July 9, 2005

This Weekend’s Unanswered Questions (070905)

Filed under: Economy,MSM Biz/Other Bias,Taxes & Government,TWUQs — Tom @ 3:31 am

Another installment in a nearly-regular series of mysteries and pseudo-mysteries (usually 3-4) this inquiring mind would like to have answers for (some links included may require free registration):

QUESTION 1: Why are so many Americans still pining for the wonders of nationalized health care (excuse me, now they dress it up as “single-payer”) when the majority of our neighbors to the north want to be able to get around it?

Apparently the majority of Canadians have had enough of the status quo:

Sixty-three per cent of those polled said they would be willing to “pay out of pocket” to gain faster access to medical services for themselves or their family members.

It also showed that 55 per cent of Canadians agree with the Supreme Court decision that they should have the right to buy private health insurance if the public system cannot provide medical services in a timely fashion.

The Canadian public knows that the “if” in the previous sentence is really “when.”

QUESTION 2: Could we please have more of what Reuters calls “tepid“?

Unemployment drops to 5% (lowest in about 4 years) and 146,000 jobs are added (less than “expected”). Reuters follows the MSM business reporting rule, which states that if a Republican is in office, concentrate on the worse of the two numbers:

U.S. job growth tepid, jobless rate drops

By Andrea Hopkins

WASHINGTON (Reuters) – U.S. employers added 146,000 jobs in June, below Wall Street’s forecasts, but the unemployment rate fell to its lowest since September 2001 as few people joined the labor force, a government report showed on Friday.

June’s tepid hiring fell short of analysts’ expectations of 188,500 new jobs and did not keep pace with population growth. But the drop in the unemployment rate to 5.0 percent was a surprise, since it was forecast to hold at 5.1 percent.

“It’s enough to keep the wolves at bay but not enough to get excited about,” said Michael Jansen, currency strategist at National Australia Bank in New York.

…. The Labor Department also revised up job growth in April and May to 292,000 and 104,000, respectively, boosting the two-month count by 44,000 payroll jobs.

…. But not everyone was as optimistic, because the unexpected decrease in the jobless rate was mostly due to a paltry 1,000 increase in the labor force — suggesting many Americans have stopped looking for work.

“The decline is not a sign of vigorous labor market activity, in our view, since it came in tandem with a pullback in the labor force participation rate to 66.0 percent,” economists at Merrill Lynch said.

….. In a potentially troubling sign, the length of the average workweek was 33.7 hours, unchanged from May’s downwardly revised total. The factory workweek was also unchanged at 40.4 hours, while overtime held at 4.4 hours.

Employers typically increase the length of the workweek before taking on new workers, so a lack of growth in that area can mean scant hiring ahead.

Expect the economic naysayers to continue to focus on the increase in jobs and not the unemployment rate in the coming months, even though the unemployment rate has traditionally (and properly) been the correct focus of attention, as it concentrates on the portion of the population that is working or actively looking for work. There are a lot of good reasons to not be looking for work (other than being a “discouraged worker”) that have become, and will continue to be, more important, namely the increased numbers of retirees (the Boomers are coming, the Boomers are coming) and the well-documented trend towards stay-at-home parenting the Census Bureau has noted (BizzyBlog calls it “The Dr. Laura Effect”).

A sidebar: Andrea Hopkins, the article’s author, is the same person BizzyBlog caught in March lifting a statement Alan Greenspan made to Congress during the Q&A after his formal opening remarks, and implying that it was part of those remarks. The statement she lifted “just happened” to make it look like Greenspan was not as strongly in favor of Social Security private accounts as his formal remarks clearly were.

UPDATE: Opinipundit helpfully notes: “Reuters may have been ‘tepid’ but the stock market wasn’t….. Dow up 150, Nasdaq up 36.”

QUESTION 3: When are we going to catch up with the rest of the world and eliminate the death tax?

From The Wall Street Journal (link requires subscription):

… Russia eliminated its inheritance tax last month. Its move comes after January’s decision by the government of Sweden, the birthplace of the modern-day welfare state, to eliminate its estate tax. Like the Russians, the Swedes have come to believe that the tax is unjust and economically counterproductive. Russia and Sweden join Argentina, Australia, Canada, India, Mexico and Switzerland as nations that don’t make death a taxable event.

The U.S. now has the distinction of imposing the most onerous death tax in the industrialized world. The federal estate-tax rate is 45% on every dollar above a $1.5 million exemption, but in many states the combined federal/state tax on dying rises above 50%. This means that the government can snatch a larger share of the business, home and savings that a citizen builds up over a lifetime than would go to his heirs. If this sounds, well, a bit communistic, it is. The third policy plank of Marx’s “Communist Manifesto” is “taxation of all inheritance.”

In Russia, President Vladimir Putin pushed the death tax-repeal bill through the lower chamber of Parliament by a vote of 414-2. Here at home, Mr. Bush is straining mightily to round up just eight of 44 Democratic Senators to permanently liberate America from this confiscatory tax when repeal comes up for a vote later this month. Let’s hope they can muster at least as much faith in capitalist incentives as Europe’s former Marxists.