Thursday, September 20, 2012

The "Real" unemployment rate?

Businessweek just ran an article about an increase in Social Security benefits for retirees. The article notes the total number of benefit recipients: 56 million. If we add this to the BLS statistic of 155 million for the labor force, we get 211 million - and there are another 100 million Americans who are not counted. Clearly many of those are children, (75 million under 18 years in 2010, according to the Census Bureau). So now there are an additional 25 million who are not retired, not disabled, and not receiving social security benefits, but also not counted in the labor pool, and thus not counted as unemployed. If we take out 1.6 million or so for our prison population we've cut this down to 23.4 million adults.  Next let's take out 7.8 million full time college students (61% of the 12.8 million college youths) and that brings us down to 16.6 million. 

Another article has come to my attention today.  It discusses stay at home parents and includes census data.  The numbers provided for 2011 are stay-at-home dads make reached "176,000, or 3.4 percent" of stay-at-home parents.  Dividing one by the other gives us a little less than 5.2 million stay at home parents, so let's also drop those out of the uncounted.  16.6 million less 5.2 million means there are 11.4 million  additional adults that are not employed but simply not counted. 

The bottom line is, if these uncounted people were added to the labor force and factored into the unemployment rate, it would be 14.1%, not even counting underemployment.


I've long been adamant that the government statisticians cook their books.  I decided to review the unemployment numbers and see whether I could determine, from their data, how different the numbers should be.  While this is purely an exercise in skepticism, it does provide some interesting insights into the labor market.

First I took a look at the labor participation rate, and noted that it's been in decline since October 2008. This data is used to separate out those who are counted as job-seekers (employed or unemployed), or just not counted.  Now a decline of 3% sounds pretty small, but when you apply it to ~200 million people it turns out to be pretty big - about 6 million. 

What I did next was pull the raw data for the civilian labor force and apply the participation rate from earlier to it, which gave me a calculated total number of "able-bodied" men and women who might seek employment.  I then calculated the average participlation rate up from October 2002 to the September 2008 (66.1%) and applied that to the "able-bodied" numbers, which gave me an adjusted labor pool.  This adjusted labor pool revealed those who are unemployed but not counted as such.  The number that started low (230k) but as time went on and the participation rate dropped, it reached upwards of 6 million people in 2012.  These people have simply been dropped off of the rolls.

Next I took the raw data for unemployment and adjusted it upwards by adding back those people who had been dropped off the rolls.  Finally I did two calculations - using BLS's original number for labor pool and unemployment, I calculated the unemployment rate.  I did the same with my revised labor pool and unemployment numbers. 

The difference is huge.  The unemployment rate is steady around 12%, and has been since December, 2009.  There are close to 19 million people fully unemployed, a full 6 million more than are being reported.  It's pretty crazy.

Now remember this is just an exercise.  It's important to realize that a portion of those I added back in probably did retire.  But given the steady participation rate of the 20 years (we've been above 66% since 1989) I think that number is small.

Anyway, just having fun here, questioning authority as usual.  Hope you've enjoyed the read.

Tuesday, September 18, 2012


The world is full of problems, but more and more I notice it is also full of "solutions."  These "solutions" are people's grand schemes for handling some real or imagined problem.  I say grand because they are almost always big, gaudy solutions.  People like to tell them around the dinner table or while sipping on a latte at Starbucks.  Almost always these "solutions" are short sighted, foolishly stupid, or even downright dangerous.

The proposals come from people who never seem to ask themselves these four questions:
  1. Is the problem well defined?
  2. Is your solution thoughtful?
  3. Is your solution practical?
  4. Is your solution consistent?
If you want to solve a problem, it must be a specific problem.  Symptoms are not problems.  Corollaries are not the right problems.  If you want to solve a problem you must think carefully on the solution.  You must understand the causes, the sources, any cascading problems, consequences that could occur with your proposed solution, you have to think of failure, and how to respond.  If you want to solve a problem, you must be pragmatic.  What are the costs, in time, labor, capital?  Do you have the time?  Can you gather the labor?  Do you have that money?  Finally, if you want to solve a problem you should be consistent across your entire narrative.  That is, your solution should work with every solution you've proposed, and not cause other problems that you will have to "solve" again.

Take drug use for example.  The problem is well defined. People are use dangerous, mind-altering drugs. The cascading problems are well known, ranging from mental issues such as loss of concentration to impairment while driving, to outright criminality.  The big government solution was the "War on Drugs."  But is this solution thoughtful?  Did our government attempt to understand the cause of drug use - the reason people turn to drugs?  Did they consider the consequences of caging people for their addiction?  Did they think of how to respond to the failure of their solution?  Clearly not.  Government talks about the "War on Drugs" as if drug dealers are forcibly injecting their helpless victims with heroin.  Only in their view the victims are criminals too.  They don't understand the root causes of drug use.  They don't understand the consequences of putting non-violent people in jails.  They don't even understand that their program has failed, let alone what to do in case of such failure.  If they are forced to see their failure, it is only seen as a reason to increase their funding.  They've never considered the great cost of this program.   Is the Drug War consistent with the American narrative?  No!  Resoundingly.  The Constitution gives no authority to punish people for vices.  It gives no authority to criminalize the personal behavior of individuals in private settings.  The drug war was not created by Constitutional Amendment, as was prohibition (which also failed).  It is not consistent with freedom.

This is just one example.  The reason I wanted to write about this today is that earlier I read a suggestion that we erect an electrified border fence, with armed soldiers every 500 yards along the fence, "in order to  keep out the drug dealers and illegal immigrants."  Clearly his "solution" is aimed at two different problems - drug use and illegal immigration.  It is also neither thoughtful or practical.  For reasons that should be obvious to everyone.  This "solution" was posted on a pro-Second Amendment website.  As such it is horribly inconsistent.  The idea that a group that by rights ought to understand the true purpose of the Second Amendment - to protect our final defense against a government turned tyranny, would, at the same time propose building an "iron curtain" around our own country is ludicrous. 

Think people!  You are capable of it.  You just need to do it.  Cast aside reactive emotion and ask yourself:
  1. Is the problem well defined?
  2. Is your solution thoughtful?
  3. Is your solution practical?
  4. Is your solution consistent?

Wednesday, September 12, 2012

Judge finds NDAA section 1021 Unconstitutional! Issues a permanent injunction!!

I'm very happy!  For the first time in months there is some truly great news on the liberty front!  NDAA 2012 section 1021 (indefinite detention of US Citizens) has been struck down!  If you don't know what the NDAA is, here's my earlier post on it.

You may recall that Judge Forrest issued a temporary injunction in May.  Some months later, she enjoined the lawyers for the government to assure her that the NDAA injunction had been followed, and the lawyers refused, essentially admitting that the government was unwilling to follow the orders of the court.

From Wikipedia:
Attorneys Carl J. Mayer and Bruce I. Afran filed a complaint January 13, 2012, in the Southern U.S. District Court in New York City on the behalf of Chris Hedges against Barack Obama and Secretary of Defense Leon Panetta to challenge the legality of the Authorization for Use of Military Force as embedded in the latest version of the National Defense Authorization Act, signed by the president Dec. 31. Additionally plaintiffs were also included into the suit such as Noam Chomsky, Daniel Ellsberg, Naomi Wolf, and Cornel West.

The federal court in New York City issued an order blocking the indefinite detention powers of the NDAA for American citizens after finding it unconstitutional. On May 16, 2012, in response to the lawsuit filed by journalist Chris Hedges, Noam Chomsky, Naomi Wolf and others, US District Judge Katherine B. Forrest ruled in a 68-page opinion that Section 1021 of the NDAA was unconstitutional because it violates the 1st and 5th Amendments. Judge Forrest struck down language in the law that she said gave the government the ability to incarcerate people based on what they said or wrote. “At the hearing on this motion, the government was unwilling or unable to state that these plaintiffs would not be subject to indefinite detention under [Section] 1021,” Judge Forrest noted. “Plaintiffs are therefore at risk of detention, of losing their liberty, potentially for many years.” Judge Forrest therefore issued a preliminary injunction which prevents the US government from enforcing section 1021 of the NDAA's "Homeland Battlefield" provisions pending further order of the court or an amendment to the statute by US Congress.

Judge Forrest was requested by the Obama administration to undo her ruling. In a footnote of the request, the Administration claimed "The government construes this Court’s Order as applying only as to the named plaintiffs in this suit".

In an opinion and order filed June 6, 2012, Judge Forrest clarified her statement, saying that her injunction applies not just to the named plaintiffs in the suit, contrary to government's narrow interpretation. She wrote, “Put more bluntly, the May 16 order enjoined enforcement of Section 1021(b)(2) against anyone until further action by this, or a higher, court — or by Congress...This order should eliminate any doubt as to the May 16 order’s scope”. The detention provision is not blocked for any persons connected to the September 11 attacks.

The U.S. government appealed Judge's Forrest preliminary injunction which prevents the U.S. government from enforcing section 1021 of the National Defense Authorization Act's "Homeland Battlefield" provisions on August 6, 2012. The Manhattan U.S. Attorney's office, which represents the government in this case, along with named defendants Obama and Defense Secretary Leon Panetta filed its notice of appeal with the 2nd U.S. Circuit Court of Appeals. The federal government argues in its appeal that in cases dealing with “militants” and those offering “substantial support” to them indefinite detention without due process is appropriate. According to Reuters the US government believes they are justified to have the authorization to lock alleged belligerents up indefinitely because cases involving militants directly aligned against the good of the US government warrants such punishment.

In a court hearing chaired by Judge Forrest on August 7, 2012 the plaintiffs were asking the court for a permanent injunction of the indefinite detention powers of the NDAA. During this hearing Assistant U.S. Attorney Benjamin Torrance admitted that the government doesn't specify whether detainees are held under the NDAA provisions or under the Authorization for the Use of Military Force. Consequently, the government was continuing to detain people covered by the challenged provisions in spite of the court's injunction. One of the plaintiff's attorneys, Carl Mayer, said later that he and his colleagues were considering bringing contempt of court charges over what he called an apparent disregard for the court injunction. Judge Forrest closed the hearing with a promise that she had not yet made her mind up i.e. that she had not yet reached a decision regarding making her preliminary injunction permanent.

On August 9th, 2012 Tangerine Bolen, one of the plaintiffs in the trial, reported that the attorneys for the US government were unwilling or unable to answer whether or not the US government has complied with Judge Forrest's court order: "in this hearing, Obama’s attorneys refused to assure the court, when questioned, that the NDAA’s provision – one that permits reporters and others who have not committed crimes to be detained without trial -- has not been applied by the US government anywhere in the world -- AFTER Judge Forrest’s injunction. In other words, they were saying to a US judge that they could not or would not state whether Obama’s government had complied with the legal injunction that she had lain down before them. To this, Judge Forrest responded that if the provision has indeed been applied, the United States government itself will be in contempt of court."
An anti-terrorism law was struck down Wednesday by a federal judge who said she saw legitimate fears in claims by journalists, scholars and political activists that they could face indefinite detention for exercising First Amendment rights.

U.S. District Judge Katherine Forrest in Manhattan said the government has softened its position toward those who filed suit challenging the law, but she said the “shifting view” could not erase the threat of indefinite military detention. She urged Congress to make the law more specific or consider whether it is needed at all.

“First Amendment rights are guaranteed by the Constitution and cannot be legislated away,” Forrest wrote. “This Court rejects the Government’s suggestion that American citizens can be placed in military detention indefinitely, for acts they could not predict might subject them to detention.”


But she said the Constitution places limits on the president’s power to act and requires courts to safeguard core Constitutional rights. She noted that scattered cases during World War II when the Supreme Court sanctioned undue deference to the executive and legislative branches resulted in actions that “are generally now considered an embarrassment,” such as the internment of Japanese Americans based on wartime security concerns.

Forrest called the government’s suggestion that the court’s role be limited to a post-detention habeas review “without merit and, indeed, dangerous” because cases would take years to be resolved and are reviewed under a lesser legal standard.

She said if habeas petitions that allow prisoners to challenge their detention are the only way for those detained under the law to gain freedom — even U.S. citizens on U.S. soil — then “core Constitutional rights available in criminal matters would simply be eliminated.”

She added: “No court can accept this proposition and adhere truthfully to its oath."

Read more at the washington post.

From the SDNY Blog:
Today, Judge Forrest permanently enjoined enforcement of a portion of the National Defense Authorization Act, a federal law President Obama signed on December 31, 2011, authorizing the government to detain persons, including U.S. citizens, who “substantial[ly] support” Al-Qaeda, the Taliban or their “associated forces.” Judge Forrest had issued a preliminary injunction in May, and the ruling today, which is 112 pages, follows similar reasoning. She was particularly forceful in rejecting the Government’s argument that the Court should “essentially ‘stay out of it’–that is, exercise deference to the executive and legislative branches and decline to rule on the statute’s constitutionality”

The Court is mindful of the extraordinary importance of the Government’s efforts to safeguard the country from terrorism. In light of the high stakes of those efforts as well as the executive branch’s expertise, courts undoubtedly owe the political branches a great deal of deference in the area of national security. See Holder v. Humanitarian Law Project, 130 S. Ct. 2705, 2711 (2010). Moreover, these same considerations counsel particular attention to the Court’s obligation to avoid unnecessary constitutional questions in this context. Cf. Ashwander v. Tenn. Valley Auth., 297 U.S. 288, 347 (1936) (Brandeis, J., concurring) (“The Court will not pass upon a constitutional question although properly presented by the record, if there is also present some other ground upon which the case may be disposed of.”). Nevertheless, the Constitution places affirmative limits on the power of the Executive to act, and these limits apply in times of peace as well as times of war. See, e.g., Ex parte Milligan, 72 U.S. (4 Wall.) 2, 125-26 (1866). Heedlessly to refuse to hear constitutional challenges to the Executive’s conduct in the name of deference would be to abdicate this Court’s responsibility to safeguard the rights it has sworn to uphold.
And this Court gives appropriate and due deference to the executive and legislative branches–and understands the limits of its own (and their) role(s). But due deference does not eliminate the judicial obligation to rule on properly presented constitutional questions. Courts must safeguard core constitutional rights. A long line of Supreme Court precedent adheres to that fundamental principle in unequivocal language. Although it is true that there are scattered cases–primarily decided during World War II–in which the Supreme Court sanctioned undue deference to the executive and legislative branches on constitutional questions, those cases are generally now considered an embarrassment (e.g., Korematsu v. United States, 323 U.S. 214 (1944) (upholding the internment of Japanese Americans based on wartime security concerns)), or referred to by current members of the Supreme Court (for instance, Justice Scalia) as “wrong” (e.g., Ex parte Quirin, 317 U.S. 1 (1942) (allowing for the military detention and execution of an American citizen detained on U.S. soil)). Presented, as this Court is, with unavoidable constitutional questions, it declines to step aside.

Chicago teachers strike!

Twenty-five thousand teachers in Chicago are striking today. Most of the time we think strikes are about pay and work conditions. This is not the case in Chicago. These teachers earn an average of $72,000, about $30,000 more than the national median salary for teachers. Furthermore, the school district offered them a 16% raise over 4 years. So why are they striking? Accountability.

That's right, they don't want to be held accountable for the performance of their students. They are striking because the district wants to include teacher evaluations in its program. You may recall that I wrote about the budget problems of the San Diego school district. I included teacher evaluations in my plan, and some people told me that it would never happen, that teachers would never accept evaluations. It appears to be true.

So, public school teachers, who are being paid by the taxpayers, don't want oversight and evaluation of their performance? Attendence is mandatory, taxation is mandatory. So what we're being told is we have no choice but to send our children to these schools, to pay for them, and performance be damned. Oh, but don't worry! No child will be left behind. The curve to the rescue, and As for everyone! So what if our highschool graduates can't read or write, and don't understand math. So what if our college graduates do not have the skills necessary to perform the jobs they supposedly trained for. Everyone will feel good about themselves, and that pink fluffy feeling is all that matters, right? We wouldn't want to make kids feel bad about poor performance.