Friday, August 12, 2011
Sunday, July 10, 2011
More fun during "Recovery Summer"
Progressive Unemployment
By Clarice Feldman
The great political philosopher P. J. O'Rourke said, "You can't get rid of poverty by giving people money." If anyone doubted that, the present inhabitant of the White House has proven it by tossing away trillions of dollars on projects that had no lasting effect on eradicating poverty, creating employment, or improving the nation's purse or infrastructure. Indeed, his initiatives have increased unemployment, will continue to do so, and must be reversed if we are ever to get back on track. He has given us all a clear picture of the devastating effect progressive policies have on employment.
As the week drew to a close, the President and his advisers surely were gasping at the figures. It is what my friend Rick Ballard calls Wreckovery Summer. Most especially 9.2 percent unemployment, a figure significantly higher than what we'd been led to believe, and a figure higher than the 8 percent we were warned we would face if we didn't open the doors of the treasury to create those promised "shovel ready "jobs. Jobs which today the President laughingly admits were not exactly shovel ready.
As Bloomberg reports:
"U.S. employers added 18,000 workers in June, less than forecast and the fewest in nine months, while the unemployment rate unexpectedly climbed, indicating a struggling labor market." Plus this: "The so-called underemployment rate - which includes part- time workers who'd prefer a full-time position and people who want work but have given up looking - increased to 16.2 percent from 15.8 percent."
Both Obama and his party look like fools or liars. Just last year, then-Speaker of the House Pelosi promised if we passed ObamaCare we would create 400,000 jobs almost immediately.
I'd say she is an economic nincompoop, but for the fact that in the past few years her already lavish financial holdings increased by 63%. Alas, for some reason her economic genius seems to work only for herself and her family.
But, she was certainly not alone in peddling the snake oil Obama was producing. His vice president Joe Biden also promised voters a booming economy. Just last April he said:
"All in all we're going to be creating somewhere between 100[,000] and 200,000 jobs next month, I predict," Biden said, according to a pool report, adding that he "got in trouble" for a job growth prediction last month. "Even some in the White House said, 'Hey, don't get ahead of yourself.' Well, I'm here to tell you, some time in the next couple of months, we're going to be creating between 250,000 jobs a month and 500,000 jobs a month."
"We caught a lot of bad breaks on the way down," Biden added. "We're going to catch a few Friday' good breaks because of good planning on the way up."
Friday's jobs report was apparently not the promised "good break." It "stunned" economists, reported the New York Times, who must be talking to different economists than I've been reading:
For the second month in a row, employers added barely any jobs in June, showing that the economic recovery has hit a serious speed bump.
With all levels of government laying off workers, the Labor Department reported that employers eked out just 18,000 new nonfarm payroll jobs in June. The already low number created in May was also revised downward to a dismally small 25,000 new jobs, less than half of what was originally reported last month.
Although the government's survey of employers showed them adding jobs, a separate survey of households showed that more people were out of work than in the previous month, causing the unemployment rate to rise to 9.2 percent.
The President's advisers and spokesmen are trying to brush off this unwelcome news. White House spokesman Carney says most people don't analyze gross domestic product and unemployment numbers.
David Plouffe, Obama's senior political adviser says people won't vote in 2012 based on the unemployment rate.
I think these guys are wrong if they think the failure of the administration to gin up the economy will not hurt Obama's reelection fortunes. People know if they are unemployed or not. And they aren't blind to their children's dim job prospects, and those of their neighbors and other family members.
Professor Jacobson over at Legal Insurrection comments wittily but wisely that:
"The only way for Obama to stimulate the enormous private sector job growth needed to ensure Obama's reelection is for Obama to announce he is not running for reelection, which would unleash a wave of investment and economic activity not seen since the Great Depression."
What Jacobson means in this shorthand way is that the President and his party have brought investment, economic activity and hiring to a standstill by a series of ill-conceived actions, including the unworkable and grandiose ObamaCare, the stifling of almost all conventional domestic energy production, the arbitrary acts of his regulatory agency appointees.
Having studied Soviet Law in my youth I predict the next action of the gang that has no idea how to create wealth, but knows only to demagogue voters with class warfare promises of free stuff grabbed from others, is to start looking for kulaks figuratively to hang. Never mind that it was the action of the government that killed domestic production from farming to manufacturing, they will start attacking the successful farmers and the hard working professionals (engineers, doctors, managers) and accuse them of sabotaging the economic recovery. At this point, America having been successful for so long in helping people climb the ladder, there are still so many of us in the kulak class I suspect it will be a harder sell than it was for Stalin.
The jobs picture will improve when he's out of office and we undo his handiwork (and that of Reid and Pelosi when the Democrats controlled two of the three branches of government and rode roughshod over us all). Still, it's time we understood the chronic nature of this nation's unemployment and start working together to change attitudes and laws to make it possible for unskilled workers to support themselves again if we are to have any hope of reducing poverty.
I was impressed this week, by Walter Russell Mead's article
"Beyond the Big City Blues" in which he says the urban underclass in this country is not hampered as much by race as the left would have us believe, that their serious problems are not racial in nature.
One of these problems, he notes is the lack of jobs. In this case progressive policies are largely at fault and must change, but these are the policies at the heart of Obama's thinking and which given his intellectual rigidity he is unlikely to alter.
Our most important task for returning poor urban neighborhoods to health is "the creation of large numbers of private sector jobs that relatively unskilled people can do," Mead argues. He notes that the "days when domestic manufacturing anchored an emerging urban working class and provided a ladder into the middle class " are dead. Obama's preposterous notion that vast numbers of unskilled urban youths can be gainfully employed on "green projects' like creating solar panels and retrofitting housing is quackery, a delusionary notion that he and his upper class supporters adore just as was the takeover of the auto companies in the belief that they could turn this industry (and with it Detroit and the UAW's fortunes) around.
The idea that manufacturing will return and save us is, I fear, a snare and a delusion. The road is closed. Foreign competition is part of the story, but technology is the real driver. As factories become more automated, you can make more and fancier stuff with fewer people. Ending free trade will wreck our economy and the world economy, put the world on the road to World War Three and give a boost to the robotics industry, but it won't bring back the days of high wage unionized manufacturing labor in the United States.
Generally speaking, manufacturing employment is going to shrink in the US over the medium to long term and large factories for big employers will be shedding workers as they update their technology rather than hiring. GM and GE will not propel the next generation of Americans into the middle class.
No. contrary to the progressives' vision, the urban underclass will find jobs in small businesses (if ObamaCare does not destroy them first) and many will not be "particularly attractive" Mead adds. Such jobs are often "smelly and noxious"; often it will be casual employment with few benefits. These jobs, like those of our grandfathers' time are "bad jobs," but it's the only way for many to get on the ladder out of poverty.
To get these jobs, we have to change the way our cities work. Essentially, we have created urban environments in which the kind of enterprises that often hire the poor - low margin, poorly capitalized, noisy, smelly, dirty, informally managed without a long paper trail - can't exist. The kind of metal bashing repair shops that fill the cities of the developing world are almost impossible to operate here. Plumbers, carpenters, electricians, pushcart vendors and day care operators need licenses; construction work has to comply with elaborate guidelines and city bureaucracies disgorge the required permits slowly and reluctantly.
[snip]
The combination of a tangled thicket of regulations that interact with one another in unpredictable ways and a bureaucracy that for whatever reasons cannot manage the process in a timely way is a massive job killer. The number of small enterprises that have not started, of small businesses that have given up on expansions or on simple repair jobs deferred is incalculable but large. Our cities are strangling themselves in red tape; we need to a better job of balancing the legitimate need for safety and health regulation with the need to promote enterprise and the kind of jobs that our fellow citizens can actually get.
Changing the way cities work matters a lot. If we want new businesses and new jobs in our inner cities, we are going to have to declare war on the cost structures of cities like New York and Chicago. The tax load must come down drastically, implying both a reduction in government activities and a revolution in the way services are provided. The forest of regulations that makes everything from opening a new business to repairing a building complex and expensive must be dramatically thinned. If we are serious about creating conditions in which workers with poor skills can make a living inside great cities, we have to move away from regulations and practices which make it prohibitively expensive to do business there.
In fact, it's time to challenge the very notion that people who so hamstring development are in any real sense 'progressive." They and the president benefit a certain tier -- upper middle class citizens and overly compensated, well-cushioned public employee union members -- who whether they mean to or not are preventing job creation for all, but most especially for those most in need of work.
Tuesday, May 03, 2011
May 3, 2011
Coutesy of Judith McGrane
Barack Obama met with the Queen of England.
He asked her, "Your Majesty, how do you run such an efficient government? Are there any tips you can give to me?"
"Well," said the Queen, "the most important thing is to surround yourself with intelligent people."
Obama frowned, and then asked, "But how do I know the people around are really intelligent?"
The Queen took a sip of tea. "Oh, that's easy; you just ask them to answer an intelligent riddle."
The Queen pushed a button on her intercom. "Please send Tony Blair in here, would you?"
Tony Blair walked into the room and said, "Yes, Your Majesty?"
The Queen smiled and said, "Answer me this please, Tony , your mother and father have a child. It is not your brother and it is not your sister. Who is it?"
Without pausing for a moment, Tony Blair answered, "That would be me."
"Yes! Very good," said the Queen.
Obama went back home to ask Joe Biden , his vice presidential choice the same question. " Joe , answer this for me. Your mother and your father have a child. It's not your brother and it's not your sister. Who is it?"
"I'm not sure," said Biden . "Let me get back to you on that one"
He went to his advisors and asked everyone, but none could give him an answer.
Finally, he ran into Sarah Palin out eating one night. Biden asked, " Sarah , can you answer this for me? Your mother and father have a child and it's not your brother or your sister. Who is it?"
Sarah Palin answered right back, "That's easy, it's me!"
Biden smiled, and said, "Thanks!" Then, he went back to speak with Obama.
"Say, I did some research and I have the answer to that riddle. It's Sarah Palin!"
Obama got up, stomped over to Biden , and angrily yelled into his face, "No! You idiot! It's Tony Blair !"
Friday, February 18, 2011
American Thinker: It's the Teachers, Stupid!
Unionized teachers outnumber other government workers and run the schools in every state; why do we keep on accepting their decades of miserable results?
A careless airline pilot, a lazy waitress, a crash-prone cabdriver, an unproductive salesman, an innumerate cashier will all have to find other work; poor teachers keep teaching and receiving raises as years go by and kids don't learn. Of course; they, with their unions, run the show.
Adam Smith prophesied when he wrote The Wealth of Nations, saying of professors in 1776:
If the authority to which he is subject resides in the body corporate, the college, or university, of which he himself is a member, and in which the greater part of the other members are, like himself, persons who either are, or ought to be, teachers; they are likely to make a common cause, to be all very indulgent to one another, and every man to consent that his neighbor may neglect his duty, provided he himself is allowed to neglect his own.
Professor Smith didn't have to see teachers' unions to comprehend featherbedding.
Public schools are administered as though all teachers were similarly productive, an approach heavily reinforced by the unions. Evaluations of teachers have uniformly avoided including their students' test results; investigations suggest why.
The author's study of Federal No Child Left Behind (NCLB) proficiency test data for 2009-2010 showed clearly that teachers aren't uniformly effective. The study included 1019 teachers in the Albuquerque Public Schools district, New Mexico. The three elementary schools listed below reported the highest, the median and the lowest percentages of students who tested proficient.
NCLB Percentages of Students Tested Proficient in Reading and Math by Teacher
Teacher No. At Top School At Median School At Bottom School
1 96% 61% 25%
2 97 62 44
3 100 43 43
4 83 68 23
5 94 46 31
6 92 60 47
7 96 47 30
8 91 73 19
9 77 66 23
10 0
Teachers were listed alphabetically by names, not by results. The maximum differences between teachers were 23 percentage points at the top school, 30 points at the median and 47 points at the bottom school. Teachers with good results were closer together than those with worse results; the differences remain materially significant in all three cases. Such differences between teachers and between schools seem to demand -- but have not received -- public investigation.
These findings were heavily reinforced by data reported by a similar Los Angeles Times study reported in August, 2010 in an article headed: Who's teaching L.A.'s kids?
The Times described its analysis as a look at data largely ignored by L.A. schools, data showing which educators help students learn and which hold them back. The analysis used 7 years of math and English test scores from more than 6,000 3rd through 5th grade teachers in the Los Angeles Unified School District. What the Times found can be summed up in its own words:
The fifth-graders at Broadous Elementary School come from the same world -- the poorest corner of the San Fernando Valley, a Pacoima neighborhood framed by two freeways where some have lost friends to the stray bullet of rival gangs. Many are the sons and daughters of Latino immigrants who never finished high school, hard-working parents who keep a respectful distance and trust educators to do what's best.
The students study the same lessons. They are often on the same chapter of the same book. Yet year after year, one fifth-grade class learns far more than the other down the hall. The difference has almost nothing to do with the size of the class, the students or their parents. It's the teachers.
With Miguel Aguilar, students have consistently made striking gains on state standardized tests, many of them vaulting from the bottom third of students in Los Angeles schools to well above average...John Smith's pupils next door have started out slightly ahead of Aguilar's but by the end of the year have been far behind.
In Los Angeles and across the country, education officials have long known of the often huge disparities among teachers. They've seen the indelible effects, for good or ill, on children. But rather than analyze and address these disparities, they have opted mostly to ignore them.
A few years ago, New Mexico installed a three-tier teachers' pay scale intended to improve teaching; additional education and training brought higher pay. An attempt to add student test results was quashed during a full-court press from the teachers' union. In 2006 and 2009 when nobody could produce data to correlate the teachers' higher pay with their results, the state's legislature recommended using student tests but again, as the Albuquerque Journal recently editorialized regretfully, that hasn't been done. The teachers getting merit pay can show more seniority but they can't show changes in their students' performances.
The Times, the Journal and the data are clear: There is one controlling reason the schools are as dismal as we see; the reason stated in Adam Smith's 1776 prediction: It's the teachers. There's additional responsibility in the politicians who fund the status quo with tax dollars because they receive services and cash from teachers' unions; they're enablers.
Teacher performance isn't all; administrators fall in here too. To complete the picture for any doubters, add Project Follow Through, a Congressionally-ordered (1967), nearly billion-dollar comparative evaluation of both progressive and old-style education methods in 120 communities involving 10 thousand elementary students for eight years. The study showed that the old-style teaching programs beat progressive education methods unequivocally in teaching the chosen subjects to children. Nevertheless at the requests of administrators, politicians have subsequently ignored the data to fund the less effective (but more expensive) progressive programs and assure the abandonment of the older -- and proven -- methods. Clearly, the efficient and effective education of children has not been the primary goal of U.S. educators at any level.
That makes sense; as Adam Smith also said:
In every profession, the exertion of the greater part of those who exercise it, is always in proportion to the necessity they are under of making that exertion.
The Times and the Albuquerque study found some outstanding teachers who push themselves -- but they're a minority and not in charge. In every state, teachers have the largest government unions; no one else is allowed to run public education. They have to accept responsibility.
If holding this mirror up to the public schools is troubling, take a good look; since it's certainly not the kids, there's only one presence to reflect. It's the teachers.
Wednesday, February 09, 2011
Gotta love the old rust belt...
By Richard A. McCormack
richard@manufacturingnews.com
Dozens of American cities throughout the industrial Great Lakes states and Midwest have lost half of their populations over the course of one generation -- places like Cleveland, Youngstown, Detroit, Warren, Buffalo and Flint. This is the first time that so many cities have lost half of their populations in such a short amount of time since the Plague struck Europe in 1348, according to Hunter Morrison, director of Youngstown State University's Office of Planning and Partnerships.
Morrison, former director of the Cleveland City Planning Department for 20 years, has studied the health of global cities over the centuries. He has looked for similar trends worldwide in which such a large number of cities have fallen into despair. He studied what happened in Great Britain when deindustrialization struck places like Newcastle, Glasgow, Birmingham, Sheffield and Belfast. He looked at what happened when the Berlin Wall came down in 1989, and tens of millions of people were expected to abandon dilapidated Eastern European cities.
None of those regions experienced what the U.S. Midwest has experienced because other countries understood how vital it was for their cities to remain healthy. They committed themselves and the resources required to keep their old cities vibrant.
No such attitude or policy prevailed in the United States.
In the Great Lakes region, each city and town felt that it was on its own facing its own unique dilemma -- that it was engaged in its own battle for survival -- as well they were, since the cities are not linked in a large megalopolis as they are on the East Coast.
"We all look at these places as separate places and what we are learning now is that it is like being in a family with alcohol or drug dependency," says Morrison. "When you go into intervention and recovery one of the first things you discover is that there are lot of other people who are dealing with the same thing."
That realization is now occurring in many of the "Forgotten Cities" (as they were described by MIT in 2007) or "Weak Market Cities" (as they were described by the Brookings Institute in 2006). But it has been a long time coming and with the current economic downturn it might be too late.
"As I sit in my apartment on Pennsylvania and Park [Avenues in Youngstown, Ohio] until three months ago I was looking out at six abandoned houses," Morrison explains. "Today I am looking out at six vacant lots because in November we had arsonists who burned down all six houses. This is the experience of Youngstown -- disinvestment, destruction of property and values, the weakening of our cultural systems -- the orchestra is struggling because it was dependent on wealthy industrialists and they have disappeared from the scene."
A pandemic of destruction that continues to be rationalized by economists has struck a "nation within a nation -- the entire Great Lakes Nation," says Morrison. This region "grew around a business model that created enormous wealth that rebuilt the postbellum South and built the West, the Northwest and the Southwest. If you go back to the 1930s and Roosevelt, the wealth of the industrial centers was transported via various [WPA] programs to create Charlotte Airport, Atlanta Hartsfield -- the new southern cities were funded by wealth created in the North."
Now that wealth is dissipating, and dozens of cities stretching from upstate New York down the Appalachians to St. Louis through the upper Mississippi to Lake Superior and Duluth, Minn., are in ruin. It is the industrial heartland, the old Northwest Territory -- the alternative to the slave economy of the South and the Anglo-centric economy of the East Coast. It is a section of the country that still maintains a certain class structure that the rest of the country does not have. It grew up around immigrants, industrialization and heavy investment in infrastructure to move products to more densely populated areas of the country: canals, locks, railroads and highways that fostered further industrial investment.
Cities grew up around mills and factories and along rivers. Most of them developed core industries and monocultures. But suburbanization in the 1950s started to drain the cities. Unionization and good wages allowed residents to live the American dream and move to the suburbs away from the smoke. In the 1960s, investment in capital equipment and productivity improvements started replacing workers with machines. Featherbedding rules (hiring more workers than is required) were revoked. The rush of immigrants from places like Poland and Ireland dried up and the cities emptied out. Today, young people leave and are never expected to return.
"I started to read histories of the Plague years and I realized in these accounts that in the course of a year or two, cities would lose half of their populations," says Morrison. "It happened all over Europe, from the Urals all the way to England. Nothing on that scale has occurred since except in the United States."
So Morrison went to England and visited Glasgow and Newcastle, cities that were facing similar difficulties of deindustrialization and abandonment. What he found was significant differences in national policies between those of Britain and the United States. "In the 1980s on a national level, the British government determined that inward investment was essential to keep the population of these cities from flooding into London and coming to the Southwest of England and overwhelming that infrastructure," he explains. "So there was a deliberate effort to make places like Cardiff, Birmingham and Newcastle viable. Is it perfect? No. But there was a clear understanding that the UK existed as a system of communities not as a beggar thy neighbor situation."
Similar policies were implemented by the European Community with the opening of Eastern Europe. Huge investments flowing eastward for more than a decade effectively transformed communities and allowed local people to accept change and "see a new future," says Morrison.
"So when you go to Newcastle and you talk to the Geordies up there, they are still working class, they still have Newcastle Brown Ale and they still speak their own language. They still love to party -- they promote Newcastle as the best party city in Europe. They love their football. They haven't ceased to be working class. They are tough as nails, but they are proud that their biomedical community is one of the best in Europe. They are proud that their universities have been transformed and they have come to a point where the value proposition is they have a proud past and a promising future. It didn't happen in isolation. What you see in the United States is individual communities trying to figure this out on their own. But individual communities can't do it on their own."
America is more interested in building Baghdad and Kabul than it is in assuring the viability of its own cities. "I grew up in Cleveland," says Morrison. "It is disheartening. There is a lot of energy, hope and faith. But it's disheartening. It's like having diabetes or lupus. It's a chronic condition that never seems to get better. You take one step forward and two steps back. If there are going to be another 100 million people in this country by 2050 and they are all going to the coasts and Florida, how are those places going to accommodate that growth in fragile ecosystems? You have to step back and ask if it is in the national interest to continue to pump more people into a place like Florida to accommodate that growth."
What needs to be done to turn the situation around?
"A way to address a problem is to recognize that you have one," says Morrison. "It's not Cleveland's problem or Elyria's problem. It's not saving Cleveland. It's the way we operate as a nation -- a nation of places. What has been brought to the table is that deindustrialization is something that is good because it is cleaner. But it is nothing of the sort. It is a diminution of wealth creation. If deindustrialization was such a good thing, then why is China industrializing? The reason you do manufacturing is to create wealth by adding value. It's real simple. We've gone away from that."