This job report, like all its predecessors, is utter nonsense! Economist Paul Craig Roberts deconstructed it with the deftness of a knife slicing through warm butter: http://www.paulcraigroberts.org/2015/11/06/another-phony-payroll-jobs-number-paul-craig-roberts/.
He observed: (1) 145,000 of the presumed 271,000 jobs were added by the
birth-death model, which as he puts it "provides an estimate of the net
amount of unreported jobs lost to business closings and the unreported
jobs created by new business openings" & which presumes a normally
functioning economy (whatever that is). The mistake is to overestimate
the number of jobs created by new businesses & to underestimate the
number of jobs lost through business closings. Eliminate this
assumption, & we are left with 126,000 jobs, not 271,000.
(2) Of those, what kinds of jobs were they? According to the BLS itself
none were in manufacturing or similar productive activity. They were in
low-paying domestic services, retail sales, personal services, waiters,
waitresses, bartenders, temp help, & similar products of the
post-NAFTA era: many of them part-time. You will not retain a first
world economy with such jobs, which do not generate sufficient income to
support a household of four unless both parents are each working,
probably at two jobs each. Many people are staying afloat only by
allowing themselves to go massively into debt (witness college /
university students many of whom will be debt slaves for the rest of
(3) The problem with announcing a 5% unemployment rate is that it only
counts as unemployed those who are (a) not working; & (b) have
sought work in the past four weeks. It does not count "discouraged
workers." The BLS itself has other measures of unemployment that will
count as unemployed those who have sought work in the past six months;
that number is in two digits. If you base the figure on the labor
participation rate (at its lowest since the 1970s recession & almost
down to projected Great Depression levels), the actual unemployment
rate is around 23%, Roberts notes.
A few "disclaimers" are in order. Roberts was Assistant Treasury
Secretary under Reagan, then was a co-editor at the Wall Street Journal,
& is the author or co-author of many books on economics &
public policy, if these count as credentials. But in 2004 he penned
(with Chuck Schumer) the landmark heresy "Second Thoughts on Free Trade"
(NYT) which got him kicked out of the economics community, for which
the "benefits" of "free trade" are articles of religious faith. He's
continued as best he could to tell the truth about the post-NAFTA
decline of the U.S. economy & the fall of what was the largest
financially independent middle class in history, even though this means
publishing on his own website & in alternative media, & often
being dismissed as a "conspiracy theorist" (i.e., a person who does not
trust government numbers any further than he can throw them).
We'll see if the Federal Reserve raises interest rates based on these
ludicrous job numbers & precipitates the next step in the long term
decline of the U.S. economy (economists will call it a recession,
naturally). Or will it be QE4, to keep the present bubble on Wall Street
afloat at least past the Nov 2016 election?
Saturday, November 7, 2015
Tuesday, January 6, 2015
IRS Changes Rules On IRA to IRA Rollovers:
In a recent US Tax Court case, Bobrow v. Commissioner, the Tax Court ruled that all IRAs of a taxpayer should be looked at together when it comes to the one-rollover-per-year rule. Based on IRS guidance, IRAs include every type of IRA (traditional, Roth, SEP and SIMPLE). Prior to The Bobrow case, the IRS had applied this only on a per IRA basis.