September 20, 2013

AP Headline Whitewashes KU Prof’s Placement on Leave Over Wishing Sons and Daughters of NRA Members Dead

The Associated Press, in story carried at Channel 6 in Lawrence, reported (HT Twitchy) that a Kansas University professor has been “placed on administrative leave” after he issued the following tweet concerning Monday’s Navy Yard murders: “The blood is on the hands of the #NRA. Next time, let it be YOUR sons and daughters. Shame on you. May God damn you.” A NewsBusters post by Ken Shepherd yesterday, since updated to note his placement on leave, noted that Guth is an avid gun-grabbing advocate and that his Twitter account links to KU.

The AP apparently those who peruse its its national site to skip their story on Guth. The item’s headline belongs in the “this is boring, don’t waste your time” wing of the Journalism Hall of Shame:

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Latest PJ Media Column (‘Obamacare and That Q-Easy Feeling’) Is Up

Filed under: Economy,Health Care,Taxes & Government — Tom @ 1:36 pm

It’s here. I appreciate PJM’s quick review of a time-sensitive submission.

It will go up here at BizzyBlog on Sunday afternoon (link won’t work until then) after the blackout expires.

But don’t wait for it to appear here. Go there; the topic, especially what’s noted at the end, is too important.

Another Month of Poor Buckeye State Employment Results — Again, Except in Columbus (See Updates)

Filed under: Economy,Ohio Economy,Taxes & Government — Tom @ 12:36 pm

It would sure be a lot more fun if I could relay good news about the job market in Ohio. Sadly, I can’t — as usual, except for Metro Columbus.

The latest Regional and State Employment and Unemployment report from the federal government’s Bureau of Labor Statistics came out this morning. Its Household Survey component tells us that the Buckeye State’s unemployment rate inched up to a seasonally adjusted 7.3 percent in August, making it the same as the rest of the nation.

For quite a while, the state’s rate had been over a full point lower than the rest of the U.S. No more.

Meanwhile, the Establishment Survey of employers tells us that Ohio:

  • Lost 8,200 seasonally adjusted jobs in August after gaining a downwardly revised 3,200 in July.
  • Has gained only 32,500 jobs in the past 12 months.

A dive into the BLS’s databases reveals that Ohio has only gained 3,300 jobs since February.

But if you live within or around the I-270 Beltway, i.e., in Metro Columbus, things are soooo much better.

The Columbus metro area’s July unemployment rate (the Household Survey hasn’t been updated at the metro level yet) was 6.3 percent, a full point below where the rest of the state was in August. Columbus’s unemployment rate probably did not go up in August.

The Establishment Survey says that Columbus gained 2,400 seasonally adjusted payroll jobs in August, meaning that the rest of the state lost 10,600. In the past six months, Columbus has gained 16,000 payroll jobs, an employment increase of almost 1.7 percent. The rest of the state has therefore lost 12,700.

Oh, and the state’s seasonally adjusted workforce shrank by over 13,000 in August (over 24,000 in the past two months). I’ll betcha none or almost none of that shrinkage occurred in Metro Columbus.

Again, it’s no fun to say this, but Metro Columbus continues to prosper, arguably at the expense of the rest of the Buckeye State.

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UPDATE, 2:25 p.m.: Here’s what has happened in Ohio and its major metro areas per the Establishment Survey in the past 12 and 24 months (not seasonally adjusted):

OhioEmploymentGrowth12and24mos0813

Percentage employment growth has been twice as fast in Metro Columbus than it has been in the rest of the state.

This is the good news. The more inclusive Household Survey data at the metro level comes out towards the end of this month, and you can virtually take it to the bank that it will show a far greater disparity between Columbus and the rest of the state.

UPDATE 2, Sept. 21: In a partial defense of Ohio, the BLS has Ohio’s seasonally adjusted unemploymment rate 0.1 points higher than a year ago (from 7.2% to 7.3% in Table 3) even though the not seasonally adjusted (i.e. actual) rate of 6.9% is lower than Auugst 2012′s 7.0% (Table 4). So the state can still legitimately claim a sliver of overall improvement in the past 12 months.

Friday Off-Topic (Moderated) Open Thread (092013)

Filed under: Lucid Links — Tom @ 7:05 am

This open thread will stay at or near the top today. Rules are here. Possible comment fodder may follow. Other topics are also fair game.

9:50 a.m.: Taranto at Best of the Web yesterday on the delegitimized 2012 presidential election —

As we have argued before, Barack Obama’s re-election deserves to be listed with an asterisk in the record books. He is the political equivalent of an athlete found to have used illicit performance-enhancing drugs. Whether he would have won in 2012 absent the IRS’s political corruption is unknowable. We know only that he did win with the help of a corrupt IRS. And if indeed the election was stolen, many in the media were complicit in its theft.

9:10 a.m.: How classy (HT Hot Air) — “Spitting on Their Graves: Democrats Leave Benghazi Hearing Before Testimony From Families of Victims.” Specifically, “The only Democrats who stayed were Ranking Member Elijah Cummings and Rep. Jackie Speier.” How shameful.

8:45 a.m.: Zero Hedge notes that in 2011, the Federal Reserve forecast calendar year 2013 growth would come in at 4.2%. Their latest forecasts, recently downgraded, average about 2.15%. I think we’ll be lucky to get that.

Larry Summers: A Casualty of the Left’s False ‘Financial Crisis’ Narrative

Filed under: Business Moves,Economy,Taxes & Government — Tom @ 6:59 am

Sorry, progressives. “Wall Street” bears little of the blame.

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This column went up at PJ Media and was teased here at BizzyBlog on Wednesday.

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Larry Summers won’t be the next chairman of the Federal Reserve. On Sunday, he informed President Barack Obama that he was withdrawing his name from consideration.

There were plenty of substantive reasons to oppose Summers’ possible selection, not the least of which was his role in creating our current Keynesian policy-driven economic malaise. Of course, the left complains that if only the 2009 “stimulus” had been much larger, something Summers opposed, we’d now be better off. Sure, guys. More Keynesian “stimulus” would only mean we’d now be reeling from even more than the $5.3 trillion in budget deficits and $6.1 trillion in national debt increases accumulated since Barack Obama took office in January 2009.

As I noted last week, key output and employment statistics during the current alleged economic “recovery” more closely resemble what the nation experienced during the 1930s than any of the recoveries seen since World War II. The common factor in both eras? Reliance on large-scale Keynesian stimulus, which in each case stimulated nothing but prolonged misery.

The real reason that Summers, who started out as President Obama’s favorite for the post, didn’t even get to the starting line has nothing to do with merit and everything to do with the left’s determination to preserve its fundamentally false narrative about what caused the financial crisis of 2008. You see, Larry Summers’ biggest sin was that he had a “past role in financial deregulation.” In Leftyland, interstate banking deregulation, with accompanying “Wall Street greed,” is entirely to blame.

The truth is that deregulation is a far distant third on the list of contributors, and would never have been a relevant factor without government regulators’ aggressive handling of the Community Reinvestment Act (CRA) and the conduct of “government-sponsored enterprises” Fannie Mae and Freddie Mac.

In June 2009, John Carney at Business Insider posted the definitive essay on how federal officials’ and regulators’ zealous use of CRA eventually ruined the entire mortgage lending market by forcing the industry to make loans to unqualified buyers. Here are his key points:

… (CRA) evolved over the years from a relatively hands-off law focused on process into one that focused on outcomes. Regulators, beginning in the mid-nineties, began to hold banks accountable in serious ways. Banks responded to this new accountability by increasing the CRA loans they made, a move that entailed relaxing their lending standards.

… the lax lending standards created in response to the CRA … dug a pit that was waiting to get filled when the circumstances were right.

… The regulators charged with enforcing the CRA praised the lowering of down payments and even their elimination. They told banks that lending standards that exceeded that of regulators would be considered evidence of unfair lending. This effectively meant that no money down mortgages were required.

… banks were expected by regulators to relax income requirements. Day labors and others often lack reportable income. Stated-income was a way of resolving the gap between actual income of borrowers and reported income.

… (Ultimately) the CRA required lax lending standards that spread to the rest of the mortgage market.

It is no coincidence that the number of subprime loans, which barely existed before 1995, exploded. Regulators also enthusiastically embraced especially risky “low doc” and “no doc” loans, which came to be known as “liar loans.”

Fannie Mae and Freddie Mac did their part by lowering borrowers’ credit score approval thresholds in their automated underwriting systems for loans they would purchase from originating lenders. The key changes, according to a mortgage brokerage executive with whom I spoke in 2006, involved reducing the conventional loan threshold from a FICO credit score of about 670 to 630 and the subprime threshold from about 630 to 590 (other online sources I’ve found indicate that each threshold may have actually been an additional ten points lower).

As seen in the following 2008 chart, which shows the likelihood of consumers going 90 days delinquent on debt for various score ranges, these changes radically increased the likelihood of making bad loans:

FICOdelinquencyChances2008

But Fan and Fred, whose combined loan portfoliios grew to  over $5 trillion by they time they collapsed into government-supervised insolvency on September 7, 2008 — the real point at which the housing bubble turned into a financial crisis — took matters even further by deceiving the bond ratings agencies and financial markets about the quality of their securitized offerings. Specifically, in 2009 research later confirmed as fundamentally accurate:

“… Edward Pinto, a former chief credit officer for Fannie Mae and a housing expert, has found that from the time Fannie and Freddie began buying risky loans as early as 1993, they routinely misrepresented the mortgages they were acquiring, reporting them as prime when they had characteristics that made them clearly subprime or Alt-A.”

In a September 17 column, normally astute economist Robert J. Samuelson, while acknowledging that they were “the exception, not the rule,” noted that in the latters stages of the home-lending bubble, “banks and investment banks (‘Wall Street’) knowingly packaged bad home mortgages in securities that were then sold to unsuspecting investors.” But he failed to recognize that the dollar volume of Fan’s and Fred’s known 15-year deception dwarfed any latter-stage fraud in which “Wall Street” may have engaged.

The bottom line, as Peter Wallison observed in the Wall Street Journal in October 2011 as the Occupy movement was playing “pin the blame for everything” on “Wall Street,” is that “Reckless government policies, not private greed, brought about the housing bubble and resulting financial crisis.”

Obama himself played along with the “deregulation did it” fiction by identifying September 14, the fifth anniversary of the failure of Lehman Brothers, as when the financial crisis officially began. When he did that, it was a foregone conclusion that Summers would have to walk the plank. Alinsky-trained progressives know that preserving the narrative is far more important than any one person’s qualifications or career.

Summers apparently knew that his duty to the cause was to fall on his sword. And he did.

Positivity: ‘The Greatest Genius No One Has Heard Of’

Filed under: Marvels,Positivity — Tom @ 6:00 am

Published by Charlie Martin at PJMedia.com:

September 13, 2013 – 4:00 pm

One man in the 20th century has had more effect on our daily lives than any other. He is directly responsible for everything digital, and for much of modern communication. And hardly anyone knows his name.

In the 1930s, “computer” was a job description: someone, usually a woman of mathematical bent, with an adding machine and a big sheet of columnar paper who performed a rigorous routine of hand calculations, using paper and pencil, slide rules and tables of logarithms. Stone knives and bearskins weren’t involved, but to modern eyes they might as well have been.

Large research organizations and the Department of War had a few special purpose mechanical computers intended to integrate differential equations. Vannevar Bush (who deserves his own article someday) brought a young grad student to MIT to work on the differential analyzer, a relatively advanced version of these.

… This young man, a recent graduate of the University of Michigan, was named Claude Shannon, Jr. Shannon, while working on the differential analyzer, had the insight that these same computations could be done using combinations of a few simple circuits that performed basic logical operations on true and false values. He described how this could be done, and invented the whole concept of digital circuits, which derive from from Shannon’s thesis on what he called switching theory.

His Master’s thesis.

At about the same time, Alan Turing wrote his series of famous papers on computability; those papers included an idea of how a computer with memory might work, but without Shannon’s switching theory, no one knew how to actually build one. (Google did a great Google Doodle for Turning’s 100th birthday.)

Vannevar Bush then sent Shannon to the Cold Spring Harbor laboratory. Shannon worked with biologists and geneticists, and — remember this was before DNA had been discovered — described how genetics could be understood as an algebra using a small collection of symbols. This was enough to get Shannon a Ph.D. but attracted little attention at the time. However, his Ph.D. is now recognized as pre-figuring what we now call bioinformatics.

During the war, Shannon, still working for the War Department, was put to work on cryptography, where he merely invented a general mathematical basis of nearly all cryptography, and in the meantime proved that there is one and exactly one method of making an unbreakable cipher. This is called a one-time pad.

But this wasn’t enough. He went to work for Bell Labs, and began thinking about radio or telephone signaling. (His original switching theory was already the basic for new telephone switches — direct telephone dialing depended on Shannon’s Master’s.) What was common to all these different ways of signaling we already used: telegraph, telephone, radio, and that new-fangled thing television? Shannon had a surprising insight: what made a signal a signal was whether or not you could predict it. …

Go here for the rest of the story.