June 4, 2012

Factory Orders Fall for Second Straight Month; So Why Is ISM’s Manufacturing Index Still Showing Strong Orders Expansion?

Filed under: Economy,Taxes & Government — Tom @ 5:43 pm

Unexpectedly,” of course.

In March and April, factory orders as reported by the Census Bureau dropped by 2.1% and 0.6%, respectively.

In March, April, and May, the Institute for Supply Management’s Manufacturing Index, still thought by many to be the gold standard of leading indicators of business sentiment, claimed that new orders were “growing slower” (index value went from 54.9 to 54.5), “growing faster” (from 54.5 to 58.2), and “growing faster” (from 58.2 to 60.1), respectively. Any value above 50 indicates expansion. Getting to 60 indicates pretty strong expansion.

The ISM Index would seem to stand indicted for not reflecting reality. Maybe the concerns I expressed two years ago (here and here) weren’t really off the wall after all. My immediate concern at the time was that a donor to Democratic Party causes and Barack Obama’s 2008 presidential run was ISM’s chairman.

Maybe the problem, assuming there is one, is deeper than that. It seems at a minimum that ISM’s survey respondents aren’t sufficiently representative of the full population of U.S. manufacturing entities. It also seems that the burden of proof would be on ISM to prove my contention wrong.

WSJ on the Stakes in Wisconsin

Filed under: Economy,Taxes & Government — Tom @ 5:09 pm

From this morning’s lead editorial in the Wall Street Journal (bolds are mine):

A single election rarely determines a democracy’s fate, but some matter more than others. Tuesday’s recall election of Wisconsin Governor Scott Walker is one that matters a great deal because it will test whether taxpayers have any hope of controlling the entitlement state and its dominant special interests.

Specifically, we will learn if a politician can dare to cross government unions and survive.

… His political offense was daring to challenge the monopoly sway that public unions have come to hold over modern state government through collective bargaining. Public unions aren’t like private unions that negotiate labor terms with a single company or workplace. Public unions have outsize influence because they can often buy the politicians who are supposed to represent taxpayers. The unions effectively sit on both sides of the bargaining table.

Thus over time they have been able to extort excessive wages, benefits and pensions, as well as sweetheart contracts like the monopoly provision of health insurance. Their focused special interest trumps the general interest of taxpayers, who are busy making a living and lack the time to focus on politics other than during elections or amid a fiscal crisis.

Democrats—even liberals—once understood this danger and opposed collective bargaining for public workers. No less a Democratic hero than Franklin Roosevelt once said that collective bargaining “can not be transplanted into the public service.”

… Mr. Walker and his fellow Republicans challenged that status quo, and the unions have reacted with such vitriol because they realize the threat to their long-unchallenged clout. They’re especially incensed that the reforms ended the state’s practice of automatically collecting union dues. Now dues are voluntary—and lo, many government workers are finding they don’t want to join the union after all.

Since Mr. Walker’s reforms went into effect, membership in government unions has dropped. At the American Federation of State, County and Municipal Employees (Afscme), membership fell to 28,745 in February from 62,818 in March 2011, according to a Journal report. If the union can no longer guarantee monopoly wages and benefits, workers are better off keeping dues that can add up to several hundred dollars a year.

… Students of democracy from Alexis de Tocqueville to Mancur Olson have pointed out that the greatest threat to self-government comes from the tendency of democracies to become barnacled with special interests that vote themselves more benefits than society can afford. This is the crisis of the modern entitlement state, which is unfolding from California to Illinois, Greece, Italy and even Washington. Wisconsin is a critical test of whether democracies can reform before the crisis becomes debilitating.

For the flips side, we can look at Ohio, where the failure of SB5 has led to layoffs in school districts, police departments, and fire departments. Wisconsin’s idea is, and SB5 was, superior.

For the ‘African Americans Hardest Hit’ File

Filed under: Economy,Taxes & Government — Tom @ 11:34 am

According to last Friday’s employment report, the number of unemployed increased by 220,000, from 12.50 million to 12.72 million.

The number of unemployed African-Americans, who make up about 12% of the overall population, increased by 101,000, or about 46% of the overall number.

A strong Republican challenger to Obama with blue-collar lineage might be able to make meaningful inroads into the monolithic African-American voting bloc. Too bad the GOP isn’t going to nominate one.

AA support of Obama may fall on apathy or even in some cases on hostility, but barring a miracle it won’t be because of anything Mitt Romney does.

Monday Off-Topic (Moderated) Open Thread (060412)

Filed under: Lucid Links — Tom @ 7:00 am

Rules are here. Possible comment fodder may follow later. Other topics are also fair game.

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Positivity: 2 girls thrown from jet ski, rescued from lake near Winnetka

Filed under: Positivity — Tom @ 5:56 am

From Winnetka, Illinois:

6:26 p.m. CDT, May 28, 2012

Two girls were rescued late this afternoon after they were thrown from a jet ski and stranded in Lake Michigan for about a hour, officials said.

The girls, both 14, told rescuers they made a sharp turn and were thrown from the jet ski, said U.S. Coast Guard Command Duty Officer Charles Wolfson.

The girls were about four miles north of Winnetka when the accident occurred, he said.

The girls were stranded in the water for about a hour before they were found by a coast guard helicopter crew when they spotted the jet ski and then located the girls, he said.

The jet ski had an automatic shut off switch and the girls were both wearing life jackets, Wolfson said.

“We were happy the girls were wearing life jackets–it saved their lives,” he said. …

Go here for the rest of the story.