus expand eligibility. With encouragement from the Obama Administration, 43 states have now adopted broad-based categorical eligibility. WSJ reports:

    The resulting change in the program’s structure has been profound. In 2006, 18.7% of SNAP households qualified through an easier screening process. In 2011, that number reached 65.8%. The change didn’t mean the majority of SNAP beneficiaries had large savings accounts. Rather, it meant that states were no longer checking, according to state guidelines and program officials.

    On top of broad-based categorical eligibility, in 2009, as part of the stimulus bill, the Obama Administration suspended food stamps’ work requirements for able-bodied adults. The suspension was to be only temporary and end in 2010. However, Obama’s last two budgets
    called for a continuation of the suspension. Instead of waiting for Congress to act, the Administration began issuing work
    requirement waivers.

  6. Replies
    1. Because the Standard of Living that the Federals will subsidize is pretty damned shitty.
      The income derived from labor is heavily taxed, as compared to income from capital.

      Just the FICA tax contribution for the self employed is as much as the mega rich pay on their entire income. Mr Romney avoids the FICA, he does not have a payroll job, but only pays a 14% tax on his entire income...
      That is just a point and a half above my FICA contribution, then I get to add the income tax. Which taxes that FICA contribution, as well.

      Why should I participate?

    2. Rich property owners receive $24,000, annually, in welfare payments and health care subsidies.
      These rich folk were not receiving such welfare largesse in 1960.

      Why do they get it, now?

  7. It is not subsidies to the poor that are bankrupting the budget.

    It is the aid and subsidies that the rich are provided, by the Federals, that is busting the budget.. Especially when combined with the lowest tax rates on high incomes since 1960.

  8. Means test Social Security and Medicare.

    Repeal the FICA tax and roll all the Federal income taxes into one.
    Stop the tax con game.

    1. .

      Excellent point.

      Do the same with Medicare. The money all ends up in the same place anyway. Then let the voters decide on the priorities the boys in OZ go with.

      Official: Obama to propose cuts to Social Security

      The reductions in growth of benefit programs, which would affect veterans, the poor and the older Americans, is sure to anger many Democrats. Labor groups and liberals have long been critical of Obama's offer to Boehner for including such a plan.

      From The Detroit News:


  9. New data assembled by EWG from over a million government records never before made public and obtained by the Environmental Working Group through the Freedom of Information Act has found that in 2011 more than 10,000 individual farming operations have received federal crop insurance premium subsidies ranging from $100,000 to more than $1 million apiece. Some 26 farming operations received subsidies of $1 million or more last year.

  10. The cost of the crop insurance programs has exploded from $2 billion a year in 2002 to $9 billion a year in 2011. The Congressional Budget Office (CBO) projects the program will cost taxpayers $90 billion over the next ten years.

    Let alone compared to what the Federals spent on crop insurance, in 1960

  11. In 2012, the Department of Agriculture (USDA) spent $22 billion on subsidy programs for farmers. Introduced in the 1930s to help struggling small family farms, the subsidies now routinely draw condemnation from both left and right as wasteful corporate welfare. While the number of farms is down 70 percent since the 1930s—only 2 percent of Americans are directly engaged in farming—farmers aren’t necessarily struggling anymore. In 2010, the average farm household earned $84,400, up 9.4 percent from 2009 and about 25 percent more than the average household income nationwide.

    What’s more, a handful of farmers reap most of the benefits from the subsidies: Wheat, corn, soybeans, rice, and cotton have always taken the lion’s share of the feds’ largesse. The Environmental Working Group (EWG) reports that “since 1995, just 10 percent of subsidized farms—the largest and wealthiest operations—have raked in 74 percent of all subsidy payments. 62 percent of farms in the United States did not collect subsidy payments.”

    I cannot even easily find what the Federals spent on farm subsidies, in 1960.

  12. Take the $4.1 billion the federal government spent on direct payments in 2011. Created in 1996 as a way to get farmers off their addiction to price guarantee programs, these supposedly temporary direct payments are still around. In 2013, a new farm bill, even with the elimination of direct payments, would be a similarly hollow victory. Lawmakers would compensate farmers by expanding another unjustifiable farm subsidy program: crop insurance.

    Like most businesses, farms buy insurance policies to protect from potential losses, such as poor yields or declining prices. Unlike most businesses, they can count on the government to pay about two thirds of the premiums, at a cost of $7 billion annually. The proposed “shallow-loss program” would send money to farmers in the event of small drops of revenue that are not typically covered by crop insurance.

  13. In honesty (for a change,) we have Two very serious problems:

    1) Automation/Robotics

    2) Offshoring (China, mostly)

    1. Exacerbated, of course, by Peak Oil.

      We're on the "front end" of an enormous paradigm shift. One such as has never been seen in the history of the world.

  14. .

    These days you can run but you can't hide.

    Millions of internal records have leaked from Britain's offshore financial industry, exposing for the first time the identities of thousands of holders of anonymous wealth from around the world, from presidents to plutocrats, the daughter of a notorious dictator and a British millionaire accused of concealing assets from his ex-wife.

    The leak of 2m emails and other documents, mainly from the offshore haven of the British Virgin Islands (BVI), has the potential to cause a seismic shock worldwide to the booming offshore trade, with a former chief economist at McKinsey estimating that wealthy individuals may have as much as $32tn (£21tn) stashed in overseas havens.


    The whistleblowing group WikiLeaks caused a storm of controversy in 2010 when it was able to download almost two gigabytes of leaked US military and diplomatic files.

    The new BVI data, by contrast, contains more than 200 gigabytes, covering more than a decade of financial information about the global transactions of BVI private incorporation agencies. It also includes data on their offshoots in Singapore, Hong Kong and the Cook Islands in the Pacific.


  15. Little boy gets home from school and says "Dad, I've got a part in the school play as a man who's been married for 25 years."
    His Dad replies "Never mind Son. Maybe next time you'll get a speaking part!!"

  16. .

    Hopkins’s institutional intolerance would be boring were it simply redundant evidence of academia’s commitment to diversity in everything but thought. It is, however, indicative of the increasingly extreme ambitions and tactics of those operating under the anodyne rubric of “choice.” In Florida recently, a legislative debate that reverberated in the U.S. Senate in the 1990s was revived concerning the right to choose infanticide...

    Recently in Florida, Alisa LaPolt Snow, representing Florida Planned Parenthood organizations, testified against a bill that would require abortionists to provide medical care to babies who survive attempted abortions. Snow was asked: “If a baby is born on a table as a result of a botched abortion, what would Planned Parenthood want to have happen to that child that is struggling for life?” Snow replied: “We believe that any decision that’s made should be left up to the woman, her family and the physician.” She added, “That decision should be between the patient and the health care provider.” To this, a Florida legislator responded: “I think that at that point the patient would be the child struggling on a table. Wouldn’t you agree?”

    Planned Parenthood, which receives more than $500 million in government subsidies, is branching out, expanding its mission beyond the provision of abortions to the defense of consumers’ rights: If you pay for an abortion, you are owed a dead baby.

    From the WaPo (G. Will)