Saturday roundup

The  headline for the Washington Post's story about May unemployment numbers had a hold-off-on-the-celebration tone to it, but it turns out to be a case in which reading the actual article greatly diminishes the sensationalism:

. . . the Washington Post is out with a story titled “A ‘misclassification error’ made the May unemployment rate look better than it is.  Here’s what happened.”

The story itself takes the shock out of the headline. Nothing went wrong with the May unemployment rate in particular. There’s just an ongoing, and incredibly boring, technical difficulty stemming from the pandemic.

Basically, the unemployment rate is calculated from surveys the government conducts; people are classified as employed, unemployed, or out of the labor force depending on the answers they give to a slew of questions. But these questions were not written with a pandemic in mind. For instance, if someone is not working because their business was idled, are they considered temporarily laid off (and thus unemployed), or are they employed but not working, like someone who’s on leave?

These workers are supposed to be counted as unemployed, but they’re not always getting entered into the system that way:

The BLS instructed surveyors to try to figure out if someone was absent because of the pandemic and, if so, to classify them as on “temporary layoff,” meaning they would count in the unemployment data. But some people continued to insist they were just “absent” from work during the pandemic, and the BLS has a policy of not changing people’s answers once they are recorded. It’s how the BLS protects again[st] bias or data manipulation.

How does this affect the numbers? Basically, it just makes the official unemployment rate a little lower during this period. After adjusting for the sudden rise of “absent” workers, the March, April, and May unemployment rates are about 5.4 percent, 19.7 percent, and 16.3 percent, respectively, instead of the official figures of 4.4 percent, 14.7 percent, and 13.3 percent. The unemployment rate still fell a bit in May when everyone expected it to rise, and it’s still good news.

Hey, I warned you it was boring.

Saving Elephants, a website I've recently discovered and become a big fan of, has the second part of a series on how belief in an enduring moral order is the crux of conservatism. The latest installment explores how we can know that the order exists a priori:

Kirk summarized two methods of discerning order outside of reason. The first was prescription—"those ways and institutions and rights prescribed by long—sometimes immemorial—usage”—and the second was tradition—“received opinions, convictions religious and moral and political and aesthetic passed down from generation to generation.” Both methods operate from a basis of faith—namely, faith in the notion that order can be discerned via revealed truths or those things shown to be true through generations of trial-and-error. The conservative who believes in God might go so far as to say that the only reason humans would ever conform to order—which grates against our sin nature of appetite and pleasure-seeking—is that God has put inside of each of us the capacity for both discerning and obeying that order.

 Part One is here. Poke around the site. Great podcasts and resources for learning more about the foundations of conservatism.

This one's pretty big and may warrant its own post as things develop: The VSG has issued a directive to draw down U.S. troops in Germany by 9500, and, as of mid-day Saturday German time, had not notified that country's government.

Senate Republicans fear that the VSG might take their majority in that chamber down with him in November. Well, people, it's a little late in the game, but you could still demonstrate some spine and forthrightly declare that you're not in his camp.

Bracing piece by Alexandra Hudson at The Bulwark on how the riots press upon us the truth that it never takes all that much to sever the gossamer thread by which civilization hangs:

The violence and destruction that emerged from the protests, and the speed with which they emerged, should cause us to reconsider some of our assumptions—some of the fundamental social facts we misunderstand or take for granted. In particular, the events of the past week provide a valuable reminder of the fragility of our civilization and our way of life; they refute the notion of inevitable human progress; and they underscore the way in which a truly civilized society is underpinned by a respect for equal human dignity—without which we are lost.

First, the fragility of civilization. Many of us ordinarily and unthinkingly assume that the civilization—and perhaps even the peace and prosperity—we enjoy are somehow natural, the default state of things. Students of history, of course, know otherwise. And even before the events of the last week, 2020 has been an education in overturning such comfortable assumptions.

The riots remind us that civilization and community are not foregone conclusions. They do not simply spring up from the earth, but are the work of centuries; they are the fruit of institutional and social arrangements that must be cultivated and nurtured in our every interaction, every day. Democratic governments in particular depend upon most individuals choosing to follow the law, respect their fellow citizens, and act for the common good. As we saw over the last week, when even just a few citizens choose not to do so, chaos ensues.

Second, the riots also refute the conceit of human progress—the notion that we are continually evolving to have moral and ethical codes superior to those of our forebears. In his autobiographical book Surprised by Joy, C.S. Lewis referred to this way of thinking as “chronological snobbery”—“the uncritical acceptance of the intellectual climate common to our own age and the assumption that whatever has gone out of date is on that account discredited.”

Whether today or two millennia ago, the right conditions can unleash the worst of human nature. We remain as vulnerable to fear and rage and tribalism and a “mob mentality” as we have ever been. Social science research suggests that when people act in groups, individuals suppress their moral codes and dispel some of the social and societal constraints that otherwise inhibit violence and destruction. Relatedly, research also suggests that the sense of self—and the individual moral codes that come with it—are diminished in crowds. Anonymity is easier to maintain in large groups, and responsibility is easier to spread across large numbers.

Thanks especially to advances in technology, our overall standards of living have risen dramatically in the last several hundred years. But it is a mistake to think that because our species is improving materially, we are also improving socially and morally. The chaos we observed across the country over the last week reminds us of the truth of an unchanging human nature. 

That last point, by the way, is the point of Part One of the series at Saving Elephants.  We keep getting fancier in terms of comfort, convenience and amazing gadgets but we're still the same critters we were when we got kicked out of the garden of Eden.

The economy is rockin'

My last few posts have portrayed the health of the nation in less than sunny terms, but on one undeniably important level, it's doing really well:

The jobs market turned in a stellar performance in November, with nonfarm payrolls surging by 266,000 and the unemployment rate falling to 3.5%, according to Labor Department numbers released Friday.

Those totals easily beat the Wall Street consensus. Economists surveyed by Dow Jones had been looking for solid job growth of 187,000 and saw the unemployment rate holding steady from October’s 3.6%. The decline in November’s jobless rate came amid a corresponding 0.1 percentage point drop in the labor force participation rate, to 63.2%.

Health care, leisure and hospitality, business and professional services, manufacturing. Low unemployment for pretty much every demographic that gets measured.

The specter of recession in the next year has faded.

Trumpists are going to crow about this, and why wouldn't they? Compounded with the fact that Dems' narrowing field of presidential candidates is utterly unexciting, save for the trembling their wrecking-ball economic policies induces in the voting populace, and the fact that impeachment is going to fizzle once it gets to a Senate trial, it only makes sense.

But let us remember that when the economy does great it's because government got out of the way.

What we should hope for is that the likes of Larry Kudlow continue to have Trump's ear and tell him, "Yeah, chief, getting government out of the way will make you look like a winner."

We'll have to put up with the VSG being insufferable on Twitter, but that will happen in any event.

And it will take some time for the VSG's protectionist bent to reveal its full effect. Farmers, in particular, are a nervous lot these days.

And remember that material well-being is not the full picture. It does not tell us anything about how God views our having given him the middle finger. History shows that continuing down that path leads to a reckoning.

But economically, there's no denying that the outlook is vibrant.

What happens when you increase freedom

You get economic numbers like these:

The numbers: The U.S. created 263,000 new jobs in April to help drive the unemployment rate down to a 49-year low, the latest cue pointing to a rebound in the economy after a slow start in the new year.

The increase in hiring was concentrated at white-collar businesses, construction and health care. The only sector to suffer a big drawback was retail, whose employment fell for the third straight month.

The increase in new jobs easily topped the 213,000 forecast of economists surveyed by MarketWatch. 

The unemployment rate, meanwhile, slipped to 3.6% from 3.8% in March, marking the lowest level since December 1969, the Labor Department said. The decline in April stemmed from nearly a half-million workers dropping out of the labor force, but by the any measure, layoffs and unemployment are scraping a 50-year low. 

The amount of money the average worker earns, meanwhile, rose 6 cents to $27.77 an hour. 

The increase in pay in the past 12 months was unchanged at 3.2%. While hourly pay is rising at the fastest pace in nearly a decade, the increase in wages appears to have leveled off. That ought to ease any worries at the Federal Reserve about rising wages triggering a sharp increase in inflation.

What happened: Professional and business services added 76,000 jobs, continuing a torrid steak under which total employment has risen by more than a half million in the past year. 

Construction companies boosted payrolls by 33,000, the second straight solid gain. Health-care providers hired 27,000 people and employment in social assistance climbed by 26,000.

Manufacturers added a scant 4,000 jobs after no increase in March. Hiring has been very weak this year as companies struggle with stagnant exports and the effects of U.S. trade tensions with China.

Government jobs rose by 27,000. The federal government is already starting to hire workers for the 2020 Census.

Retailers, on the other hand, cut 12,000 jobs as traditional brands continue to lose ground to internet rivals. 

Although the economy is still pumping out plenty of new jobs, the rate of hiring has slowed. The U..S. added an average of 169,000 jobs in the past three months, down from a three-year high of 232,000 in January.

Still, the U.S. is on track to add 2 million new jobs for the ninth straight year.

It's a direct result of government backing off from interfering in human economic activity. Letting people keep more of their own money.

This is not a Trump shill piece. Credit is due him for listening to advisors who actually understand the principle (freedom) involved, as well as to those in Congress who understand it, but the brunt of the credit goes to the enterprising people of this country who were itching to be productive.

The Very Stable Genius has no consistent set of economic principles - today's edition

  . . . which means his successes, such as the great jobs report released this morning (unemployment at an 18-year low) are of a hit-and-miss nature rather than being the result of a coherent vision.

Lowering taxes, of course, is always good, and the current employment picture is a direct result of the fundamental principle that people and organizations ought to be able to keep all their money save what government can convincingly justify taking from them. When they keep their own money, they tend to put it to productive use.

But these tariffs slapped on European, Canadian and Mexican goods are about as boneheaded a move as could be asked for.  It is already catalyzing what looks for all the world like a trade war.

The EU responded by saying it will impose retaliatory tariffs on US goods and take the US to the World Trade Organisation’s “trade court” to get Mr Trump’s policy declared illegal.

Britain branded the move as "absurd" with Liam Fox, the international trade secretary, signalling the UK could take retaliatory measures.

The announcement from the US commerce secretary, Wilbur Ross, comes as Mr Fox's department seeks to lay the groundwork for a post-Brexit trade deal with Washington.

Steel imports will now be hit with a 25 per cent US levy. Aluminium exporters will face an additional 10 per cent charge. The Trump administration claims these are justified on US “national security” grounds.

The EU has previously threatened retaliatory duties on US whiskey, jeans, orange juice, peanut butter and other products if the US followed through on its metal tariff plans. 

The chorus of sane voices strongly objecting is loud and forthright:

"This is dumb," Nebraska Sen. Ben Sasse said. "Europe, Canada, and Mexico are not China, and you don't treat allies the same way you treat opponents. We've been down this road before— — blanket protectionism is a big part of why America had a Great Depression. 'Make America Great Again' shouldn't mean 'Make America 1929 Again.'" 

House Ways and Means Chairman Kevin Brady said the tariffs "are hitting the wrong target" that "puts American workers and families at risk, whose jobs depend on fairly traded products from these important trading partners. And it hurts our efforts to create good-paying U.S. jobs by selling more 'Made in America' products to customers in these countries." 

Sen. Orrin Hatch, a reliable ally for Trump, said the tariffs amounted to "a tax hike on Americans and will have damaging consequences for consumers, manufacturers and workers." 

"We should build on our success in overhauling the nation's tax code with complementary trade policies that, rather than favoring one narrow industry, make all sectors of the US economy more competitive," Hatch added.
Even House Speaker Paul Ryan dismissed the decision as counterproductive. 

"I disagree with this decision. Instead of addressing the real problems in the international trade of these products, today's action targets America's allies when we should be working with them to address the unfair trading practices of countries like China," Ryan said in a statement. "There are better ways to help American workers and consumers. I intend to keep working with the president on those better options." 

Heritage Foundation economist Tori Whiting told Business Insider that the move by the Trump administration represented a "tremendous misstep" that would harm American companies. 

"Sixteen percent of our steel imports come from Canada, our closest neighbor. Roughly 60% of our aluminum imports come from Canada, our closest neighbor," Whiting said. "And that's not only going to reduce supply of those products for manufacturers here in America that use them in their production, but it's also going to result in the prices for those products increasing even more domestically — not just for those companies that buy imports but also for companies that buy domestically." 

"I think that anytime you are imposing tariffs on your friends, it's a poor move, especially when we want these other countries to help us with China," Whiting added. "And dealing with trade complications between the US and China, we want the EU and Canada and Mexico to help us with that. So I wouldn't necessarily say that this is the beginning of a trade war. ... But I would say it's not conducive to maintaining a long-term relationship with those countries and having them help us in other areas of trade." 

Other tariffs, like one Trump is considering on foreign cars, caused similar levels of concern in Washington. 

"The announcement that foreign automobiles might be subjected to similar tariffs does not bode well for the economy or for the Trump economic record," wrote American Enterprise Institute Resident Scholar Benjamin Zycher in a Wednesday op-ed for National Review. "Because there is no obvious limit on the national-security rationale for protectionism, this policy will engender substantial uncertainty in the economy." 

But rather than these voices, it seems it's the rank protectionist Peter Navarro who has the VSG's ear:

“This particular action on steel and aluminum is not about unfair trade practices. It's about national security… without an aluminum steel industry, we don't have a country,” Navarro said during a FOX Business interview on the “After the Bell” program on Thursday.

Navarro added that imposing tariffs on the nation's closest allies is an opportunity to create jobs.

“All we are trying to do here with the 232 tariffs is to provide our domestic industries an opportunity to earn a decent rate of return and invest in this country,” he said.

Peter, the number of jobs created for steel and aluminum workers is dwarfed by the number lost in industries downstream in the supply chain.

The VSG is winging it, which seems to be working out okay for the moment, but what happens right around the bend in this nationalist-populist era is anybody's guess.

 

Bottom line: don't even mention the word "government" when looking for solutions to what are basically cultural problems

Steven Greenhut has a piece at The American Spectator about a plan afoot in Stockton, California - the city that famously went bankrupt a while back - to solve its myriad social and economic ills with a universal basic income.

It's a most unappealing municipality at present:

KQED News pinpoints some of Stockton’s enduring problems: “Wage stagnation. Rising housing prices. Loss of middle-class jobs. The looming threat of automation.” We can add some others: A dreadful violent-crime problem, trash-strewn streets, a vacant downtown that could be a movie set for a third installment of Blade Runner, crumbling public services, overpaid public employees, high taxes, and a troubled city budget.

The article is good. It covers nearly all the right bases: how the universal-basic-income "solution" would disincentivize the search for any kind of work, diminish human dignity and, as a practical matter, not provide enough to actually live on to recipients.

I'm pleased to see that he acknowledges that over the years even conservative wonks such as Milton Friedman have considered whether there were any possible merits to the idea. He could have included James Pethokoukis at the American Enterprise Institute as well. 

Our society needs intellectuals - that is, intellectuals who put clarity front and center among their standards and are driven by free-market principles - but there is a temptation to which many of them succumb as they occasionally emerge from the reams of data in which they bury themselves. They tend to think it's clever to kick around kinky ideas that run counter to their basic premises. Such is the case here.

Pethokoukis, like Friedman before him, does adamantly insist that a UBI would only work if it replaced every other kind of transfer payment: Social Security, Medicare, housing subsidies, SNAP certificates, etc.

I don't care if you came up with the most airtight way of achieving this, it would still be kinky.

What I mean is, that it's a scheme that still involves government.

Bad and wrong from the get-go. As I said in a post the other day about climate-"science" tyranny, the faultiness of these kinky ideas stems from looking at these things on a macro level. It leads policy wonks to start asking, "What are we going to do about these people?"

Wrong way to come out of the gate. Let's not be a "we" about this, and let's not concoct some kind of group called "these people." There are individual human beings, with talents, aspirations, dignity, lack thereof, foibles and maybe even pathologies. They are each free, or we must presume so, to chart their own destinies. To come up with some macro "solution" to what is essentially their business is to rob them of the most basic kind of dignity we each and all ought to be accorded.

How does this apply to the Stockton situation?

If I lived there, I'd decide between coming up with some radically creative entrepreneurial idea to start turning my own life, and my community's life, around, or getting the hell out of there. But I'd insist on it being my own idea and my own decision.

The way economics works in Freedom-Hater Land

Labor Secretary Tom Perez has the solution to the nation's record-low labor force participation rate:  expansion of paid leave!

All kinds of moms must be out there, just sitting at their kitchen tables, brimming with in-demand job skills and burning with desire to make meaningful contributions, waiting to hear about opportunities to sign on to some productive organization and then come back to the kitchen  table, paycheck in hand!

Yet more layoff announcements

Vestas Wind Systems (This one is another green outfit subsidized with your tax dollars)

Harper Collins (nearly 200 "family-sustaining" jobs)

Hawker Beechcraft (about 410 jobs)

Turns out Jay Carney is as koo-koo as San Fran Nan

Says unemployment checks creat jobs.  Even sniffs at Laura Meckler of the Wall Street Journal for challenging him on it, calling it "entrance-exam" self evident.

Hoo, boy.  We are up to our eyeballs in trouble.