Two events coincided this past week that presented an interesting tableau. The first was the "decline" in the nation's unemployment rate to 6.6% and the second was the ongoing debate in Washington about reauthorizing extended unemployment benefits due to the "emergency" of high unemployment. Now let's be clear; I recognize that the debate about authorizing an extension of unemployment benefits is more about the November elections than about helping those who face unemployment, but there still ought to be some smidgeon of reality included in the debate. According to the federal statistics, there are fewer unemployed today than there were the last time that the nation's unemployment rate was 6.6%; supposedly, that is due to people dropping out of the workforce. And since people are not entitled to unemployment compensation if they are no longer seeking a job, those who dropped out of the workforce should not be getting benefits. That means that today there are fewer entitled to benefits than there were when there was no emergency and it brings up this question: if the federal unemployment statistics are correct, why is there an "emergency" of high unemployment?
Let's take this one step further. Over the last 40 years, the average annual rate of unemployment for the country was higher than 6.6% about 40% of the time. That's right, in 16 of the last 40 years, the average ANNUAL rate of unemployment was higher than it is now. During most of those 16 years, there was no unemployment "emergency" with extra benefits coming from the federal government.
So does this mean that the discussion of extending emergency unemployment benefits is a phony one? I do not think so. My take on this is that the government employment statistics are what is phony. We go month after month with paltry job creation and dropping unemployment rates. It is as if a person were put on a starvation diet but continued to gain weight at a rapid pace; it does not make sense. Every month, we hear about weather impacts, seasonal adjustments, and other reasons why the figures are "temporarily" distorted. The reality, however, is that temporary periods end and temporary distortions reverse. What seems more likely is that these figures are being intentionally manipulated by the government to make things look better than they really are.
Until recently, it would have been unthinkable for me to write or even think such a thing. Could the Bureau of Labor Statistics really be cooking the books? No way! This is the USA, not some banana republic or even China. Then we heard about the "corrections" to the numbers that were made during the election campaign in 2012 to bring down the unemployment rate. After an initial fuss about the event, it disappeared from view, much like the IRS scandal. Even so, it is hard to believe that the BLS is knowingly putting out faulty figures. Nevertheless, someone has to explain what is going on.
Let's take this one step further. Over the last 40 years, the average annual rate of unemployment for the country was higher than 6.6% about 40% of the time. That's right, in 16 of the last 40 years, the average ANNUAL rate of unemployment was higher than it is now. During most of those 16 years, there was no unemployment "emergency" with extra benefits coming from the federal government.
So does this mean that the discussion of extending emergency unemployment benefits is a phony one? I do not think so. My take on this is that the government employment statistics are what is phony. We go month after month with paltry job creation and dropping unemployment rates. It is as if a person were put on a starvation diet but continued to gain weight at a rapid pace; it does not make sense. Every month, we hear about weather impacts, seasonal adjustments, and other reasons why the figures are "temporarily" distorted. The reality, however, is that temporary periods end and temporary distortions reverse. What seems more likely is that these figures are being intentionally manipulated by the government to make things look better than they really are.
Until recently, it would have been unthinkable for me to write or even think such a thing. Could the Bureau of Labor Statistics really be cooking the books? No way! This is the USA, not some banana republic or even China. Then we heard about the "corrections" to the numbers that were made during the election campaign in 2012 to bring down the unemployment rate. After an initial fuss about the event, it disappeared from view, much like the IRS scandal. Even so, it is hard to believe that the BLS is knowingly putting out faulty figures. Nevertheless, someone has to explain what is going on.
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