Tuesday, July 30, 2013

Morning Twitter Messages -- July 30

I haven't done a Twitter message sweep for a while in favor of subjects that do better with dedicated blog posts. So here is a potpourri for today.


If you aren't aware of Reza Aslan and Zealot you have homework to do. After watching the embarrassing FOX interview, bookmark the much better Fresh Air interview for later listening. He's quite impressive.


The struggle for democracy continues in Bahrain. Videos like this break my heart. The Sunni monarchy there rules the place with an iron hand and minorities are really treated like second-class citizens.

Who needs The Onion when you have Karl reMarks? 





America has left a big bloody footprint in the Middle East. I hope all the war mongerers are happy. Anyone who thinks US policies and actions causing that bleeding began with the attack on the World Trade Center is seriously ignorant about history. It started decades ago and has got worse ever since. And contrary to all the criticisms of Barack Obama about not being assertive enough, it continues to this day. 
"I am deeply concerned about the heightened level of violence which carries the danger that the country falls back into sectarian strife," said acting United Nations envoy to Iraq, Gyorgy Busztin.
"Iraq is bleeding from random violence, which sadly reached record heights during the holy month of Ramadan."
At least 10 people were killed when two car bombs blew up near a bus station in the city of Kut, 150 km (95 miles) southeast of the capital, police said.

...as I said. 

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In other news, or more accurately non-news, yesterday's scattered wildcat strikes by fast food workers all over the country received virtually no media attention. They didn't even generate a Twitter hashtag, much less a trend. Sadly, those at the bottom of the economy have always been at the mercy of those who make the rules.  Plus ├ža change, no?  Suggestions to raise the federal minimum wage fall on deaf ears in good times and have even less impact when times are bad. And anyone who thinks times are good is not paying attention no matter what the numbers say.

In a somewhat dry but excellent long read Daniel Alpert looks at those numbers and draws some dismal conclusions.  The New Sick-onomy? Examining the Entrails of the U.S. Employment Situation  is too long to summarize here, but is a highly recommended piece. He carefully dissects a lot of analytical numbers and documents what most of us already know, that an increasing number of people are being employed in jobs way below their skill sets, living payday to payday and finding that upward mobility is more of a concept than a reality.  (When Atlanta was preparing for the 1996 Olympics a representative from the Olympic committee paid a visit to inspect what was underway. One morning as he left Georgia Tech he observed that construction was just starting for a swimming pool, and when he returned to his hotel that evening was surprised to see the pool was finished. His timeless comment sticks in my memory: "In Europe constructing a swimming pool in one day is an intellectual concept.")

...the fact is that the U.S. employment situation is more of a wounded beast than a bull. And it is a wounded beast whose entrails tell a different story, indeed—one that ties far more convincingly into the anemic sub-2 percent GDP growth rate of the U.S. economy and the sluggish retail sales data we have seen of late....
  • Over 69 percent of the jobs created in Q2 2013 and over 57 percent of all the jobs created in the first half of 2013 were created in the three lowest wage sub-sectors of the economy, Retail Trade, Administrative and Waste Services, and Leisure and Hospitality, that otherwise account for an aggregate of only 33 percent of all private sector jobs. These jobs, in the aggregate, pay an average of only $15.80 per hour, compared with the other two-thirds of private sector jobs, which pay $27.16 per hour. Relative to unemployment benefits and other assistance, jobs at $15.80 per hour put less than $3.00/hour more in the pockets of a newly working consumer. 
  • About half of the jobs created during H1 2013, and a large majority of the jobs created in Q2 2013, appear to have been part-time jobs that offer employees as little as one hour of work per week, and up to 35 hours of work. Moreover, after falling from a recession high of 9.2 million to a post-recession low of 7.6 million at the end of Q1 2013, the number of people saying they are working part time because they can’t find full time work (part time for economic reasons) crept back up to 8.2 million, double pre-recession levels. The U-6 underemployment rate, incorporating those working part time for economic reasons, plus another 6.6 million folks who the Bureau of Labor Statistics does not count as part of the labor force, but who nevertheless say they want a job, as well as others, rose during Q2 2013 to 14.3 percent from the 13.8 percent it registered at the end of Q1. 
  • The U-6 rate topped out at 17.1 percent during the Great Recession, and has only declined by 16.4 percent from its peak, while the official U-3 unemployment rate has declined by 24 percent. 
  • Unsurprisingly, therefore, since the recession it turns out that the decline in the U-3 unemployment rate has been principally due to a reduction in the labor forces itself, which stood at 65.09 percent when unemployment hit its 10 percent peak (down already from the pre-recession high of 66.11 percent) to 63.46 at the end of Q2 2013. If the unemployment rate were calculated at the 65.09 percent labor force participation level, U-3 would stand at 9.77 percent today. 
  • Real wages, calculated after giving effect to inflation, have been falling for nearly fifteen years. But with inflation at or near all-time lows, U.S. families were beginning, on average, to scratch their way back—albeit slowly. But decidedly not so in the sectors in which most of the jobs are being created. On the whole—with hyper-low inflation (which is likely to continue)—U.S. wages are roughly keeping pace across the board (real wages are up 0.07 percent—tiny, but considering that they have been falling for so long, not so bad). But in the three low-wage sectors responsible for the creation of over 69 percent of jobs in Q2 2013, wages have fallen after inflation by -0.7 percent (seven tenths of 1 percent) year over year. In contrast, wages in the high-wages sectors which have generated less than a third of newly created jobs, have risen 0.44 percent after inflation.
There's more. Much more. 
He has loads of charts and numbers to support his argument. But as Dylan said, it doesn't take a weatherman to tell which way the wind is blowing. 
But when the percentage of low-wage sector job creation accelerated sharply from the first quarter into the second quarter of 2013, elevated hopes turned to elevated concerns. The job creation this year may not evidence of a curing trend, but rather continued sickness. I am beginning to believe that we may be seeing workers accepting jobs at wages only marginally above the assistance benefits they were receiving, because their benefits have run out. Employers—seeing a bit more demand (not much, however, given the poor final reading for the growth of Q1 2013 GDP), seeing confidence build from monetary policy-led asset inflation in the housing sectors, and perhaps reacting to the deceptive jobs numbers themselves—have been willing to take on a little extra help here and there after years of cutting back to the bone, as long as that extra help comes dirt cheap and isn’t looking for anything in the way of a raise. 
I am concerned also by the fact that an expansion in revolving consumer credit has accompanied this rise in confidence. Credit card growth led by rising incomes is a great thing. Consumer credit growth resulting from people having jobs paying little more than the assistance they were previously receiving (after all, you can’t get credit when you’re on the dole) is not a good sign—it shows people still can’t make ends meet. It is possible that may be some of what we are seeing. Regardless, I know that what we are taking for a jobs recovery is not the “real thing.”
Personal anecdote here. The neighborhood where we live was already in trouble years before the housing bubble and financial crisis of 2008. What was supposed to be a moderately upscale subdivision of 70 homes got stalled along the way for a variety of reasons and a string of developers never succeeded in finishing the project.   To make a long story short our little cluster of homeowners, about 28 altogether, finally wrested control of the HOA from the last developers and has done all a little group can do to keep one street and a cul-de-sac from looking like the economic casualty it is.

Despite all efforts, those of us who are home owners are being surrounded by rental property as the value of our homes sinks along with the rest of the country's real estate. Recently, however, another foreclosed property has been acquired by a large national company with an interesting business model. Unlike the banks (which are typically poor property managers) and small-time investors with limited resources, this big outfit is buying foreclosed single-family homes at bargain prices, not for resale, but to be marketed as rental property. Their target market is -- wait for it -- people who are now renting, living in apartments, who were once home owners but had to declare bankruptcy and want to be back into a single-family home. They can't "lease with an option to buy" because their credit rating must first recover, so they are stuck renting for a few years.

This shift in real estate management indicates to me that Mr. Alpert (and a growing number of others saying the same thing) that what is being billed as a recovery is not, in fact, anything to brag about. Yesterday's fast food wildcat strikes are just another indicator of the same phenomenon. It all puzzles together.

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I thought I was finished, 
but this is too good to pass up.
Karl Sharro is the wittiest ME observer of them all.  He has put together a taxonomy of Arab secularists.
Go read the whole piece. Here is a snip:
The Libertarians 
The libertarians are liberals who also like porn. The good porn with pictures and stuff, not the complicated type in serious novels that liberals and leftists like. 
The Communists 
It used to be said that “when it rains in Moscow, Arab communists open their umbrellas.” But since the demise of the Soviet Union, Arab communists have been wandering around aimlessly, mostly trying to organise the third annual party conference that will bring new blood in. The second conference was organised 47 years ago. 
While waiting for the objective conditions to ripen, Arab communists spend their time calling each other ‘comrade’ and talk about workers’ rights in the abstract. Someone promised to introduce them to some workers and they’re very excited about that. 
Major locations: London, Paris, and one street in Beirut. 
Favourite drink: cheap vodka. 

2 comments:

  1. I try to avoid Walmart for several reasons, but the main reason is not wanting to hear how parents treat their kids badly in the store. I think Child Services should set up a table in the store.

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    Replies
    1. Very sensible. Too bad most local political types climbed into the Walmart pocket to get one of those monster stores nearby. The Walmart business model is as magnetic to local politicians as the lure of a drug dealer in his line of work.

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