U3 and let 'em eat cake

.

If Marie Antoinette were alive today, she'd be down with the U3 method of calculating unemployment. This method of calculation is cold-hearted, soulless and a downright infuriating insult to the American people. For it declares some of the worse off among us, those that have exhausted unemployment benefits and have given up looking as non-persons unceremoniously tossed out of numerator and denominator.

Perhaps economic calculations should indeed be soulless, but they shouldn't be Satanic, and the U3 calculation is.

It's simply a way to gin up a better looking number to report, by creating an ever-shrinking "eligible employment base," down to almost 59% of adults these days, from a high of 65% just a few years ago. This measure simply tosses those folks out of the base and recalculates. Poof - through modern day statistical witchcraft, hoards of our fellow Americans disappear. A potion no less offensive than that of the witches of Macbeth, whose brood called for "liver of blaspheming Jew."

By the end of 2009, 1.5 million Americans will be thus cooked out of the sauce. Look for some of theses government-declared non-people to be taking to the streets in food riots by Christmas.

Our government needs to stop hiding the truth in statistical chicanery. The closest measure we have to an apples-to-apples measure of comparison to the way we calculated unemployment during the Great Depression is the U6 method. The U6 method adds back in the discouraged lookers and those who have had to settle for crappy part-time work to put some food on the table. Even that measure does not adjust for the millions of people who are working but have had their hours and pay slashed, sometimes dramatically. By the U6 measure, unemployment isn't far from 18%, and is up in the low twenties in some cities. This is flirting with Great Depression territory, and our government and media needs to start being upfront about this. True, the U6 number is released every month, but it's the U3 that gets all the attention. A number that actually ticked down a tenth of a percent in July, even as 247,000 more Americans found themselves out of a job.

Let's start reporting honest numbers, using methods that would please a Teddy Roosevelt or Thomas Jefferson, and leave cold-hearted Marie, whose thoughtless inconsiderations have already been judged, to the ash heap of history where she belongs.

Scared little boys in expensive suits

Why can't we get a number anymore? Just a simple, straightforward, friggin number.

So someone asks you, "What percentage of your money is disposable income?" And you go through the calculations. You know you have about $1,000 in total, but $900 is obligated, so you calculate that $100/$1,000 = 10% of your money is disposable income.

But then you say, "Wait, I owe $75 to Chuck, but I don't really have to pay him until next month." So you decide to do something sneaky - instead of shifting that $75 over to disposable income, you remove it from the denominator.

So now your disposable income in terms of percentage magically grows to $100/$925 = 10.8%. You just grew your percent disposable income by dropping out the $75 you owe to Chuck.

The Labor Bureau reported that we lost yet another big chunk of jobs in July - 247,000 of them. Less people working. But the unemployment rate went down! Why? Because like your Chuck Shenanigans, they tinkered with the denominator. They "dropped out" hundreds of thousands of people who have had their unemployment insurance run out, and are so discouraged they stopped looking for work. That's how they did it! They changed the labor base. And the news media starts jumping up and down going "green shoots green shoots!"

But think about this just for a second. This green shoot was reliant on despair! It literally required the destitution and despair of hundreds of thousand of people for this "green shoot" to pop up. What kind of a green shoot is that!

But this is where we are these days. We can't get a simple, honest, straightforward number anymore from our government. Then after this green-shoot-of-despair, the stock market rallies on the "good news!" But (see my post of Aug 9) the market is a ponzi scheme, being fueled by TARP funds the banks are laundering in through the back door. So we have a not-real market going up on not-real good news.

So who will get the bill when this next bubble bursts? You will, you and your children. But what will land down on your head will be so much more than government and Wall Street debt, it will be Government and Wall Street Shame. The absolute shameful behavior of not being able to tell the truth. So afraid they are of losing their positions and their power and their authority, as if they're going to live forever.

There comes a time when citizens take to the streets and tear down governments and institutions with their bare hands. Are we there yet? Not yet, I don't think. History books tell us that the people revolt when they are not fed bread. I suspect it's more likely that they were sick of being fed lies.

And lies and more lies are what we are getting, dished up cold, by scared little boys in expensive suits.