NYT:$3Bgov’tretrainingprogramaseffectiveas

NYT: $3B gov’t retraining program as effective as you’d guess

posted at 5:21 pm on August 18, 2014 by Ed Morrissey

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To paraphrase the old Tennessee Ernie Ford song — you take a ton of government cash to get job retraining, and what do you get? Several years older and deeper in debt, according to the New York Times, which casts a critical eye on the Workforce Investment Act. The program first came into existence in 1998 and was expanded in the 2009 stimulus bill passed by Democrats, but does it actually help people find work and restore their economic independence? Not really, and the costs more often make situations worse instead of better:

Instead, an extensive analysis of the program by The New York Times shows, many graduates wind up significantly worse off than when they started — mired in unemployment and debt from training for positions that do not exist, and they end up working elsewhere for minimum wage.

Split between federal and state governments — federal officials dispense the money and states license the training — the initiative lacks rigorous oversight by either. It includes institutions that require thousands of hours of instruction and charge more than the most elite private colleges. Some courses are offered at for-profit colleges that have committed fraud in their search for federal funding. This includes Corinthian Colleges Inc., which reached an agreement last month with the federal Education Department to shut down or sell many of its campuses.

The Times’ Timothy Williams walks readers through several anecdotes of utter failure, including one man who ended up $20,000 in debt after getting training to be a cardiology technician — only to discover that no one needed cardiology technicians. He now makes minimum wage at Autozone, a job that he could have had without running up debt for specialty training.

Some of the problems originate with the schools themselves, which don’t always deliver what they promise, but much of it comes from poor guesswork by the government on labor needs. Barack Obama himself emphasized retraining as one of the necessities for transforming the sidelined labor force into the cutting-edge candidates in emerging fields and technologies. Federal and state governments offer grants tied to specific vocational training, including grants that make taxpayers partners with the unemployed who supplement the grants with loans for their training. According to Williams, we have spent the money training thousands of workers for jobs that will never materialize.

Most of them could have done better by staying out of the WIA program:

In some states, data and academic studies have suggested that a vast majority of the unemployed may have found work without the help of the Workforce Investment Act.

In South Carolina, for example, 75 percent of dislocated workers found jobs without training, compared with 77 percent who found jobs after entering the program, according to state figures.

Those who have graduated from these programs don’t usually do much better even when they do find work:

At Central Valley Opportunity Center Inc. in Merced, Calif., of 34 people enrolled in a cooking course in 2012, only three found work, according to school data.

More than one-third of the students who graduated from the center’s welding course and more than two-thirds from its general business course earn less than $20,000 a year, according to school records.

There are a couple of problems with the job-retraining approach. First, the government turns out to be a terrible prophet for labor needs down the road. Second, the issue for the last several years has not been a glut of jobs without qualified applicants, but a glut of applicants for a paucity of open positions. Even if the WIA had overall merit, it would only have sufficient value in the former context, when businesses needed applicants for jobs open now. The WIA would be better aimed at subsidizing employer-based training for jobs that need filling now or in the near future, as a kind of partnership in apprentice work. That would at least ensure that the funding went to real jobs, and not to training centers for jobs that are selected by darts on a dartboard, even if there would be a real danger that taxpayers would just end up subsidizing hiring that would have occurred anyway.

The best solution is to create an economic environment of true growth, which would tighten the labor market and give much more leverage to job seekers. That would mean scaling back regulation and reforming the tax code, neither of which this administration wants to do. Instead, we’re seeing more and more of the chronically unemployed owe their souls to the vocational school.

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Tags: economy, job creation, job training, jobs, Obamanomics, stimulus

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Julyjobsreport:209,000jobsadded,joblessrate

July jobs report: 209,000 jobs added, jobless rate 6.2%

posted at 11:21 am on August 1, 2014 by Ed Morrissey

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The US economy added fewer jobs in July than in the previous three months, and the unemployment rate ticked up slightly, although job creation still outpaced population growth. The addition of 209,000 jobs is the lowest level since March, while the slight change in the jobless rate is the first uptick since January:

Total nonfarm payroll employment increased by 209,000 in July, and the unemployment rate was little changed at 6.2 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in professional and business services, manufacturing, retail trade, and construction.

Both the unemployment rate (6.2 percent) and the number of unemployed persons (9.7 million) changed little in July. Over the past 12 months, the unemployment rate and the number of unemployed persons have declined by 1.1 percentage points and 1.7 million, respectively. (See table A-1.) …

Among the major worker groups, the unemployment rate for adult women increased to 5.7 percent and the rate for blacks edged up to 11.4 percent in July, following declines for both groups in the prior month. The rates for adult men (5.7 percent), teenagers (20.2 percent), whites (5.3 percent), and Hispanics (7.8 percent) showed little or no change in July. The jobless rate for Asians was 4.5 percent (not seasonally adjusted), little changed from a year earlier. (See tables A-1, A-2, and A-3.)

Both the U-3 (the official jobless rate) and U-6 measures moved up slightly in July. U-3 went from 6.1% to 6.2%, and U-6 from 12.1% to 12.2%. These may not reflect moves of much significance, and could be rounding artifacts, but it’s worth noting that both moved up slightly.

There was a little good news on the full-time/part-time front. The number of workers in part-time jobs for economic reasons dropped a bit, from 7.544 million to 7.511 million. That’s still the second-highest reading of the year and well above May’s 7.269 million, but it suggests that the growth in jobs for July came in full-time positions — unlike that in June. On the other hand, the ranks of government workers swelled again to 20.453 million, an increase from June of 96,000. That is the highest level of government workers in the economy all year, and over 400,000 more than since May — and these figures are seasonally adjusted.

MSN noted that the report missed expectations, and says “growth cools” in July:

U.S. job growth slowed in July and an unexpected rise in the unemployment rate pointed to some slack in the labor market that could give the Federal Reserve room to keep interest rates low for a while.

Nonfarm payrolls increased 209,000 last month after surging by 298,000 in June, the Labor Department said on Friday.

Data for May and June were revised to show a total of 15,000 more jobs created than previously reported, showing underlying momentum and taking some of the sting from the report. …

Economists polled by Reuters had expected payrolls to increase 233,000 last month and the unemployment rate to hold steady at 6.1 percent.

The cooling in hiring is unlikely to change perceptions about strong economic growth in the third quarter.

“It still points to a job market and an economy that is improving, but we also have the absence of wage pressures building, which is becoming another concern for investors,” said Sean Lynch, managing director of global equity and research strategy at Wells Fargo Private Bank in Omaha, Nebraska.

The Wall Street Journal gives a tepid thumbs-up:

In July, hiring was broad-based. Payrolls rose in the professional and business services, manufacturing, retail, construction and public sectors.

But much pain remains in a labor market that still bears scars from the 2007-09 recession. Some 3.2 million people in July had been out of work for more than six months, down 1.1 million from a year earlier but still accounting for 32.9% of all unemployed Americans. The number of people working part-time jobs because they couldn’t find full time work was 7.5 million in July, largely unchanged from June.

A broad measure of unemployment known as the U-6, which includes people working part-time jobs because they can’t find full-time work and people who are marginally attached to the labor force, was 12.2% in July. That’s up slightly from 12.1% in June but down 1.7 percentage points from 13.9% in July 2013.

The labor-force participation rate ticked up slightly in July, to 62.9% from 62.8% in June, but remained near its lowest level since the late 1970s.

Wage gains remained sluggish in July. Average hourly earnings for private-sector workers rose 1 cent from June to $24.45 last month, up 2% from a year earlier.

The average workweek in July was unchanged at 34.5 hours.

The US economy needs to add 150,000 jobs a month just to keep up with population growth at the current workforce participation rate. At the rate we are adding jobs in July, it would take us another four and a half years to re-employ the 3.2 million chronically unemployed noted in the report. Even at last month’s pace, we’d be almost two years in regenerating those jobs, and that’s assuming we can sustain the 298,000 pace for a solid two years — when we haven’t been able to do so for any length in the five-plus years of the Obama recovery.

I’d be curious to know where the government is doing all that hiring, too. That metric has fluctuated quite a bit this year, but it’s definitely trending upward.

Update: Jim Pethokoukis says the economy has finally hit its stride … and that’s the problem:

In other words, the Obama recovery seems to have hit its sweet spot. And that’s the problem. This may be as good as it gets given that the expansion is five-years old and GDP growth seems stuck in low gear. The US employment rate of 59.0% is still well below its prerecession level of 62.9%, a gap of nearly 10 million jobs. There are still 3.2 million long-term unemployed vs. 1.3 million in December 2007. And as Capital Economics points out, “Despite the strength of employment gains and the decline in the unemployment rate, there is still no sign of an acceleration in average hourly earnings, which were unchanged in July.” …

We have a long way to go, and we are getting there oh-so slowly. Here are two more stats for you: 1.) Since 2000, the US economy has generated 5.2 million private-sector jobs vs. a total of 42.5 million in the 1980s and 1990s; 2.) The US economy has only produced three quarters of 4% or faster growth since 2000 vs. 36 in the 1980s and 1990s. There is little happening in the economy right now that suggests this expansion will ever be a whole lot more than what it currently is.

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Rebound:Q2GDPhits4% postedat

Rebound: Q2 GDP hits 4%

posted at 10:01 am on July 30, 2014 by Ed Morrissey

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The US economy took an unexpected beating in the first quarter, but made a big rebound in the second. Gross domestic product grew at an annualized rate of 4% in the spring, a welcome change from the newly-adjusted -2.1% contraction in Q1:

Real gross domestic product — the output of goods and services produced by labor and property located in the United States — increased at an annual rate of 4.0 percent in the second quarter of 2014, according to the “advance” estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP decreased 2.1 percent (revised).

The Bureau emphasized that the second-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency (see the box on page 3 and “Comparisons of Revisions to GDP” on page 10). The “second” estimate for the second quarter, based on more complete data, will be released on August 28, 2014.

Just as the steep drop in Q1 seemed odd based on its internals, so does the big upside in today’s report. All the news looks pretty good, but not the kind of great that one would expect from 4% growth. For instance, real personal consumption expenditures — consumer spending — only jumped up 2.5% in Q2, and that had risen 1.2% in Q1, which was one of the puzzles of the awful GDP number last quarter. Services only grew 0.7%, less than the 1.3% in Q1. Real final sales of domestic product, which factors out inventory growth, increased 2.3% after falling one percent in Q1. That’s not really spectacular growth; it’s more or less what we’ve experienced since the end of the Great Recession.

The big change from Q1 to Q2 was in exports. Exports in Q1 fell 9.2%, but jumped up 9.5% in Q2, a sign of strength — or perhaps just a sign of deferred sales from Q1. Imports also rose sharply (11.7% vs 2.2% in Q1), but that doesn’t get reflected in the PCE numbers. Real gross domestic purchases, which measures overall purchases that includes imports, rose 4.5%, but a significant portion of that seems to be inventory growth, which accounts for 1.66 points of the GDP number in Q2.

Nevertheless, it’s a lot better than a -2.1%, and the Associated Press was impressed:

Last quarter’s rebound was broad-based, with consumers, businesses, the housing industry and state and local governments all combining to fuel growth. The robust expansion will reinforce analysts’ view that the economy’s momentum is extending into the second half of the year, when they forecast an annual growth rate of around 3 percent. …

In the April-June quarter, business investment in new equipment jumped at a 7 percent rate after having fallen 1 percent in the first quarter. That setback had reflected the expiration of business tax breaks at the end of 2013. Those tax breaks led companies to boost equipment spending at the end of last year.

Businesses, optimistic about future demand, increased their stockpiling last quarter. The increase in inventories contributed two-fifths of the growth in the quarter after having subtracted 1 percentage point from first-quarter activity.

That only works if consumer spending picks back up. The PCE rate of 2.5% growth is decent but not spectacular, and stockpiling has been seen before in this recovery only to see discounting later to clear warehouses. Watch the real final sales of domestic product in the next couple of quarters to get a better sense of how well this gamble pays off.

ADP provided more good news on the economic front. Their estimation of private-sector hiring shows 218,000 jobs added in July, which is a step down from June’s 281K but still the fourth month in a row above 200K:

Private sector employment increased by 218,000 jobs from June to July according to the July ADP National Employment Report®. Broadly distributed to the public each month, free of charge, the ADP National Employment Report is produced by ADP®, a leading global provider of Human Capital Management (HCM) solutions, in collaboration with Moody’s Analytics. The report, which is derived from ADP’s actual payroll data, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis.

Goods-producing employment rose by 16,000 jobs in July, down from 43,000 jobs gained in June. The construction industry added 12,000 jobs over the month, less than half last month’s gain. Meanwhile, manufacturing added 3,000 jobs in July, less than one-third the number of jobs added in June.

Service-providing employment rose by 202,000 jobs in July, down from 238,000 in June. TheADP National Employment Report indicates that professional/business services contributed 61,000 jobs in July, down from 79,000 in June. Expansion in trade/transportation/utilities grew by 52,000, down slightly from June’s 56,000. The 9,000 new jobs added in financial activities was down 25% from last month’s number.

“Although down from June, the July jobs number marks the fourth straight month of employment gains above 200,000,” said Carlos Rodriguez, president and chief executive officer of ADP.

The ADP report this year has proven to be a pretty good indicator of the BLS report, which is due on Friday. The figure itself is like the PCE figure in the GDP report — it’s decent but not spectacular, and not all that much different than what we’ve been seeing. The US economy needs to add 150K jobs to keep up with population growth, so the addition of 68,000 more jobs over that figure is not going to penetrate far into the millions of the chronically unemployed. We need sustained job growth in the 300K-400K range for a significant period to deal with that problem, and that’s not even addressing whether the jobs created are full time or part time.

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WaPo:FivePinocchiosforObamaintwodays

WaPo: Five Pinocchios for Obama in two days on economic claims

posted at 12:41 pm on July 16, 2014 by Ed Morrissey

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A few days ago, I criticized the usually reliable Glenn Kessler for refraining on assigning his Pinocchios to clearly false representations about the meaning of the Hobby Lobby decision. Over the last couple of days, though, the Washington Post fact checker has become very productive in reviewing claims from Barack Obama. Today, Kessler gives Obama two Pinocchios for claiming that Republicans were putting 700,000 jobs at risk by holding up a bill dealing with the Highway Trust Fund:

If Washington were working the way it’s supposed to, Congress would be fixing that.  We’d be investing in the things that help America bring more good jobs to our shores.  Instead, here’s what’s going on in Washington.  There’s something called the Highway Trust Fund — I suspect this crew is familiar with it.  It helps states support transportation projects.  If Congress fails to fund it, it runs out of money.  That could put nearly 700,000 jobs at risk, including more than 17,000 right here in Virginia.  More than 100,000 active projects across the country — projects where workers as we speak are paving roads and rebuilding bridges and modernizing our transit systems — those projects would be slowed or stopped.  And some states have already had to put some projects on hold because they don’t trust Congress to get its act together.  So remember that the next time you see a job site sitting idle.

There are actually two issues at play with the Highway Trust Fund — reauthorization and funding a revenue gap. Reauthorization has to take place at the beginning of the next fiscal year, but that’s a foregone conclusion; Congress won’t kill the golden pork goose any time soon, and it’s broadly popular with public as well. The acute issue is about adding funds to make up for a shortfall in federal gas-tax revenue caused in part by federal pressure to improve gas efficiency in vehicles, as well as a fixed-amount tax per gallon rather than a percentage, which therefore doesn’t get indexed to inflation, as Kessler notes. This gap is what has prompted some in Congress to propose a mileage tax, a very bad idea with all sorts of privacy implications, not to mention collection and enforcement issues.

The funding gap in this case falls far, far short of impacting 700,000 jobs, though. In fact, even the progressive Center for American Politics, using the widest possible interpretation of CBO findings, only finds less than a third of that figure would be impacted:

The Congressional Budget Office has estimated that $15 billion will be needed in fiscal 2015 to keep the trust fund solvent. Administration officials say that even before the end of the fiscal year Sept. 30, payments to states may need to be slowed or curtailed as the trust fund gets close to the $4 billion mark.

Earlier this year, the Center for American Progress, a left-leaning think tank, took the CBO estimate and calculated that a failure to provide that additional funding would result in as many 185,000 layoffs. Not all of these are construction jobs; the figure contains jobs “indirectly” created from the funding (such as suppliers to highway construction) and “induced” jobs, which are jobs created as construction workers and others spend their earnings.

That’s a lot of jobs, but it’s far fewer than 700,000.

So why is the administration’s number so much higher? That’s because the White House is assuming that the entire trust fund would not be authorized at all — even though just about no one in Congress supports that position.

Kessler gives Obama two Pinocchios for confusing reauthorization with stopgap funding and using old numbers despite newer data. That’s one less than Obama got yesterday from Kessler for claiming that House Republicans were blocking “every serious idea to strengthen the middle class“:

But here’s the odd thing: on the very day the president recorded his weekly address, the office of House Speaker John A. Boehner (R-Ohio) releasedthis photo under the happy headline of “What Working Together Looks Like.” It showed Boehner, Democratic leader Nancy Pelosi (Calif.) and other lawmakers signing the Workforce Innovation and Opportunity Act, which streamlines job training programs,  so it could be sent to Obama for his signature.

“This morning, leaders of both parties in the House came together to get something done for the millions of Americans who continue to struggle to find work in today’s economy,” the news release said.

Obama had earlier said he looked forward to signing the bill. “This bipartisan compromise will help workers, including workers with disabilities, access employment, education, job-driven training, and support services that give them the chance to advance their careers and secure the good jobs of the future,” he said in a statement on July 9. “Today’s vote helps ensure that our workers can earn the skills employers are looking for right now and that American businesses have the talent pool it takes to compete and win in our global economy.”

Kessler goes on to list a number of bills passed by the House and entirely ignored by the Senate in this session. Perhaps one could quibble about whether they were “serious,” but most of them passed with some Democratic votes and have popular support outside of Washington DC. Kessler cites the Keystone XL pipeline bill as one such example:

But, let’s face it, the Republicans have their own list of bills passed in the House but which have failed to progress in the Senate, which they also claim are serious and enjoy popular support. For instance, one pending bill would approve construction of  the Keystone XL oil pipeline, which a recent Washington Post-ABC News poll found is supported by Americans by a 3 to 1 margin. The House list, displayed on Boehner’s Web site, includes nearly 50 bills, of which only a handful have been signed by the president into law.

Kessler gives Obama three Pinocchios for this claim, calling it “rhetorical overkill.” It’s part of the new White House strategy to paint Obama as a victim of Republican bullying, which falls apart on any kind of scrutiny — especially the kind Kessler supplies here. The unserious player in this drama is Obama.

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Tags: Barack Obama, fact check, gas tax, Glenn Kessler, Highway Trust Fund, jobs, Pinocchio, stimulus

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GreatnewsfromObama:It’stimeforsome

Great news from Obama: It’s time for some “economic patriotism”

posted at 6:41 pm on July 3, 2014 by Allahpundit

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Via Ace, a holiday-themed gloss on Daniel Henninger’s point that “More and more, Mr. Obama’s speeches reflect the progressives’ impatience with politics of any sort and their preference for policy by imposition.” He’s presenting this as a plea to Congress to work with him on infrastructure spending, not (for once) as a threat to act unilaterally if they don’t do what he says, but if you’re framing your preferred outcome as the “patriotic” option then you’re probably not too invested in compromising with the other side. (Right, Patriot Act critics?)

“[W]e can make even more progress if Congress is willing to work with my administration and to set politics aside, at least occasionally, which I know is what the American people are urgently looking for,” Obama said Thursday at 1776. “It’s a sort of economic patriotism where you say to yourself, how is it that we can start rebuilding this country to make sure that all of the young people who are here but their kids and their grandkids are going to be able to enjoy the same incredible opportunities that this country offers as we have. That’s our job. That’s what we should be focused on. And it’s worth remembering as we go into Independence Day.”

House Speaker John Boehner’s office has pointed out that the Republicans are doing things — 40 things, currently pending in the Senate — they just aren’t passing the bills that Obama wants.

He didn’t get into detail but I’m going to guess that “economic patriotism” involves plenty of deficit spending and lots of unsustainable unfunded liabilities. Actually, I don’t have to guess: You may not remember but this isn’t the first time he’s used this term. It popped up towards the end of Campaign 2012, replete with a two-minute TV ad on the subject and a 20-page booklet with “economic patriotism” in the title. He’s mostly laid off since then — maybe even The One finds this phrase a tad too clumsily Orwellian for his liking — but now that we’re four months out from an election his party’s expected to lose badly, it’s kitchen-sink time again.

Via RCP, here he is warning that if the GOP doesn’t move left, i.e. embrace economic patriotism, they’ll never win the presidency again. Exit question: I’m afraid to ask, but I’ll ask anyway. How would he define “immigration patriotism”?

immigration patriotism

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It’sallaboutjobsinIllinois–900

It’s all about jobs in Illinois – 900 of them

posted at 2:21 pm on July 2, 2014 by Jazz Shaw

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Welcome to Illinois! The Land of Lincoln… home to the City of the Big Shoulders… a great place to get a thick, round, casserole-like dish which the locals mysteriously refer to as “pizza.” One thing that you probably shouldn’t hope to get in Illinois, though, is a job. Because from August of last year until this May the entire state managed to generate … 900 of them.

A report by the Illinois Policy Institute finds that only 500 jobs were created in the state from August 2013 to May 2014, ranking it among the worst in the country over that period. Among Midwestern states, Illinois ranked last, well behind the next closest, South Dakota.

The time period corresponds with the academic year, with IPI noting that there was about one job created for every 300 high school seniors.

This year alone, Illinois is last in job creation and one of just four states with negative job creation. The Bureau of Labor Statistics reports that the state has lost 26,300 jobs since January.

Things are tough all over, but what could explain this? It’s impossible to point to any single factor, but here are a few that might come to mind:

For one thing, Illinois is the 5th highest taxed state in the nation. And that’s only because they still have to compete with states like New York, California and Connecticut. (Tough competition.)

The state is also in the ten most restrictive states when it comes to gun rights. Crime may be a big problem in Illinois, but don’t try taking any steps to defend yourself.

Illinois is also home to the 4th most dangerous city in the country for women who wish to avoid being raped, assaulted or killed. (Shockingly, that city is Springfield, which somehow beat out Chicago for the honors.)

There are others should you wish to browse, but that provides a pretty good flavor of the situation. What explains all of these dubious top rankings? Could it be the long history of extensively liberal policies, repression of business and nanny state intrusion?

Naw… that couldn’t be it.

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Video:Theemployee-freecafeandthehonorsystem

Video: The employee-free cafe and the honor system in North Dakota

posted at 4:01 pm on June 24, 2014 by Ed Morrissey

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In a world of arrogant apparatchiks, biased media, and laughably dishonest pols, it’s time to take a quick break and restore a little faith in humanity. We turn to North Dakota, where one entrepreneur has discovered that trusting his neighbors to pay for their coffee is not just a good bet, but actually even better than assuming they won’t (via Rob Port):

A coffee shop in Valley City is saving money on employee costs…because it doesn’t have any.

“The Vault” downtown has been growing in popularity as a self–serve hangout.

It’s like any other coffee shop in that it has coffee, tea, and pastries.

The one thing it’s missing?

Staff.

“At the time I didn’t realize how unique that was, I thought it just made sense. And I found out later by Googling…there really isn’t anything else like it,” said co-owner/operator David Brekke.

WTNH also picked up on The Vault’s business model of trust:

If you don’t have cash, you can use a credit card or a check. Another bonus is that you don’t need exact change; the computer will round the cost of your coffee up or down, depending on your drink.

Owners say people actually tend to pay 15 percent more instead of being dishonest.

You can also purchase tea and pastries, and the coffee shop offers movies every Saturday.

Here’s why I think The Vault succeeds, even if it’s not quite profitable yet. First, people are generally honest, especially in smaller communities where social connections are tighter and everyone knows each other. Valley City has a population of around 6600 people as of the 2010 census, so not too many people will be chintzing out on payment when others are watching. Second, the act of paying on the honor system is an opportunity for self-affirmation. It would make people feel good that they are participating in a transaction honestly, and that may be even better than the coffee and the conversation.

There is another aspect to this, too. North Dakota has a booming economy thanks to the oil industry, and in many places has more good-paying jobs available than people. The labor market is much tighter as a natural result of economic expansion, therefore more expensive, and the need to forego staff may be more of a necessity than an innovation. Where labor becomes more expensive from artificial interventions such as minimum-wage hikes in looser labor markets, the employee-free approach will look more attractive where it can be applied, and will have little to do with self-affirmation.

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Huzzah:Obamatopivottotheeconomytomorrow,

Huzzah: Obama to pivot to the economy tomorrow, again

posted at 4:01 pm on June 16, 2014 by Erika Johnsen

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I can hardly wait. Via Pittburgh’s WTAE:

President Barack Obama will visit Bakery Square in Larimer to deliver a speech on the economy Tuesday afternoon.

The White House says Obama will visit TechShop, a fabrication and prototyping studio open to the public via paid memberships.

“The most important thing about TechShop and what it symbolizes is that this really is the future. It’s the intersection of technology, machines and people making things, and that really is the collision that’s right around us,” said Audrey Russo, President and CEO of the Pittsburgh Technology Council. “The exciting thing is that Pittsburgh has a lot of core competencies in this arena.”

Who even knows anymore whether this counts as a full-on “pivot,” but I suppose we’ll just have to wait with bated breath to see if the White House is going to take this particular sojourn as another opportunity to drop some new and glorious executive order on us — which will almost inevitably lie somewhere between “pointless” and “outright damaging” on the effectiveness spectrum — or if this is merely going to be yet another chance for His Eloquence to deliver an overly affected progressive soliloquy to which not even the people present will pay attention. Either way, despite the administration’s insistence on the foremost importance of the economy, they do seem unusually eager to talk about it when they want to especially avoid talking about something else. The Obama economy just contracted, after all, as Noah aptly reminded us this morning, and Democrats’ excuse about the extraordinarily cold winter being such an insuperable barrier to economic growth — as if no harsh winter in all of American history has ever witnessed a period of economic growth, and there are no other major factors to blame — is the lamest of the lame. Still, better for Obama to talk about why those spiteful Republicans are refusing to work with him on job creation than address a little ol’ foreign-policy flareup like Iraq falling apart, eh?

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WillPresidentObamatakethehintfromNorth

Will President Obama take the hint from North Dakota’s energy boom during his visit?

posted at 7:11 pm on June 13, 2014 by Erika Johnsen

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President Obama journeyed to North Dakota on Friday where, for the first time during his entire presidency, he visited an American Indian reservation to “tout the strides his administration has made with Native Americans, unveil new education and economic measures aimed at Native Americans, and speak of the difficult work that remains to pull many tribal members out of crippling poverty and endemic unemployment.” Indeed. For the number of ways in which the federal government blithely engenders the conditions that keep many Indian reservations in states of crippling poverty, I recommend this handy piece from PERC’s Shawn Regan at Forbes, but while President Obama happened to be in North Dakota this afternoon anyway, why wouldn’t he finally take the opportunity to at least momentarily draw the nation’s attention to the state’s uniquely productive energy boom and economic prosperity? Via the Bismarck Tribune:

Is the president skipping what some call the North Dakota economic miracle because the solutions aren’t coming out of Washington? Or is it because the president’s Environmental Protection Agency just issued a costly new set of rules for all U.S. electricity providers that could adversely impact North Dakota’s energy costs and continued economic prosperity?

We’d argue that the president should view North Dakota’s economy and energy landscape as a model for other states to emulate, with an incredibly low unemployment rate of 2.6 percent; high-paying jobs; low-cost, affordable energy (some of the least expensive in the nation); and clean air. Indeed, North Dakota’s energy abundance and diversity is one reason Gallup named it the happiest state in the nation.

Small businesses play an important role in the state’s energy landscape — from manufacturing parts and supplies for the energy sector to building homes and providing needed services for workers attracted by new created high-wage jobs.

North Dakota’s affordable, ample energy supply also frees these businesses from the burden of high energy costs, enabling them to grow and employ even more people. In turn, small businesses can pass their savings down to consumers, helping families live better, more affordable lives and bolstering the local economies of the communities they call home.

The geopolitical implications of allowing America’s energy boom to expand are just the gravy.

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Tags: Barack Obama, economy, energy, jobs, national security, North Dakota, Oil and Gas Industry

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London,Paris,Madrid:Taxidriversaroundtheworld

London, Paris, Madrid: Taxi drivers around the world are protesting innovation, competition

posted at 8:51 pm on June 11, 2014 by Erika Johnsen

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If innovative and wildly successful ride-sharing services like Uber and Lyft — which ingeniously allow customers to hail and pay for a GPS-traceable taxi cab through a smartphone app — have been facing regulatory hurdles and legal challenges in Washington, D.C. and New York City, they’re practically nothing compared to the veritable war European taxi drivers and unions are waging to thwart them.

With even larger bureaucracies, more under-the-table corruption and cronyism, farther-reaching regulations and the accompanying capture, more expensive taxes, and more inflexible labor laws, the good ol’ fashioned free-market competition that these new businesses are dishing out is an excellent and rapidly unfolding test of Europe’s willingness to either accept partial creative destruction as the growth-positive force that it is — or else allow their economy/economies to continue to languish in stagnation mode.

But the entrenched taxi businesses will not be going gently into that good night. Via Reuters:

Taxi drivers sowed traffic chaos in Europe’s top cities on Wednesday by mounting one of the biggest ever protests against Uber, a U.S. car service which allows people to summon rides at the touch of a button.

Drivers of hundreds of London’s black taxis snarled traffic in the streets around Trafalgar Square, hooting their horns as they passed Downing Street, the home of Prime Minister David Cameron, and the Houses of Parliament.

In Paris, taxi drivers slowed traffic on major arteries into the city centre during the morning commute. In Berlin hundreds choked the main road to the city’s historic centre while commuters juggled buses and trains, or simply walked, to get to work in Madrid and Barcelona. …

“This about an all out assault on our profession, our livelihoods,” said Max Small, a driver of one of London’s black taxis for 34 years. “These big companies are coming in, not playing by the rules.”

Taxi drivers across Europe level a variety of charges against Uber: that its applications break local taxi rules; that its drivers fail to comply with local insurance rules; and that it is therefore in breach of licensing and safety regulations.

You know, there might very well be something to the argument that new enterprises like Uber have an unfair advantage because they are managing to work outside of many European countries’ innovation-killing Procrustean bed of antiquated, prohibitive regulations, while traditional taxi drivers have to pay for expensive leases and medallions and training certifications and whatever other barriers to entry they’ve come up with over the years. Perhaps what they should be protesting, then, are those prohibitive regulations themselves, because their attempt to disparage new enterprises today… kind of backfired. Oops.

Taxi-hailing app Uber saw sign-ups jump to record levels on Wednesday, following a rush of publicity as cab drivers across Europe went on strike to protest against the company.

Marketing experts described the strike as an “own goal”, after Uber said there had been an 850 percent increase in sign-ups compared to last Wednesday. …

Andre Spicer, professor of organisational behavior at Cass Business School, described the strike as “PR gold” for Uber.

“It’s an own goal. Uber is top of everyone’s minds. Lots of people who have never heard of the app before now know what Uber is,” he told CNBC.

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Tags: big government, Europe, innovation, jobs, labor, regulations, taxi, technology, unions

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So,isObama’sstudent-loanexecutiveorderactuallygoing

So, is Obama’s student-loan executive order actually going to do anything to mitigate rising tuition prices?

posted at 5:01 pm on June 10, 2014 by Erika Johnsen

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Noah already covered the reliable Republican-bashing optics of President Obama’s latest attempt to rope in young people with the allure of super-free stuff, but I just wanted to take a quick look at the unintended-yet-entirely-predictable consequences of the White House’s oh-so-munificent executive action that is ostensibly meant to lessen students’ debt burdens. Via WaPo:

In an attempt to further ease heavy college debt, President Obama on Monday signed an executive order allowing millions of student-loan borrowers to cap their payments at 10 percent of their monthly income.

Flanked by students and recent graduates who borrowed money to go to school, Obama said the cost of college and burden of student debt are suffocating middle-class families and putting students at an economic disadvantage before they enter the workforce. …

Most student-loan borrowers already have the option to limit payments to 10 percent of their income under recent legislation and regulations. Obama’s order on Monday extended that option to about 5 million others who were not covered by the previous changes, including those who took out loans before October 2007. …

Obama has publicly endorsed legislation sponsored by Sen. Elizabeth Warren (D-Mass.) that would allow students to refinance both public and private loans at lower interest rates. It would be paid for by closing a tax loophole available to the wealthy.

The real, most fundamental problem with crushing student loan debt is, of course, that it is so very crushing. Traditional college tuition prices have been on a continuous upswing far outstripping inflation for going on several decades now, largely helped along by the fact that the federal government has stepped in as a cheap and indiscriminate lender to anyone and everyone looking for any type of student loan.

President Obama’s executive order is a relatively small item, but it certainly isn’t going to do diddly squat to help pay down the more than $1.2 trillion debt bubble currently plaguing students, and nor is sending out the precisely wrong message to future borrowers: We’re going to make it even easier than it already is for you to take out even more and even bigger loans. How do you suppose colleges and universities will respond to that message? By, in turn, raising their prices, perhaps? And might apparently cheaper loans factor into potential students’ personal cost-benefit analyses when evaluating their education/career ideas and future prospects, perhaps tipping the scales in favor of less wise investments? Even worse than Obama’s executive order, however, is Sen. Warren’s proposed legislation, which is an even larger item that creates even more of these perverse incentives.

Neal McCluskey at the Cato Institute hit the nail on the head here:

In the name of helping them, federal politicians, and many other people, massively oversell higher education to the detriment of students. Perhaps as much as half of people who enter college don’t finish; a third of people with a bachelor’s degree are in jobs not requiring the credential; underemployment is even worse for graduate-degree holders, and; cheap college has almost certainly fueled credential inflation, not major increases in knowledge or skills.

Decreasing what borrowers will repay means taxpayers – who had no choice in whether the loans were made – have to make up the difference. And there is a little matter of being nearly $18 trillion in debt already.

There is no such thing as a free lunch, or a free education at a liberal arts college for that matter — and teaching students otherwise is not doing them any favors.

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Tags: Barack Obama, economy, jobs, student loans, tuition, youth

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Source from: hotair