Lies, damn lies and census statistics
Flickr user ClaraDon
(MoneyWatch) COMMENTARY It's a good thing I write commentary for real people in the real working world and not to win voters over to the right or left. That simple fact allows me the latitude to actually be straightforward and genuine. Mainstream journalists should try it sometime.
That little bit of satire was brought to you by Thursday's Associated Press "news" story, and I use that term loosely, indicating that the U.S. Census Bureau American Community Survey suggests that the economy has finally "bottomed out."
The article hangs its flimsy premise on a number of "glimmers of hope in an economic recovery" (their words, not mine). I've got no skin in this game, but for the life of me I cannot understand how anyone can spin -- I mean interpret -- this data to look like good news and somehow keep a straight face.
Lies, damn lies and unemployment data
The truth about job creation
Are we better off today than 40 years ago?
The best quote from the article, hands down, is "analysts say the latest census data provide wide-ranging evidence of a stabilizing U.S. economy." So who are these "analysts" quoted in the story? A professor of sociology, an executive with the Population Reference Bureau (whatever that is) and a demographer. Some analysts.
To its credit, the article did actually cite one economist, Harvard's Richard Freeman, who said, "the data point to a 'fragile recovery' with the economy still at risk of falling back into recession ..." and "we are doing better than many other countries." Not exactly a ringing endorsement of the premise, if you ask me.
The article cites a lower unemployment rate of 8.9 percent (as of March, the end of the period covered in the Census survey), versus 9.6 percent in 2010. That's true. But according to the Bureau of Labor Statistics, the unemployment rate, which is now 8.1 percent, has remained above 8 percent for 43 straight months, longer than all the months from 1948 to 2008, combined. I'm not even going to get into how many people gave up looking for jobs or are underemployed.
The sociology professor, Andrew Cherlin of Johns Hopkins, said, "We may be seeing the beginning of the American family's recovery from the Great Recession," because of "an upswing in mobility" and "young men moving out of their parents' homes." I don't know what mobility has got to do with anything, but maybe, just maybe, kids are getting kicked out because their unemployed parents can't afford to keep them on the gravy train.
The article goes on to say that, "More young adults are staying in school." That's because there are no jobs and they have nowhere else to go. Sort of obvious, don't you think?
The article optimistically says that "Americans were slowly finding ways to get back on the move," with about 12 percent of the population moving to a new home, up from 11.6 percent in 2011. Sure, I believe that data. Everyone I know that moved to a new home is either downsizing or getting out from under an upside-down mortgage.
It points to "slowing growth in the foreign-born population" because "many Mexicans already in the U.S. opted to return home." And how is that good news? They're leaving because there's no work here. You know America's in bad shape when things are better in Mexico.
Sure, the poverty rate is still increasing, but at a slightly slower rate. Whoopee. More people -- 13 percent of U.S. households or one in eight families -- are on food stamps. That's the highest number ever recorded. And home ownership dropped to 64.6 percent, the lowest it's been in over 10 years and the fifth-straight annual decline.
Also unmentioned in the article:
- According to the Census Bureau report, median household income declined in 18 states. Only one state, Vermont, showed an increase.
- In an article entitled Face It: 2013 Is Gonna Be a Bummer, 79 economists surveyed by Bloomberg lowered their consensus estimates for gross domestic product growth in 2013 from a lackluster 2.5 percent to an anemic 2.1 percent.
- The Federal Reserve last week unleashed a fresh wave of "quantitative easing," essentially flooding the U.S. economy with $40 billion a month by buying up mortgage bonds. Why did Fed chairman Ben Bernanke decide to do that? Why do you think? To try to boost the economy and keep America from falling back into recession.
Look, I'm not saying the sky is falling. The sky fell a long time ago. What I am saying is that, if you want an honest assessment of the U.S. economy, one that doesn't lean one way or the other, it's this: Don't expect the sky to be back up where it belongs, all sunny and blue, anytime soon.
Image courtesy of Flickr user ClaraDon
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"about 12 percent of the population moving to a new home, up from 11.6 percent in 2011"
This figure includes the many people who are moving to a "new home" because their old one was foreclosed. Of course their "new home" is a dumpy apartment or worse.
"More young adults are staying in school."
As you stated, if they can obtain student loans, it might be better to stay in school. But here's an idea for a future article. What happens if the economy stays in the dumper for a few more years, as is likely? Then those people will have large student loans and will have to start making payments without an income source. Depression 2.0 will just go on and on.
You also could have mentioned that our debt just passed $16 trillion, with GDP being just a bit higher than $15.6 trillion, meaning that our debt/GDP ratio is 1+, dangerous territory. And our elected Neros just fiddle on.
http://saucymugwump.blogspot.com/2012/09/debt-follies-part-3.html
The article goes on to say that, "More young adults are staying in school." That's because there are no jobs and they have nowhere else to go. Sort of obvious, don't you think?
--[end quote]--
The net effect of this:
Young men and women will be overqualified for entry level jobs when they finally do decide to enter the workforce. If we had a sense of what degrees these young people are pursuing (in my mind, STEM would be a good thing, vs degrees that do not lead to employment within their field of study: anthropology, sociology, literature, etc), I might think this is a good thing.
But when one is making the choice between working entry-level jobs, not working at all or staying in school; I can see the attraction of the path of least resistance (and the path of least homework, intellectual rigor and least hardest exams).
I also see these "stay in schoolers" debt-to-income ration going from astronomical to infinite. Think Sally Mae has seen the last of her troubles? Wait until the students who borrowed over the past 2-3 years run out of financial aid and student loans and settle into a life funded by an entry-level paycheck.
When deciding between buying food, paying rent and paying off student loans (after mom and dad have finally dumped the family home and moved to a 2 bedroom over-fifty community condo), I'm thinking that student loans will be low on the priority list.
Many young people feel that if Obama will be re-elected, all student loans will be forgiven. According to the Houston Chronical (and others) http://www.chron.com/opinion/outlook/article/Saunders-America-can-t-afford-Obama-s-student-3875473.php, Congress has already passed a measure that will cap student loan payments at 15% of discretionary income and forgiveness of any balance after 25 years.
How much discretionary income is left on an entry-level salary or hourly rate?
Sally Mae's problems haven't been solved, they've been pushed out to future generations (and most importantly, to future administrations).
Why is importing tens of thousands more foreign workers good for America, given our high unemployment rate? It's only a great deal for employers because they will now be able to offer even lower salaries.
Marc Jellinek wrote: "Many young people feel that if Obama will be re-elected, all student loans will be forgiven"
This is probably correct, as young people are usually naive and ignorant of reality. Obama is using this carrot to get young people to vote for him, but unless the House magically converts into a Democratic majority, it will never happen.