• ZipDialog Roundup for Friday, November 3

    Articles chosen with care. Your comments welcomed.
    Linked articles in bold purple

    Bowe Bergdahl, Army deserter held by Taliban, avoids prison sentence (Washington Post)

    Comment: This outcome is shocking. US soldiers died looking for this creep. Others were injured. Lots of resources devoted to finding a soldier who voluntarily abandoned his post and planned for weeks to do so.

    Pres. Trump immediately weighed in, via Twitter. My guess is that Trump’s position will be very popular on this issue. He’s implicitly daring the Democrats to come out on the other side, as many of them did (to their cost) on the NFL kneeling.

    More good economic news: Unemployment down to 4.1%, the lowest rate since 2000.

    Less good: Wage growth slow (Wall Street Journal, subscription)

    Best news of all: Strong Productivity Growth. (CNBC)

    Comments: Productivity growth is crucial. It is the underlying source of real wage growth.

    The biggest problem for the economy now is the misfit between the skilled jobs available and the unskilled workers who are unemployed.

    Tax Bill, next phase: We will find new details (none good, otherwise they wouldn’t be hidden), and gored oxen will come out to save themselves

    Example of hidden details:

    House Republicans claim the tax plan they introduced Thursday keeps the top individual rate unchanged at 39.6 percent—the level at which it’s been capped for much of the past quarter-century. But a little-noticed provision effectively creates a new band in which income is taxed at over 45 percent.

    Thanks to a quirky proposed surcharge, Americans who earn more than $1 million in taxable income would trigger an extra 6 percent tax on the next $200,000 they earn—a complicated change that effectively creates a new, unannounced tax bracket of 45.6 percent. –Politico

    Example of gored oxen:  Republican Tax Proposal Gets Failing Grade From Higher-Ed Groups (Chronicle of Higher Education)

    The House tax-reform proposal released today would discourage participation in postsecondary education, make college more expensive for those who do enroll, and undermine the financial stability of public and private two-year and four-year colleges and universities,” said Ted Mitchell, president of the American Council on Education and under secretary of education in the Obama administration, in a written statement.

    In broad terms, the bill would eliminate or consolidate a number of tax deductions meant to offset the costs of higher education for individuals and companies, including the Lifetime Learning Credit, which provides a tax deduction of up to $2,000 for tuition, a credit for student-loan interest, and a $5,250 corporate deduction for education-assistance plans. –Chronicle of Higher Education

    Comment: There is also tremendous pushback on the limitations on deducting state and local taxes, led by Republicans in high-tax states.

    These issues will be fought out over the next month, first in House committee, then on the floor in both chambers, then in reconciliation.

     Spain issues arrest warrant for Catalonia’s leader, who has fled the country (BBC)

    ◆ Mainstream media ignore bombshell, documented revelation that Hillary and DNC rigged primaries

    All three major TV news networks completely skip the story (Fox News)

    NYT: nothing

    Comment: It’s not surprising that most Democratic politicians are silent. But the story is a significant one, and it’s omission by mainstream outlets is bias, pure and simple.

     Pressure builds on AG Jeff Sessions, accused of false or misleading statements to Congress. The issue: what he knew Trump campaign officials’ contacts with Russia 

    The Atlantic magazine calls it: “Jeff Sessions’ Selective Memory

     

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    Hat Tip to

    ◆ Robert Pahre for the Chronicle of Higher Education story

     

  • ZipDialog Roundup for Thursday, October 19

    Articles chosen with care. Your comments welcomed.
    Linked articles in bold purple

    ◆ US consulting firm with ties to the Clintons lobbied on behalf of Russia’s nuclear giant (Circa)

    A Russian nuclear executive, whose company was the target of an FBI investigation and who admitted to corrupt payments to influence the awarding of contracts with the Russian state-owned nuclear energy corporation, paid millions of dollars in consulting fees to an American firm in 2009 and 2010 to lobby the U.S. regulatory agencies and assist the Russian’s who were then attempting to acquire twenty percent of American uranium, according to court documents, a former FBI informant and extensive interviews with law enforcement sources.

    Roughly $3 million in payments from 2010 to 2011 were made to APCO Worldwide Inc., which is described on their website as the second largest lobbying firm in the United States. The firm also provided in kind pro-bono services to Bill Clinton’s foundation, the Clinton Global Initiative, services they begin 2007, according to APCO officials who spoke with Circa

    and press releases from the company. It was during the same time that then-Secretary of State Hillary Clinton was part of the Obama administration board that would eventually approve the sale of the U.S. uranium to Russia. –Sara A. Carter at Circa

    ◆ Great News about the US Economy: Lowest jobless claims since 1973 (Bloomberg)

    Comment: One-month data contains random effects, but the trend is great.

    Head of NBC News dined with Harvey Weinstein, then spiked the well-sourced exposé from Ronan Farrow. Pressure to resign–but he’s still on the job. (Fox News)

    NBC says they are not investigating.

    NBC News is coming under increasing criticism for its failure to investigate why its embattled president, Noah Oppenheim, spiked a bombshell story that would have been the first to expose Hollywood mogul Harvey Weinstein as a sexual predator.

    An NBC spokesperson says the network is not investigating the matter, despite new revelations that Oppenheim sat at small table with Weinstein at an exclusive New York gala in April, when Oppenheim reportedly already knew that his reporter, celebrity scion Ronan Farrow, had obtained damning audio recordings in which Weinstein admitted groping the breasts of an Italian model. –Fox News (link here)

     Screenwriter close to Weinstein highlights Hollywood’s code of omertà: “Everybody f**king knew” (Mashable)

    Scott Rosenberg worked with Weinstein and company for almost a decade:

    “Everybody fucking knew,” he wrote (not once, not twice, but three times) in a lyrical, near novella-length Facebook response to those shrinking away from responsibility in enabling Weinstein’s behavior.

    Hollywood’s general unwillingness to face the music of personal accountability for the rot in their own industry added insult to injury in the onslaught of allegations. Because those (seemingly) well-meaning yet spineless responses only ensure one thing: that this will keep happening. –Mashable

    Comment: Mr. Rosenberg’s choice of words is certainly apt.

    I just hope this little unpleasantness doesn’t keep Hollywood from preaching to the rest of us.

    ◆ John Kelly speaks eloquently about his son’s combat death, says he was “stunned” by a Congresswoman’s criticism of Pres. Trump’s condolence call

    NYT gives it a straightforward headline: Kelly Speaks About Son’s Death and Criticizes Congresswoman Wilson

    CNN gives it an ugly spin: John Kelly’s stirring but incomplete attempt to clean up for Donald Trump

    Comment: CNN’s spin, presented as hard news, is shameful.

    ◆ FUSION GPS:  Founders of the firm behind Trump-Russia dossier take the Fifth (Business Insider)

    Won’t talk to House Intel Committee. Refuse to say who paid for the smear job.

    Comment: The now-discredited dossier is important because then-director of the FBI, James Comey, used it as the basis for an investigation of the Trump campaign.

    ♦♦♦♦♦♦♦

    Hat Tip to

    ◆ Tom Elia for the Mashable “everybody knew” story.

  • The values needed to succeed in modern society–and those who hate them

    Amy Wax and Larry Alexander make a powerful case that America is America is paying a heavy price for the steady breakdown of our country’s bourgeois culture (Philadelphia Inquirer and Philly.com)

    In this post, I will explain their argument and then show how they have been viciously attacked for it, culminating in a petition that their universities investigate them.

    ♦♦♦♦♦♦♦

    Professors Wax and Alexander begin by listing some of our country’s most difficult problems, from opioid abuse to low labor-participation rates. Lawyers call them a “parade of horribles,” and both Wax and Alexander are distinguished legal scholars.

    But this is not a legal article. Rather, it’s a thoughtful meditation on the deeper sources of our country’s problems and is intended for a general audience.

    The problems Wax and Alexander mention are well known. What’s important is that they argue that these problems are rooted in a breakdown in “bourgeois values,” once revered in the US but now ignored or damned in public discourse.

    ♦♦♦♦♦♦♦

    The contribution “bourgeois values” to American life–

    And the breakdown of those values

    To quote Wax and Alexander:

    The causes of these [bad outcomes] are multiple and complex, but implicated in these and other maladies is the breakdown of the country’s bourgeois culture.

    That culture laid out the script we all were supposed to follow: Get married before you have children and strive to stay married for their sake. Get the education you need for gainful employment, work hard, and avoid idleness. Go the extra mile for your employer or client. Be a patriot, ready to serve the country. Be neighborly, civic-minded, and charitable. Avoid coarse language in public. Be respectful of authority. Eschew substance abuse and crime. –Wax and Alexander in Philly.com

    These ethical precepts and social guidelines were widespread, broadly endorsed, and were not limited by race, income, or religion.

    These basic cultural precepts reigned from the late 1940s to the mid-1960s. They could be followed by people of all backgrounds and abilities, especially when backed up by almost universal endorsement.  –Wax and Alexander

    They do not excuse the racism, anti-Semitism, and other black marks of that period. They mention them by name, before adding two significant points:

    • Those stains on our culture were being steadily remedied during that era, and
    • The remedies work best when they accompany bourgeois culture rather than condemn it.

    Banishing discrimination and expanding opportunity does not require the demise of bourgeois culture. Quite the opposite. –Wax and Alexander

    Their bottom line is powerful–and, naturally, has irritated the very people who are hell-bent on destroying bourgeois culture.

    All cultures are not equal. Or at least they are not equal in preparing people to be productive in an advanced economy. The culture of the Plains Indians was designed for nomadic hunters, but is not suited to a First World, 21st-century environment. Nor are the single-parent, antisocial habits, prevalent among some working-class whites; the anti-“acting white” rap culture of inner-city blacks; the anti-assimilation ideas gaining ground among some Hispanic immigrants. These cultural orientations are not only incompatible with what an advanced free-market economy and a viable democracy require, they are also destructive of a sense of solidarity and reciprocity among Americans. If the bourgeois cultural script — which the upper-middle class still largely observes but now hesitates to preach — cannot be widely reinstated, things are likely to get worse for us all. –Wax and Alexander

    They conclude by urging Hollywood, the media, and cultural arbiters to return to celebrating the values that ultimately opened American society to upward mobility and integration and made our country so successful.

    Their argument broadly tracks two of the most important social theorists writing today, Deirdre McCloskey (writing on bourgeois virtue) and Charles Murray (writing on the social breakdown of lower classes).

    ♦♦♦♦♦♦♦

    The Left Hates these Bourgeois Values

    So They Hurl Invectives at Wax and Alexander

    “Racist, Sexist, Patriarchal, Hetero-normative” ⇒ “White Supremacist”

    54 Students and Faculty at the University of Pennsylvania, where Wax teaches, write a scathing denunciation of her (Daily Pennsylvanian, student paper at UPenn)

    Their op-ed is a self-parody of academic-leftist clichés, ad hominem argumentation, and virtue shaming. It is sliming, not thinking coherently, and is virtually untethered to the argument they are purportedly rebutting.

    [Wax and Alexander] extol the virtues of white cultural practices of the ‘50s that, if understood within their sociocultural context, stem from the very same malignant logic of hetero-patriarchal, class-based, white supremacy that plagues our country today. These cultural values and logics are steeped in anti-blackness and white hetero-patriarchal respectability, i.e. two-hetero-parent homes, divorce is a vice and the denouncement of all groups perceived as not acting white enough i.e. black Americans, Latino communities and immigrants in particular.

    –Guest Column by 54 Penn students & alumni 

    They don’t just disagree with Wax. They explicitly attack her as a fellow traveler of the KKK and neo-Nazis: “it has come time to challenge the weak foundations of white supremacist rhetoric like Wax’s on cultural grounds.” Oh, and Wax and Alexander are sexist, too. Due to some oversight, they neglected to call them Zionists, imperialists, and capitalists.

    But they conclude with a chilling proposal, that the University of Pennsylvania investigate Wax so they can put a stop once and for all to her thinking.

    ♦♦♦♦♦♦♦

    The letter by the 54 (almost all from the anthropology and education departments) illustrates a point made by Norman Podhoretz:

    Our culture is ill-equipped to assert the bourgeois values which would be the salvation of the under-class, because we have lost those values ourselves. –Norman Podhoretz (Daily Mail, November 1989)

    Ironically, though many upper-middle class progressives will not defend these bourgeois values, they actually live their own lives by them and raise their children to respect them (even as they feel guilty about their achievements).

    This same hypocrisy applies, I am sure, to many of those who signed the letter condemning Wax and Alexander.

    • How many of those PhD students and professors have children out of wedlock (much less while they were teenagers)?
    • How many aspire to live in stable domestic situations, whatever their gender orientation?
    • How many are postponing families until they can afford to raise them well?
    • How many will move to a good school district and encourage their children to develop strong work habits so they can enter the white-collar workforce?

    The answer, I’m sure, is that nearly all these signers demonstrate their true regard for bourgeois values by living their lives that way–valuing hard work and education, postponing gratification, waiting to have children until they can raise them in stable environments.

    What, pray tell, is wrong with asserting that those values make sense if you want to succeed in the modern world? What’s wrong with defending those values?

    ♦♦♦♦♦♦♦

    Comment: My views on this should be clear.

    • The 54 are slinging mud, not making arguments. They are certainly not making sustained, rational arguments.
    • The 54 are doing their best to stifle reasonable debate on major issues, first by shaming, then by trying to get Wax investigated and perhaps fired
    • The 54 are engaged in mass bullying, pure and simple.
    • The 54’s letter bears no rational relationship to the argument they are sliming.
    • The issues raised by Wax, Alexander, McCloskey, Murray are others are crucially important and deserve open, reasonable debate. The arguments should ultimately be logical and empirically-based, not virtue signalling.
  • ZipDialog Roundup: Breaking News for Tuesday, August 8

    Articles chosen with care. Your comments welcomed.
    Linked articles in bold purple

    ◆ BREAKING: North Korea now making miniaturized, missile-ready nuclear weapons, U.S. analysts say (Washington Post)

    North Korea has successfully produced a miniaturized nuclear warhead that can fit inside its missiles, crossing a key threshold on the path to becoming a full-fledged nuclear power, U.S. intelligence officials have concluded in a confidential assessment.

    The new analysis completed last month by the Defense Intelligence Agency comes on the heels of another intelligence assessment that sharply raises the official estimate for the total number of bombs in the communist country’s atomic arsenal. The U.S. calculated last month that up to 60 nuclear weapons are now controlled by North Korean leader Kim Jong Un. Some independent experts believe the number of bombs is much smaller. –Washington Post, reporting on Defense Intelligence Agency

     

    North Korea’s dangerous game: Trump is not Obama (BESA, Israeli think tank)

    Pyongyang uses the buzz that accompanies its ballistic missile and nuclear tests, as well as the obscurity that conceals the extent of its infrastructure for weapons grade fissile materials production and nuclear weaponization, as tools with which to challenge Washington. Trump is not Obama, however. Kim Jong-un will need to tread carefully to avoid provoking an American preemptive strike. — Raphael Ofek for the Begin-Sadat Center for Strategic Studies

     Robust US economy: Record number of job openings (Bloomberg)

    The gain in job openings underscores the need for workers in an economy that’s continuing to expand. At the same time, the pool of qualified Americans is shrinking and making some positions tougher to fill, one reason economists expect the monthly pace of hiring will eventually cool. –Bloomberg

    Comment: Great news. Now, to get wages moving up and people trained to fill those openings.

     Google fires author of viral memo on the downside of diversity hiring (Bloomberg)

    Google was already being sued for discrimination, and some executives said that, after the memo, they could not “in good conscience” assign some people to work the memo’s author, James Damore. They claimed his memo “perpetuated gender stereotypes.”

    Mr. Damore’s own response, which virtually nobody prints begins this way:

    I value diversity and inclusion, am not denying that sexism exists, and don’t endorse using stereotypes. When addressing the gap in representation in the population, we need to look at population level differences in distributions. If we can’t have an honest discussion about this, then we can never truly solve the problem.
    Psychological safety is built on mutual respect and acceptance, but unfortunately our culture of shaming and misrepresentation is disrespectful and unaccepting of anyone outside its echo chamber. –James Damore

    James Damore’s complete, original memo and response are here (Medium.com)

    Comment:

    • Expect him to sue.
    • Expect him to find it hard to gain employment in Silicon Valley.
    • Expect an honest discussion of these issues to become impossible.

    More troubles for Obamacare: Major insurers keep leaving the marketplace (Fox News)

    Exchanges are now down to 3 states. Insurers lost over $1 billion in last two years.

     

     

    ♦♦♦♦♦♦♦

     

  • ZipDialog Roundup for Friday, August 4

    Articles chosen with care. Your comments welcomed.
    Linked articles in bold purple

    ◆ EXCELLENT ECONOMIC NEWS: Surging jobs in July means that the US has now regained all the jobs lost in the recession. Wages rose 2.5% last year. Unemployment remains 4.3% Dow-Jones above 22k for the first time ever (Washington Post)

    Comment: Now, to get more healthy people back into the labor force.

     

     ◆ After latest leaks of private Presidential phone calls to foreign leaders, AG Jeff Sessions announces more measure to find and punish the perps (Fox News)

    Based on the leaked documents, The Washington Post reported new details Thursday about Trump’s tense phone calls in late January with Mexican President Enrique Peña Nieto and Australian Prime Minister Malcolm Turnbull. In the former, Trump reportedly told the Mexican leader to stop publicly saying his government would not pay for a border wall.

    The newspaper said the transcripts had notes indicating they had been classified by the chief of staff on the National Security Council. The Post said it obtained full transcripts, which were “produced by White House staff” and based on records kept by White House note-takers. –Fox News

    Comment: My guess: holdover staff from the last administration or people who have just been fired.

    Special Counsel Mueller empanels Grand Jury in Washington (The Hill)

    They already had one in Virginia, so this is really not new, just a more convenient location for Mueller’s office, which now has 16 full-time prosecutors.

    Comment: It means the investigation is

    • Clearly a criminal one, not limited to counter-intelligence
    • Not limited to Mike Flynn, who was the subject of the Virginia panel
    • Likely to last many more months

    Who should be worried? Anybody in Trump’s circle who has extensive business dealings with Russia or Russian-sponsored entities and, of course, anybody who lies to Federal agents. Lying to the media is not a crime, but a pattern of lying could indicate intent to cover up and prompt further inquiry.

    West Virginia’s Democratic Governor announces switch to GOP at Trump rally (Charleston WVa Gazette-Mail)

    West Virginia, once reliably Democratic, has voted for Republicans in each presidential race since 2000, and dramatically last year. Four of the state’s five Congressional seats have flipped to Republican.

    The most important elected Democrat in the state is now centrist Joe Manchin, who said he will remain a Democrat.

    Comment: Democrats now control only 15 governorships and the fewest state legislatures in the party’s history.

    Sticking with Bernie and Nancy is not going to help, but the ineptitude of the current Congress will.

    Israel: PM Netanyahu’s top aide agrees to testify against him in a bribery, fraud investigation (Bloomberg)

    Comment: Likely outcome: Netanyahu indicted.

    It’s grim when top officials are suspected of corruption, but it is good news when an independent judiciary can investigate them, as they do in constitutional democracies . . . and nowhere else.

    Chief of Staff John Kelly emerges as key supporter of National Security Council Adviser McMaster in White House in-fighting (Politico)

    Comment: Yes, it helps that they are both former generals. But the main point is that they are both experienced at high-level Washington bureaucratic politics.

    McMaster has been cleaning house in his operation, putting his own people in place.

    The problems: McMaster has a violent temper, often on display in staff meetings, and is frequently pitted against Steve Bannon, who is an important link to Pres. Trump’s populist constituency–and who would be harder on the Trump Administration outside the tent than inside.

    Fragile economy limits Putin (Reuters)

    And US sanctions weak him further.

    Comment: ZipDialog has made this point repeatedly. Most news commentary has overlooked it.

    ♦♦♦♦♦♦♦

    Hat Tip to

    ◆ Michael Lipson for the Grand Jury story

  • ZipDialog Roundup for Thursday, May 18

    Topics and articles chosen with care. Linked articles in bold purple

    It’s wonderful to see a growing community of readers here at ZipDialog. Thanks for visiting and for sharing it with friends.

    I hope it really does build a dialog of diverse viewpoints on public issues.

     What does the Mueller appointment mean?

    Here’s my take:

    • The appointment was widely applauded. Everybody said that, if anyone had to do the job, Mueller was the best choice. He is
      • A straight-shooter, not a partisan
      • A work horse, not a show horse
      • An experienced hand at the FBI, which he directed. That means he can get up-to-speed quickly and choose a staff quickly.
      • An experienced prosecutor, who will know what to pursue and what to leave aside.
      • A focused investigator, who is unlikely to go off on tangents, as previous special prosecutors have
    • The appointment decision was made by Rod Rosenstein, the second-in-command at DOJ and, in this case, acting Attorney General because Jeff Sessions has recused himself.
      • Rosenstein continues to acquit himself well. He made the decision himself and simply gave the White House a heads-up shortly before the public announcement.
    • Some strong Trump supporters think a special counsel was not needed and is a victory for the Democrats. They are mistaken, IMO.
      • It is a victory for the Democrats in the sense that they, and not the Republicans, have been seeking such an appointment.
      • But it was essential to restore public trust after the Comey firing and conflicting stories about what caused it, following by Comey’s leaked memo.
      • The reason why the appointment was essential is that only a trusted, non-partisan, and highly-competent investigator, such as Mueller, can clear Trump of the serious allegations against him and his team, namely that they collaborated with the Russians and that Trump tried to kill the investigation in a private conversation with Comey.
        • If the prosecutor or special counsel were tainted, the findings would be, too.
        • If Trump wants to reboot his Presidency and move beyond the Democrats’ unsubstantiated charge that he stole the election and committed a high crime to cover it up, then he needs Mueller and not some toady to say so.
    • The big question about the scope of the investigation is how much it will delve into Russia’s overall involvement in the 2106 election.

    I will stay on top of this issue and, in later posts, will take up other aspects.

    Meanwhile, we need an equally thorough investigation by the intel agencies themselves into who is leaking their crown jewels to hackers and highly-classified material to the Washington Post and New York Times.

     How bad is Turkey’s sinking Islamic autocracy? Erodogan’s thugs beat up protesters in Washington, DC, outside the Turkish Embassy (Washington Post)

    D.C. police arrested two men, one from Virginia and one from New York, and said they are pursuing charges against additional suspects since the melee outside the Turkish ambassador’s residence at Sheridan Circle. Eleven people were injured, among them a police officer. Some were kicked and stomped, their heads bloodied.

    Included in the police search are members of Erdogan’s armed protective detail, according to two people with direct knowledge of the case. –Washington Post

    Comment: This is really nasty and some of the thugs will escape justice because of diplomatic immunity.

     Twenty-one members of the violent MS-13 Gang arrested in LA raid (Los Angeles Times)

    Twenty-one people accused of being part of the notoriously violent MS-13 gang were arrested Wednesday as federal and local investigators forced their way into homes and businesses across Los Angeles County in a pre-dawn sweep that came as a result of a more than two-year racketeering investigation. . . .

    MS-13, also known as Mara Salvatrucha, preys on immigrants without legal status.

    “They extort them. They rob them. They rape them. They murder them. Without their cooperation as witnesses, none of this would be possible,” [LA Police Chief Charlie] Beck said, noting that LAPD officers do not check immigration statuses before talking to witnesses. –LA Times

    Comment: This needs to keep going, month after month.

    ◆$ The tech sector is leaving the rest of the US economy in its dust: Apple, Alphabet, Facebook, Amazon, and Microsoft  (The Verge) Their dominance in the stock market rally is clear-cut.

    It took Amazon 15 years to match the market capitalization of Walmart. Two years later, it is worth more than double its biggest rival. –The Verge

    ◆$ Ben Bernanke says America’s economy is now nearing capacity  (Financial Review, Australia)

    “We’ve got basically a 2 per cent economy here and that means it doesn’t take that much to knock you off track,” Bernanke told attendees at the SkyBridge Alternatives Conference in Las Vegas. “We have already approached the limits of our capacity and unemployment is pretty much about as low as it can go, so we don’t have that extra capacity to create growth.” –Financial Review

     Here’s what free speech means: Univ. of Chicago students get to hear a talk by the head of Homeland Security and actually engage with a key policymaker on crucial issues  (WLS, ABC7 Chicago)

    Comment: At many universities, the head of DHS, retired general John Kelly, would be shouted down because he is the front line of Trump’s immigration policy and anti-terrorism efforts. Because he was not shouted down, our students got to hear him, ask tough questions, and make their own decisions, without intimidation.

     

    ♦♦♦♦♦♦♦

     

  • US Job Market Is Tightening Significantly: Why It Matters. What Policies Would Help

    ◆ That tightening sound you hear in the economy is coming from the labor market.

    And you soon may hear a more ominous sound – the US economy choking, unless policy makers begin addressing the regulatory and education constraints on labor.

    The Evidence Is Increasingly Clear

     Commercial real estate contractors told the Wall Street Journal Monday (May 8) that major building projects are soaking up huge gulps of available electricians, carpenters and other subcontractor laborers.

    Those labor-hungry projects include O’Hare modernization in Chicago, office-building projects in New York, condo and rental-housing projects in Boston, Miami and Los Angeles.

    Elsewhere, shortages of auto mechanics due to increasing complexity of cars are driving up labor rates to where a certified master mechanic can command $100,000 pay check. Fiat Chrysler Corp. said its dealers – forget about your local auto mechanic — will need 25,000 new mechanics in the next five years.

    With the US unemployment rate now at 4.4 percent – lowest since the recession began, according to the April jobs report – and with 700,000 workers having moved in the past year to fulltime status from part-time status, the market grows tighter.

    It seems unlikely the Trump administration will encourage immigration to mitigate the shortage.

    Exasperated employers are raising wage rates, but there are fewer workers on the sidelines to lure into jobs. That’s a stiff headwind for any economy, even one growing at the dismal 0.7 percent annual rate for the first quarter.

    What Policies Could Help?

    (1)  US business needs a skills-certification program for key jobs – an education and certification program that’s national in scope so certified workers can move easily and quickly into jobs in many states without having to jump through local-union apprenticeship hoops.

    (2) Long term, the US education system has to confront its depressing record of failing to educate students for 21st Century jobs in the trades.

    Indeed, social and education policies discourage students from investing in a trade-school education.

    Dan Miller is one of Chicago’s most respected and experienced economic journalists.

    He served as Chairman of the Illinois Commerce Commission in the 1990s, then business editor of the Chicago Sun-Times, and, in recent years, as policy adviser to the Heartland Institute, a libertarian think tank.  He also co-founded the Chicago Innovation Awards, which as recognized best-practices in products and services for over 15 years.

  • ZipDialog Explainer: What Do the Unemployment Numbers Mean?

    Each month, we hear news reports about “today’s unemployment figures,” numbers that are currently very good and getting better.

    What do those unemployment numbers measure? Are there different ways to figure them?

    Basically, the numbers we hear are the “top line” numbers, collected by the United States Bureau of Labor Statistics (BLS), based on their surveys. But, just as the Dow-Jones Average is only one measure of how the overall stock market is doing, those top line numbers are only one gauge of employment.

    ♦♦♦♦♦♦♦♦

    The goal here is simply to explain what those unemployment numbers include and what they leave out.

    First, the official BLS numbers come from sample surveys, which are adjusted later as additional data comes in.

    Second, the numbers need to be adjusted for seasonal-weather effects. If we didn’t do that, then we couldn’t fairly compare unemployment in January and July. So, we adjust for known seasonal effects. The problem is that the average effects for January may not apply to this January. Perhaps it is warmer than normal so more construction can be done outdoors. Or perhaps a major storm knocked out power. These differences mean seasonal adjustments are always approximate. That’s why it is more reliable to look at trends and averages.

    BLS data includes both seasonally-adjusted and raw numbers, but the news reports only the adjusted number. That’s reasonable. Sometimes, they add the caveat that this year’s weather may tilt the numbers in one direction or another.

    Third, there are different ways to decide

    • Whether someone is fully employed, unemployed, or underemployed (either working fewer hours than full-time or working in a lesser position), and
    • Whether someone is part of the potential work force or not. Are they of working age and fit to work, mentally and physically? Are they actually looking for work?

    Since there are different ways to answer these questions, the BLS offers several ways of measuring unemployment, from U1 to U6. These are the 3 most important:

    1. U1: The narrowest measure of unemployment.
      • Persons unemployed 15 weeks or longer, as a percent of the civilian labor force
    2. U3: The standard measure–the one reported in the news
      • Total unemployed, as a percent of the civilian labor force
      • These are people who are without jobs and have actively looked for work within the past four weeks
    3. U6: The broadest, most comprehensive measure
      • Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force

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    These numbers usually go up and down in sync, but not always. When the job market gets stronger, some people move off the sidelines and begin hunting for jobs again. If they don’t find them right away, their failure actually increases the U3 unemployment number (since they had not been counted as unemployed when they were not actively looking).

    Since we mostly hear about the U3 rate, it is important to understand who is not included. If I were laid off, age 39 as the Chicago White Sox backup shortstop and stopped looking for work because I knew nobody was hiring 39 year-old shortstops, I would not be counted as unemployed. Why? Because I wasn’t looking for work.

    If I decided, as a last resort, to work 10 hours a week coaching a high-school baseball team, I would be counted as employed, even though I wanted to work 40 hours. So, the U3 rate leaves out some people that you or I might consider “unemployed” or “underemployed.”

    To get this larger picture, you can look at a more comprehensive measure, such as U5 or U6.

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    Fortunately, the numbers on all these measures is good and getting better. Here are the seasonally-adjusted numbers.

    Here is the ten-year trend for U3,  showing the drastic rise with the financial crash and the steady improvement since unemployment peaked in late 2009. If GDP growth had been stronger, the numbers might have been better sooner. But the Obama Administration can rightly look at this steady improvement in employment numbers and tout it as a major achievement.♦♦♦♦♦♦♦♦

  • ZipDialog Roundup for Thursday, April 27

    Topics and articles chosen with care. Linked articles in bold purple

     Trump goes BIG with proposed tax cuts

    New York Times: “Trump Proposes Sharply Cutting Tax Rates for Individuals”

    The plan is still broad strokes, rather than details, but the strokes are bold.  The point men are Steven Mnuchin at Treasury and Gary Cohn at the National Economic Council.

    The proposal envisions slashing the tax rate paid by businesses large and small to 15 percent. The number of individual income tax brackets would shrink from seven to three — 10, 25 and 35 percent — easing the tax burden on most Americans, including the president, although aides did not offer the income ranges for each bracket.

    Individual tax rates currently have a ceiling of 39.6 percent and a floor of 10 percent. Most Americans pay taxes somewhere between the two.

    The president would eliminate the estate tax and alternative minimum tax, a parallel system that primarily hits wealthier people by effectively limiting the deductions and other benefits available to them. –New York Times

    The Times also has a perceptive story: Trump’s Tax Plan Is a Reckoning for Republican Deficit Hawks

    The White House insists that economic growth will cover the cost, which could be as high as $7 trillion over a decade. But the question will dog Republicans and could fracture their party as they face the prospect of endorsing a plan that many economists and budget analysts warn will increase the deficit. –New York Times

    Comment: The main story on tax cuts is riddled with editorial attacks on Trump and often personal ones. The opening line of the lead story is that the tax cuts benefit the rich. And all the stories emphasize the NYT’s speculation–and that is all it is–that the cuts will benefit Trump personally. The implications are that he is self-dealing and that this plan is just another “favor-the-rich, Republican plutocrat” idea. They also love to follow the “benefit the rich” with the words “like Donald Trump.” They have given up all pretense of distinguishing their hard-news reporting from their editorial stance. The difference is the first thing student journalists learn.

     US THAAD anti-missile system, sent to South Korea, to be active within days  (CNN)

    Comment: The US has also sent major naval assets to the area, while China and Russia have deployed significant land forces, possibly fearing an influx of refugees if the Kim regime collapse. But also a signal to Kim Jong Un that he is facing pressure on multiple fronts. 

     Obamacare repeal: House GOP factions making progress, Senate Republicans still an obstacle.  Politico reports: GOP senators not so keen on House’s Obamacare repeal

    The House may finally be on its way to scrapping Obamacare, but don’t expect the Senate to go along: Any plan sent over will undergo major surgery — and survival is far from assured.

    The hurdles in the upper chamber were on vivid display Wednesday as House Republicans celebrated their breakthrough on the stalled repeal effort. The compromise cut with House Freedom Caucus members won over the right flank, but the changes will almost surely make it harder to pick up votes in the more moderate-minded Senate. –Politico

    Comment: The pressure to get this done will be enormous. The GOP knows that they face electoral disaster if they don’t pass their biggest promise of the past seven years.

     How good is the economy in Austin, Texas? “Employers struggling to find workers who will take less than $15 an hour” (KXAN)

    The story also notes, oddly, that unemployment there has crept up slightly in the past few months.

    Comment: When I was in Austin this winter, I asked some workers at a fast-food chain what the starting wage was. “$12 an hour.” I often ask that question when I travel since the starting wage at a McDonald’s or Dairy Queen is the effective minimum wage in the area. 

    I draw two lessons from the Austin story.

    First, the only lasting way to raise the minimum wage is to strengthen business demand for workers, which means making it easier for them to do business and prosper. That’s the Texas story, in a nutshell.

    Second, if unemployment is creeping up (though still very low in Austin) but businesses cannot find workers, then something is wrong. Either people don’t have the right skills or there are disincentives to work. Either way, those are problems that need solutions.

     First settlers came to America 130,000 years ago, long before previous estimates, according to a new study.  (Science News)

    An unidentified Homo species used stone tools to crack apart mastodon bones, teeth and tusks approximately 130,700 years ago at a site near what’s now San Diego. This unsettling claim upending the scientific debate over the settling of the Americas comes from a team led by archaeologist Steven Holen of the Center for American Paleolithic Research in Hot Springs, South Dakota, and paleontologist Thomas Deméré of the San Diego Natural History Museum. If true, it means the Cerutti Mastodon site contains the oldest known evidence, by more than 100,000 years, of human or humanlike colonists in the New World, the researchers report online April 26 in Nature. –Science News

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    zd-hat-tip-facing-inward-100px-w-margin♥ Hat Tip for helpful suggestions:
    ◆ Michael Lipson
     for the Austin, Texas, story