December 12, 2006

Weblog Awards Daily Post (121206)

Filed under: General,News from Other Sites — Tom @ 3:41 pm

Voting ends Dec. 15. Vote for BizzyBlog here. You can vote once every 24 clock hours. If you’re new here and in evaluation mode, see the biz/econ-related posts in the “Top 20″ near this page’s top right. Others to vote for: (links to ballots) Viking Spirit, Right Angle Blog, Pundit Review, Hot Air, Brussels Journal, Willisms, Sean Gleeson.

Shameless Plug: BizzyBlog is currently in a fierce neck-and-neck fight for 4th place. The top 3 would appear to be out of reach. All votes would be appreciated.

Women’s Workforce Participation in 7-Year Drop: The Economic Impact

Filed under: Economy,Taxes & Government — Tom @ 3:38 pm

Besides illegal immigration, this decline in workforce participation by women goes a long way towards explaining why the total employment figures haven’t jumped since 2000 as they did during most of the 1990s. Partially it’s because total workforce participation is down, but I also believe it’s partially because many women returning to the workforce for a different kind of work are not being counted.

The National Center for Policy Analysis digested a subscription-only column by Sue Schellenbarger at The Wall Street Journal, whose factual lead was this:

The first national demographic analysis of the trend toward new mothers dropping out of the work force sheds new light on women’s motives for staying at home. New data from the Bureau of Labor Statistics shows that the seven-year trend has been broader than previously believed, with women at all income levels taking job breaks, not just the highly educated, prosperous moms examined in many recent studies.

The NCPA picked out these three nuggets:

  • The dropping-out trend was most pronounced among mothers of children under age 1, whose labor force participation fell about 8 percentage points from 1997 to 2004, to 51 percent.
  • The decline for mothers of 3- to 5-year-old children was less than half as large, down 3.4 percentage points to 63.6 percent.
  • And for mothers of older children up to age 17, the decline was just 1.6 percentage points.

Overall, that’s a very big drop, amounting to probably several million, in the number of people in the workforce at any given time compared to what that number would be if participation rates had stayed where they were until the late 1990s (there was a slight decline from 1997-1999, followed by the steep decline Schellenbarger cites above).

Addtionally, I also believe that when women are returning to the workforce, they are more likely to be working at places (e.g., in their homes or at very small businesses) that are NOT being picked up in the BLS’s Establishment Survey, the one used every month to report how many jobs were added to the economy. Since January 2002 (numbers that follow are in the second section of the linked text), the trough of the job market, the Establishment Survey tells us that 5,410,000 jobs have been added in the economy. But the BLS’s Household Survey, which is used to determine the unemployment rate, shows an increase in the workforce of 9,866,000 during that same time period, including almost a million in September, October, and November alone.

If you insist (if you don’t, I will :–>), there are a few potential public-policy points to be made about all of this:

  • In light of the documented decline in workforce participation by women, the better measurement for comparing one economic era to another has to be the unemployment rate and not the total number of jobs.
  • As the American Shareholders Association has opined (see last item at link), the Household Survey is probably a better benchmark to use than the Establishment Survey. I would add that it is especially important to do that if you are going to do any kind of total employment comparisons between eras.
  • Comparing economic growth rates between eras gets tricky too. It’s relatively easy to grow the economy by 3% or more when the number of people in the workforce is going up at that rate, because you can get away with zero productivity growth. When the workforce isn’t growing a great deal because of voluntary decisions by potential workers not to participate for a while, it’s a lot tougher. There had better be significant productivity improvements, or it’s just not going to happen. In that context (ignoring other inhibiting factors like Sarbanes-Oxley that I’ll save for another time), the fact that GDP has grown by about 3.8% annualized during the past 3-1/2 years (table at link reads 3.89%, but lower GDP growth in the third quarter will bring the figure down to about 3.8%), a rate that is very close to the 3.9% achieved in the last seven years of the Clinton Administration, is truly remarkable.

Pinochet Pointer: On the Social Security System We Should Have

Filed under: Economy,Soc. Sec. & Retirement,Taxes & Government — Tom @ 1:05 pm

Although this morning’s Washington Post editorial on the death of Augusto Pinochet (also discussed in the final item at this post earlier today) gave proper credit to Chile’s economy as “leaving behind the developing world, where all of its neighbors remain mired,” it did not specifically mention one of the biggest, if not THE biggest contributors, to that success: its privatization of what had been a Social Security-like retirement system.

This BizzyBlog blast from the past (2nd item at link) will make you wonder why Chile listened to the late Milton Friedman, and we haven’t (the pre-TimeSelect NYT link below still works, but may require free registration):

Why won’t the supporters of Social Security privatization say more about Chile? A New York Times (!) writer (link requires free registration) went there and found that if he had invested his Social Security money in the privatized social pension system (reflecting real results in real mutual funds since 1981′s privatization there), he would be able to retire with benefits nearly triple that of what he’ll get from the US Social Security system.

Chile has had problems with participation by self-employed people and day-laborer types, but the fact is that it has undeniably worked out marvelously for those who are in it. I personally feel robbed by Alan Greenspan, who, though a supporter of private accounts, did not push for them when Social Security was fixed band-aided in the early 1980s.

There’s still a window of opportunity to make this kind of increase in benefit levels possible for retirees 20 years or so from now by taking action quickly. Or we could dither for 5-10 years, and turn into Germany, where the situation is about as intractable as it can get.

Six Imams Update: Those Darn Facts, and Some Opinions

Here are items, mostly from supposed right-wing “propaganda outlets,” which happen to be raising uncomfortable “truth and facts” in the six imams situation.

CAIR is doing their expected shakedown dance.

The Washington Times notes the cuff contradications:

CAIR says the men were handcuffed for several hours and is also demanding hearings on religious and ethnic profiling at airports.

Mr. Shahin told The Washington Times he was only handcuffed for “10 or 15 minutes” and that the imams were not led off the plane in handcuffs.

Richard Miniter, among many other salient points, notes something that yours truly raised 10 days ago, namely that a few people involved think that Marwan Sadeddin was pretending to be blind.

Powerline reminds us that newly-elected Congressman Keith Ellison lurks in the background, his involvement apparently peripheral but still unclear.

(Aside — Oh boy, this next one apparently
“counts,” because it comes from a
Buckeye State Blog staff-Approved
“MAINSTREAM SOURCE.”
So pay special attention to this one. Zheesh.
)

Katherine Kersten of the Minneapolis Star-Tribune is an op-ed writer who apparently frequently scoops that paper’s beat reporters, especially if there are rocks to turn over that might reveal something that will upset the politically correct. She was last seen at BizzyBlog scorching Minnesota’s Democratic Farm Labor Party (the DFL, the name for that state’s Democrats) for characterizing ads produced by former Iraq War soldiers and the families of slain soldiers from that state as (I’m not kidding) “un-American.” Kersten, who may be the ideologically loneliest employee in one of the furthest-left newsrooms in America, follows up on a story the Star-Trib’s editor apparently thinks is old news, and connects lots and lots of dots between the imams and outfits associated with terror.

Now, to some opinions.

Transterrestrial Musings is not amused:

(US Airways) ….. should countersue against these people for (probably deliberately, based on most accounts) terrorizing the passengers and disrupting service. I’d be happy to even contribute to a legal fund for it. In fact, it would be a good idea to set up a fund and get all the airlines to contribute to it, because US Air is waging this battle for the whole industry.

Dan Riehl raises a good point:

Radical Islamists have been actively working America’s tradition of charity to feed money to their malignant cause. The government has been fairly effective in shutting them down. So, is it really out of the question to wonder if some of the same individuals aren’t re-directing their energies, seeing charges of discrimination as a means of getting America to lower her defenses?

Ace was on a roll — “Shock of all shocks, they’re looking to settle just as their dirty laundry is ….. precluding any chance of a verdict in their favor.”

CAIR’s Ohio Chapter President Asma Mobin-Uddin did his part in the coordinated PR blitz that is surely occurring nationwide with a Sunday letter (“Airline discriminated against Muslim clerics”) to the Columbus Dispatch. Let Freedom Ring rang his bell, but good.

* * * * * * *

I think Captain Ed has the best read on the whole affair, as it relates to both the imams and the local Twin Cities press:

At first, the provocation seemed designed to promote Muslims as a victim class. With the kinds of connections that Kersten details, it looks more like a serious attempt to force a retreat on airline security that would allow terrorists to conduct another attack. The Star Tribune’s refusal to do actual reporting on this subject and their abdication of their journalistic responsibilities to their local columnist do a disservice to their Minneapolis readers and to the nation as a whole.

True enough, Captain. But Katherine Kersten still works for a Buckeye State Blog staff-Approved “MAINSTREAM SOURCE,” which means that even though no one can possibly believe you (despite the fact that you broke the publicaton ban in Canada’s “Adscam” scandal that ultimately took down that country’s Liberal Government), or Powerline, or Let Freedom Ring, or the WashTimes, or Richard Miniter, everyone MUST believe her.

……

….. and Rathergate was just pulp fiction until the NY Times called the forged memos “fake but accurate.” (/sarcasm)

_______________________________

UPDATE: Debra Burlingame, whose husband brother piloted one of the 9/11 planes, of 911 Families for America, appeared on Fox News (oops, guess this one doesn’t “count” either — Ed.), and made some of the points described in this post. She also urged viewers to contact US Air to support their conduct. Done.

UPDATE 2: Another apparently “untrustworthy” opinion (HT the “untrustworthy” Jawa Report), because it’s from a Muslim organization that stridently objects to the conduct of the six imams:

As a devout Muslim, I have watched this painfully protracted saga unravel, fearing what comes next. The media, especially print media, have bent over backward to hear minorities’ fears. Yet public opinion has not seemed to budge in favor of the imams. The lesson here lies in why. It has to do with credibility.

We are all creatures of passion. This fiasco has stirred the passionate cry of victimization from the Muslim activist community and imam community. But where were the news conferences, the rallies to protest the endless litany of atrocities performed by people who act supposedly in my religion’s name? Where are the denunciations, not against terrorism in the abstract, but clear denunciations of al-Qaida or Hamas, of Wahhabism or militant Islamism, of Darfurian genocide or misogyny and honor killings, to name a few? There is no cry, there is no rage. At best, there is the most tepid of disclaimers. In short, there is no passion. But for victimization, always.

SOX Reform: Good News, Bad News

Filed under: Business Moves,Economy,Taxes & Government — Tom @ 9:12 am

From The New York Times (link may require registration):

The Securities and Exchange Commission will begin the process of easing auditing standards for thousands of smaller public companies this Wednesday when it proposes rules under the most contentious provision of the Sarbanes-Oxley Act.

….. The commission’s long-awaited interpretation of Section 404 is the culmination of a fierce lobbying battle. It has pitted the largest accounting firms, which have reaped huge profits from the tighter standards, against an equally influential coalition of small public companies, which has lobbied for years for relief.

The proposal will, for the first time, impose a “materiality standard” — that is, auditors will be advised to scrutinize only those controls that could have a reasonable risk of having a material impact on the financial statements. It is expected to encourage auditors to rely on prior years’ work as a basis for testing controls and discourage auditors from multiple testing of the same controls. And it will encourage the auditors to use a “risk assessment” to focus the audit on the areas of greatest potential concern.

The above is otherwise known as “common sense.” The materiality standard means that no longer will the bean-counters scrutinize the receptionist’s abiliity to run off with or steal from the petty cash fund. It appears to apply to all companies; I would certainly hope it does, unless you think that worrying about HP’s receptionist running off with a few hundred bucks is something auditors should spend time on.

As would be expected, The Time does a political calculation:

The fight over auditing standards has far broader political implications, according to officials, lawmakers and industry executives. An adequate resolution of the issue by regulators would take significant pressure off Congress to address other complaints from some business groups about the law and other corporate governance rules.

This, if true, is unfortunate. I guess we’re going to have to lose all of the world’s IPO business and watch an ever-larger number of public companies go private before someone pays attention to the wide swath of Sox’s other negative effects:

_________________________________

Selected Previous Posts:
- Dec. 7 — Excerpt of the Day: Holman Jenkins in Wednesday’s WSJ on SarBox
- Dec. 5 — ‘London & Hong Kong Heart Sarbox SOX’ Bumper Stickers are for Sale
- Dec. 4 — London and Hong Kong ‘Heart’ Sarbanes-Oxley
- Nov. 12 — Greenspan: NOW He Says Something about Sarbanes-Oxley
- June 21 — Contrary to “Expert” Predictions, Post-Sarbanes-Oxley Audit Fees Continue to Balloon
- June 5 — Told You: SarBox Is Causing More Companies to Go Private, and Causing IPOs to go Elsewhere
- May 25 — The Enron Verdicts Are Proof that Sarbanes-Oxley Wasn’t Needed
- May 21 — News Flash: Company Execs Aren’t All Crooks
- Feb. 5, 2006 — It’s About Time Somebody Said This (about Enron, SarBox, and Business Leaders)
- Dec. 28, 2005 — Passage of the Day: John Stossel on the Cost of Sarbanes Oxley
- Dec. 16 — Announcing the “We’re Out of Control, and Sarbanes Oxley Should Apply to Us” Winner for 2005

Couldn’t Help But Notice (121206)

Filed under: Business Moves,Taxes & Government — Tom @ 6:22 am

Yeah, this is good news (link requires subscription):

Homes for Sale in Metro Areas Fall

The number of homes listed for sale in 18 major U.S. metropolitan areas at the end of November was down 4% from a month earlier, according to data compiled by ZipRealty Inc., a national real-estate brokerage firm in Emeryville, Calif.

The decline is an encouraging sign for home sellers. Prices have been falling in recent months in many areas, largely because of a glut of unsold homes, and are unlikely to rise again until inventories come down.

Remember supply and demand, ECON 101? When supply falls in the face of lower demand, prices stabilize. This is good.

_________________________________

How you know the legal system is out of control (link requires subscription): When the plaintiff’s lawyer tries to tell the judge that he doesn’t have to prove anything to win a claim:

The plaintiffs claim that BellSouth, Verizon, and the other Bells agreed among themselves to refrain from competing against each other and to prevent smaller telecom rivals from entering their respective markets. Mr. Richards had just finished explaining to the Court why “proving the facts alleged is not a plaintiff’s burden.” He said it was contrary to the Bells’ self-interest to stay out of each other’s territory and therefore a conspiracy can be inferred.

_________________________________

Repeat after me:

“Fidel Castro has held dictatorial power for over 45 years, will never voluntarily give it up, has ruined his country’s economy, and has oppressed his people at a far worse and far more comprehensive level than the late Augusto Pinochet ever did.”

(listening…..) I can’t hear you….

(listening) Say it like you mean it! You KNOW it’s true.

(listening…..) That’s better.

(No dedicated leftist will get through the preceding exercise.)

Okay, NOW you can point out Pinochet’s faults. Then read this balanced, eyes-open OpinionJournal.com editorial (may require e-mail registration).

UPDATE: Call GuinnessThe Washington Post, apparently not dedicated enough leftists (HT Instapundit), actually gets the Castro-Pinochet comparison, and even brings in the late Jeanne Kirkpatrick to bolster its case:

In “Dictatorships and Double Standards,” a work that caught the eye of President Ronald Reagan, Ms. Kirkpatrick argued that right-wing dictators such as Mr. Pinochet were ultimately less malign than communist rulers, in part because their regimes were more likely to pave the way for liberal democracies. She, too, was vilified by the left. Yet by now it should be obvious: She was right.

UPDATE 2: Accompanying Insta-Understatement“The other contrast is that you can find apologists for Castro in pretty much every newsroom and university campus in America. Pinochet, not so much.”

Quote of the Day: Why Jamil Hussein and the Fake Sources Story Really Matters

From Ray Robison at American Thinker:

Speaking for me, there is one motivation for investigating the accuracy of the AP. That is the fate of the military members in Iraq. Every new massacre begets more violence and thus endangers our soldiers a little bit more. So while pining away about the fortunes of writers in a dangerous place, consider the fate of the soldiers there as well. If the AP falsely reports a massacre, and there is some reason to believe they have, it only makes it that much more dangerous for our men and women in uniform in Iraq. This simple truth should be obvious. It makes me shudder when I read an AP editor who says nothing about this reality, as if it never even entered her mind.

Spam: Worse than Ever; No End in Sight?

Bill Gates missed very badly on his 2004 predix that spam “would be solved” in two years (yes, he proposed a user fee, but he also had some pretty decent-sounding technical ideas; what happened?).

Spam quantity this year will be up 143%, and is up 73% in just the past three months. What’s more, more spam is getting through the filters because of embedding messages in pictures and other tricks:

….. image- and document-based spam—the latter is when a junk mailer tucks the marketing message inside a document attached to a message—accounted for as much as 45% of all spam in the fourth quarter, up from less than 2% a year ago.

“The combination of the [high] volume and the type of spam now coming in is what’s causing companies’ defenses to melt down,” Druker says. “They just can’t keep up with the rising tide.”

Expect more employers to limit employee access to the company’s Intranet, or at least to company e-mail addresses (if segregation is possible) if the problem continues or gets worse. One would hope that Windows Vista has some kind of answer for all of this. The toll spam takes on the US and worldwide economy may become significant enough that leaders in countries where the high volume of garbage is coming from may be forced to rethink what has obviously been thus far a hands-off approach.

Non-Surprise of the Day: UN Renovation Spiraling out of Control

Filed under: Business Moves,Consumer Outrage,Taxes & Government — Tom @ 6:07 am

And they haven’t even started the work.

From the UK Telegraph (HT Instapundit):

The United Nations is facing fresh accusations of bureaucratic incompetence after the disclosure that renovation costs for its vast New York headquarters have rocketed to nearly £1 billion.

The projected bill for the scheme, which includes updating the 1950s building and a makeover for the Secretary General’s New York residence, has risen by nearly two-thirds from an original 2002 estimate of $1,170 million (£600 million) to $1,900 million.

….. The projected temporary offices for staff and diplomats during the eight-year renovation – which is not due to start until 2008, despite being first mooted in 2001 – has jumped from $170 million to $220 million.

The spiralling figures involved have astonished New York property moguls such as Donald Trump, who claimed that the costs were being pushed up by “incompetents”.

“It’s the most ridiculous construction development I have ever witnessed,” he said. “It’s being run by a bunch of incompetents, and it’s a disgrace to this country. It should cost $700 million, but I bet it will now end up costing $3.5 billion.”

“Incompetence” is too kind.

This is making Donald Trump’s idea from last year (blogged here at the time) seem a bit less outrageous.

French Cop-out: It’s the Police’s Fault

Filed under: Taxes & Government — Tom @ 6:02 am

As in Cincinnati 5 years ago, I guess the idea that when you run from the police any number of bad things can happen isn’t relevant any more.

Instead, as it relates to the two teenagers electrocuted last year after they ran from the police into a power sub-station:

Based on analysis of radio exchanges, the report confirms the pair were chased by police into a power sub-station, and that the officers did nothing to ensure their safety despite knowing them to be inside the dangerous site.

Five police officers have been questioned as witnesses in an investigation into “failure to assist a person in danger”.

The officers had no such responsibility, and plenty of reason to be concerned for their own safety. Three of the five arrested the late-October French “bus burning incident” were minors. One was 14.

Positivity: Cleveland Browns Inspired by Legless Teen

Filed under: Positivity — Tom @ 5:57 am

Bobby Martin was the subject of a Positivity Post last year that is a must-read if you don’t know who this kid is.

Martin has graduated from playing high school football and has gone straight to the pros — helping them keep their heads on straight — in this case, the Cleveland Browns.

You won’t regret reading the whole thing.