Relevant and even prescient commentary on news, politics and the economy.

Confused over this Real Wage Debate?

Cheney says real wages are rising, while Kerry says they are falling. Who’s right? It seems the Washington Post editorial writers failed to notice it was Cheney who was lying, but Billmon notes the WaPo faux pas from the Whiskey Bar here, here, and here.

The Bureau of Labor Statistics (BLS) reports real average hourly earnings per year (in terms of 1982$), which were as high as $9.08 in January 1973 but only $7.52 by Dec. 1992. During the first Clinton term, this series rose to $7.58 so one might wonder what J. Carter Edwards meant by lower real compensation per hour (more later). Over the next 5 years, real wages rose rapidly reaching $8.24 by Dec. 2001. Real wage growth was very slow over the next 2 years and has been negative over the past 6 months so that real wages in June 2004 dropped to around $8.20.

The Economic Policy Institute (EPI) summarizes the current labor market here as well as shows the recent history for real wages those with lower levels of income:

Despite the fact that it is now over two years since the economy began growing after the downturn that lasted from March to November 2001, the U.S. economy has yet to achieve significant or sustained job creation. In fact, 33 months into this business cycle there are 1.8%, or 2.4 million, fewer jobs than when the recession began. This lack of job growth has been well documented, but its negative impact on the growth of wages has received little attention.

The evidence shows that the persistently weak labor market has reversed the positive wage trends that prevailed towards the end of the last recovery. The slack labor market has hurt both the jobless as well as those who held onto their jobs. The disappointing wage growth in 2003, which resulted in real wage declines for many workers, will continue to beset working families because it will take several quarters of robust employment growth and falling unemployment to once again spark wage growth.

But let’s be fair – labor compensation includes various forms of fringe benefits and not just wages, which leads us to the only part of the Economists for Bush (J. Edward Carter) claims that our friend Mike (“I’m not an economist”) friend did not rebut quite convincingly here – the claims about real compensation.

The Bush-Cheney crowd loves to confuse things and some of their comments noted by Jonathan Weisman and Neil Henderson’s “Quality of New Jobs is Focus of Election-Year Debate” have NOMINAL wages rising and total compensation increases of 13% since Bush took office compared to the 10.5% increase during Clinton’s first term. But Mr. Carter said real compensation fell during Clinton’s first term. Oh wait – the Bush-Cheney crowd was talking nominal again – good grief!

Albert E. Schwenk and Jordan N. Pfuntner discuss how fringe benefits grew as a share of compensation from 1973 to 1992 but fell during the first Clinton term. EPI provide this table of real fringe benefits (in 2001$ but note that the CPI rose by a factor of 1.77 over the 1982 to 2001 period). Over the past few years, real fringe benefits have been rising. Even though Mr. Carter did not provide his source for real compensation, let me suggest the Employment Cost Index – constant dollars – from BLS here, which provides information on various sectors of the economy as well as an overall index for civilian workers.

I guess with all the potential confusion as to how to measure real compensation, we’ll be left with the Economists for Bush crowd manipulating the data this summer, which is a shame since the economists at BLS or EPI not only provide useful data but insightful discussions as to what may be causing the observed trends in real compensation. And I have yet to see either group of economists claim that low savings and investment and a weak economy cause real compensation to rise.

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Kerry Picks Edwards

WASHINGTON (CNN) — After months of speculation and a highly secretive selection process, presumptive Democratic presidential nominee Sen. John Kerry, has chosen his colleague Sen. John Edwards as his running mate for the 2004 presidential election, sources close to the campaign say. Kerry is expected to make an official announcement at a rally in downtown Pittsburgh, Pennsylvania, at 9 a.m. ET.

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My Fahrenheit 9/11 Review …

Actually, I don’t have one, due to the movie being sold out both times I tried to see it. First, I went to a suburban theater on Saturday for a 6:30 showing; given that it was showing on two screens and it was the second week that the movie was out, I certainly didn’t expect it to be sold out. Then, last night, I tried to see it again, this time at a downtown theater playing the movie on three screens. Sold out again.

I can’t recall any other movie that I was unable to see on its second week of showing. I take this as the result of some combination of popular word of mouth about the movie, its fairly narrow release (eight hundred and something screens), and the fact that its second week out is a holiday weekend. I’ll try again later this week or next weekend.


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The Crusades, Alive and Well

I just received an email letter that is currently making the rounds among the Republican faithful. The letter articulates the (apparently quite widespread) belief that the US is currently engaged in a religious war and needs national unity above all else. It’s long, but I thought I’d share some excerpts with you. The problem is that the letter is all so mesmerizing (in a horrifying kind of way) that I’ve had difficulty cutting much of it, so I have to apologize for the length of what’s left. At any rate, it’s rather sobering.


This was written by a retired attorney, to his sons, May 19, 2004.

Dear Tom, Kevin, Kirby and Ted,

As your father, I believe I owe it to you to share some thoughts on the present world situation. We have over the years discussed a lot of important things, like going to college, jobs and so forth. But this really takes precedence over any of those discussions. I hope this might give you a longer term perspective that fewer and fewer of my generation are left to speak to. To be sure you understand that this is not politically flavored, I will tell you that since Franklin D. Roosevelt up to and including our present President, I have without exception, supported our presidents on all matters of international conflict… So be sure you read this as completely non-political or otherwise you will miss the point.

Our country is now facing the most serious threat to its existence, as we know it, that we have faced in your lifetime and mine (which includes WWII). The deadly seriousness is greatly compounded by the fact that there are very few of us who think we can possibly lose this war and even fewer who realize what losing really means.

First, let’s examine a few basics:

1. When did the threat to us start?

Many will say September 11th, 2001. The answer as far as the United States is concerned is 1979, 22 years prior to September 2001, with the Iran Embassy hostages. (Note that during the period from 1981 to 2001 there were 7,581 terrorist attacks worldwide).

2. Why were we attacked?

Envy of our position, our success, and our freedoms. The attacks happened during the administrations of Presidents Carter, Reagan, Bush 1, Clinton and Bush 2. We can not fault either the Republicans or Democrats as there were no provocations by any of the presidents or their immediate predecessors, Presidents Ford or Carter.

3. Who were the attackers?

In each case of attacks on US they were Muslims.

4. What is the Muslim population of the World?

25%. (There are 64 Muslim countries. This does not count countries like Spain that are controlled by the Muslim terrorists.)

5. Isn’t the Muslim Religion peaceful?

Hopefully, but that is really not material. There is no doubt that the predominately Christian population of Germany was peaceful, but under the dictatorial leadership of Hitler (who was also Christian), that made no difference. You either went along with the administration or you were eliminated… Almost the same number of Christians were killed by the Nazis, as the 6 million holocaust Jews who were killed, and we seldom heard of anything other than the Jewish atrocities. Although Hitler kept the world focused on the Jews, he had no hesitancy about killing anyone who got in his way of exterminating the Jews or of taking over the world – German, Christian or any others. Same with the Muslim terrorists. They focus the world on the US, but kill all in the way – their own people or the Spanish, French or anyone else. The point here is that no matter how many peaceful Muslims there may be, they are no protection for us from the terrorist Muslim leaders.

6. So who are we at war with?

There is no way we can honestly respond that it is anyone other than the Muslim terrorists. Trying to be politically correct and avoid verbalizing this conclusion can well be fatal. There is no way to win if you don’t clearly recognize and articulate who you are fighting.

So with that background, now to the two major questions:

1. Can we lose this war?

2. What does losing really mean?

If we are to win, we must clearly answer these two pivotal questions.

We can definitely lose this war, and as anomalous as it may sound, the major reason we can lose is that so many of us simply do not fathom the answer to the second question – ‘What does losing mean?’ It would appear that a great many of us think that losing the war means hanging our heads, bringing the troops home and going on about our business, like post Vietnam. This is as far from the truth as one can get. What losing really means is:

  • We would no longer be the premier country in the world.
  • The attacks will not subside, but rather will steadily increase. Remember, they want us dead, not just quiet. If they had just wanted us quiet, they would not have produced an increasing series of attacks against us over the past 18 years. The plan was clearly to attack us until we were neutered and submissive to them.
  • They will pick off the other non Muslim nations, one at a time. It will be increasingly easier for them. They already hold Spain hostage. It doesn’t matter whether it was right or wrong for Spain to withdraw its troops from Iraq. Spain did it because the Muslim terrorists bombed their train and told them to withdraw the troops. Anything else they want Spain to do, will be done. Spain is finished.
  • The next will probably be France. Our one hope on France is that they might see the light and realize that if we don’t win, they are finished too, in that they can’t resist the Muslim terrorists without us. However, it may already be too late for France. France is already 20% Muslim and fading fast.
  • If we lose the war, our production, income, exports and way of life will all vanish as we know it. After losing, who would trade or deal with us if they were threatened by the Muslims. If we can’t stop the Muslims, how could anyone else? The Muslims fully know what is riding on this war and therefore are completely committed to winning at any cost. We better know it too and be likewise committed to winning at any cost.

Why do I go on at such lengths about the results of losing? Simple. Until we recognize the costs of losing, we cannot unite and really put 100% of our thoughts and efforts into winning. And it is going to take that 100% effort to win.

So, how can we lose the war? Again, the answer is simple… If we are united, there is no way that we can lose. If we continue to be divided, there is no way that we can win.

Let me give you a few examples of how we simply don’t comprehend the life and death seriousness of this situation.

  • President Bush selects Norman Mineta as Secretary of Transportation. Although all of the terrorist attacks were committed by Muslim men between 17 and 40 years of age, Secretary Mineta refuses to allow profiling. Does that sound like we are taking this thing seriously? This is war. For the duration we are going to have to give up some of the civil rights we have become accustomed to. We had better be prepared to lose some of our civil rights temporarily or we will most certainly lose all of them permanently. And don’t worry that it is a slippery slope. We gave up plenty of civil rights during WWII and immediately restored them after the victory and in fact added many more since then.
  • Some of us have gone so far out in our criticism of the war and/or our Administration that it almost seems they would literally like to see us lose. I hasten to add that this isn’t because they are disloyal. It is because they just don’t recognize what losing means. Nevertheless, that conduct gives the impression to the enemy that we are divided and weakening, it concerns our friends, and it does great damage to our cause.
  • Of more recent vintage, the uproar fuelled by the politicians and media, regarding the treatment of some prisoners of war, perhaps exemplifies best what I am saying. We have recently had an issue involving the treatment of a few Muslim prisoners of war by a small group of our military police. These are the type of prisoners who just a few months ago were throwing their own people off buildings, cutting off their hands, cutting out their tongues and otherwise murdering their own people just for disagreeing with Saddam Hussein. And just a few years ago these same type prisoners chemically killed 400,000 of their own people for the same reason. They are also the same type of enemy fighters who recently were burning Americans and dragging their charred corpses through the streets of Iraq… Compare this with some of our press and politicians who for several days have thought and talked about nothing else but the “humiliating” of some Muslim prisoners – not burning them, not dragging their charred corpses through the streets, not beheading them, but “humiliating” them. Can this be for real? …If this doesn’t show the complete lack of comprehension and understanding of the seriousness of the enemy we are fighting, the life and death struggle we are in and the disastrous results of losing this war, nothing can.

To bring our country to a virtual political standstill over this prisoner issue makes us look like Nero playing his fiddle as Rome burned – totally oblivious to what is going on in the real world. Neither we, nor any other country, can survive this internal strife… Remember, the Muslim terrorists stated goal is to kill all infidels. That translates into all non-Muslims – not just in the United States, but throughout the world. We are the last bastion of defense.

If we don’t recognize this, our nation as we know it will not survive, and no other free country in the World will survive if we are defeated. And finally, name any Muslim countries throughout the world that allow freedom of speech, freedom of thought, freedom of religion, freedom of the Press, equal rights for anyone – let alone everyone, equal status or any status for women, or that have been productive in one single way that contributes to the good of the World.

This has been a long way of saying that we must be united on this war or we will be equated in the history books to the self inflicted fall of the Roman Empire. If, that is, the Muslim leaders will allow history books to be written or read.

If we don’t win this war right now, keep a close eye on how the Muslims take over France in the next 5 years or less. They will continue to increase the Muslim population of France and continue to encroach little by little on the established French traditions. The French will be fighting among themselves over what should or should not be done, which will continue to weaken them and keep them from any united resolve. Doesn’t that sound eerily familiar?

Democracies don’t have their freedoms taken away from them by some external military force. Instead, they give their freedoms away, politically correct piece by politically correct piece. And they are giving those freedoms away to those who have shown, worldwide, that they abhor freedom and will not apply it to you or even to themselves, once they are in power. They have universally shown that when they have taken over, they then start brutally killing each other over who will be the few who control the masses. Will we ever stop hearing from the politically correct about the “peaceful Muslims”?

I close on a hopeful note, by repeating what I said above. If we are united, there is no way that we can lose. I believe that after the election, the factions in our country will begin to focus on the critical situation we are in and will unite to save our country. It is your future we are talking about. Do whatever you can to preserve it.



I must confess that I found it particularly horrifying to see the thousands of email addresses of people – some of whom I know to be well-educated, even somewhat thoughtful people – who had read this, agreed with it, and passed it along. Am I wrong for despairing when I read this?


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Bush & Snow on June Employment Report

Treas. Sec. Snow told CNNFN’s Market Call that he is looking more at the Household Survey because it supposedly picks up self-employed workers more effectively than the separate payroll survey of employers — an issue on which there is some debate among economists — and showed a gain of 259,000 jobs in June. It wouldn’t be that the 259,000 reported increase is larger than the 112,000 reported increase from the Payroll Survey – would it? But Snow was more focused on the Payroll Survey for earlier months. Note over the past 5 months, this Household Survey shows an increase of only 465,000 as opposed to the 1.1 million number being hyped by the White House.

I agree with the following statement from President Bush:

We’re witnessing steady growth, steady growth. And that’s important. We don’t need boom or bust type growth. We want just steady, consistent growth so that our fellow citizens will be able to find a job and so that the small business sector will feel confident about expanding.

Compares this to: “The U.S. economy is growing at its fastest rate in 20 years”, which is often tossed out in reference to one good quarter – 2003QIII where the ANNUALIZED rate of growth. But real GDP in 2004QI was only 1.082 times real GDP in 2000QIV, which means average annual growth of only 2.47% over the past 3.25 years. Real GDP in 2000QIV was 1.327 times real GDP in 1992QIV so the Clinton years saw an average annual growth rate equal to 3.6%.

But Bush was talking employment. During the Clinton years, average employment rose 240,000 per month. From January 2001 to now, employment increases averaged NEGATIVE 32,000 per month.

I’m glad Bush is emphasizing the longer term as opposed to very brief periods of time, but did his advisors brief him about what the data really say?

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Death on the Fourth of July: The Story of a Killing, a Trial, and Hate Crime in America

Orcinus proprieter Dave Neiwert’s new book is out:

Dave summarizes his book in this post on the book release:

The book on its surface is about an unusual homicide case that happened in Ocean Shores, Washington, four years ago. Three young Asian men were confronted late at night by a group of young white men shouting racist slogans and epithets, the ringleader of whom eventually assaulted them. But one of the young men fought back, and the young white instigator — a kid named Chris Kinison — wound up being stabbed to death.

I became involved in the story in the months that followed because of what the case revealed about the nature of hate crimes. As far as anyone could tell, neither Chris Kinison nor his friends had any organizational or other connection to skinhead or hate groups — though in the process of assaulting not just the three Asians but a series of other minorities in town throughout the weekend, Kinison and his friends had affected the look, the rhetoric and even the symbology of white supremacists, in the form of a large Confederate flag.

This reflects one of the realities that butts up against the many myths about hate crimes, namely, that only a small percentage of such crimes are committed by real “skinheads” or white supremacists. The average hate criminal is a young white man with no previous criminal record and no organizational “hate group” ties or history. And yet in the vast majority of these crimes, “hate group” rhetoric and symbols are used.

Dave spends a lot of time studying and blogging about right wing extremists and, like his blog, I’m sure the book is a great read. Order now.


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The Public: Starting to Get It

Ruy T. runs through the latest polls and finds that a majority of the public believes that Bush is doing a lousy job, the country’s not going in the right direction, the economy is still in trouble, the war wasn’t really worth it, the war hasn’t made us safer, and more…


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Faith-Based Fertility Treatment

Some of you may recall a purported study from a few years back claiming to demonstrate that remote prayer by strangers doubled the success rate of in-vitro fertilization among infertile women. The study, by researchers then employed by Columbia University, was published in the reputable-sounding Journal of Reproductive Medicine.

Now, astoundingly, like faith-healing, faith-based intelligence on Iraq, and faith-based missile defense, it turns out to be a giant crock of hogwash. One of the authors, Daniel Wirth, has now “… pleaded guilty to multi-million-dollar fraud charges against US cable telecommunications company Adelphia Communications”; another, Dr. Kwang Cha, has left Columbia and is working in fertility clinics (using, I presume, methods other than just prayer); and the third, Dr. Rogerio Lobo, remains at Columbia where, like the university, he refuses to comment or return reporters’ calls.

Journal editors and referees, take heed: if it sounds to good to be true, it probably is.

One real scientist, without whome the fraudulent research might have gone undected, deserves credit: Dr. Bruce Flamm, of the University of California. More details here.


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Job Growth Slows

This is bad news, via the WSJ (subscription):

The pace of job growth in the U.S. slowed for the first time in four months in June and fell short of expectations, catching Wall Street off guard.

Nonfarm business payrolls grew by a net 112,000 jobs last month, raising this year’s total to slightly more than a million, the Labor Department said Friday.

The June payroll gain was less than half the 250,000 that economists had expected, according to a survey by Dow Jones Newswires and CNBC. It was also below the 150,000 monthly additions that economists say are necessary to keep the job market stable.

Also, employers added 35,000 fewer jobs than previously thought in April and May. The job creation nevertheless drew previously discouraged workers back into the civilian labor force, expanding it by 305,000 to 147.3 million in June. The unemployment rate, as a result, held steady at 5.6%.

This reinforces my contention (and Kash’s) the other day that the most recent rate hike may have been premature.


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