The U.S. Economy: Stand by for more worse news

[joepistole]

True. For example, I think that US debt, I quoted, includes the bonds Treasury gave to the Social Security trust fund. Until recently when few could collect compared to the many paying the SS tax, SS ran huge surpluses and gave money to the Treasury - but it is all spent as Treasury ran deficits and even had to issue other bonds, which you agree are "real debt" not just booking debt that is an asset of some other government agency. Trouble with your POV, (that the SS trust funds bonds are not real debt) is that it is founded on the idea that those bonds will not need to be paid off like the other bonds Treasury sold to investors will need to be. - That simply is not the case unless you think it is politically possible to tell old folks: "Sorry we are cancelling SS as we don't want to pay off the principle held by the SS trust fund."

First, interagency debt is more than just Social Security IOU’s. Two, the US Treasury does not issue Treasury bonds to the Social Security Trust Fund. The Treasury issues a Special Issue Security. It is nonnegotiable, it isn’t a bond. It is an interagency IOU. And three, interagency debt, isn’t debt. Government is not obligated to fund the trust fund. And trust fund beneficiaries are not entitled to a benefit. Fourth, the Social Security IOU’s, the Special Issue Security, represents excess taxes and not debt. For decades now, ever since Ronald Reagan, Social Security has been over taxing middle class wage earners and using that overage to fund tax cuts for our wealthiest citizens. So if Congress doesn’t lower beneficiary benefits and there is no material change in program costs, and Congress will need to raise taxes in order to pay out program benefits, and given the dramatic decreases in taxation over the last several decades, there is plenty of room to increase taxes. Fifth, there is the debt held by The Federal Reserve and is accounted for as debt held by the public because it can be resold o the public at any time. But the Federal Reserve is not obligated to resell those Treasury Bonds. The Federal Reserve holds 2.3 trillion dollars of the public debt. So you are being more than a little myopic.

http://en.wikipedia.org/wiki/National_debt_of_the_United_States

Although, currently, I believe, the short fall (SS pay out - SS tax collection) is less than the interest SS trust fund collects on the bonds it holds, that changes soon (or may already have?) I.e. then the short fall will require some of the bonds be redeemed by the treasury. That of course, reduces the interest payments on the smaller volume of bonds held in the trust fund - a problem that rapid feeds on itself as every year more bonds must be redeemed to cover the short fall.

Trust funds have no bonds. They have a Treasury IOW, called a special interest security. Two, Social Security is already spending more than the taxes it collects every year. So government has to either raise revenues (i.e. raise taxes), decrease benefits, increase program efficiency, or decrease other federal expenditures. The point being, the federal government doesn’t have to pay a fixed debt because interagency debt is not debt as you want/need it to be.

In principle retirement ages could be raised again or benefits cuts or every one under say forty be simple be told "their" SS will not be paid, etc. but none of this is politically feasible. SUMMARY; Those SS bonds must be paid, just like bonds sold to investors - Why they are just as real a part of the US's debt as any other bonds the Treasury has issued.

Hogwash, as previously pointed out, they are not bonds. And as much as you want/need interagency debt to be real debt, it isn’t for all the reason previously pointed out.

Only if the debtor can pay it back. New born American baby is about $60,000 in debt before it takes it first breath and his share is growing - he can't pay it back.* So Fed's "asset" (treasury's debt) will be monetized, as is now, but only more rapidly than now - i.e. greater inflation, making the debt easier to pay with less valuable dollars.

New born babies are not born in debt. That makes nice demagoguery, but it isn't true. That is like saying because I have partial ownership of a corporation, that corporate debt is my debt. And that is clearly not the case. And finally your numbers are over stated by a factor of 50%. It’s called per capita public debt.

Additionally, US government debt is not like individual debt. Government can increase taxes at will. Individuals may have a more difficult time increasing their incomes at will. Two, government debt needs never be fully repaid because government is not confined by a human life time. Government need only be able to service its debt. And since government can print money, always has enough money to pay its debts. Individuals cannot print money and expect to stay out of a jail cell. And as recently demonstrated, government can print money without causing inflation.

* Hell, even many young adults can not pay off their student loans, which total more than all the debt on charge cards! Furthermore, their "Big Mac" / part time jobs shown up as increase in employment are in aggregate less wages now even with increased employment. More important measures than the BLS's measure of unemployment is the average salary's purchasing power - it going lower - Why even bargain stores like Walmart are making less money now with less sales.

I guess it all boils down to what do you mean by “many”. I didn’t have any trouble paying off my student loans or my wife’s student loans. Actually, the correct metric here is disposable income. Disposable income is the money consumers have available after they have paid off expenses. And disposable income has been increasing.

http://www.tradingeconomics.com/united-states/disposable-personal-income
-----------

* I don't comment on your long gold text, as you don't seem to know that Germany has recently cancelled its earlier request to get much of its US held gold back - See my Bloomberg link - except to counter your true statement that buyers of paper gold tend to drive the price up, just as seller tend to drive the price down. What you are forgetting is the law of supply and demand. Paper gold has increased supply by at least factor of 50 - that holds the price down. If there were no paper gold for buyers to buy and they had either do without any gold in their investment portfolio, or he had to find an owner of physical gold to buy from, then the price would be much higher - simple law of supply and demand.

 I wonder why you don’t want to comment on your previous Fed claims. Wither Germany recently cancelled its plans to repatriate its gold really isn’t material to your claims that the Fed didn’t have Germany’s gold and was delaying repatriation. It was a conspiracy theory you have repeatedly advanced and most recently repeated yesterday just hours before my response. The facts are there is and there never was any evidence or even reason to back up your conspiracy notions related to The Federal Reserve and Germany’s gold.

And no I am not forgetting the law of supply and demand. What you apparently do not know and do not want to know, is that there is a significant difference between buying actual gold and gold futures. The two are not the same. And you keep trying to conflate the two. Increased future trading doesn’t increase the supply of gold as you allege. It may increase- underline may - increase the number of futures contracts. And if you are buying a futures contract, at some point that contract becomes a real sale of gold.

http://en.wikipedia.org/wiki/Futures_contract

 

[Billy T]

... The Treasury issues a Special Issue Security. It is nonnegotiable, it isn’t a bond. It is an interagency IOU. ...

You can chose- Old or new rebuttal:
A rose by any other name is still a rose.
If it walks like a duck, quacks like a duck..."

These "special issue securities" (1) pay specified interest. (2) have specified face value or principle. (3) are issued by Treasury when money is given to the Treasury.

 

[joepistole]

You can chose- Old or new rebuttal:
A rose by any other name is still a rose.
If it walks like a duck, quacks like a duck..."

These "special issue securities" (1) pay specified interest. (2) have specified face value or principle. (3) are issued by Treasury when money is given to the Treasury.

It doesn't change the fact that interagency debt is not the debt which you are representing it to be for all the previously stated reasons. It is debt one fund owes another. It is like owing your vacation fund money because you used it to buy a gift for your wife.

 

[Billy T]

It doesn't change the fact that interagency debt is not the debt which you are representing it to be ...

I'm representing it to be a cost the Treasury must pay - same as any other promises made to people or firms, or countries who gave the Treasury money for Treasury's promise to pay. - I.e. it is a debt the US government will pay, but like other debts will be paid in dollars with less value. I.e. "monetized" as that is the only way US can pay its ever growing (even as percent of GDP) debts.

Just to be clear: Are you asserting that the Treasury will not pay back the principal given to it? Treasury is paying the contract* required interest already - why not the principal?

* I used the word "contract" as you don't want me to call a bond a bond.

 

[joepistole]

I'm representing it to be a cost the Treasury must pay - same as any other promises made to people or firms, or countries who gave the Treasury money for Treasury's promise to pay. - I.e. it is a debt the US government will pay, but like other debts will be paid in dollars with less value. I.e. "monetized" as that is the only way US can pay its ever growing (even as percent of GDP) debts.

Actually, as previously pointed out, it isn't a cost. It is 33 years of excess Social Security taxes. It has nothing to do with current or future program expenditures. It is an accounting artifact that you are obsessing on. As previously pointed out, and as courts have ruled, Social Security recipients are only entitled to whatever Congress gives them. There is no government contractual obligation. It isn't like a bond where payments are ennumerated and fixed in a contract. It isn't debt.

The US Treasury is indeed obligated to pay its contractual obligations (i.e. debt). That isn't the issue here.

to be clear: Are you asserting that the Treasury will not pay back the principal given to it? Treasury is paying the contract* required interest already - why not the principal?

* I used the word "contract" as you don't want me to call a bond a bond.

LOL, except it isn't a contract. It would be like an individual contracting with himself. To be clear, I am saying you are obsessing over a government accounting artifact.

 

[Billy T]

Actually, as previously pointed out, it isn't a cost. It is 33 years of excess Social Security taxes.

That excess has already been spent.

(1) As previously pointed out, and as courts have ruled, Social Security recipients are only entitled to whatever Congress gives them. ... (2) It isn't like a bond where payments are ennumerated and fixed in a contract. {therefore} It isn't debt.

(1) is legally true, but is a political fiction - not possible with US's democracy and aging voting population. I. e. it is not possible to not pay the expected SS benefits to people retiring (but still voting, more than they ever did).

(2) then how are the currently made interest payments computed? I don't believe you are correct here. I think each special security "instrument"* has both a "principle" and "interest rate" specified.

* I call them "instruments" as you don't like contract or bond, but that is what they effectively are.

 

[Billy T]

A group of Americans larger than Washington state’s population can find only part-time work. ... those 7.5 million part-time workers who want full-time jobs are inflating the broad measure of underemployment she {Yellen} watches to gauge job market health. Involuntary part-time workers have gained by 325,000 from February’s five-year low.

The high share of workers who are part time for economic reasons is one reason that the Labor Department’s broadest measure of unemployment remains far above its 8.8 percent pre-recession level. U6 unemployment, which includes involuntarily part time and discouraged job seekers in addition to the jobless, is 12.2 percent, or almost double the 6.2 percent level of the main unemployment rate.

Younger workers are most often stuck in part-time jobs: 20 to 24 year olds are more than twice as likely as the average worker to be employed part time for economic reasons, according to Labor Department data compiled by Bloomberg.

Minneapolis Fed President Narayana Kocherlakota, who votes this year, cautioned in an Aug. 15 speech that the “progress in the decline of the unemployment rate masks continued weakness in labor markets.” He said the historically high share of part-time workers is “especially significant” and indicates “remaining some way from” full employment.

I've been pointing out to Joepistole for years* that the frequently quoted unemployment rate is useless index of how the labor market is. Furthermore, although it matters agreatly to people who can't live like their paretns did, (with lower purchasing power salaries) it matters to the entire economy too - Their lower salaries (and insecurity) reduce their buying, delay marriages /home buying, etc. - Why even low-prices outlets like Walmart are hurting financially and laying off full time workers.

* but he still doesn't get it - thinks it is a good measure of unemployment as is put out by BLS, not Shadowstats, which uses BLS's earlier formulae - much like BLS's U6.

The Bloomberg article I quote from above, ends with David Beck's story to put a "human face" on the US's labor problem: Dave has been looking for full-time work since he lost his job as a buyer at retailer Stage Stores in May 2013. The 61-year-old found temporary employment with a catalog company in May, consulting on retail apparel about 20 hours a week. “I need to work full time and get a decent salary,” said Beck, who lives with his wife in Springfield, Illinois, and applies to 12 to 15 jobs per week. “It’s still tough.”

In closing I'll add that ObamaCare is accelerating the move to hire part time, instead of full time workers. - Employers don't need to cover them. US needs to copy (but is too arrogant to) European Socialized medicine: Doctors on salary, massive buying of drugs via negotiated prices, no Mal-Practice costs (expect in extreme cases when government, like in US, grants the injured the right to sue it.) to also enjoy about three years longer life expectancy at half the cost to society (often zero cost to the patient). Sometimes "half steps" in this direction, like ObamaCare, do more harm to society than good.

Two, not often cited benefits of full socialized medicine are:
(1) With birth to death, centralized records of health, (and modern computers) research into causes of disease is greatly facilitated. If aids had originalted in London instead of Southern California, its cause would have been known years earlier and active prevention / education, may have contained it. etc. US medical records are in doctor's hand written scrawl and stored in a million filing cabinets, for a few years at best, once the patient ceases to visit that doctor.

(2) People chose to go to medical school as they want to server other citizens, not because it is a high probably path to great wealth. The doctor (not his assistants) can take time to learn about the patient as it does not reduce his salary, even if that takes 20 minutes. In the US your contact time with a doctor averages less than 6 minutes*, but he will order four or five times more tests be done. That of course adds to the medical cost in the US, and most of these tests are to protect the doctor from legal action, if you did have some rare condition. So most pay monthly to some medical insurance company - more costs with their profit slice taken out of the US's medical system. The poor don't see doctors, until very sick. Then a friend drops them at some hospital's emergency room entrance - where cost are at least 10 times higher. If a simple vaccination would have prevented their illness, perhaps more than a 1000 times higher.

* On average, US doctors, with several assistants, see about 13 patient per hour - the higher that number goes, the more they earn. This data of course excludes surgeons and psychiatrists - refers to office visits. My MD father was an exception - his office financially failed in in three different cities, so eventually took job in a state hospital - If he understood how the "doctor's game" is played in the US, he did not want to play by the AMA's rules.

SUMMARY: US is too arrogant to learn from other's much better and well tested (for decades) medical services systems. "USA, USA, USA - We're the greatest."

 

[joepistole]

I've been pointing out to Joepistole for years* that the frequently quoted unemployment rate is useless index of how the labor market is. Furthermore, although it matters agreatly to people who can't live like their paretns did, (with lower purchasing power salaries) it matters to the entire economy too - Their lower salaries (and insecurity) reduce their buying, delay marriages /home buying, etc. - Why even low-prices outlets like Walmart are hurting financially and laying off full time workers.

* but he still doesn't get it - thinks it is a good measure of unemployment as is put out by BLS, not Shadowstats, which uses BLS's earlier formulae - much like BLS's U6.

The Bloomberg article I quote from above, ends with David Beck's story to put a "human face" on the US's labor problem: Dave has been looking for full-time work since he lost his job as a buyer at retailer Stage Stores in May 2013. The 61-year-old found temporary employment with a catalog company in May, consulting on retail apparel about 20 hours a week. “I need to work full time and get a decent salary,” said Beck, who lives with his wife in Springfield, Illinois, and applies to 12 to 15 jobs per week. “It’s still tough.”

That is more than a little disingenuous don’t you think? You are trying to push another conspiracy theory as you have consistently done for years now. Your thesis is that the, “frequently quoted unemployment rate is useless” and the government is playing with the unemployment number to make unemployment look better than it really is. In order for this conspiracy to work all of the following need be complicit in the conspiracy, academia, investors, banks, and businesses around the globe, because they all use the “frequently reported unemployment rate”.

The only people using your Shadow Stats number, compiled by a single man and his pc, are folks like you who are long on conspiracies and short on knowledge, evidence and reason. He clearly inflates his unemployment number by counting employed people as unemployed.

There is no doubt the US has not reached “full employment”. No one has made that claim. And there is no doubt that unemployment is very painful for the unemployed both emotionally and financially – especially the long term unemployed. But that doesn’t make the “frequently reported and used unemployment data” wrong. The bottom line is US unemployment has dramatically improved since 2009.

Every month, investors, businessmen, and academics anxiously await the “frequently reported unemployment data”. None of them wait for your “Shadow Stats” numbers. Think about it. One more point, anecdotal stories don’t tell the whole story.

Below is a paper describing the changes made to unemployment reporting in 1995 by the BLS. Changes were made to the CPS survey and unemployment reporting was made more transparent. One man and his pc doesn’t have the resources to conduct the pre 1995 employment surveys. And the only place he can get them is if he conducts them himself.
http://www.bls.gov/mlr/1995/10/art3full.pdf

In closing I'll add that ObamaCare is accelerating the move to hire part time, instead of full time workers. - Employers don't need to cover them. US needs to copy (but is too arrogant to) European Socialized medicine: Doctors on salary, massive buying of drugs via negotiated prices, no Mal-Practice costs (expect in extreme cases when government, like in US, grants the injured the right to sue it.) to also enjoy about three years longer life expectancy at half the cost to society (often zero cost to the patient). Sometimes "half steps" in this direction, like ObamaCare, do more harm to society than good.

Except you have no, absolutely no, evidence to back up the assertion that Obamacare is increasing part-time unemployment, part-time unemployment has shrunk since the implementation of Obamacare. European healthcare models are something the US can and should learn from, I agree with that. But not all European healthcare models are as you describe. European healthcare models are not monolithic or uniform. The Swiss healthcare model is remarkably similar to the US Obamacare. Obamacare certainly has room for improvement. What is that old adage about baby steps? Obamacare is a baby step in the right direction.

Two, not often cited benefits of full socialized medicine are:
(1) With birth to death, centralized records of health, (and modern computers) research into causes of disease is greatly facilitated. If aids had originalted in London instead of Southern California, its cause would have been known years earlier and active prevention / education, may have contained it. etc. US medical records are in doctor's hand written scrawl and stored in a million filing cabinets, for a few years at best, once the patient ceases to visit that doctor.

(2) People chose to go to medical school as they want to server other citizens, not because it is a high probably path to great wealth. The doctor (not his assistants) can take time to learn about the patient as it does not reduce his salary, even if that takes 20 minutes. In the US your contact time with a doctor averages less than 6 minutes*, but he will order four or five times more tests be done. That of course adds to the medical cost in the US, and most of these tests are to protect the doctor from legal action, if you did have some rare condition. So most pay monthly to some medical insurance company - more costs with their profit slice taken out of the US's medical system. The poor don't see doctors, until very sick. Then a friend drops them at some hospital's emergency room entrance - where cost are at least 10 times higher. If a simple vaccination would have prevented their illness, perhaps more than a 1000 times higher.

* On average, US doctors, with several assistants, see about 13 patient per hour - the higher that number goes, the more they earn. This data of course excludes surgeons and psychiatrists - refers to office visits. My MD father was an exception - his office financially failed in in three different cities, so eventually took job in a state hospital - If he understood how the "doctor's game" is played in the US, he did not want to play by the AMA's rules.

SUMMARY: US is too arrogant to learn from other's much better and well tested (for decades) medical services systems. "USA, USA, USA - We're the greatest."

Well Obamacare does take care of #1 and number #2 is a work in process. And the demand created by Obamacare is increasing the use of physician assistants and nurse practitioners is changing the healthcare industry and eating away at the physician healthcare monopoly. And it is more than just arrogance that ills the US healthcare system.

 

[Billy T]

That is more than a little disingenuous don’t you think? You are trying to push another conspiracy theory as you have consistently done for years now. Your thesis is that the, “frequently quoted unemployment rate is useless” and the government is playing with the unemployment number to make unemployment look better than it really is.... but that doesn’t make the “frequently reported and used unemployment data” wrong. The bottom line is US unemployment has dramatically improved since 2009. ...

Unlike you I don't claim anything I don't agree with is "conspiracy theory." I give facts, not unsupported opinion - i.e. I cite data from reputable reference like Bloomberg. In contrast you only assert - don't give supporting references.

Your "bottom line" assertion ("US unemployment has dramatically improved since 2009") is shot full of holes by Bloomberg (Following is re-quote from Link in post 807): "The high share of workers who are part time for economic reasons is one reason that the Labor Department’s broadest measure of unemployment remains far above its 8.8 percent pre-recession level. U6 unemployment, which includes involuntarily part time and discouraged job seekers in addition to the jobless, is 12.2 percent, or almost double the 6.2 percent level of the main unemployment rate."

Last time I did math, 12.2% is greater than 8.8% of the pre-recession rate."

What you unintentional do is prove that the BLS's often quoted 6.2% is, as I said: "Not representive of the real unemployment picture." Also more reflective of the true unemployment situation is the labor force participation rate - never been so Low, even with much larger fraction of women in the work force than 3 or 4 decades ago. Or the fact that purchasing power of salaries has increased only for the top 20% of salary levels.

Here is more from Bloomberg. Note in second paragraph even Yellen thinks the 6.2% does not reflect the true unemployment picture.

Meager improvements since 2009 have barely kept up with a similarly tepid pace of inflation, raising the real value of compensation per hour by only 0.5 percent. That marks the weakest growth since World War II, with increases averaging 9.2 percent at a similar point in past expansions, according to Bureau of Labor Statistics data compiled by Bloomberg.

Federal Reserve Chair Janet Yellen has zeroed in on faster wage growth as an important milestone for declaring the job market healed and ready to withstand policy tightening, even as other labor measures improve. Stagnant earnings also explain an economy that’s having trouble sustaining a rebound in housing and consumer spending, according to David Blanchflower, a professor of economics at Dartmouth College in Hanover, New Hampshire.

Households in the top 20 percent of U.S. socioeconomic groups saw their incomes grow by an average of $8,358 a year from 2008 to 2012, compared with a $275 annual decline for the lowest 20 percent, according to data from the Bureau of Labor Statistics.

 

[joepistole]

Unlike you I don't claim anything I don't agree with is "conspiracy theory." I give facts, not unsupported opinion - i.e. I cite data from reputable reference like Bloomberg. In contrast you only assert - don't give supporting references.

No you don’t, you give regurgitated conspiracies like the Fed conspiracy along with the unemployment number conspiracies are just a few of the conspiracy theories you promulgate. If you give facts, where are the facts that support your notion that the Fed delayed repatriotization of Germany’s gold reserves because the Fed had loaned out Germany’s gold? Where is your proof that part-time unemployment is increasing because of Obamacare. You have no proofs because none exists.

Your "bottom line" assertion ("US unemployment has dramatically improved since 2009") is shot full of holes by Bloomberg (Following is re-quote from Link in post 807): "The high share of workers who are part time for economic reasons is one reason that the Labor Department’s broadest measure of unemployment remains far above its 8.8 percent pre-recession level. U6 unemployment, which includes involuntarily part time and discouraged job seekers in addition to the jobless, is 12.2 percent, or almost double the 6.2 percent level of the main unemployment rate."

Last time I did math, 12.2% is greater than 8.8% of the pre-recession rate."

Well it helps if you use the correct numbers. Below are charts taken directly from the Bureau of Labor Statistics.

Unemployment Rate 2008-present

Unemployment Rate Plus Part-Time Workers 2008-present (i.e. U-6)

What you unintentional do is prove that the BLS's often quoted 6.2% is, as I said: "Not representive of the real unemployment picture." Also more reflective of the true unemployment situation is the labor force participation rate - never been so Low, even with much larger fraction of women in the work force than 3 or 4 decades ago. Or the fact that purchasing power of salaries has increased only for the top 20% of salary levels.

Only if you head isn’t screwed on tightly. Now you are introducing something else, the labor force participation rate. The labor force participation rate is the percentage of individuals who are actively working or seeking work. That really isn’t a problem as we have previously discussed for all the reasons previously discussed. And its impact on the unemployment rate is miniscule. Labor force participation rate becomes important when we approach full employment, we are not there yet. And the low labor force participation rate is more reflective of changing demographics than it is of anything else. People are choosing not to work – people like me who have chosen to retire early.

Here is more from Bloomberg. Note in second paragraph even Yellen thinks the 6.2% does not reflect the true unemployment picture.

What Yellen meant was that there is no single number, no single statistic that can give you a complete picture of anything. That is why we have multiple measures of unemployment. That is why in 1995 the BLS expanded and increased the number of labor metrics they produce. Some portions of the labor force are more adversely affected than others. For example workers over 50 who are unemployed are hit harder than younger workers by unemployment. That fact isn’t reflected in the aggregates. But that doesn’t mean the aggregates are any less valid or any less meaningful.

 

[pjdude1219]

Unlike you I don't claim anything I don't agree with is "conspiracy theory." I give facts, not unsupported opinion - i.e. I cite data from reputable reference like Bloomberg. In contrast you only assert - don't give supporting references.

well what the hell do you thinks going to happen when you quote conspiracy theotist sites like shadow states. the guy plays with numbers cause he doesn't like the government.

 

[Billy T]

well what the hell do you thinks going to happen when you quote conspiracy theotist sites like shadow states. the guy plays with numbers cause he doesn't like the government.

If it is a "conspiracy" it is an open one - others well versed in economic agree that Shadow Stats's Data is just continuing the older calculation of the BLS, before methodology was changed, mainly to reduce the annual cost increase of the Social Security system - the "corrections for inflation." I.e. between 1997 and 1999, BLS redefined things so that part time workers were counted same as full time worker as "employed", so the people ceasing to look "actively" for work were not unemployed, even if they had actively looked for work for a year with no success, added adjustment for "quality" (BLS use smoke screen terminology to obscure what they are doing -I.e. BLS is doing "hedonic regression") so old type writer that cost $100 was more expensive than modern $1000 computer with word processor and printer used for writting letters. Same is true of cars and their tires - Accounting to BLS's new methodology, they only cost about half as much as the did a decade or more ago as their quality has more than doubled. That may be true for both these examples, but also true is writing a letter with machine or driving to work cost twice as much now - with no "quality adjustment" to your out of pocket cost for the machines. That is inflating faster than your average salary.

Another example, I've given before. Sally is finding it harder every year to buy the things she got from her parents when younger. She always used Dove soap, but now can not afford that so has had to switch to cheaper Ivory. BLS notes this general trend (substitution of hot dogs for beef etc.) and says: "Great - the cost of personnel hygiene and protein is declining so that component of inflation is actually negative. We can reduce the published inflation rate again."

Fed is trying hard to get BLS's computed inflation up to 2% and true inflation is well above that, but static salaries plus ceasing to work for one, plus only "Big Mac" jobs with low salary and or part time, coupled with the real out of pocket inflation, is make ever more people reduce their standard of living, like Sally did. That is why Fed can not get inflation rate up.
Here is that from Wiki (an obvious part of the conspiracy)

Shadowstats.com is a website that claims to recalculate government published economic and unemployment statistics that have been updated or replaced or are no longer emphasized by traditional media outlets. The site is authored by John Williams,* an economic consultant with an economics BA and an MBA from Dartmouth College, New Hampshire.[1]

Regarding inflation statistics, Williams says that some of the biggest changes to the Consumer Price Index were made between 1997-1999 in an effort to reduce Social Security outlays, using controversial changes by Alan Greenspan that include "hedonic regression", or the increased quality of goods.[2] Some other investors have echoed Williams' views, most prominently Bill Gross*, who reportedly called the US CPI an "haute con job".[2] John S. Greenlees* and Robert B. McClelland*, staff economists at the US Bureau of Labor Statistics, wrote a paper to address CPI "misconceptions", such as those of Williams.[3]

Regarding unemployment statistics, Williams points out that under President Lyndon B. Johnson, the U-3 unemployment rate series was created, which excludes people who stopped looking for work for more than a year ago as well as part-time workers who are seeking full-time employment. Although the old unemployment rate series', which include part time workers looking for full time work and unemployed who stopped looking over a year ago, is still published monthly by BLS, the U-3 series is generally considered more meaningful and is the headline rate picked up by most media outlets.

That is true - only a few still prefer the BLS's older methodology. Even the Fed, which a year ago said 6.5% unemployment was its main guide as to when to start returning interests rates to normal, not longer thinks BLS's U3 is of much use. It is now just one index on their "dashboard." Total wages, seems to be more important to Yellen* - She still thinks US economy needs stimulus help or at least artificially & historically low interest rates. - We should her more on her POV tomorrow in the keynote speech. I'll be "all ears" - hope you will be too.

I agree total wages is a much better index of the economy that BLS's unemployment rate. Unfortunately with labor force participation rate falling and average salary (except for top 20%) static or actually declining for bottom 20%, total wages are not keeping up with inflation. - Not good for an economy that is 2/3 based of consumer buying. - Why even cheaper outlets did well until recently. Limited buying power customers gravitated there, but also partly because they let go full time employees and replaced them with lower wage part-time employees. They have done about all of that firing of full timers they can, so are not doing well anymore - only Sack 5th Avenue etc. are doing well.

* Members of the "conspiracy" identified here, but Millions of others who shop for food or pay for energy know U3 is not reflecting their cost of living so are members of the "conspiracy" too as they think the BLS's old method, still available as U6, reflects their cost of living better. I. e. That 12.6% is a more realistic index of their cost of living than 6.2% is.

 

[joepistole]

If it is a "conspiracy" it is an open one - others well versed in economic agree that Shadow Stats's Data is just continuing the older calculation of the BLS, before methodology was changed, mainly to reduce the annual cost increase of the Social Security system - the "corrections for inflation." I.e. between 1997 and 1999, BLS redefined things so that part time workers were counted same as full time worker as "employed", so the people ceasing to look "actively" for work were not unemployed, even if they had actively looked for work for a year with no success, added adjustment for "quality" (BLS use smoke screen terminology to obscure what they are doing -I.e. BLS is doing "hedonic regression") so old type writer that cost $100 was more expensive than modern $1000 computer with word processor and printer used for writting letters. Same is true of cars and their tires - Accounting to BLS's new methodology, they only cost about half as much as the did a decade or more ago as their quality has more than doubled. That may be true for both these examples, but also true is writing a letter with machine or driving to work cost twice as much now - with no "quality adjustment" to your out of pocket cost for the machines. That is inflating faster than your average salary.

Except none of that is true, it’s just more regurgitated conspiracy crap. One of the many things you like to ignore is that one man and his pc cannot reproduce what the BLS and CPS used to do. He cannot do the surveys and he cannot reproduce what hundreds of government used to do. And the only people who take Shadow Stats seriously are conspiracy nuts and partisans who are desperate for data to support their inane ideological agenda. I suggest you go back and reread the material I previously referenced from the BLS. This is from your Wiki citation, “Shadowstats.com is a website that claims to recalculate government published economic and unemployment statistics that have been updated or replaced or are no longer emphasized by traditional media outlets.”. Note the emphasis on the word “claims”. It is difficult to recalculate something that is no longer reported or collected by the government – damn minor detail again.

Another example, I've given before. Sally is finding it harder every year to buy the things she got from her parents when younger. She always used Dove soap, but now can not afford that so has had to switch to cheaper Ivory. BLS notes this general trend (substitution of hot dogs for beef etc.) and says: "Great - the cost of personnel hygiene and protein is declining so that component of inflation is actually negative. We can reduce the published inflation rate again."

Fed is trying hard to get BLS's computed inflation up to 2% and true inflation is well above that, but static salaries plus ceasing to work for one, plus only "Big Mac" jobs with low salary and or part time, coupled with the real out of pocket inflation, is make ever more people reduce their standard of living, like Sally did. That is why Fed can not get inflation rate up.
Here is that from Wiki (an obvious part of the conspiracy) That is true - only a few still prefer the BLS's older methodology. Even the Fed, which a year ago said 6.5% unemployment was its main guide as to when to start returning interests rates to normal, not longer thinks BLS's U3 is of much use. It is now just one index on their "dashboard." Total wages, seems to be more important to Yellen* - She still thinks US economy needs stimulus help or at least artificially & historically low interest rates. - We should her more on her POV tomorrow in the keynote speech. I'll be "all ears" - hope you will be too.

I agree total wages is a much better index of the economy that BLS's unemployment rate. Unfortunately with labor force participation rate falling and average salary (except for top 20%) static or actually declining for bottom 20%, total wages are not keeping up with inflation. - Not good for an economy that is 2/3 based of consumer buying. - Why even cheaper outlets did well until recently. Limited buying power customers gravitated there, but also partly because they let go full time employees and replaced them with lower wage part-time employees. They have done about all of that firing of full timers they can, so are not doing well anymore - only Sack 5th Avenue etc. are doing well.

* Members of the "conspiracy" identified here, but Millions of others who shop for food or pay for energy know U3 is not reflecting their cost of living so are members of the "conspiracy" too as they think the BLS's old method, still available as U6, reflects their cost of living better. I. e. That 12.6% is a more realistic index of their cost of living than 6.2% is.

Here is one of the many problems for you; the rest of the world isn’t buying your conspiracy notions. Academia, investment professionals, and corporations around the world are just fine with the way the BLS collects and reports unemployment and inflation. Only the conspiracy crowd and desperate ideologues in need of data to support their inane ideologies flock to Shadow Stats.

 

[Billy T]

... One of the many things you like to ignore is that one man and his pc cannot reproduce what the BLS and CPS used to do. He cannot do the surveys and he cannot reproduce what hundreds of government used to do. ...

Of course not but no need to as the BLS makes public all the survey data monthly. Shaddow Stats just processed the data the way BLS did prior to 1997. Below is list of ONE of about 175 sub pages of links to BLS data. The ONE below is just unemployment related data BLS collected last month. See the ~174 others at: http://www.bls.gov/data/ it is really an attractive color coded page. I looked briefly at a couple of sub links on the "international prices" page - another of the ~175 main pages. Ergo your claim Shadow Stats does not have the data is just more of your BS NONSENSE.

Labor Force Statistics from the Current Population Survey
(Select from list below):

Employment Level - Civilian Labor Force - LNS12000000
Civilian Labor Force Level - LNS11000000
Civilian Labor Force Participation Rate - LNS11300000
Unemployment Level - Civilian Labor Force - LNS13000000
Unemployment Rate - Civilian Labor Force - LNS14000000
Civilian Employment-Population Ratio - LNS12300000
Unemployment Rate - 16-19 Yrs. - LNS14000012
Unemployment Rate - 20 Yrs. & Over Men - LNS14000025
Unemployment Rate - 20 Yrs. & Over Women - LNS14000026
Unemployment Rate - White - LNS14000003
Unemployment Rate - Black or African American - LNS14000006
Unemployment Rate - Hispanic or Latino - LNS14000009
Unemployment Rate - 25 Yrs. & Over, Less than a High School Diploma - LNS14027659
Unemployment Rate - 25 Yrs. & Over, High School Graduates No College - LNS14027660
Unemployment Rate - 25 Yrs. & Over, Some College or Associate Degree - LNS14027689
Unemployment Rate - 25 Yrs. & Over, Bachelor's Degree and Higher - LNS14027662
Number Unemployed For Less Than 5 weeks - LNS13008396
Number Unemployed For 5-14 Weeks - LNS13008756
Number Unemployed For 15 Weeks & Over - LNS13008516
Number Unemployed For 27 Weeks & Over - LNS13008636
Average Weeks Unemployed - LNS13008275
Median Weeks Unemployed - LNS13008276
Unemployment Level Job Losers - LNS13023621
Unemployment Level Job Losers On Layoff - LNS13023653
Unemployment Level Reentrants To Labor Force - LNS13023557
Unemployment Level Job Leavers - LNS13023705
Unemployment Level New Entrants - LNS13023569
Persons At Work Part Time for Economic Reasons - LNS12032194
Marginally Attached to Labor Force - LNU05026642
Discouraged Workers - LNU05026645
Alternative measure of labor underutilization U-6 - LNS13327709
Multiple Jobholders Level - LNS12026619
Multiple Jobholders as a Percent of Total Employed - LNS12026620
Employment Level, Nonag. Industries, With a Job not at Work, Bad Weather - LNU02036012
Employment Level, Nonag. Industries, At Work 1-34 Hrs., Usually Work Fulltime, Bad Weather - LNU02033224

All use this survey data - the difference I how you process it.

 

[joepistole]

LOL, if you took your blinders off for a moment and actually did some relevant research you would know the pre 1995 metrics were based on questions that are no longer asked, so they are not in the current CPS data - damn minor details again..oops.

You cannot use data that no longer exists...oops. You like to throw up a bunch of irrelevant material and hope people will get lost in the chaff. Go back and read my previous posts.

 

[Billy T]

LOL, if you took your blinders off for a moment and actually did some relevant research you would know the pre 1995 metrics were based on questions that are no longer asked, so they are not in the current CPS data - damn minor details again..oops.

proof by giving link please. (Your calling anything you don't like / agree with "conspiracy" or "right wing propaganda" is of course not proof)- your opinions too often are just BS. At least tell what significant question(s) are no longer part of the BLS survey - My impression is it has be come MORE EXTENSIVE over the years.

 

[Billy T]

{post 670 of this thread}...The distorted BLS unemployment rate is starting to cause problems for the Fed who said they would stop suppressing interest rates when unemployment fell significantly below 6.5%. I.e. that may happen before the economy is strong enough to with stand normal interest rates (more than twice the current ones).

I re-post this prediction that the Fed would back away from placing high importance on the BLS's unrealistic (by clever definitions) unemployment index as its main criteria for letting rates return to normal, before Yellen speaks today (8AM mountain time) - The "keynote" speech at Jackson Hole.

Back when I posted (10 Jan 2014) above prediction, I did not know the Fed would call their new mix of indicators a "dashboard." I doubt that Yellen will be openly critical of how the BLS computes "unemployment" as I am. She will probably just state that the problem is more complex than any single indicator can capture - hence the need for the "dashboard." Any way you slice it - fact that Fed has dropped the 6.5 or less percent unemployment as trigger for letting rates rise is proof that BLS's unemployment is not an accurate indicator, as they once believed, of US employment conditions.

 

[joepistole]

proof by giving link please. (Your calling anything you don't like / agree with "conspiracy" or "right wing propaganda" is of course not proof)- your opinions too often are just BS. At least tell what significant question(s) are no longer part of the BLS survey - My impression is it has be come MORE EXTENSIVE over the years.

LOL, I already told you. I gave you the BLS link which explained the differences. I cannot make you smarter.

And for those reasons Shadow Stats has no credibility with investment and business professionals and academics. I have friends who are CFOs, controllers, investors nd business executives. We have never even discussed Shadow Stats. We do on the other hand talk about the BLS numbers and the ADP Jobs Report.

Shadow Stats one man and his pc cater to the conspiracy nuts.

 

[Billy T]

LOL, I already told you. I gave you the BLS link which explained the differences. I cannot make you smarter. ...

True.
YOU have already told many things (BS) with zero references supporting the statements. - Even when directly asked for something other than repetition of your BS.

And YES the BLS does have clear explanations of what they do and how the do it - but not much if anything about why major re-definitions were required - the fact the inflation correction to Social Security with there old computation methodology would soon become unaffordable as Baby Boomers would soon be retiring at rate of more than 10,000/ day, for about 15 years!

 

[Billy T]

As I predicted back in post 670 (see relevant part re-posted in post 817, this page) Fed was forced to drop exclusive use of BLS's unemployment index as 6.5% came much too quickly with that false index of US's unemployment as trigger for returning interest rate to normal. Here is how Yellen stated this in her speech today:

"the FOMC explicitly recognized that factors determining maximum employment “may change over time and may not be directly measurable,” and that assessments of the level of maximum employment “are necessarily uncertain and subject to revision.” Accordingly, the reformulated forward guidance reaffirms the FOMC’s view that policy decisions will not be based on any single indicator, but will instead take into account a wide range of information on the labor market, as well as inflation and financial developments. ... Federal Reserve Board staff developed a labor market conditions index from 19 labor market indicators, including four I just discussed.14 This broadly based metric supports the conclusion that the labor market has improved significantly over the past year, but it also suggests that the decline in the unemployment rate over this period somewhat overstates the improvement in overall labor market conditions."

SUMMARY (in simple words): The BLS's unemployment rate is a poor index of the labor conditions, so Fed developed its own index.

Bold added by Billy T. Read all her speech at: http://www.bloomberg.com/news/2014-08-22/text-of-yellen-s-remarks-at-the-jackson-hole-symposium.html

Note at least Joepistole is consistent. He is still attacking Shaddow Stats data and defending BLS's (now even abandoned by Fed, as I predicted it would be in post 670) unemployment index as an accurate measure of the unemployment picture as he was back here:

{post 687}Yeah, it's pretty amazing what counting employed people as unemployed can do for your unemployment rate. It's amazing what you can claim when you just make up numbers in order to support your ideology. In the real world, we don't make up numbers. We don't invent fiction and call it nonfiction.

Note also, that back then, as now, Joe just asserts his POV, without giving references. For example no reference showing Shaddow Stats counts employed people as unemployed - He can't support that assertion as it is not true. Summary: don't believe what Joe, just asserts, with no reference. Even when Joe claims to be quoting from reputable source - check it. I asked him 17 time over the course of about a year for link to his quote of Bloomberg I knew was false invention of his - never could he give that link, but is good at making excuses.