March 31, 2016

AP’s Boak Ignores Weak Data and His Own Reporting in Creating an Economic Fable

In covering Thursday morning’s report from the Department of Labor on initial unemployment claims, one of a relatively few economic reports showing strength these days, Associated Press reporter Scott Boak spread his enthusiasm over the result to the entire economy. It wasn’t justified.

It’s as if the poor guy has missed most of the pertinent other economic news during the past week, most of which — other than the stock market’s recovery from earlier losses this year, which is more dependent on Federal Reserve Chairman Janet Yellen’s moods than it is on economic fundamentals — have been anything but strong.

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California’s $15 Minimum-Wage Law Gives Public-Sector Employees Large Unnegotiated Raises

A Los Angeles Times story by Liam Dillon and Patrick McGreevy
hailed the “historic” increase in the state-mandated minimum wage to $15 an hour.

Apparently giddy with excitement, the pair also unwisely told readers that many public-sector employees who earn far more than that will be receiving big raises as a result of the legislation with having to bother negotiating with the government entities involved to get them.

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David ‘Dying Husk of Reaganism’ Brooks Praised the Gipper’s ‘Future-Oriented’ Conservatism 12 Years Ago

Wednesday morning, Tim Graham at NewsBusters observed how pseudo-conservative David Brooks, who is no fan of Donald Trump, gave the current GOP frontrunner credit for having “destroyed a dying husk” of “obsolete Reagan ideology” in the Republican Party.

That’s fascinating stuff, given the catch of the day by Instapundit’s Ed Driscoll. You see, 12 years ago, Brooks gave Reagan credit for having transformed the party and conservatism “from a past- and loss-oriented movement to a future- and possibility-oriented one.” In other words, even Dense David recognized at the time that Reagan’s positive tone and belief in American exceptionalism — a term which the left, up to and including President Obama, has tried to ridicule out of existence — were the foundation for how Reagan, in Brooks’s words, “embraced America as a revolutionary force.”

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Initial Unemployment Claims (033116): 276K SA; Raw Claims (236K) 2 Pct. Below the Same Week Last Year

Filed under: Economy,Taxes & Government — Tom @ 8:46 am

From the Department of Labor:

SEASONALLY ADJUSTED DATA

In the week ending March 26, the advance figure for seasonally adjusted initial claims was 276,000, an increase of 11,000 from the previous week’s unrevised level of 265,000. The 4-week moving average was 263,250, an increase of 3,500 from the previous week’s unrevised average of 259,750.

… UNADJUSTED DATA

The advance number of actual initial claims under state programs, unadjusted, totaled 235,839 in the week ending March 26, an increase of 4,957 (or 2.15 percent) from the previous week. The seasonal factors had expected a decrease of 4,771 (or -2.07 percent) from the previous week. There were 239,748 initial claims in the comparable week in 2015.

Predictions were for 264,000 to 265,000 seasonally adjusted claims.

Last year’s seasonal adjustment factor for the same week (89.4) is significantly higher than this year’s (85.3). But that’s because this past weekend was Easter, including Good Friday.

Forget the factors. Last week’s raw claims should logically have come in significantly lower than last year’s same week, and, at just 2 percent, they didn’t.

It’s very premature to see this as a trouble sign, but the weeks following next week, which should be genuinely comparable, will bear watching (Easter was on April 5 last year).

Thursday Off-Topic (Moderated) Open Thread (033116)

Filed under: Lucid Links — Tom @ 8:00 am

This open thread is meant for commenters to post on items either briefly noted below (if any) or otherwise not covered at this blog. Rules are here.

Positivity: The story of a loving father who was killed for resisting the Nazis

Filed under: Positivity — Tom @ 7:55 am

From Denver:

Mar 31, 2016 / 03:04 am (Denver Catholic).- One theme unifies the stories of all the saints: Christians are never alone. Even in the most isolated circumstances, saints have a profound union with God. This principle is demonstrated by the martyrdom of Franz Jagerstatter, a father and martyr during the Nazi occupation of Austria.

A peasant background

Franz was no St. Therese. He was the illegitimate child of a maidservant in a tiny village in Upper Austria. His mother married when Franz was 10.

Franz was a wild child. He was a womanizer, and even had a daughter born out of wedlock. Gordan Zahn, whose book In Solitary Witness is the definitive work on Jagerstatter’s life, discovered that Jagerstatter was exiled from his community for several years, during which time he stopped attending Mass.

However, Jagerstatter received a passable education in the village’s one-room school schoolhouse before becoming a farmer. Then he met his wife.

Marriage transformed him

He married Franziska Schwaninger on Holy Thursday 1936. On their honeymoon, they received a blessing from Pope Pius XI.

Franziska’s effect on her husband was subtle but persistent. Jagerstatter became the sexton of the village church, meaning he assisted at all the liturgies and maintained the building. This led to him becoming a daily communicant. He began to memorize the Bible and learn the lives of the saints. In fact, he once told his wife, “I could have never imagined that being married could be so wonderful.”

Road to martyrdom

Jagerstatter and Franziska had three girls together, and remained close to his other daughter. In 1938, around the time their eldest daughter was born, Germans invaded Austria.

The Catholic Church in Austria had warned against Nazi socialism for years. Catholics in Germany were facing severe restrictions, including the prohibition of Mass outside of Sundays, even for the holiest solemnities and feast days. Jagerstatter’s own pastor had been jailed for delivering an anti-Nazi sermon. His bishop had dictated an anti-Nazi letter to be read in all the parishes several years earlier. That same bishop would declare, “It is impossible to be both a good Catholic and a true Nazi.” He was later replaced with a bishop who spoke more cautiously.

The same pope who had blessed Jagerstatter’s marriage, Pius XI, in 1937 published the encyclical Mit brennender Sorge, on the strained relations between the Church and Nazi Germany.

Buoyed by these witnesses, Jagerstatter was still the only person in his whole town to disavow Anschluss, or the German annexation of Austria. He was dismayed to see many Catholics support the Nazis. One cardinal even demanded that all parishes fly the Nazi flag from their churches on Hitler’s birthday.

“I believe there could scarcely be a sadder hour for the true Christian faith in our country,” he wrote.

The prevailing idea at the time was that a peasant layman should do what his country told him to do. By this obedience, the people who made the decisions, and not the peasant, would hold moral responsibility for the actions. But Franz couldn’t reconcile that worldview with the fact that he had free will, and that he could not call himself a disciple if he bowed that will to a movement he viewed as satanic. He would not fight for the Nazis.

At first it seemed that being a farmer would keep him from fighting–Germany’s massive army required equally massive amounts of food. Unfortunately, in 1943 the need for fighters grew, and Jagerstatter was called to active duty. He went to the induction center, where he announced that he would not fight. He was summarily carted to the military prison at Linz to learn his fate.

“I am convinced it is best that I speak the truth, even if it costs me my life,” he wrote.

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March 30, 2016

Non-Surprise of the Evening at CNN Money: ‘Obamacare Patients Are Sicker and Pricier Than Expected’

Nobody could have seen this coming.

That’s sarcasm, folks. Everyone but those who somehow thought that hope would somehow triumph over experience in the kinds of patients who would utilize Obamacare saw this coming. CNN Money Senior writer Tami Luhby is reporting, with some apparent surprise, that “Obamacare patients are sicker and pricier than expected” (bolds are mine; HT Twitchy):

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Imagine That: Mark Zandi, the Economy’s Head Cheerleader, Donated the Max to Hillary’s Campaign Last Year

Mark Zandi, Moody’s economist, comments monthly on the ADP private-sector employment report his firm compiles. He is “often quoted in national and global publications and interviewed by major news media outlets, and is a frequent guest on CNBC, NPR, Meet the Press, CNN, and various other national networks and news programs.”

Zandi has also been the economy’s head cheerleader during much of historically weak Obama “recovery.” During the past few months, Zandi has openly questioned the validity of the government’s estimates of economic growth, believing that they are materially understated. Though I have argued that the official unemployment rate is not credible, Zandi does not have a problem with Uncle Sam’s usually decent jobs reports. In fact, they are his main form of “proof,” despite badly lagging productivity, that the government is understating gross domestic product (GDP) growth. His persistence on this issue led me to do some research.

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German Historian’s Allegation: AP ‘Willingly Cooperated With the Nazis’ From 1933-1941

Those who have noticed that the Associated Press, even to this day, tends to be sympathetic towards leftist causes, leftist protesters, leftist and totalitarian governments, and even terrorists in its coverage of domestic and world events won’t be surprised by what follows. Others who still believe that the AP has always at least tried to be a paragon of objectivity will be stunned.

The UK Guardian addresses evidence found by a German historian who claims that AP, alone among international news agencies, was allowed to remain in Germany after Adolf Hitler rose to power because it was willing to cooperate with his Nazi regime (HT Times of Israel; bolds are mine):

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ADP March Employment Report: 200K Private-Sector Jobs Added (With Conference Call Notes)

Filed under: Economy — Tom @ 8:00 am

This month’s version is coming out relatively early because the government’s employment report will appear on Friday.

Predictions are that 196,000 to 200,000 private-sector jobs were added in March.

The report will be accessible here at 8:15. I’ll be on the conference call and taking notes after that.

HERE IT IS (direct link):

Private-sector employment increased by 200,000 from February to March, on a seasonally adjusted basis.

From the press release:

… Payrolls for businesses with 49 or fewer employees increased by 86,000 jobs in March, up from February’s downwardly revised 68,000. Employment at companies with 50-499 employees increased by 75,000 jobs, up from February’s 60,000. Employment at large companies – those with 500 or more employees – dropped off to 39,000 which is about half of February’s 77,000. Companies with 500-999 employees added 20,000 jobs, up from 14,000 in February. Companies with over 1,000 employees fell from 63,000 jobs added in February to 18,000 this month.

… Mark Zandi, chief economist of Moody’s Analytics, said, “The job market continues on its amazing streak. The March job gain of 200,000 is consistent with average monthly job growth of the past more than four years. The only industry reducing payrolls is energy as has been the case for over a year. All indications are that the job machine will remain in high gear.”

Prior-month revisions:
- February — from 214K to 205K
- January — no change (193K; originally 205K)
- December — no change (287K; originally 257K)

CONFERENCE CALL NOTES:

Mark Zandi, Moody’s — Another month, another 200K in job growth, exactly. Roughly double the increase in working-age population. Radidly absorbing slack.

Growth strong across every sector except energy. Manufacturing is soft, esp in trade-sensitive areas. Job creation is broad-based across pay scales. Construction strong, lots of high-paid jobs. Feels like it’s on very strong ground.

Unemp insurance claims remain low. Seeing no weakening in layoffs. Job openings at record highs. Pickup in number of people quitting jobs.

As we get into full employment, wages picking up. Harder to see in BLS numbers. Employment cost index is tepid. ADP data indicates that wage growth has picked up significantly.

Everything looks good.

Growing chasm between positive jobs message and weak GDP numbers. Q116 coming in below 1 percent. Partially because productivity growth has flatlined. He’s very skeptical of GDP because of measurement issues. Still significant residual seasonality in GDP numbers, still thinks BEA is not getting it right, even after corrections a year ago. Still resid seasonality there. So Q1 will be due to measurement problems. Expects upward revisions to Q1 in later releases.

BEA is missing a lot of GDP. Clear in business investment in tehnology, significantly underestimating investment. Missing a lot of consumer spending in social media, a lot of growth there that isn’t being picked up.

Don’t pay attention to GDP, DO pay attention to jobs numbers because we can count jobs. Econ is in good shape producing a lot of jobs. No significant fallout from weak markets at beginning of year.

QUESTIONS:

ME (Pay and GDP inventory change) — Real wage growth is starting to push 2.5 percent annually, and is accelerating. ADP data (workforce vitality data) is showing strong growth. Hard not to see a meaningful pickup in wage growth. Everything is pointing to that. Only caveat is that other economies internationally (UK, Germany, Japan) are still seeing tepid wage growth, indicating that there may be other problems out there in generating wage growth.

Inventories build more than originally estimated. Should subtract from growth going forward, and it’s part of the reason why Q1 and maybe Q2 will be on the soft side. BUT … there’s a huge build in oil inventories, and maybe that’s part of the explanation why there hasn’t been a comprehensive inventory decline.

Chris Rugaber, Associated Press — Broader Q on the economy. Angst about the economy and candidates not running on the strength of the economy.

Zandi: People look at the econ through the prism of their pay, and it hasn’t been that great until recently. That’s the key in terms of perception. If wages improve, that will get reflected, but too late for the election. A year from now people will recognize that the econ is improving.

There are also regional differences. Trump fans are in perennially depressed regions of the country, e.g., poor counties in VA and other states. Big part of mfg, coal industry, etc. are struggling. People in those areas feel despair. Even in an improving economy, it will take longer for those areas to get better. They feel like Trump is listening.

Rugaber again on productivity —

Zandi: Lots of things going on, no one answer. Robert Gordon’s pessimism might be justified. Big disconnect based on where you sit and the anecdotes you’re looking at. Measurement issues are real, even though others are pushing back against it (e.g., Brookings).

Deflators were 10 percent to 15 percent in the tech sectors. Now the deflators are rising, but chip companies are focusing on battery life and versatility. Speed isn’t what matters any more. If tech deflator was the same as in previous years, that would add a few tenths of a point of GDP every year for the past decade.

10-15 years from now we’ll see a lot more in GDP than currently being reported.

Vicki Needham, The Hill — Friday BLS number

Zandi: predicts 210K. Possible decline to 4.7 in unemployment rate and decent growth in hourly earnings. You can quote me on that.

Wednesday Off-Topic (Moderated) Open Thread (033016)

Filed under: Lucid Links — Tom @ 6:00 am

This open thread is meant for commenters to post on items either briefly noted below (if any) or otherwise not covered at this blog. Rules are here.

March 29, 2016

Time and the Left Trot Out a 75 Year-Old Excuse For the Poorly Performing Economy

It’s so predictable.

Whenever a government or leader follows the left’s playbook and the results “uexpectedly” don’t turn out to be anywhere near what was desired, it isn’t the policies’ or the leader’s fault. No-no-no. During the Mayor David Dinkins era in New York City, it was because Gotham had become ungovernable by any human being – until Rudy Giuliani took over. During the Carter Era, the conventional wisdom was that America had become too unwieldy and ungovernable — until Ronald Reagan righted the ship. We’re now hearing a similar refrain about the U.S. economy after seven-plus years of Keynesian economic policies, except that, as we’ll eventually see it involves recycling. On Friday, Jacob Davidson at Time.com engaged in a lengthy excuse-making exercise (HT Hot Air Headlines; bolds and numbered tags are mine):

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Positivity: A hopeful sign? New development in the Little Sisters’ court case

Filed under: Life-Based News,Positivity,Taxes & Government — Tom @ 7:46 pm

From Washington:

Mar 29, 2016 / 04:42 pm

The Supreme Court on Tuesday asked for parties in the Little Sisters’ case to submit alternative means, if possible, of ensuring contraceptive coverage while maintaining religious freedom.

“This is an excellent development. Clearly the Supreme Court understood the Sisters’ concern that the government’s current scheme forces them to violate their religion,” Mark Rienzi, lead attorney for the Becket Fund for Religious Liberty, which represents the Little Sisters, stated on Tuesday.

The Court instructed both the plaintiffs in the case – the Little Sisters of the Poor, the Archdiocese of Washington, the group Priests for Life, and several Christian colleges – and the administration to submit supplemental briefs answering whether employees can receive contraceptive coverage while maintaining the religious freedom of the employers who object to providing such coverage. If a way exists, the brief should explain how it works.

At the heart of the case Zubik v. Burwell is the administration’s mandate that employers provide cost-free coverage for contraceptives, sterilizations, and drugs that can cause abortions, and the so-called “accommodation” offered to objecting non-profit employers.

This accommodation involves the employer sending the government a form stating its objection to providing the coverage. The government notifies their insurer (or third-party administrator for self-insured parties) of their objection and the insurer provides the coverage separately.

The plaintiffs like the Little Sisters – as well as many other non-profits – argue that this still forces them, under threat of heavy fines, to cooperate with practices they believe are immoral.

They say they are still facilitating access to these drugs in their health plans by sending the form to the federal government because they know the coverage will ultimately be provided. Furthermore, they argue the government is unlawfully “hijacking” their health plan which is between them and their insurer.

Meanwhile, the administration argues that contraception coverage in employer health plans is in the common interest and that any other method of the government separately providing this coverage on the public exchanges or through Medicaid or Medicare would be insufficient to achieve the universal coverage that Congress envisioned in its health care law.

An alternative method – if it exists – of ensuring the contraceptive coverage while not implicating objecting parties in facilitating access to this coverage should be found, the Court stated Tuesday.

“The parties are directed to address whether contraceptive coverage could be provided to petitioners’ employees, through petitioners’ insurance companies, without any such notice from petitioners,” the order stated. …

Go here for the rest of the story.

San Jose Paper’s Howler: Jerry Brown Is ‘Notoriously Frugal’ (With Tax $? No, With Employers’ Resources)

This sentence actually appeared at the web site of the San Jose Mercury News Monday afternoon regarding California’s Democratic Governor Jerry Brown: “In his 2016 budget plan, the notoriously frugal governor warned that a $15 minimum wage would cost the state about $4 billion a year and risk plunging it back into the red.” Yesterday, Governor Brown “sudden(ly) embraced” the $15 minimum wage.

At one time, Brown had a reputation for personal frugality, cultivating it well past its expiration date, even as he and his wife lived in a $1.8 million mansion before he became governor in 2010. He also recently had the state pay $2.5 milllion so he could move into the old governor’s mansion. But in the context of reporter Matthew Artz’s just-cited sentence, the average reader would surely come away believing that Brown is frugal with taxpayers’ money. Hardly.

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Bloomberg Describes Tax-Greedy Connecticut as ‘Cash-Strapped’

In a variation on a popular saying in real estate — “The three most important factors are location, location and location” — the State of Connecticut, since Democrat Dannel Malloy became Governor five years ago, has employed three strategies to balance its budget: raising taxes, raising taxes, and raising taxes. (To be clear, previous administrations of both parties have been playing this game for at least a quarter-century, but Malloy and Connecticut’s legislature have taken matters to an ugly new level.)

The Nutmeg State’s next planned round of tax increases includes a proposal pushed by the eponymously named Senate President Martin Looney to tax Yale University’s $25.6 billion endowment. The headline at Bloomberg News’s coverage of the proposal last Wednesday absurdly described the state as “cash-strapped,” and didn’t even try to explain how the state has gotten to this desperate point.

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