The Post Which Should Not Have To Be Written: Labor Participation Rate in the U.S.

Presidential candidate Willard Mitt Romney:

“So it looks like unemployment is getting better, but the truth is, if the same share of people were participating in the workforce today as on the day the president got elected, our unemployment rate would be around 11 percent,” said Romney. “That’s the real reality of what’s happening out there.” [ABC]

First the birthers, and now the jobbers.  After campaigning vigorously on the theme the President’s economic policies are failures because the unemployment rate was 8% or above, when the BLS reported a downtick to 7.8% the GOP found it incredible.

Candidate Romney may be referring to the labor participation rate, also calculated by the Bureau of Labor Statistics — which some of his surrogates are now disparaging.   The labor participation rate in November 2008 was 65.8%, admittedly higher than 63.6% in the latest report.  However, it was 66% during the month before the 2008 election.  In fact, as the chart indicates, the labor participation rate has been steadily declining since January 2007.

There is also the “Alternative Measures of Labor Underutilization” report, otherwise known as Table A-15.  U1 refers to those who have been unemployed for 15 weeks or longer as a percentage of the civilian labor force; in September 2011 the number was 5.3%, in September 2012 the number dropped to 4.3%.  How about the U2′s — those who have completed temporary jobs and are now looking for work?  In September 2011 the number was 5.2%, in September 2012 the number reported was 4.2%.

Well, maybe it’s in the U4 number, since they didn’t like the 7.8% in the U3 numbers?  In September 2011 the U4 percentage was 9.6%; in September 2012 the U4 the percentage dropped to 8.3%.  OK, if it’s not the U4, then how about the U5 numbers?  U5 reports the unemployed plus discouraged workers, and in September 2011 the U5 figure was 9.6%, by September 2012 the percentage dropped to 9.3.

OK, if it’s not the U1, the U2, the U4, or the U5, maybe it’s the U6? (That’s the number of people who aren’t working for any reason.)  Nope.  The U6 report for September 2011 was 14.8%, dropping to 14.7% by September 2012.

Click on the image to go to the original chart:

In short, no matter which numbers one reports the figures illustrate what we’ve known all along.  Employment is a lagging indicator.  And, those who live in a fact-free universe are often reduced to conspiracy theories to refute news they’d rather not hear.

Supreme Court Rules In Favor Of ACA: Heller Kicks The Gator Ade Bucket

Senator Dean Heller (R-NV), or as the Fine Wordsmith The Gleaner calls him, “The Senator By Appointment Only,”  wants us all to know that he is not pleased by the Supreme Court’s ruling on the Affordable Care Act and Patients’ Bill of Rights.

“Nevada families and businesses are already struggling in this current economic environment, and the President’s job-killing healthcare law is making a difficult situation worse. Congress spent more than a year debating healthcare legislation while Nevadans were losing their jobs and their homes. Obamacare made sweeping changes to Medicare, impacting thousands of Nevada’s seniors, and cut the program by a half trillion dollars.

“This law has now been affirmed as a colossal tax increase on the middle class, and its excessive regulations are stripping businesses of the certainty they need to hire at a time when Nevadans and the rest of the country are desperate for jobs. The President should work with Congress to find real solutions to healthcare reform so the excessive mandates and taxes in this law do not further add to our national debt or continue to stifle economic growth. This onerous law needs to be repealed and replaced with market-based reforms that will provide greater access, affordability, and economic certainty to our nation,” said Senator Dean Heller.

Let us parse:

Heller: “Nevada families and businesses are already struggling in this current economic environment, and the President’s job-killing healthcare law is making a difficult situation worse.”

Coupling “job-killing” and “healthcare” is a Republican construction which doesn’t do anything more than seek to associate a change in health care statutes with something (anything) negative.  If unemployment in Nevada were at 2%, and the nation’s major problem was smog, then it would be easy to imagine that the ACA and Patients Bill of Right would be “pollution producing.”  That’s speculative, so let’s drill down a bit further.

Let’s go to that bastion of liberal thinking, Forbes, to see if the ACA/PBR is actually “job killing?”  The answer: No.  In fact, when we go to the Urban Institute’s Study the Massachusetts health care reform enacted under Governor Romney’s administration did NOT produce “job killing” results:

The graphic reduction is difficult to read, so click on the image for the full sized version in the Urban Institute’s original study.  What happens when we take a look at the right hand side of the chart?

While the U.S. was experiencing a decline in full time jobs during the Recession of 3.6%, Massachusetts saw a 2.8% drop.  While the U.S. witnessed a 0.8% increase in part time employment, Massachusetts saw a 0.9% increase.  Whether Governor Romney wants to admit it or not, the Massachusetts plan is the closest statutory comparison to the Affordable Care Act we have, and the numbers about “job losses” in Massachusetts don’t make the Republican point.

Neither do the national numbers: “Since the Affordable Care Act was signed into law, the economy has created 3.5 million private sector jobs, including 488,000 jobs in the health care industry. The unemployment rate is 8.3%, lower than it was in March 2010.“  [Hoyer] And this: “360,000 small businesses have taken advantage of tax credits that are making health insurance more affordable for 2 million workers.  As many as four million small businesses are eligible for these credits.” [Hoyer] And, again, this: “…over 2,800 employers are participating in the Early Retiree Reinsurance Program, which is helping provide coverage to 13 million early retirees who are not yet eligible for Medicare.”  [Hoyer]   Whether we look at national numbers or state numbers, or both — the health care reforms enacted in Massachusetts and in the United States are NOT job killing.

Heller: “Congress spent more than a year debating healthcare legislation while Nevadans were losing their jobs and their homes.”

Yes, many things happened while foreclosure rates in Nevada were leading the nation,  and during this time what was the GOP agenda on financial reform and mortgage relief?

On October 12, 2010 Representative Eric Cantor (R-VA) laid out the GOP position on the foreclosure crisis: “Republican leader Eric Cantor chose to break his silence on the foreclosure crisis, with other Republicans quickly picking up the talking points.  And his position should come as no surprise.  Rep. Cantor came to the defense of the housing industry and laid blame squarely on the feet of the American homeowner.” [C2C]

Then, there was the infamous comment from current GOP standard bearer Governor Romney on home foreclosures: “Don’t try to stop the foreclosure process. Let it run its course and hit the bottom,” Romney said when asked what he would do to jump-start the floundering housing market.” [WashMonthly Oct 2011]

Thus, while Congress was debating, the President was signing, and then the Department of Health and Human Services was implementing the provisions of the Affordable Care Act and Patients Bill of Rights, the Republicans were blaming homeowners for the foreclosure debacles and the leader among the GOP presidential candidates was asserting that Nevadans who were in the foreclosure process should close their eyes and Think of the Free Market.  In other words, the Congress could have been debating the desirability of regulating Sea Horse Races, and the GOP wouldn’t have been much interested in legislating solutions to the housing crisis.

Heller: ” Obamacare made sweeping changes to Medicare, impacting thousands of Nevada’s seniors, and cut the program by a half trillion dollars.”  We won’t go into the part in which the Ryan Budgets in their various incarnations cut massive amounts from Medicare AND sought to turn the program into a voucher/coupon program.  Let’s just deal with the blatantly misleading statement about cuts to Medicare, and see what the professional fact checkers had to say:

“Under the act, Congress voted to reduce $500 billion in projected Medicare spending over the next 10 years, not in one substantial chunk. The reductions are aimed at eliminating parts of the Medicare program seen as ineffective or wasteful. For example, the plan phases out payments to the Medicare Advantage program, an optional program set up under the George W. Bush administration, where seniors could opt to enroll in a private insurance program and the federal government would subsidize a portion of their premium.”  [PolitiFact.com, 5/10/11] (emphasis added)

Under the Affordable Care Act the savings were reinvested in the Medicare program itself, not simply cut from the budget and the program privatized.  And note — some cuts were made to the taxpayer subsidies to insurance companies offering highly profitable optional insurance.  The cuts were in areas considered wasteful, and were NOT related to basic Medicare services.

Heller: “This law has now been affirmed as a colossal tax increase on the middle class, and its excessive regulations are stripping businesses of the certainty they need to hire at a time when Nevadans and the rest of the country are desperate for jobs.”   This statement is straight out of the GOP Talking Point Random Generator.

Interesting how Republicans like Senator Heller become really engaged in the problems of the Middle Class when taxes or fees might be increased, but rarely (if ever) when said Middle Class is getting pounded by corporate raiders, union busters, private equity Giant Squids, and stagnating wages.   Be that as it may, if the middle class wants a colossal tax increase — it’s more likely to come from the Republicans.

There is, for example, the tax proposal set forth by Governor Romney, about which the Christian Science Monitor reported:

“In any case, not extending the 2009 tax cuts still in effect in 2012 means that Romney’s plan would, on average, raise taxes for households in the bottom two quintiles, relative to what they’re paying this year.  Mitt Romney’s tax plan would cut taxes, by about $180 billion in 2015 alone, relative to current tax policy. And, despite all arguments to the contrary, a disproportionate share of the savings would go to households with the highest incomes.”  (emphasis added)

Ezra Klein, Washington Post columnist, added this analysis of Governor Romney’s plan:

“Note that the Tax Policy Center could only conduct a partial analysis of Romney’s tax plan. That’s because Romney’s proposal itself is incomplete. He’s said that he wants to scrap various deductions in the tax code, particularly for high earners, in order to broaden the tax base. But he hasn’t offered any details about which deductions he’d scrap or how, so there wasn’t anything for the Tax Policy Center to analyze.

Based on the details Romney has provided so far, his plan would lower tax rates for the top quintile by 5.4 percent, saving the wealthiest an average of $16,134. (The top 1 percent of earners, meanwhile, would save an average of $149,997.) The lowest fifth of earners, by contrast, would see a small tax increase of 1.3 percent under Romney’s plan, owing the federal government an additional $143 extra on average.

Obama’s tax proposal, meanwhile, would keep tax rates roughly the same except for married couples making over $250,000 per year (or single earners making more than $200,000 per year). On average, under Obama’s plan, the top 1 percent would be paying about $87,173 more per year.”

Klein offers the following illustration:

There are many “ifs” involved in the Romney tax proposal, incomplete as it is, but there are some deductions which if eliminated would have a definitely negative impact on middle income level Americans:

“Most middle-class families would get little help. About 18 million working families would actually pay higher taxes because Romney would end the American Opportunity Tax Credit for college and cut tax credits for taxpayers with children and earned income.”  [OCCD]

In fine, if one would like to see a tax structure which bestows the greatest advantages on those who already have great advantages — Governor Romney and the Republicans are your kind of people.

There’s nothing quite like tossing in a phrase like Excessive Regulations to stir the hearts of the financial and insurance sectors, both of whom dislike being told, for example, that using premium payments for CEO compensation and advertising aren’t the best use of consumer dollars.   And, the phrase tickles those who think the EPA is merely a professional thorn in the side of the energy sector — Deep Water Horizon notwithstanding.  It’s often notable that when expounding on the “excessive regulations” in the ACA, very few — if indeed any — examples are offered.

Ah, the now hoary and hirsute talking point “uncertainty and hiring” comes back for yet another encore.   The “uncertainty” allegation is a one size fits all gob-lob at any legislation or legislative proposal which might cause corporations to THINK about what they’re doing.

We’ve been told that implementing the provisions of the Dodd Frank Act on financial regulation reform creates “uncertainty.”  In this instance there’s something to be said for a bit of uncertainty — no bank should believe that it “certainly” has the latitude to use depositors funds to play around in proprietary trades, or has blanket permission to bet against the interests of its own clients, or has leave to arbitrarily play with interest rate reporting because it wants to make its own books look better.

And for the umpteenth time — small business hiring won’t increase until small businesses (not to be confused with Washington, DC lobby shops and hedge funds) see the demand for their goods and services increase such that their current staffing levels are insufficient to meet customer needs.   The only thing that is Certain is that middle class income and middle class jobs need to advance in order to improve aggregate demand.  This has precious little to do with the desires of the Wall Street Wizards to play cowboy with depositors dollars.

Heller: “The President should work with Congress to find real solutions to healthcare reform so the excessive mandates and taxes in this law do not further add to our national debt or continue to stifle economic growth.”

Now what could be adding to the national debt?

So, if we are really serious about reducing the federal deficit — then we get rid of the Bush Tax Cuts! And, we do something to get more “growth” into the economy.  Hardly the austerity prescription being touted by Senator Heller and his Republican cohorts.

Heller: “This onerous law needs to be repealed and replaced with market-based reforms that will provide greater access, affordability, and economic certainty to our nation,” said Senator Dean Heller.”

Yes, the House will make another symbolic move at “repealing” the Affordable Care Act during the week of July 9th.  Meanwhile, what are “market based reforms?”

Representative Paul Ryan has suggested some “market based” reforms which mean that Medicare recipients will get a “coupon” or voucher toward paying their private health insurance premiums.   This is essentially a government subsidy for health insurance corporations to give them an “incentive” to offer health insurance for the elderly.  Meanwhile back in the real world — the reason we have Medicare in the first place was that insurance corporations do not want to offer plans for elderly people — they get sick, and old, and old and sick.

This might be a good time to remind ourselves that it’s not a “free market” when some corporations are being subsidized by the taxpayers to offer services and products they don’t otherwise want to sell.  For those keeping score, “market based solutions” is GOP-Speak for privatization.

Not to belabor the point much further, but the GOP response to the ACA ruling as evidenced by Senator Heller is simply to offer no solutions to demonstrated problems, and demonstrations about issues of primary interest to the upper 1% of the American income earning public.  It is a tale bedecked with focus group tested buzz words and talking points, which can mean almost anything to their devoted listeners, and almost nothing to anyone seeking solutions to real American problems.

Reid Suggests Compromise on Student Loan Rates

From the e-mail inbox, Senator Harry Reid (D-NV): “Washington, D.C. – In a letter to Speaker John Boehner and Minority Leader Mitch McConnell, Senate Majority Leader Harry Reid today offered two bipartisan proposals to pay for a one-year extension of student loan rates to prevent them from doubling on July 1st. The first proposal expands an offset that recently passed the Senate on a strong bipartisan vote of 74-22 as part of the transportation jobs bill. The combination offers a bipartisan path forward to break the impasse currently facing the student loan bill.”

OK, but I’m still not happy.  First, there is really no excuse for putting student loan interest rates up for revision on an annual basis.   Last time I looked it still took four years to get a college degree, and longer if the individual was interested in advanced degrees.  Advanced degrees being the kind that get a person into the 3.6% and below unemployment categories. [DoL]

Secondly, not so long ago it was declared unnecessary to put the cost of military operations in Iraq and Afghanistan  on the books, and thus the Bush Administration ran those activities via emergency supplemental appropriations without any mention of “pay fors.”  Neither was it deemed necessary to subject  the Medicare Part D program to “pay fors,” with some demonstrably budget busting results as of January 1, 2006.   However, when we’re speaking of educating our future work force — now, suddenly it’s absolutely essential we “pay for” every federal expenditure.

Granted, it is more fiscally responsible to know from whence the money is coming to pay for federal expenditures.  However, would it crush the Job Cremators so much to have a loophole for ultra-wealthy hedge fund and lobby shop operators closed? — as was suggested, and as caused Senator Dean Heller (R-NV) to issue his usual  cri de coeur for “small business.”

And thus we continue to tinker, Senator Reid offering the following:

(1)    Reforms to employer pension payment contributions. The proposal outlined by Senator Reid would create a “stabilization range” for employers to compute their pension liabilities. Instead of being forced to use the two-year corporate bond rates in computing their pension liabilities, the new proposal would allow them to compute liabilities using rates for a 25-year period within which the two-year rates must fall.  To the extent that the two-year rates fall outside this range, the company would be allowed to use a rate closest to the two-year rate that falls within the stabilization range to compute its pension funding requirements.  This more flexible approach would narrow fluctuations in computing pension contributions and result in businesses taking fewer tax deductions for contributions.

(2)  Change contributions to Pension Benefit Guarantee Corporation premiums. In addition, Senator Reid proposed increasing premiums paid by employers for the insurance provided by the Pension Benefit Guaranty Corporation.  Currently, employers pay a flat dollar premium of $35 per pension plan participant as well as a variable premium equal to $9 for each $1,000 that the plan is underfunded.  To help improve the PBGC’s finances, these premiums could be increased as part of this proposal.

“The combination of these two proposals will provide sufficient resources to fund both a one-year extension of the current student loan interest rate and re-authorization of the nation’s surface transportation programs.”

OK, if we adopt these proposals then we get a continuance of the 3.4% student loan rate AND the re-authorization of the surface transportation programs.  And, I can hear it now — OMG, a more flexible approach to calculating pension fund contributions will be “a plague upon Capitalism?”  Or, increasing the premiums for the PBGC will be a “onerous burden on job creators?”   The former argument is offset by the fact that BUSINESS groups are the ones asking for the recalculation of the pension funding formula. [WallStJournal]

There are reasons to be concerned about the recalculation of pension fund contributions, none of which have anything to do with plaguing Capitalism.  One major cause for careful consideration is that changing the formula could have detrimental effects on defined benefit plans.  [WallStJournal]

The Pension Benefit Guarantee Corporation is already facing some serious issues, some of which were outlined in a 2010 report from the GAO:

“Plans in the worst condition may find that the options of increasing employer contributions or reducing benefits are insufficient to address their underfunding and demographic challenges. For these plans, the effects of the economic downturn, declines in collective bargaining, the withdrawal of contributing employers, and an aging workforce will likely increase their risk of insolvency. Without additional options to address plan underfunding or to attract new employers to contribute to plans, plans may be more likely to require financial assistance from PBGC.  Additional claims would further strain PBGC’s insurance program that, already in deficit, it can ill afford.”

Economic growth, as we’ve seen in the private sector over the past 27 months, will help these issues, but asking employers to pay increased premiums to backstop an already serious issue isn’t too much to ask.  If the corporations make additional contributions, then the PBGC isn’t further behind the eight-ball when companies fail.

On the optimistic side, both suggestions from Senator Reid have received bi-partisan support in the past.  On the pessimistic side, chucking their previously held positions over the side has become a Republican art form — witness the individual mandate for health care insurance coverage, and “cap and trade” schemes for pollution elimination.

Since it’s been “campaign season” since January 20, 2009 I am a bit leery of Republican cooperation in the U.S. Senate.  Meanwhile, the clock is ticking as students and their parents try to get body and soul together concerning educational expenses for the next school term.

Romney’s Job Creation Response: Yawn

The Romney campaign responded to reports that during Governor Romney’s tenure as the chief executive of Massachusetts he wasn’t particularly successful at creating jobs because the unemployment rate in the Bay State was 4.5% at the end of his term.   YAWN.   There are some reasons to indulge in a simultaneous inhalation of air and stretching of the ear drums followed by an immediate exhalation of breath.

#1.   2007 was also the year that Nevada had a 4.7% unemployment rate, California had a 5.7% unemployment rate, Arizona had a 3.7% rate, while Florida had a 4.0% rate — can we say “Housing Bubble?” [BLS] The national average that year was 4.6%, and that doesn’t make the 4.5% look all that impressive.

#2.  Massachusetts’ unemployment rate in 2003 was 5.8%, compared to a national unemployment average of 6.0%.  [BLS] It doesn’t look as though Mr. Romney can argue he was “starting out in a hole.”

#3.  As of 2004, the national unemployment rate was 5.5%, while the Massachusetts rate was 5.2%.  [BLS] In 2005 the national rate was 5.1% and the MA rate was 4.8%. [BLS] The national rate of unemployment in 2006 was 4.6%, while the Massachusetts rate was 4.8%. [BLS] It may not do to get too excited about the reduction of unemployment levels in a state when the outcome amounts to a +0.2% overall gain in four years.

#4. The job creation Romney promised in Massachusetts never really materialized.  “By the time Romney left the State House, Massachusetts had generated 24,400 net new jobs, according to an analysis by Moody’s Economy.com, an independent research group. The state had only an 0.8 percent increase in employment, giving it the fourth-weakest rate of job growth among all states over that time.”  [Boston Globe]

Coffee and the Papers

Money Money Money: The Las Vegas Sun offers a breakdown of the campaign coffers of leading Nevada Congressional candidates. Republican candidate Danny Tarkanian contends the $17 million judgment against him is the result of “fraud.” [NNB]  Can we add that to “practicing law without a license” in which he also said he was confused and misled? [LVRJ]  Or, his confusion about the 1Q filing requirement with the FEC? [NNB]

The Homeowners Association mess in Clark County continues:  A federal judge is taking guilty pleas [RGJ] as … “New details surfaced Thursday — including on the role of real estate agents — in the long-running criminal investigation into fraud and corruption at Las Vegas-area homeowner associations.” [Las Vegas Sun]

Jobs Jobs Jobs:   The employment figures are out, and they aren’t all that ‘Summery.’   Economist Chris Rupkey (BTM) advises a bit of restraint:

The unemployment rate went up a tenth today, but at least we don’t have to hear about how people are dropping out of the labor force.  The labor force had fallen in March and April, those not in the labor force had risen.  No jobs for them so they dropped out was the argument.  But today, the labor force went up 642K, 422K of them found jobs, employment up, and 220K of them did not find jobs, so the unemployment level went up to 12.7 million.  We cannot be too bearish then on the 8.2% unemployment rate, and this is especially true as unemployment claims are still low.

Back to payroll jobs of 69K, a disappointment, but we do not view this crawl speed as a stall speed reading for the labor market.  We don’t think jobs will actually decline, say next month, and keep in mind a double-dip or recession for the economy is signaled by three consecutive declines in payroll jobs.  (emphasis in original) [Business Insider]

There’s more:  Calculated Risk adds,

“If we average over the first five months of the year, the economy has added 164,600 jobs per month (169,400 private sector per month). At this pace, the economy would add around 2 million private sector jobs in 2012; about the same as in 2011.”

“There were 69,000 payroll jobs added in May, with 82,000 private sector jobs added, and 13,000 government jobs lost. The unemployment rate increased to 8.2%. The household survey showed a strong increase in employment (422,000 jobs added), but the participation rate increased too (from 63.6% to 63.8%) so that pushed up the unemployment rate.” [CR]

The scary part is not necessarily the overall jobs numbers, but what’s NOT happening to family earnings.  Angry Bear takes the latest DoL report as dismal news indeed, and notes:

“…the average work week fell from 33.5 to 33.4.  In combination with the weak employment increase this generated a significant drop of 0.2% in aggregate hours worked.  This reversed the recent strengthened in the index of hours worked as it fell back below the trend for this cycle. [...] Average  hourly earnings rose less than 0.1% from $23.39 to $23.41.  The year over year gain is back to an all time record low of 1.39% [...] With the drop in hours worked, average weekly earnings fell $806.96 to $805.30.”

It’s really difficult to get an economy rolling at speedier revival rates when the people who are supposed to be purchasing the goods and services have less money to spend.  There are some weeds to be explored in the data that should have a post of their own.

Hey Kids Your Student Loan Rates Are About To Double?  Interesting that the House GOP never balked at credit card conservatism when the Bush Administration kept the costs of operations in Iraq off the books, and there were no “pay fors” attached to military spending, but “college students,” well, that’s another matter.  The House is now offering it’s third proposal to “pay for” the cost of cutting the middle-men Bankers out of the Stafford Student Loan program.

“One of those proposals would raise the required federal employee contribution toward retirement benefits by 1.2 percent of salary over three years in equal portions starting in 2013. That increase was in the budget plan the White House proposed earlier this year.”  [WaPo]

The battle does seem to be heating up. [NYT]

Recommended Reading:   The headline says it all – “Michelle Rhee, Go-to Girl For Scott Walker’s Union-Busting Ways” [Crooks and Liars] What do we want to talk about during this campaign season? “Mitt Romney’s Massachusetts Record Shows Why He’d Rather Talk about Bain” [Politicususa] The Big Dog is in the house — Bill Clinton supports recall efforts in Wisconsin. [TalkingPointsMemo]  Not to be missed: “Mitt’s Massachusetts Excuse,” [Perrspectives]

Closer to home: “Los Desperados” [NVProgressive] and “America is in the midst of a student loan crisis,” [NVRDC] ICYMI: “Heller — I’m no stockbroker!” [SlashPolitics]  “The Feminist Files” [SinCitySiren]

Chart of the Day: Why Romney May Not Want To Speak Of Unemployment Rates

Former Governor Romney may wish to speak of 4% unemployment rates, but the only President who’s touched the 4% line was a Democrat,  President Bill Clinton.   The figures for each year from 1948 to the present can be found here.

Over, Under, and Whatever: Nevada News Roundup

Underwhelmed?  Former Massachusetts Governor Mitt Romney won the Nevada GOP caucus…OK, that was expected.  However, the turnout for the event was less than expected.  [Las Vegas Sun] The Nevada Progressive was paying attention to the process.  500 caucus members showed up in Carson City; [NNB] there are 10,493 registered Republicans in the City. [NVsos]  The Secretary of State has some numbers which should be of interest to Democratic Party officials and activists:

The Secretary of State’s Elections Division reports that Republicans increased their number of active voters by 4,465 whereas Democrats increased active voters by 1,202. At the end of January, 400,310 active Republican voters and 447,881 active Democratic voters are registered in Nevada. In all, active Nevada voters total 1,082,705, an increase of 6,688 from the previous month.

Over enthusiastic?  And, no, former House Speaker Newt Gingrich isn’t dropping out.  He’s going to rack up a string of victories… [TPM] somewhere. Meanwhile he secured 22.7% of the Nevada GOP vote, winning only in Mineral County, [TPM]  population 4,772. [Census] Final totals available here.

Out of whack?  A case can be made that economically  “things are worse than they look because the U6 table shows more unemployed than the ‘regular’ figures,” but one should be careful with that [WashMonthly] because as the chart from the Christian Science Monitor illustrates the U6 tends to track with the conventional U3 numbers.

Frauds?  Remember when back in 2005 the Indiana governor signed a voter ID bill because it was “necessary to prevent fraud?”  Well, now what do we find but that the Indiana Secretary of State, Republican Charlie White has been convicted of….voter fraud. [Think Progress]  If memory serves, back in Psych 101 they called this Projection.

Job Creators? Not if you aren’t hiring the unemployed

There is, unfortunately, nothing “new” about this topic.  There are companies which are refusing to hire any applicant who is not already employed.

This, from the Los Angeles Times, February 16, 2011:

“Excluding unemployed workers from employment opportunities is unfair to workers, bad for the economy, and potentially violates basic civil rights protections because of the disparate impact on older workers, workers of color, women and others,” said Christine Owens, executive director of the National Employment Law Project, in her testimony.

Several examples of discriminatory help-wanted ads were offered: a Texas electronics company said online that it would “not consider/review anyone NOT currently employed regardless of the reason”; an ad for a restaurant manager position in New Jersey said applicants must be employed; a phone manufacturer’s job announcement said “No Unemployed Candidates Will Be Considered At All,” according to Helen Norton, associate professor at the University of Colorado School of Law.”

If we were thinking that a little publicity about this egregious practice would make it go away, we need to think again. The topic showed up again in the Huffington Post in August, 2011, this time presenting the highly dubious rationale for the practice.

“Some staffing firms, when questioned by reporters, are upfront about their intention to recruit only people who currently have jobs. Martin Recruiting Partners, a restaurant staffing agency based in Georgia, ran ads which stated candidates “Must be currently working & ready to move for the right reason.”

George Seed, the company’s vice president of operations, defended the policy.

“When my clients hire me, they want people who are motivated to go to work for the right reasons,” Seed said. “And if someone is currently employed in a good position, then their motivation to move to a different company would be that the company offers better benefits or offers more growth for advancement, or whatever. They’re not people who have to have a job, they’re people who want to move for the right reasons.”

The recruiting shop walked back the talk, but the impression is clear: “If you are unemployed there must be something wrong with you; and, if you have been unemployed for a long time there must really be something wrong with you.”

As of September 4, 2011 the issue was noticeable in Illinois:

“I recently found an array of online job postings that greet seekers with these encouraging words: “MUST BE CURRENTLY EMPLOYED, NO EXCEPTIONS.”
How lovely. In a country with 13.9 million unemployed residents, that’s akin to a restaurant requiring a hungry person to bring a sandwich in before they can buy a sandwich.”

By the end of September, 2011, the Obama Administration was moved to recommend legislation barring discrimination on the basis of previous employment status.  [NYT] Right wing members of Congress were equally quick to declare that the proposed legislation would create another “protected class,” and would invite litigation if an unemployed worker were not hired.  Unsurprisingly, the U.S. Chamber of Commerce saw no need for the bill, saying it would invite “nuisance lawsuits.”

It’s hard to see how a civil suit enforcing a policy which proscribes such egregious practices as the out-of-hand discrimination against a person because of employment status, especially when No Unemployed Need Apply appears on the job announcement, could be categorized as a “nuisance,” but conservatives in Congress seem more than willing to tow the  USCoC’s barge and categorize any legislation which might remotely restrain unfair business practices as an egregious bow to trial lawyers.

Meanwhile the problem persists.  Testimony (pdf) from National Employment Law Project’s Tim Bradley given in December 2011 offered that discrimination on the basis of current employment was still such an issue as to secure second place in his list of barriers to re-entry into the labor force.

Some employers still have policies in place which patently discriminate against individuals who have been unemployed for six months or longer.  [NELP, pdf] Meanwhile, a chart of unemployment duration from Department of Labor figures for November 2011 (seasonally adjusted) looks like this:

 

The numbers are depressing.  2,519,000 in the November report had been unemployed for 5 weeks or less.  2,911,000 were unemployed from 5 to 14 weeks.  A total of 7,801,000 were unemployed over 15 weeks, with 2,111,000 unemployed between 15 and 26 weeks, and another 5,591,000 unemployed for 27 weeks or longer.

The Senate bill to address the issue of discrimination against the long term unemployed (S.1471) the  Fair Employment Opportunity Act of 2011 was introduced on August 2, 2011 and has been sitting in the Senate Health, Labor, and Pensions Committee since.   The bill’s counterpart in the House, (H.R. 2501) was introduced on July 12, 2011 and was referred to the House Subcommittee on Employment, Labor, and Pensions on September 8, 2011.

If the Congress is truly working to create JOBS, and reduce unemployment,  then one logical place to start would be to prohibit employers from discriminating against workers who have been displaced by layoffs, off-shoring, and staff reductions.   Both bills deserve “up or down” stand alone votes in the respective chambers.

 

Nevada: Land of Inopportunity

Ouch! “Nevada Ranks Last in Nation in Job Opportunity.” [LVSun] Given an “Opportunity Index” of 21.3, out of a national average of 58.4 the headline isn’t surprising.  Statistical compilations aren’t necessarily without their own kind of vision; we could put together an index of “Pro-Business” numbers and massage the ranking until the Silver State showed no sign of tarnish.  However, the sources for this specific index ought to give Nevadans an incentive to discuss something other than “No New Taxes” in future public discussions.

The “Jobs” portion of Nevada’s score combines our unemployment rate, the median household income, the percentage of the population living below the poverty line, physical availability of banking and credit institutions, affordable housing, and Internet access.  Jobs are harder to find in areas in which there is already high unemployment and the Las Vegas area’s 13.4% indicates treacherous job hunting territory.  Reno’s 12.1% isn’t much better.  [DETR]  The official word from Carson City can be interpreted as “Gee, at least the situation didn’t get any worse.”  [DETR pdf]

There is a tiny glint of hope from the gaming industry, which “may” continue to grow, but as of last June the analysis from Carson City wasn’t all that optimistic:

“The accommodation and food services sector contracted considerably during the recession, marked by a number of casino closures and layoffs. This year however, the industry has shown improvement and should continue to add employment. About half of all employment growth in Nevada in recent months has come from the accommodation and food service industry. Prospects look promising given an improving national labor market situation and rising consumer confidence. International visitation will increase so long as the value of the dollar remains weak, making popular destinations like Las Vegas, Lake Tahoe, and Reno more affordable for foreign travelers. Employment in the accommodation and food service industry will increase by 1.4% in 2011, 1.6% in 2012, and 1.7% in 2013. This will be a total of 13,700 new jobs for the forecast period.”

That doesn’t quite cover the current 176,400 Nevadans now looking for work.   Neither will the expected employment projections in retail trade:

“Retail trade has improved over the last year. Consumers are moving into a better position given falling unemployment and improved job prospects. Pent up demand will start to drive sales higher. Money that consumers were putting towards savings or paying down debt during the downturn should slowly work its way back into the economy. Retail sales in Nevada have been growing as seen by taxable sales reports. Collections are up 5.0 percent through the first 8 months of the fiscal year. Employment in this industry will continue to grow, increasing by 0.8% in 2011, 0.7% in 2012, and 0.7% in 2013. This will be a total increase of 2,800 jobs for the forecast period.”

Notice that the analysis for both gaming and retail trade is gently phrased.  IF there is rising consumer confidence (i.e. willingness to gamble with family resources) and IF the dollar is weaker, and IF there is some “pent up demand,” then we might see some slow improvement in our job market. Some sectors are improving, but we need to look at whether Nevada is ready to take advantage of the opportunity.

High Tech, Health Care, Energy: The Big Three

One variable the Opportunity Index doesn’t include is the use of office space and its relationship to economic sector growth.  There are three areas which seem to be rebounding: High Tech, Health Care, and Energy.  [PR/Biz] “These three sectors account for nearly 650,000 or 35 percent of the 1.8 million jobs added since the employment trough in February 2010. High-tech employment has surged growing its job base by 5.1 percent (5.9 percent for services and 3.6 percent for manufacturing), surpassing growth of any other sector on a percentage basis. “

So, who is renting or leasing commercial office space now?

“Office-using employment sectors comprise 20.9 percent of total employment in the U.S., while high-tech services makes up just 1.7 percent. Nonetheless, high-tech services jobs increased by 5.9 percent from the trough, while office-using sectors increased by 1.9 percent. Though traditional office users are greater in number, high-tech office users are increasing at three times the pace, and this growth is more concentrated in specific markets thus driving office demand to a greater degree in those places. ” [PR/Biz] (emphasis added)

The main centers for this activity are  San Francisco, Silicon Valley, Seattle, New York, and Baltimore.  No Nevada towns on this list.   The High Tech expansion explains why California isn’t the same anemic blue on the Opportunity Index map, and the following should explain why Utah is a more positive shade as well:

“The Utah Department of Workforce Services projected the state will add 17,000 new jobs this year and 28,000 next year — a significant portion of which will be in the high-tech arena. Economists have also been optimistic — predicting slow, steady improvement on the employment front during 2011.

Not to mention the various recent accolades heaped on the Beehive State from national media like Forbes magazine and Moody’s Economy.com, which listed Salt Lake City and Utah among the best places to do business and best job markets in America.

[...] Kate Mitchell, co-founder and managing partner of Scale Venture Partners — a venture capital fund based in Silicon Valley, Calif., said Utah has the core infrastructure that makes it attractive to potential job creators.

“(You) have great research and universities, great innovation and a very friendly business environment,” she said.”  [DeseretNews] (emphasis added)

If Nevada’s missed the High Tech train, perhaps it could catch a car on the Health Care Services line?  The national average of health care employment as a percentage of the total is about 9.1%.  Nevada’s percentage is 6.3%.  [Kaiser]

There are 35 hospitals in the state, 16 of which are “for-profit,” 13 are non-profit, and 6 are operated by state or local governments.  There were 50 certified nursing facilities, 66% were “for-profit,” 16% non-profit, and 12% government operated, serving 4,761 residents. [Kaiser] There are only 7 certified rural health clinics in the state. [Kaiser]  The DETR projections aren’t all that optimistic for health care institution hiring:

“Health care and social assistance continues to perform well despite some challenges. While Nevada’s hospitals struggle given recessionary and programmatic difficulties, smaller businesses continue to do well during the recession.   Doctor’s offices, dentists and optometrists will continue to add employment during the projection period. Demand for health care services will continue to grow given the aging baby boom population. Employment is predicted to increase by 1.8% in 2011, 2.0% in 2012, and 2.4% in 2013. Total employment for this forecast period will increase by about 6,100 jobs.” [DETR]

The DETR projections wisely notice there will be a need for more institutional employment in the health care services sector in Nevada, but not necessarily that those 61,000 jobs will be toward the median portion of the wage scales or above.

If the employment train may have already left the station in High Tech, and Nevada is still trying to approach the station in terms of Health Care Services, we might look to the Energy Sector for employment growth?

Utility System Construction is expected to include 6,312 jobs by 2018. [DETR] Utilities in general some 4,488 jobs.  Electrical power generation may employ as many as 2,923 people by 2018. [DETR] There is nothing in these 2008-2018 projections to indicate a “boom.”

A Slow Hard Slog Toward Recovery

If our Opportunity Index showing is an indication, Nevada is in for a long and slow economic recovery.  Already poorly positioned in terms of employment in High Tech, Health Care, and emerging Energy investment, the reliance on gaming and retail trade means the state is still reliant on consumer spending to create employment, and the factors which drive consumer spending aren’t all that positive.

Slow money: Economists see a “long term average” of 37.59% in the growth of the M2 (money supply) as positive — we are now looking at a growth rate of about 9.9%. [Treas] There are some technical rationales for this problem, but the bottom line is that the slow growth indicates that wages and salaries aren’t generating economic growth in this realm.   We can argue about whether banks are extending sufficient credit or whether the ARRA funding is insufficient to generate the necessary growth — but the bottom line is that if there is depressed demand for goods and services then employment levels, wages, and salaries will also be deflated.

Temporary Employment:  It used to be said that temporary employment levels signaled the permanent employment trends.  However, this analysis isn’t all that heart warming:

“Temp jobs are now up 19.6% year over year, a record for the series going back to 1990 (when BLS began tracking it).  Private sector jobs less temp jobs are still down 0.7% year over year.  Historically — and I’ll admit going back only to 1990 isn’t a particularly robust data set — when temp jobs are up over 10% year over year, private sector jobs (less temp jobs) are running in the range, on average, of +2.4% YoY,  not -0.7%.  In the 20 year history of the series, never has the year over year gain been 10% or more while the private sector (ex-temp) has been negative.”  [RitHoltz] (emphasis in original)

If this is as good as it gets, then it’s going to be hard to move that M2 number.

The Deleveraging Demon:  There was a time not so long ago when homeowners were courted into the home equity loan market, now that home values have plummeted this is no longer a source of consumer spending as those same homeowners are now paying down debts.  Las Vegas, Atlanta, and Phoenix have posted new “lows” in home prices, indicating that the “worst” is still being explored in the housing market.  [BusWk]

While we await the “bottom of the Nevada housing market,” we may very well want to discuss how the state might better position itself in regard to high tech employment expansion, how to incentivize investment in both public and for-profit health care services, and how to insert the state into emerging energy generation technologies.  Failing that, we’ll be stuck with slow money, temporary employment which doesn’t encourage increases in demand, and the deleveraging demons which continue to plague our national and state economies.

Welcome To The Lazy A: Where Both Sides of an Equation Are Considered

There’s a persistent myth among ultra-conservatives which tells us that “there are plenty of jobs — it’s just that Americans are too lazy” to fill them.  The mythology is part individualism, part financialist cant, with generous portions of elitism and racism mixed into the recipe.  1%’ers in Chicago papered Occupy protesters with photocopied applications for work at the fast food corporation McDonalds.  1%’ers held up “Get A Job Signs” in New York.  They obviously didn’t get the message that about 83% of the Occupy Wall Street protesters are employed.  This situation didn’t happen overnight. First, the unemployed needed to be inserted into a comprehensible category supportive of conservative principles.

The Brand

We can reach back to the myth of the Welfare Queen for a modern nascence of this bit of ideological rhetoric, which often conflates unemployment benefits  with public  welfare.   That the Reaganesque myth has long since been debunked doesn’t matter. [AnitraNet] [Maran.com] [NewStatesman] [Zucchino/Amazon.com]   The image is settled in conservative minds — the unemployed must be conniving, possibly addicted, tempted to fraud, and for the most part members of minority ethnic groups.  That unemployment benefits are earned by those who have previously been employed, coming from the proceeds of contributions into the unemployment insurance programs by workers and employers, doesn’t crack the mold either. Those who have adopted this narrow mindset aren’t going to be much affected by statistics demonstrating the groundless nature of their premise.  It’s enough for them to have seen or to have known a single individual who, at least superficially, fits into their categorizations.

Once the unemployed and economically disadvantaged are firmly inserted into a mythological scheme in which they are entirely responsible for their own situations — from inconvenience to misery — they can be summarily dismissed as people who want “Something For Nothing.  The problem, of course, is that the categorization only serves to reinforce ideology and doesn’t approach or describe economic realities.

Welcome To The Real World

In the real world entirely too much work is temporary:  Table A-11 employment statistics from the Department of Labor, “Unemployed persons by reason for unemployment,”  tells us that as of October, 2011 some 1,409,000 people in the United States were unemployed because they had completed temporary jobs.  Of the 8,006,000 who had lost jobs or had completed temporary ones, 9% were on temporary layoffs while 49.2% had been permanently laid off.  More concerning, temporary, as opposed to permanent, employment is trending upward.

“Temporary jobs, both professional and blue-collar, are being added at a fast clip in an otherwise sluggish economic recovery, according to data and labor experts.

Growth in temp jobs is a good sign the economic recovery is taking hold, say experts, but it also raises concerns that temp employment could have a more permanent place in tomorrow’s workforce.”  [USAT, Jan 2011]

Facing uncertain demand for goods and services some companies are now  much more comfortable with temporary, or contingent, hiring.  The obvious problem is that temporary employment generally means lower pay, fewer benefits, and lowered overall earnings expectations.  None of these factors are conducive to improved demand for American goods and services.

If we are willing to settle for an economy resting on the efforts of temporary workers, then we must also be willing to assume that their lowered income expectations will inform their decisions about home ownership, vehicle purchases, and discretionary spending for non-essential items.

If we adopt the Financialist perspective that lowered labor expenses are always positive because they improve the earnings expectations for the corporation, then we have to dismiss the significance of the lowered income expectations of the labor force.  However, this gives the corporations yet another problem — lowered income expectations in the work force means less demand for the goods and services offered by the corporations.

In the real world not all unemployment is equal:  For example, Table A-4 from the Department of Labor informs us that the unemployment rate for those who have attained a Bachelor’s degree, or higher, is an economically comfortable 4.4%, while the unemployment rate for those who have only a high school diploma is 9.6%.  These numbers should support the proposition that at least some post-secondary education or training is necessary for our 21st century labor force.  Indeed, the unemployment rate (8.3%) for those with Associates degrees or similar educational attainment is 1.3% lower than the rate for those without any specialized or advanced education.

The statistics from Table A-14 (Department of Labor) reinforce the point that some economic sectors are more prone to higher levels of unemployment than others.  As of October, 2011, the highest unemployment rate was predictably  in the construction sector, at 13.7%.  Agricultural workers had an overall 13.4% unemployment rate, and those working in leisure and hospitality — right in Nevada’s economic midsection — were experiencing 10.8% unemployment.  By contrast, those in the financial sector saw an unemployment rate of 5.8%.

In short, what we have is a recovery in the financial district while construction has plummeted downward, and other professional and business services were looking at 10.1% unemployment rates as of last month, and durable goods manufacturing was experiencing an overall 8.0% rate.   This conclusion shouldn’t be news to anyone.   However, the point should be made that when the bottom is shaved off the economy the top can’t continue to float.  The CEO of the New York Federal Reserve seems to have grasp this notion:

“One significant problem is the trajectory of home prices. Homeowners have lost more than $6,000 billion in home equity since the housing market turned. For homeowners with mortgage debt, about one-quarter of these homeowners have mortgage debt that exceeds the value of their homes. The loss of home equity is a serious problem in itself of course, but it has been exacerbated by the fact that many households have found it very difficult to refinance to take advantage of lower mortgage rates.

Without a substantial improvement in the ability to refinance, the outlook for real estate prices, and in income prospects, it seems likely that many of the households that ended up with too much debt after house prices fell 30 percent from their peak may need to deleverage further.

This implies that for the household balance to fall and provide an impetus to growth, those households with low debts will have to spend more of their income. In many ways these households are in a similar situation to large corporations: their balance sheets contain substantial liquid assets. They are undertaking precautionary saving as a response to greater uncertainty about the economic outlook and their long-term prospects.” (emphasis added)

Translation:  Middle class Americans, whose wealth tends to be tied up in their homes, took a $6000 billion shellacking in the wake of the housing bubble explosion, and are still trying to climb out from under the economic debris.  When the NY-FED CEO says, “undertaking precautionary savings,” he means people whose home equity has been wiped out and who are looking at employment insecurity aren’t going to start spending money again until they feel more comfortable about their situation.

It needs to be said yet again:  Employers will not hire more staff unless it is evident that current staffing levels are inadequate to satisfy orders or to provide an acceptable level of customer service.  Whether those jobs are permanent or temporary doesn’t matter in this context, there will be NO jobs unless there is an increase in the demand for goods and services.

So, why aren’t the 1% supporters on Wall Street seeing the entire picture?

Tunnel Vision in Hermetically Sealed Environments

An article in Reuters yesterday described a significant portion of the tunnel vision problem on Wall Street.  The occupants inside the financial district buildings see the world very differently than the occupiers outside the buildings.   We can summarize parts of the disconnect:

(A) The Horatio Alger Syndrome.  The Reuters article explains — “(John) Paulson responded (to Occupy Wall Street)  by putting out a press release that described his $28 billion, 120-person fund as an exemplar of the American Dream: “Instead of vilifying our most successful businesses, we should be supporting them and encouraging them to remain in New York City.”   To which someone might have issued a press release in response with a popular quotation from the poet Robert Burns: “O would some power the giftie gie us to see ourselves as others see us.”

Paulson’s hedge fund may be small in terms of the number of employees he has hired to staff it, but for a  $28 billion fund?  Most small business owners may take home income in a range from about $31,246 to $233,600 depending on how the reported income is characterized and whose income is included. Paulson’s attitude also illustrates the next part of the disconnect.

(B) The No Mud On Me Syndrome.   According to the Reuters article:

“In conversations with nearly two dozen current and former bankers, finance professionals and money managers across the United States, the prevailing sentiment is that the anger at Wall Street’s elite is misguided and misdirected. Blame the politicians and policymakers in Washington, many of them say, for encouraging people to buy homes they couldn’t afford and doing nothing to stop or discourage U.S. consumers from piling on more than $10 trillion in household debt.”

But wait? Who was pitching those home equity loans? Who was financing the NINJA mortgages?  Who transformed the interest-only financing  formerly made available only to developers into “creative” financing for individual homeowners?  Who devised the ARM’s? And – who bundled these very risky loans into packages, stuffed them in off shore accounts to be hacked and stacked into CDO’s, and then who bet on the prospects?   The atmosphere around the trading desks must have been so fogged during the Housing Bubble that traders couldn’t (or wouldn’t) see that the investment banks’ insatiable appetite for more loans to cram into the CDO Craw was creating precisely the “un-valuable” risk the institutions were hoping to spread.  It isn’t like they weren’t warned. [Forbes] [CNBC] [McClatchy]

(C) Tunnel Vision Syndrome.  Or, What You Don’t See Won’t Hurt You:

“Former Wall Street practitioners say the Street does not lend itself to a lot of introspection. “The world of investment bankers and especially the trading floor region is notoriously hermetically sealed,’” says Kenneth Froewiss, a retired JPMorgan Chase investment banker and former finance professor at New York University’s Stern School of Business. “The walls may be filled with screens beaming the latest news, but there is typically an obliviousness as to what is happening across the street.” [Reuters]

It also doesn’t help when one is isolated in a building securely sealed away from the hoi-polloi, and can escape to the Hamptons or other enclaves of affluence, behind gated and secure perimeters.   There is another facet of this sealed-off existence we might also explore.

(D) The Ascent of the Trading Desk Syndrome.  The Reuters article touches on this aspect of the situation, but we can speculate that there is more to the problem — such as the attitude on full display during Senate hearings on Goldman Sachs and the Hudson deals.  “We’re just making markets,” the traders explained.  That one side was “ripping the face” off the other wasn’t incorporated into the thinking.  The testimony lead to one of the more ironic portions of the proceedings when former Senator John Ensign (R-NV) asked, “Do you have a corporate statement of ethics.”

There was “nothing wrong” with the bologna like financial substances created by the traders just as long as there was someone  willing to buy the toxic Stuff.  The Reuters article explains the bankers’ belief that they are not in the business to be customer friendly — it didn’t go as far as Liar’s Poker, or Where Are The Customer’s Yachts?’  Nor, did it take us into the realm of Predator’s Ball.  When the trading desks become the income source for the bank, their priorities become the institutions priorities –and sadly, their ethic subsumes the institutional ethic.

Bubble Boys

The occupants of the financial district buildings probably don’t know that there are variations in the unemployment levels discernible in education levels; or that altogether too much work is now contingent or temporary employment; or even that the Welfare Queen Mythology which underpins their disparagement of the unemployed is fictional.

They can’t see beyond the trading floor or past the security perimeter in order to observe the consequences of their actions.  Evidently, the only consequences they can see are the immediate results of their trading efforts.  That the dollar signs in their books translated to a $6000 billion loss for homeowners is not part of their consciousness — if the homeowners lost wealth that must be “their own fault,” surely it cannot be the result of hard working traders who made billions for their companies. After all, the only thing they are paid to see are the $$$ in their books.

To adopt this mindset as the foundation for American economic recovery is to blind ourselves to the reality that the financial markets are only one part of the total economy.  However important the Financialists believe themselves to be, they are not disconnected from the work force, the truly small business owners in the retail or construction sectors, and the unemployed who are seeking work while there are 4 workers for every job opening.

They are not disconnected from that other side of the classic economic equation that posits DEMAND must be there before any employer can hire another contractor, another tool and die machine operator, another nurse, another accountant, or another landscaper.  Until they do see the connectivity they must be relegated to the Financialist Class, calling them Capitalists would be a misnomer.