Tuesday, July 26, 2016

Income Inequality....How About Just a Little Income?

At last night's Democrat convention the crowd exploded with pent-up electric enthusiasm as they cheered politician after politician striding across the stage, proclaiming the night of UNITED TOGETHER and spoke on the issue of income inequality.  Tuesday, they plan to address this topic again.

So, let's recognize and celebrate the accomplishments of the last 8 years of a Presidency that UNITED us and trampled out the dreaded income inequality.  Let us all rejoice at an unemployment rate that has fallen to 4.9%!
Doesn't everything feel so much better in America?

Or, at least the government is telling you everything is better....

In Jan 2008, when President Obama took office, the number of Americans in the workforce was over 136 million and unemployment was at 5%.
In April 2016, the unemployment rate hit 5% again.  SUCCESS!  Our economic woes are solved!!!  We have achieved, what economists call, full employment....But....there's a little problem....

Again, in 2008, with a 5% unemployment rate, there were 136 million workers employed.  In order to keep up with the number of new workers entering the labor force, we must add 145,000 jobs....each MONTH 1.
With 100 months spanning from January 2008 to April 2016, that means we needed 14.5 million new jobs created to once again reach the  5% unemployment rate.

Or, (doing the math) 136 million + 14.5 million = 150.5 million workers.  We needed to have about 151 million workers in the labor force to reach a 5% unemployment rate. But, by April 2016, we only had 144 million people working (psst...look at the red chart).  We are SEVEN and a half MILLION jobs short of where we should be.

How is this possible?

The Obama Administration and its defenders claim that as more older folks retire out of the workforce we don't need to create as many jobs to reach 5% unemployment.  They go on to say that younger workers are staying in school longer and so they are not participating either.  And, in fact, there are fewer workers in the labor force.  The labor participation rate in this country is as low as it has been since 1978.
  Here's a funny thing about the unemployment rate that is NOT true of the labor participation rate  --  when counting unemployment numbers, the fedral gummint can exclude anyone who has given up looking for work.  So, when calculating unemployment, they can just ASSUME you don't want to work and take you out of the equation.  Sounds like a thumb is on the scales...
   The labor participation rate, however, counts everyone over 16 years of age, unless serving in the military or doing time in prison.  And so, if the older folks retire earlier, then yes, the labor participation rate can fall while unemployment also falls.  And, if young workers stay in school rather than work, they can be removed from the unemployment measure as well.

Yeah, well, there's a little snag with this rationale from the Obama Administration....t'ain't true.
Both Pew Research 2 and the American Enterprise Institute 3 actually found that older Americans (measured as over 55 years of age), are actually staying in the labor force LONGER...not leaving sooner.  And, as far as the young -- maybe they are staying in school because they cannot find a job and don't want to start paying back their student loans just yet.  In other words, the drop in labor participation isn't caused by people voluntarily staying out of the labor force -- it's because the Obama economy sucks.  (Ooops, sorry for begin so indecorous.)

This post goes a little "down in the weeds" but, I hope it clearly shows that we are being lied to about the "brilliant" Obama economy.  We are also being lied to regarding how going back to the "old ways" is bad for the United States.

For a quick history lesson to show you why the old ways are sometimes the best ways look back at the labor participation chart.  (Remember that the military and inmates are not counted.)

- From 1950 to 1953 we were involved in the Korean War.  At the end of that war, there is an uptick in labor participation as G.I's return to work.

- Then, in 1955, we begin our involvement in Vietnam.  That pleasant little soiree lasts until 1975. Again, another sharp uptick occurs as soldiers enter the labor force, but then, Jimmy Carter slows the economy and the rate stabilizes

-  Ronald Reagan is elected in 1980.  His tax cutting policies create incredible growth over his 8 years.  At the same time, the Democrat Congress spends like drunken sailors and the deficit expands.

-  1988 George H.W.Bush is elected.  He breaks his pledge to not raise taxes -- the economy sputters again.

-  1992, Bill Clinton is elected and promptly raises taxes...the economy continues to sputter for four years 4 until Newt Gingrich leads a Republican takeover of Congress.  Gingrich and Clinton work together to cut taxes and cut spending.  The economy revives, wages rise, the deficit drops.  At the same time, Clinton adopts the socialist policy of Jimmy Carter known as the Community Reinvestment Act (CRA).  This move eventually leads to the collapse of our economy in 2007 5,6.

-  The attacks on 9/11 hit us hard and the economy slows.  George W. Bush cuts taxes and reduces unemployment to 4.4% by December 2006.  Democrats are elected to the House and Senate.  They immediately raise the minimum wage.  Unemployment begins to rise through 2007.

- In 2007, the CRA machine set in motion by Bill Clinton crushes our economy and the housing bubble explodes.

-  In 2008, Barack Obama is elected.  The economy is slow and unemployment hits its peak during his Presidency.  Obama convinces Congress to allocate $787 Billion to help revive the economy.  This creates a structural deficit that has doubled the national debt during Obama's tenure and the labor participation rate falls back to the rate of Jimmy Carter.  Good job, skippy.

Really.   Obama thinks you're dumb enough to believe the old policies of Reagan were bad for the economy.

Now you have an historical timeline to refute the incessant stream of lies coming from the party of hacked emails and fake unemployment reports.


1,  http://blogs.wsj.com/economics/2016/04/07/the-new-magic-number-for-monthly-job-growth-145000/

2.  http://www.pewresearch.org/fact-tank/2014/01/07/number-of-older-americans-in-the-workforce-is-on-the-rise/

3. https://www.aei.org/publication/does-lower-labor-force-participation-mean-the-5-us-unemployment-rate-is-a-phony-number/

4. http://dailysignal.com//2012/09/07/two-huge-flaws-in-the-legend-of-the-clinton-economy/


6. http://www.investors.com/politics/perspective/faults-community-reinvestment-act-cra-mortgage-defaults/

Tuesday, July 12, 2016

Insidious Enslavement by Gummint Cheese

Why is there so much turmoil between Black Americans and police agencies?  Some people think they know, and many of them are wrong.  The answer to the question is...... “gummint cheese”. 

Follow me for just a minute here....

FACTOID 1: Black males  commit more crimes per capita than other parts of the population.
FACTOID 2: 40% of all police officers killed are killed by Black males though Black males are only 6% of the population.

   Why?  What are the reasons or causes for this higher level of criminality?  Is it that Black males are genetically more prone to be criminals?  Not at all.  Our own social policies drive poor inner-city Black males in that direction.  It's not all Black males; it's predominantly poor inner-city folks who comprise most of this statistic.

Imagine this…a foreign power takes over our country.  In order to placate the masses, we are provided subsidized housing, free food through the use of vouchers, assistance for utilities (up to 100%), medical care, and other support for which we pay nothing.  There is one catch though, we cannot earn more than a specified amount of money (as low as $1,276 per month 1), or we begin to lose these benefits, one by one.  Wait, there’s another catch –  there is a rumor that a woman cannot have a man living in the house with them.

This isn’t a fictitious takeover of the United States; it is what happens in our inner cities. 

This is our modern welfare system.  Is this true?  Must a man be “out of the house” to qualify for welfare in the United States?  Does welfare end, when families begin?  Not necessarily, but the belief still exists in many communities.  Here’s how it started…

The “man in the house” rule was written into the 1935 Aid to Families with Dependent Children welfare law.  AFDC was intended to help women and children.   If a man lived in the house, they needed to get out and work to support their family.   In 1968 this part of the law was ruled unconstitutional.  The lawsuit was brought by children of a mother who had been refused welfare because she had a periodic, but consistent boyfriend.2  So, how did the law change after the Supreme Court decision?  Women could still receive benefits, with a man in the house, as long as the man was not considered a parent! 3


That’s right, a man could co-habitate with the woman AS LONG AS HE WAS NOT CONSIDERED A PARENT TO THE CHILDREN!!!  While this no longer holds true, the idea was implanted in the last generation. 

What effect could this have had?  We can only point to correlations, not causation, but consider this…. 
- In 1890, 80% of Black homes were headed by two-parents. 
- By 1970 that figure had dropped to 64%. 
- Just 20 years later (1990), the rate of two-parent Black families had fallen to 38%.

Male children, much more capable and prone to violence, have been losing role models thanks to our welfare system 4.  Unfortunately, many of these male children are Black...but they could just as easily be White, Asian, or Middle Eastern and suffer the same fate (see France for an example of Algerian ghettos).

So, back to our occupied country example… if you are limited in what you can earn, how do you obtain those things you WANT to have?  New Nike tennis shoes, a nice jacket, a PlayStation?   If others can have those things, why can’t we?  Stymied from earning money legitimately, Social Strain 5 tells us that some will obtain those material goods through “unconventional means”6.  An underground economy and criminality are two of the more deviant means.  If you can’t earn money, you can hustle for it.  You might sell drugs, you can steal.  In the 1980’s there was a wave of inner city children harming other children to steal their Nike Air Jordan tennis shoes.  If you Google “killed for Air Jordan’s" you’ll find this is still going on.  This type of behavior becomes the new norm in some disorganized communities (The case of Trevon Johnson 7).

As a community accepts deviance as a legitimate means to an end, social disorganization forms 8.  Social Controls (the social pressure inside a community that helps to regulate behavior) diminishes.  Churches, schools, and police were the primary forms of social control.  But, remember that inner cities have government-imposed lower incomes thanks to the welfare system.  The tax-base is lower and so schools had less money to provide an adequate education.  Churches become less influential and seen as judgmental against those who embraced these new norms.  Gangs form new "congregations". 

 The last form of social control, policing 10, is seen as an impediment to achieving those things we believe we deserve.  In these strained communities, police are charged with trying to keep the community safe.  As other social controls fail, they are often the option of last resort.  At the same time, gangs and community organizers are trying to diminish police impact by waging a turf war against officers.  Even Black officers aren’t respected in this environment.

This is the highly charged atmosphere that leads to clashes in the inner cities.  While not all residents of disorganized communities embrace deviance, a significant enough portion does so and rejects any controls that would heal their neighborhoods.  Those who are contacted by the police in these neighborhoods may be law-abiding, but police must take every precaution inside these war zones -- sometimes with disastrous consequences.
Law-abiding residents may be trying to escape this environment, but some are hamstrung by the reliance on government programs to meet their day-to-day needs.  SNAP, TANF, Housing Assistance, and even WIC’s free gummint cheese 11 are insidious ways to make a population dependent on their elected officials for their sustenance.   In return, the population continues to vote for those politicians.

Rather than fix the problem, they keep these residents subjugated.  Sounds a lot like the days of the plantations.

Welfare policies, well-meaning, helpful to some, were the catalyst in this world of unintended consequences.

The only way to fix this issue is by reforming the economies of the inner cities.  Jack Kemp once proposed "enterprise zones" to make this happen.  Even President Obama agrees with this approach 12.  As people take pride in earning their living, their right to self-determination is enhanced.    Pride in the community will stem from the pride of ownership.  With money to spend, businesses will return.  Disorganization will diminish, as will the need for the poor to embrace "unconventional means" and eat gummint cheese.

1. http://www.fns.usda.gov/snap/eligibility
2. King v. Smith, 392 U.S. 309, 88 S. Ct. 2128, 20 L. Ed. 2d 1118 (1968)
3. http://tinyurl.com/hhs9jn2
4. http://articles.baltimoresun.com/1992-05-18/news/1992139210_1_unintended-consequences-poor-families-social-welfare-policies
5.  Merton, R.K. 1957. Social Theory and Social Structure, rev. ed. New York: Free Press.
6.  https://en.wikipedia.org/wiki/Strain_theory_(sociology)
7.  https://www.youtube.com/watch?v=2ZGSQXmJPaQ
8. https://en.wikipedia.org/wiki/Social_disorganization_theory
9. Velez, M. B. (2001). The Role of Public Social Control in Urban Neighborhoods: A Multi-Level Analysis of Victimization Risk. Criminology, 39, 837–864.
10.  Kappeler, V. and Gaines, L. (2015). Community Policing: A Contemporary Perspective, 7th ed. Anderson Publishing
11. http://www.fns.usda.gov/wic/wic-food-packages-regulatory-requirements-wic-eligible-foods
12. http://bigstory.ap.org/article/76f8ca143df34aa79103275cb3ed080a/obama-administration-designates-9-new-promise-zones