These are my links for The Morning Flap – August 2nd through August 3rd:
- July jobs report: America’s labor market depression continues– Only in a world of lowered, New Normal expectations was the July jobs report anything less than another disaster for U.S. workers. Nonfarm payrolls rose 163,000 last month as the unemployment rate rose to 8.3%. In addition, employment for May and June was revised by 6,000 jobs.– Not only is the 8.3% unemployment rate way above the 5.6% unemployment rate that Team Obama predicted for July 2012 if Congress passed the $800 billion stimulus plan. It’s way above the 6.0% unemployment rate they predicted if no stimulus was passed.– Job growth, as measured by nonfarm payrolls, has average about 75,000 jobs a month during the Obama recovery for a total of 2.7 million jobs. Context: During the first three years of the Reagan Recovery, job growth averaged 273,000 a month for a total of 9.8 million. If you adjust for the larger U.S. population today, the Reagan Recovery averaged 360,000 jobs a month for a three-year total of 13 million jobs.– This continues to be the longest stretch of 8% or higher unemployment since the Great Depression, 42 straight months.– If the labor force participation rate was the same as when Obama took office in January 2009, the unemployment rate would be 11.0%.
– Even if you take into account that the LFP should be declining as America ages, the unemployment rate would be 10.6%.
– If labor force participation rate hadn’t declined since just last month, unemployment rate would have risen to 8.4%.
– The broader U-6 unemployment rate, which includes “all persons marginally attached to the labor force, plus total employed part time for economic reasons,” ticked up to 15.0%.
– Two years ago, Treasury Secretary Tim Geithner wrote his now-infamous “Welcome to the Recovery” op-ed for the New York Times. During those two years, the economy has added an average of just 137,000 jobs a month.
– Not only is the 8.3% unemployment rate way above the 5.6% unemployment rate that Team Obama predicted for July 2012 if Congress passed the $800 billion stimulus plan. It’s way above the 6.0% unemployment rate they predicted if no stimulus was passed.
- 195,000 Fewer Americans Had Jobs in July; 150,000 Dropped Out of Labor Force– There were 195,000 fewer people employed in the United States in July than in June, according to the Bureau of Labor Statistics, as the national unemployment rate ticked up from 8.2 percent to 8.3 percent.Meanwhile, 150,000 people simply dropped out of the labor force during the month and did not seek to find a job.In June, according to BLS, there had been 142,415,000 people employed in the United States. In July, that dropped to 142,220,000–a decline of 195,000.Similarly, in June, there were 155,163,000 people in the civilian labor force in the United States. To be counted in the civilian labor force, person must be 16 years old or older, not be in the military, prison or a mental institution, and either have a job or have actively looked for a job in the past four weeks.In July, the number of people in the civilian labor force was 155,013,000–a decline of 150,000 from June.
- Economy Creates 163,000 New Jobs but Rate Rises to 8.3%– The U.S. economy followed up a weak second quarter by creating more jobs than expected with 163,000 new positions added in July, but the unemployment rate rose to 8.3 percent.Markets reacted positively to the announcement, with the stock market surging at the open and safe-haven bond prices plunging. Economists had been expecting 100,000 new jobs.As the country struggles to gain growth traction, the unemployment rate held above 8 percent for the 41st consecutive month, according to the latest report from the Bureau of Labor Statistics.”I’d call this a soft 163,” said Steve Blitz, chief economist at investment research firm ITG in New York. “If you want to take from this the notion that the economy is not heading to a recession or something more ominous, that’s fine. But if you want to take from this the idea that the economy is about to accelerate, I think that would be a big mistake.”
- CA Gov. Brown Allegedly Took $3 Million from 9/11 Fund– As California teeters near default in many areas, news is breaking that Gov. Jerry Brown may have taken up to $3 million from a fund created “in honor of the victims of the 2001 terror attacks” to make up for shortfalls.The fund, which was raised by the sale of specialized plates within the state, totals approximately $250 million, and the AP reports that both Brown and former Gov. Arnold Schwarzenegger each allegedly dipped into the monies in an effort to make ends meet.
- GAO: Tax cheats get millions in Medicaid money– One in every 20 health providers getting taxpayer money from Medicaid is delinquent on their federal taxes, and in some cases the tax cheats are years behind in paying the IRS, according to a new audit by Congress’s investigators.The Government Accountability Office looked at about 7,000 providers in three large states who Medicaid reimbursed more than $6 billion in 2009 and found that they had nearly $800 million in unpaid federal taxes.In two cases, the health companies — which range from dentists and doctors to private ambulances and medical supply companies — had been under criminal investigation, including for medical billing fraud.“It is outrageous that heath care providers who cheat on their taxes are getting paid with taxpayer dollars through the Medicaid program,” said Sen. Carl Levin, chairman of the Senate’s investigative subcommittee.He called for the government to prohibit companies with unpaid taxes from Medicaid money.
- Tax Scam: IRS Pays Out Billions in Fraudulent Refunds– The IRS is paying out billions of dollars in fraudulent tax refunds to identity thieves; a problem that the tax service’s inspector general told CNBC is a “growing problem” involving numbers that are increasing “exponentially.”In a new report to be issued Thursday, the inspector general for the IRS says that tax thieves are stealing the identities of taxpayers and then filing bogus returns on their behalf and collecting fraudulent refunds as a result.The inspector general estimates that the IRS could issue as much as $21 billion in fraudulent tax refunds over the next five years.
- Pelosi, Dems push Homeland Security for clarity on LGBT deportations– Scores of House Democrats called on the Obama administration this week to protect lesbian, gay, bisexual and transgender (LGBT) couples when considering deportations.Behind Minority Leader Nancy Pelosi (D-Calif.) and Rep. Jerrold Nadler (D-N.Y.), the lawmakers want the Department of Homeland Security (DHS) to state explicitly that LGBT “family ties” will be deemed “a positive factor” discouraging deportation as DHS agents gauge whether to pursue cases.
- Defense Lawyers Say Prop 37 Will Bring Bumper Crop of Litigation– With recent polling suggesting Californians want labels on genetically modified food, defense attorneys warn that an upcoming ballot initiative could generate a bumper crop of litigation.Proposition 37, also known as the Right to Know Genetically Engineered Food Act, would require labels on edibles containing ingredients whose DNA was tweaked to increase yield, to fight off disease or for any other reason. If voters approve the initiative in November, California would become the first state in the nation to employ such a far-reaching consumer alert system.Proponents say their measure has a simple rationale: Californians should know what’s in the food they buy and eat. But legal critics say compliance would be a far more complex task. And they point to an enforcement provision authorizing private consumer lawsuits, something defense lawyers compare less than flatteringly to Prop 65, the 1986 law that requires businesses to warn consumers about chemicals they use.”When I used to go and talk about Prop 65 when it was on the ballot, I would say the biggest beneficiaries would be lawyers. I think that goes double for Prop 37,” said Michele Corash, a environmental defense partner with Morrison & Foerster.James Wheaton, the Oakland attorney who helped draft Prop 37, said such claims amount to scare tactics.
- Majority of Californians say they know nothing about emissions cap-and-trade program– California’s landmark global-warming bill was a white-hot topic in the 2010 governor’s race and remains former Gov. Arnold Schwarzenegger’s signature environmental achievement.But as the state prepares to unroll the law’s cap-and-trade program in November with the first state auctions of emissions permits, a new poll finds that 57 percent of Californians say they have never heard anything about the program.The statewide poll by the Public Policy Institute of California further found that 30 percent of respondents said they had heard “a little,” while just 12 percent said they had heard “a lot.”
- Police Chief’s $204,000 Pension Shows How Cities Crashed– Stockton, California, Police Chief Tom Morris was supposed to bring stability to law enforcement when he was appointed to the job four years ago.He lasted eight months and left the now-bankrupt city at age 52 with an annual pension that pays more than $204,000 — the third of four chiefs who stayed in the position for less than three years and retired with an average of 92 percent of their final salaries.Stockton, which filed for bankruptcy protection on June 28, is among California cities from the Mexican border to the San Francisco Bay confronting rising pension costs as they contend with growing unemployment and declining property- and sales-tax revenue. The pensions are the consequence of decisions made when stock markets were soaring, technology money flooded the state, and retirement funds were running surpluses.“We didn’t have very many people looking out for the taxpayers when these deals were negotiated,” San Jose Mayor Chuck Reed, 63, said in a telephone interview. San Jose, the state’s third-largest city, approved a ballot measure in June to contain annual retirement costs that soared to $245 million from $73 million in the past decade.