tag:blogger.com,1999:blog-29706075361075019232024-03-05T20:01:36.883-05:00ECOMINOESEconomics and politics blog from Seth Mason, Charleston SC.Seth Masonhttp://www.blogger.com/profile/08575833772160662853noreply@blogger.comBlogger43125tag:blogger.com,1999:blog-2970607536107501923.post-90339690328200589422014-10-16T11:43:00.000-04:002017-07-10T08:13:17.097-04:00New Non-Profit Takes On The Federal Reserve<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgWB9lonVtmy_WlgKDBjWiYyI_bd9M6ropywQVF5wZcUjbUkMrSZV_UvvHtnc3z-Ea7bfTq8QjrYNNom8TGvlejR8SjTJow6JtFBR8lDHOnND_s6ZSdGZe5rMnsAZmKmNNh-d4ZrsJDH2w/s1600/Constantine-I-Solidus.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img alt="Seth Mason Charleston SC blog 1" border="0" height="190" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgWB9lonVtmy_WlgKDBjWiYyI_bd9M6ropywQVF5wZcUjbUkMrSZV_UvvHtnc3z-Ea7bfTq8QjrYNNom8TGvlejR8SjTJow6JtFBR8lDHOnND_s6ZSdGZe5rMnsAZmKmNNh-d4ZrsJDH2w/s1600/Constantine-I-Solidus.jpg" title="Seth Mason Charleston SC blog 1" width="200" /></a><i>Update 01/10/15: Because I've ceased publishing ECOMINOES, I've removed a great many articles I believe have become less relevant over time. I've deleted as many links that were broken as I could find...I apologize if I missed any. Also, due to the proliferation of spam, I've closed comments and deleted the ECOMINOES Facebook page and Twitter account.</i><br />
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It's been a pleasure promoting economic and individual liberty here on ECOMINOES. Now, I'm taking my passion to the next level by launching <a href="http://solidus.center/" target="_blank">Solidus.Center</a>, a 501(c)(3) non-profit that promotes economic strength and stability, sound money, equality of opportunity, and reduced government debt by limiting the Federal Reserve System’s influence on the American economy.<br />
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The following is a brief video explaining this new venture:</div>
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<iframe allowfullscreen='allowfullscreen' webkitallowfullscreen='webkitallowfullscreen' mozallowfullscreen='mozallowfullscreen' width='320' height='266' src='https://www.youtube.com/embed/TqmiANAQofc?feature=player_embedded' frameborder='0'></iframe></div>
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Solidus.Center is currently in the start-up phase, and we're looking for help. If you or anyone you know might be interested in board, fellowship, or volunteer opportunities, please contact me at seth@solidus.center.</div>
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Thank you so much for following ECOMINOES! I hope you'll join me on the next level.<br />
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Seth Mason, Charleston SCSeth Masonhttp://www.blogger.com/profile/08575833772160662853noreply@blogger.com2tag:blogger.com,1999:blog-2970607536107501923.post-15367853335095641762014-07-19T14:57:00.003-04:002016-12-21T21:11:53.360-05:00America's Undiagnosed Economic Cancer<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiZSMlPAgXTC76Usqxq7jXSi_aB2GMFVWEESI8ZqcozsiaCIUDDm6iPpWBA7fDICGKuuHou6UXBiK2frp-N49fl-jh3ORROgvc9-kTFHm0KzdGGQkoJ_08CwQOmyeCvm_7I35bWSxdr2j0/s1600/cancer-cell-through-electron-microscope.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img alt="Seth Mason Charleston SC blog 2" border="0" height="168" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiZSMlPAgXTC76Usqxq7jXSi_aB2GMFVWEESI8ZqcozsiaCIUDDm6iPpWBA7fDICGKuuHou6UXBiK2frp-N49fl-jh3ORROgvc9-kTFHm0KzdGGQkoJ_08CwQOmyeCvm_7I35bWSxdr2j0/s1600/cancer-cell-through-electron-microscope.jpg" title="Seth Mason Charleston SC blog 2" width="200" /></a></div>
Since the 1990s, the Federal Reserve and Washington--under their respective contemporary leadership--have been veritable tumors on the U.S. <i>corpus economicus</i>. The chemical marriage between our nation's central bank and central government has been--undoubtedly--the primary cause of our precipitous and painful decade-and-a-half economic decline. Tragically, the majority of Americans don't understand our economy's chronic disease.<br />
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<u><b>The Undiagnosed Disease</b></u><br />
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In the 1990s, the Federal Reserve and the federal government<b>--of which Republicans and Democrats shared control</b>--made concurrent terribly-ill-advised policy changes that precipitated the disastrous bubble-bust paradigm that's been disintegrating our economy over the last 15 years.<br />
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That decade, the Fed, led by Alan Greenspan, <a href="http://books.google.com/books?id=Q-jcWS_eEW8C&pg=PA101&lpg=PA101&dq=Gary+Shilling+great+disconnect+tech+bubble&source=bl&ots=cI22ZuIpZ9&sig=XZFmBHhgyv3Qql4F7mWJfr-_i3g&hl=en&sa=X&ei=UJLKU_fSFJauyATn1IHwBA&ved=0CEIQ6AEwBA#v=onepage&q=Gary%20Shilling%20great%20disconnect%20tech%20bubble&f=false" target="_blank">began the modern Fed tradition of pumping liquidity for long periods of time in the wake of recessions</a>. At the same time, the federal government, whose Legislative Branch <b>was controlled by Republicans</b> and whose Executive Branch <b>was controlled by Democrats</b>, passed the <a href="http://en.wikipedia.org/wiki/Gramm%E2%80%93Leach%E2%80%93Bliley_Act" target="_blank">Gramm-Leach-Bliley Act</a>, which repealed <a href="http://en.wikipedia.org/wiki/Glass%E2%80%93Steagall_Act" target="_blank">Glass-Steagall</a>, a law created in the wake of the Great Depression that prohibited deposit banks from "investing" (read: playing with) depositors' money. (Indeed, there are many similarities between the modern Fed and federal government and those of the years preceding--and during--the Depression.) Armed with cheap capital pumped by the Fed and a <i>carte blanche</i> to throw around other peoples' <b>government-insured</b> money, investors went wild, dumping buckets of Dollars into over-valued tech companies and preposterous dot-coms, multiplying their foolish, nearly-risk-free bets hundreds of times over through a derivatives market that had been <a href="http://en.wikipedia.org/wiki/Commodity_Futures_Modernization_Act_of_2000" target="_blank">recently deregulated by said bipartisan-controlled federal government</a>. Not surprisingly, the tech bubble eventually burst, the financial system crashed, and the American economy began to feel the symptoms of its new economic cancer.<br />
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During the early 2000s recession, the Fed and federal government <a href="http://www.businessinsider.com/krugman-in-02-greenspan-needs-to-create-a-housing-bubble-2009-6" target="_blank">attempted to reinvigorate the economy by inflating another bubble</a>, the housing bubble. Greenspan's Fed <a href="http://www.forbes.com/2009/04/02/greenspan-john-taylor-fed-rates-china-opinions-columnists-housing-bubble.html" target="_blank">once again kept interest rates dangerously low</a> to promote borrowing, even though inflation was becoming problematic. By summer 2008, the median price of a gallon of gas in this country had risen to--in 2014 dollars--$4.70, <b>a 400% increase in 10 years!</b> The price only returned to earth when the economy crashed.<br />
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Also in the 2000s, the Fed began vigorously enforcing the <a href="http://en.wikipedia.org/wiki/Community_Reinvestment_Act" target="_blank">Community Reinvestment Act</a>,
a passable 1970s law made draconian in the 1990s through legislation passed by--once again--the <b>Republican-controlled Congress</b> and signed by the <b>Democrat-controlled White House</b>. The new incarnation of the CRA forced lending institutions to accommodate sub-prime borrowers, a move that was supposed to stimulate the housing market and create equity for the poor. Instead, the CRA created a proliferation of so-called "toxic" mortgages that found their way into investors' portfolios due to legislation sponsored by <a href="http://www.ecominoes.com/2012/05/frank-and-dodd-started-mortgage-crisis.html" target="_blank">Democrats Barney Frank and Chris Dodd</a>--and passed by the<b> Republican-controlled Congress and White House</b>--that reduced the mortgage-buying standards of <a href="http://en.wikipedia.org/wiki/Government-sponsored_enterprise" target="_blank">Government Sponsored Enterprises</a> Fannie Mae and Freddie Mac.<br />
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With their standards watered-down, Fannie and Freddie began repackaging toxic mortgages as toxic investment vehicles and selling them to institutional
investors, who gladly snatched them up with their cheap, nearly-risk-free capital pumped by the Fed and backed by the federal government. (Sound familiar?) Once again, institutional investors multiplied their foolhardy bets hundreds of times over through the newly-deregulated derivative market. Eventually, the housing bubble, the largest asset bubble in the history of the United States (so far), led to the greatest economic collapse the U.S. had suffered since the Great Depression, a collapse <a href="http://www.gallup.com/poll/125639/gallup-daily-employment.aspx" target="_blank">whose aftermath is still apparent in the job market 6 years later</a>.<br />
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<u><b>The Overlooked Primary Symptom</b></u><br />
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The decay of the job market has been--by far--the most painful symptom of our economic cancer. Yet, it's one that's tragically overlooked by the majority of the population, whose employment hasn't been negatively affected and whose comprehension of our jobs crisis is limited by the <a href="http://www.zerohedge.com/contributed/2014-01-08/%E2%80%9C-chart-true-representation-employment-crisis-country%E2%80%9D" target="_blank">consistently-unrealistically-optimistic employment data</a> the government spoon-feeds them via the mainstream media. Indeed, one of the many insidious aspects of <a href="http://www.ecominoes.com/2013/04/americas-economic-depression-in-5-charts.html">this economic depression</a> is that the overall malaise has been--for the most part--<b>a function of the suffering of an oft-underestimated and disregarded statistical minority: the long-term unemployed and underemployed</b>, whose earning potential and contribution to consumer spending and investment have been crushed. Recall the following chart I published a while back:<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgOcIqwSLmDaD-DGJdxgVn8mwDjX6HNfCAC5JV73nQQ030xc0jlFwPdO3uZxNgLVxprva3FPLEzn4LzzpiMAXrAgu9idDZLrBClMJO7g_X0qJupZVNfYxUSX68FZvdB3YMtYYOmNqsU0jQ/s1600/chart2.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgOcIqwSLmDaD-DGJdxgVn8mwDjX6HNfCAC5JV73nQQ030xc0jlFwPdO3uZxNgLVxprva3FPLEzn4LzzpiMAXrAgu9idDZLrBClMJO7g_X0qJupZVNfYxUSX68FZvdB3YMtYYOmNqsU0jQ/s1600/chart2.png" /></a></div>
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In 2012, America's 28 million unemployed or underemployed workers, who <a href="http://www.bls.gov/cps/lfcharacteristics.htm#fullpart" target="_blank">earned a median of $16,000 from unemployment benefits and/or menial employment</a>, forwent OVER A TRILLION DOLLARS in potential earnings. Nothing has been a bigger drag on the economy than lost earnings, which reduce consumer spending--the largest segment of the economy--in the short-term and, in the long-term, delay "life milestone" contributions to the economy such as home ownership and child rearing. The jobs crisis has been--by far--the most acute symptom of our economic cancer, yet its negative influence on the economy as a whole is often overlooked due to its highly-localized nature.<br />
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Of course, the jobs crisis has been painful in ways that far transcend negative influence on GDP growth. (GDP growth, by the way, <a href="http://www.bloombergview.com/articles/2013-01-30/gdp-an-imperfect-measure-of-progress" target="_blank">might not be the best measurement of economic progress</a> anyway.) Far worse than deflating GDP, the crisis has crushed dreams, turned lives upside-down, and <a href="http://www.npr.org/2014/07/02/327058018/a-lost-generation-of-workers-the-cost-of-youth-unemployment" target="_blank">created a new economically-lost generation</a>. It's been particularly hard on young men, whose unemployment and underemployment rates have been consistently higher than those of women of most any age, yet are biologically hard-wired and socially-conditioned to be breadwinners. Lamentably, that devastating detail is also often overlooked.<br />
<br />
(As a side note, I highly recommend Gawker's <a href="http://gawker.com/men-talk-about-being-unemployed-in-their-prime-1517479368" target="_blank">extensive collection of stories of young male professionals who have been emasculated by the jobs crisis</a>. The series, entitled "Men Talk About Being Unemployed in Their Prime", serves as a poignant reminder that long-term unemployment and underemployment aren't just data sets; they're critical human conditions.)<br />
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<u><b>The Missed Diagnosis </b></u><br />
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Tragically, most Americans fail to see past their own political myopia to identify our nation's economic cancer. Republicans and Democrats blame each other, of course, and the majority of Americans are too ignorant of economics to realize that the MSM's question <a href="http://wallstcheatsheet.com/politics/democrats-and-gop-blame-each-other-for-weak-job-market-whos-right.html/?a=viewall" target="_blank">"which party is to blame?"</a> is a fallacious one. A web search of "blame for Great Recession" yields tens of thousands of results neatly divided by party line. In reality, <b>both parties contributed to our nation's economic collapse</b>, and no entity contributed more than the Federal Reserve.<br />
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Appallingly, the Fed, now under the stewardship of newly-sworn-in Chairwoman Janet Yellen, is perpetuating the carcinogenic Keynesian monetary policy it adopted under Greenspan and continued under Bernanke. The ultra-wealthy, whose net worth is highly-dependent on the success of the <a href="http://www.ecominoes.com/2013/12/evidence-that-fed-prints-for-wall-street.html" target="_blank">Fed-juiced stock market</a>, have been making money hand-over-fist during this depression. Average Americans, on the other hand, <a href="http://www.nytimes.com/2014/07/27/business/the-typical-household-now-worth-a-third-less.html?_r=0" target="_blank">have been getting poorer</a>. <a href="http://finance.yahoo.com/blogs/daily-ticker/nouriel-roubini-bullish-now-mother-bubbles-begun-140143386.html" target="_blank">New bubbles have been inflated</a>; new malignant tumors have been created. The cancer spreads unbeknownst to most Americans.<br />
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Seth Mason, Charleston SC <br />
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Seth Masonhttp://www.blogger.com/profile/08575833772160662853noreply@blogger.com2tag:blogger.com,1999:blog-2970607536107501923.post-72709241916734300922014-04-15T11:29:00.002-04:002017-07-10T08:18:46.335-04:00Paradigm Shift On The Right?<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg5MLkofd8ASzNzVdNpXcJaABo2VrVCtRolYnpIXoVRPOLhkja6sBayUJ_-Wj-cx_J7gB3rJBAvW-C52IpzBgMoJU9CqyPWDJNrnqOQbmBqoRqDEuD52l1JHa4z8yeqCCuCchuFzoWuRNI/s1600/paradigm_shift-e1327307245487.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img alt="Seth Mason Charleston SC blog 3" border="0" height="181" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg5MLkofd8ASzNzVdNpXcJaABo2VrVCtRolYnpIXoVRPOLhkja6sBayUJ_-Wj-cx_J7gB3rJBAvW-C52IpzBgMoJU9CqyPWDJNrnqOQbmBqoRqDEuD52l1JHa4z8yeqCCuCchuFzoWuRNI/s1600/paradigm_shift-e1327307245487.jpg" title="Seth Mason Charleston SC blog 3" width="200" /></a>In these times of rampant pessimism in which the majority of Americans <a href="http://www.realclearpolitics.com/epolls/other/direction_of_country-902.html" target="_blank">believe that the country has been heading in the wrong direction for some time</a>, there exists a ray of hope: the burgeoning liberty movement. Recently, there have been two significant positive developments regarding the movement's influence on the Right:<br />
<br />
Although <a href="http://www.ecominoes.com/2013/04/its-gop-vs-america-on-social-issues-war.html" target="_blank">Republicans lag the nation in its change of heart on social issues</a>,
more people on the Right are coming to realize the high price of the federal
government's marijuana prohibition.<br />
<br />
The editors of <i>National Review</i>, arguably the most influential conservative publication in the nation, recently <a href="http://m.nationalreview.com/article/367618/sensible-weed-editors" target="_blank">published an editorial arguing for the legalization of cannabis</a>.
The conservative publication of record noted the significant cost of marijuana prohibition, both in terms of currency and of human
life:<br />
<blockquote>
Regardless of whether one accepts the individual-liberty
case for legalizing marijuana, the consequentialist case is convincing.
That is because the history of marijuana prohibition is a catalogue of
unprofitable tradeoffs: billions in enforcement costs, and hundreds of
thousands of arrests each year, in a fruitless attempt to control a
mostly benign drug the use of which remains widespread despite our
energetic attempts at prohibition. We make a lot of criminals while
preventing very little crime, and do a great deal of harm in the course
of trying to prevent an activity that presents little if any harm in and
of itself. </blockquote>
Quite a departure from the Right's "Just Say No" rhetoric of the 1980s.<br />
<br />
More people on the Right are also coming around on military interventionism. Rand Paul, whose non-interventionist view of foreign policy and homeland-first view of defense is a 180-degree-turn from a decade of George W. Bush-brand military adventurism, is a serious contender for the 2016 GOP presidential nomination. In fact, according to some polls, <a href="http://www.washingtontimes.com/news/2014/mar/16/cnn-poll-rand-paul-leads-2016-gop-presidential-pac/" target="_blank">he's the leading candidate.</a> In modern history, no Republican nominee for president has had a view of foreign policy anywhere close to Rand's. Even Barry Goldwater was an interventionist.<br />
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That's impressive. Even though Rand isn't the civil libertarian his father is. <br />
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There's reason to be hopeful in these times of uncertainty: The liberty movement's growing in size and influence, and it appears to be taking the Right in the right direction.<br />
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Seth Mason, Charleston SC Seth Masonhttp://www.blogger.com/profile/08575833772160662853noreply@blogger.com6tag:blogger.com,1999:blog-2970607536107501923.post-26647517629036835152014-04-09T11:46:00.000-04:002016-12-21T21:13:59.854-05:00The Psychological Struggle Of Long-Term UNDERemployment<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiPRwswdj9V67-r3jlyJVOClY7Z9lzje5O96s7Bt6Y1CmX6dOXODAt6zUcGABbh4IZd2pGK9L1lWRTqBpFnUGQBr4bxr9urF_QzOBiKTYKMx7dWgP3NxOx39RQ5aIAiwooCDgMHql4i7Ks/s1600/suffering-suffering-for-blog.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"> <img alt="Seth Mason Charleston SC blog 4" border="0" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiPRwswdj9V67-r3jlyJVOClY7Z9lzje5O96s7Bt6Y1CmX6dOXODAt6zUcGABbh4IZd2pGK9L1lWRTqBpFnUGQBr4bxr9urF_QzOBiKTYKMx7dWgP3NxOx39RQ5aIAiwooCDgMHql4i7Ks/s1600/suffering-suffering-for-blog.jpg" title="Seth Mason Charleston SC blog 4" width="197" /></a>I've written dozens of articles about the epidemic of unemployment and underemployment in this country. In the articles, I've cited numerous statistics. We have to keep in mind that those stats represent people.<br />
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There are many accounts of the psychological toll of long-term unemployment. But little has been said about the toll of long-term UNDERemployment. Lest we forget that <a href="http://www.gallup.com/poll/125639/gallup-daily-workforce.aspx" target="_blank">Gallup pegs the underemployment rate at nearly 20%</a>. Nearly 1 in 5 members of the American workforce is working below--sometimes well below--his potential. And that's only if you count people who work part-time but want to work full-time. That doesn't count the millions of Americans working below their potential in full-time jobs. MBAs working retail. Law degree holders filing papers. Mike Alberti of Remapping Debate tells us what that can do to a person psychologically over time. As you read this, keep in mind that <a href="http://www.ere.net/2013/05/20/why-you-cant-get-a-job-recruiting-explained-by-the-numbers/" target="_blank">getting a breadwinner job in America has become a lottery in which the best and brightest don't get chosen up to 50% of the time</a> and <a href="http://blogs.wsj.com/economics/2014/04/08/more-people-are-quitting-their-jobs-but-not-enough/" target="_blank">opportunities for promotion have been limited by the large number of people staying in their jobs</a>.<br />
<blockquote class="tr_bq">
The many impacts of unemployment — including social and psychological
ones — have long been catalogued. But much less is known about the
consequences of “underemployment.” Millions of Americans — at least as
many as are unemployed, and perhaps more — have either been forced to
take part-time work because full-time jobs are not available, or are
forced to work in jobs for which they are overqualified. <br />
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“We have never experienced anything like this,” said Carl Van Horn,
director of the John J. Heldrich Center for Workforce Development at
Rutgers University. It is “not something that as a society we’re used to
dealing with.”<br />
<br />
Since the recession, researchers have begun to take more of an
interest in the psychological effects of underemployment, and what they
have found is not encouraging. In the short-term, it appears that those
who are underemployed — like those who are unemployed — have an
increased risk of depression, increased stress, and lowered self-esteem.<br />
<br />
And there may be long-term negative effects, too. On the
psychological side, there are intriguing hints of a downward spiral that
might affect underemployed workers in their family, social, and
employment relationships. In economic terms, there is already data that
show that the effects of being underemployed directly after graduating
from college can linger for more than 10 years.<br />
<br />
“Unemployment is an emergency,” Van Horn said. “Underemployment is a
crisis.” Nevertheless, the United States, unlike other countries, is not
gathering the data needed to pinpoint what the full costs of
underemployment actually are. Making it difficult to know which policies
might be effective in helping those affected.<br />
<br />
<span style="color: #0b3668; font-family: "georgia" , serif; font-size: 15px; font-weight: bold; line-height: 18px; text-decoration: none;">What’s wrong with me?</span><br />
<br />
Douglas Maynard, an associate professor of psychology at the State
University of New York in New Paltz is one of only a few psychologists
who has studied the mental health effects of underemployment.<br />
<br />
“There are a few things that we know for sure,” he said. “We see very
clear evidence of lower self-esteem, greater stress, and less job
satisfaction,” he said.<br />
<br />
To illustrate those effects, David Pedulla, a doctoral candidate at
Princeton who is writing his dissertation on the consequences of
underemployment, suggested considering the case of a worker with a
degree in accounting who is laid off from an accounting firm and has to
take a new job working in retail.<br />
<br />
“Imagine going from a situation where you had gained some status and
control over your day-to-day life, and then moving into a retail job
with a boss with less education than you,” Pedulla said. “That person
might feel like he had lost control over his life.” The theme of loss of
control is one that numerous experts cited repeatedly.<br />
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Pedulla said that the result is often that underemployed workers
internalize a sense of shame, and begin to blame themselves for their
situation. Psychologists have long recognized that shame is a very
powerful emotion, and that people who feel a strong sense of shame tend
to cope with it in different ways. <br />
<br />
The ex-accountant working retail, Maynard said, “might start blaming
himself for it. He might wonder, what’s wrong with me that I’m here?”<br />
<br />
That sense of shame intensifies if the individual has been forced to
take a pay cut, Maynard said. Underemployed workers will often feel a
greater financial strain, which can be exacerbated because their new
jobs may not provide the same levels of health or retirement benefits as
their old jobs, while at the same time making them ineligible for
government assistance programs.<br />
<br />
Pedulla said that, for men, the implications of becoming
underemployed and earning less money can have profound effects on their
perception of their masculinity, especially if they find themselves
struggling to provide for their families.<br />
<br />
“The breadwinner model is still very present,” he said. Men who feel
that their masculinity is being threatened are more likely to lash out
at their families. There is evidence that underemployment can cause
marital strain, Pedulla said, and that when older children perceive that
there has been a reduction in income or status, they may “inherit” the
sense of shame.<br />
<br />
“Kids may feel like they can no longer have the newest clothes, or
that they can’t do certain activities with their friends because their
family can’t afford it anymore,” he said.<br />
<br />
<span style="color: #0b3668; font-family: "georgia" , serif; font-size: 15px; font-weight: bold; line-height: 18px; text-decoration: none;">Social isolation</span><br />
<br />
One of the strongest effects of the shame and lowered self-esteem
that can result from underemployment is that the worker may become
socially isolated — in the workplace and outside of it — and that the
isolation can, in turn, reinforce those feelings because the worker is
not receiving social support, experts said.<br />
<br />
“Your social interactions might change,” Pedulla said. “If you were
laid off from a job where you had friends, you might feel less inclined
to see your former co-workers because you might fear that they would
look down on you.”<br />
<br />
<a href="http://hum.sagepub.com/content/48/12/1381.short" target="_blank">Some research</a>
has found that workers who have been laid off and found new jobs that
are unsatisfactory are less likely to engage in social activities. In
1988, Katherine Newman, a sociologist and the current dean of the School
of Arts and Sciences at Johns Hopkins University, wrote an influential
book called <i>Falling from Grace: Downward Mobility in the Age of Affluence</i>, in which she interviewed hundreds of people who had, for various reasons, fallen out of the middle class. </blockquote>
<blockquote class="tr_bq">
Several people reported that the social consequences of underemployment can be particularly challenging.<br />
<br />
“If your old friends are going out for drinks or going to the theater
or playing golf or doing other things that you can no longer afford to
do, then that can be a very isolating experience,” she said. </blockquote>
<blockquote class="tr_bq">
Berrin Erdogan, an associate professor of management at Portland
State University, said that underemployed people might find themselves
isolated within the workplace as well. “You would probably feel like a
misfit, especially if you are surrounded by people who are less educated
than you,” she said.<br />
<br />
She used the example of a young worker who graduated from college but
could not find a job in her field, and had to start working at a coffee
house. “After work, [your co-workers] might go out or spend time
together on the weekends, but you might be less inclined to go because
you feel like you don’t fit in,” she said. “At the same time, there’s a
great chance that your co-workers might feel intimidated by you, and
won’t want to invest in a relationship with you.”<br />
<br />
Erdogan said that that situation could quickly lead to anger and
“self-defeating behavior,” which could affect the way that underemployed
workers do their jobs. “If you don’t feel appreciated in your job, and
feel like it’s unfair to be there, you might not do your job as well. If
you’re working in a coffee house, in the end you may not end up
treating your customers very well,” she said. </blockquote>
<blockquote class="tr_bq">
In his <a href="http://onlinelibrary.wiley.com/doi/10.1002/job.389/abstract" target="_blank">research</a>,
Maynard has found that workers who perceive themselves to be
overqualified for their jobs report less job satisfaction even than
workers who are involuntarily employed part-time. </blockquote>
<blockquote class="tr_bq">
Erdogan said that evidence also exists that workers who are
overqualified for their jobs are more likely to have bad relationships
with their managers and co-workers, and that this can make them more
likely to get fired from their jobs. </blockquote>
<blockquote class="tr_bq">
“If you don’t leave a job on good terms,” she said, “that in turn diminishes your chances of finding another job.”<br />
<br />
<span style="color: #0b3668; font-family: "georgia" , serif; font-size: 15px; font-weight: bold; line-height: 18px; text-decoration: none;">Depression and boredom</span><br />
<br />
Psychologists stress that the duration of underemployment is a very
important factor. If a person finds a better job within a few weeks or
months, said Daniel Feldman, associate dean of the Terry College of
Business at the University of Georgia, the negative psychological
impacts are more likely to be limited.<br />
<br />
But if the worker remains underemployed for more than six months,
Feldman said, it would be a short step from the combination of boredom
and self-doubt to clinical depression. <a href="http://www.isr.umich.edu/src/seh/mprc/PDFs/Friedland2003.pdf" target="_blank">Researchers have shown</a>
that depression is strongly associated with underemployment, especially
if the person is making less money than he or she had come to expect.
Others have <a href="http://web.mac.com/kristian.pfanzelter/iWeb/Project/Secondary%20sources_files/Underemployement%20and%20depression.pdf" target="_blank">also found that</a> underemployed workers are just as likely as the unemployed to show signs of depression.<br />
<div class="pullquote align_left">
</div>
Going back to the example of a worker who went from an accounting job
to a retail job, Feldman said that a huge factor would be the
dissonance in the worker’s mind between his present situation and the
future that he had imagined.<br />
<br />
“You went from doing something where you were using your skills to
folding shirts,” he said. “That’s a very strong contradiction [of] the
idea that you had of where you were going to end up.”<br />
<br />
“You’re going to be constantly bored with that job,” he said. “You’re never going to be happy working there.”<br />
<br />
Depression has long been linked to self-destructive behavior such as an increased incidence of <a href="http://qjmed.oxfordjournals.org/content/97/4/237.short" target="_blank">alcoholism</a>, <a href="http://her.oxfordjournals.org/content/16/4/457.short" target="_blank">drug use</a>, <a href="http://www.springerlink.com/content/70v140nh217p80r8/" target="_blank">aggression</a> toward family members, and <a href="http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1732539/" target="_blank">suicide</a>. While little research has been done examining the incidence of these behaviors among underemployed people, the <a href="http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1732539/" target="_blank">connection between self-destructive behavior and unemployment</a> is quite strong.<br />
<br />
“We would expect to see many of the same effects in some
underemployment situations,” said Meghna Virick, an associate professor
of management at San Jose State University.<br />
<br />
Feldman <a href="http://jom.sagepub.com/content/21/6/1025.abstract" target="_blank">has also found</a>
that if workers who are laid off blame themselves for losing their
jobs, there is an increased likelihood that they will engage in
self-destructive behavior.<br />
<br />
Characteristically, people who suffer from depression can have strong
feelings of shame, guilt and worthlessness, as well as fatigue and
irritability. They can also lose interest in things that were once
important to them, such as their families, friends, and hobbies.<br />
<br />
“People spend a huge number of their hours at work,” Pedulla said.
“It’s central to the construction of their identity. If that work is
making them depressed, then it’s easy for that to affect other parts of
their lives.”<br />
<br />
<span style="color: #0b3668; font-family: "georgia" , serif; font-size: 15px; font-weight: bold; line-height: 18px; text-decoration: none;">Unfulfilled hopes and diminished expectations</span> </blockquote>
<blockquote class="tr_bq">
Though many researchers speculate that underemployment can have
long-term psychological effects, it is an issue that has not been
studied in depth. But several experts worried that, if the situation
does not improve quickly, it could lead to a sense of unfulfilled hopes
and diminished expectations, especially among young people. </blockquote>
<blockquote class="tr_bq">
“If you’re going into the labor market and have a particular idea of
what your future is going to look like, and what you actually find is
quite different, that has an effect on how you perceive yourself and how
you perceive your chances for the future,” said Sarah Anderson, a
professor of psychology at the University of South Australia who has
long studied underemployment.<br />
<div class="pullout_wide align_left">
<br /></div>
Returning to the example of the ex-accountant who works in retail,
Feldman said that after a certain amount of time the worker might start
to become discouraged. “If you don’t get out of the job after six
months, you become increasingly pessimistic that you’re going to get out
of it at all,” he said. </blockquote>
<blockquote class="tr_bq">
That could mean that the worker stops looking for other jobs, or
approaches the job search with “less gusto,” Maynard said. Because the
job search can quickly become an exhausting process, especially while an
applicant is working at another job, he or she may not put in as much
effort after a prolonged period of time, he added.<br />
<br />
“Some people might cope with being underemployed by changing their
expectations, and saying, ‘I guess this is as good as it gets for me,’”
Maynard said.<br />
<br />
The job search can reinforce that sense. Several experts in
management said that employers might be less likely to hire an applicant
for a job if the applicant has been clearly underemployed, leading to a
vicious cycle from which the worker cannot extricate him or herself.<br />
<br />
If the worker is ensnared in this vicious cycle, Maynard said that he
or she might begin to feel a sense of “learned helplessness” in which
the person stops trying to actively change his or her situation. “If
you’ve been applying to jobs and hearing nothing back, you may start to
feel like you have no control over your life,” he said.<br />
<br />
And many researchers have noted that the mental health effects of
underemployment are most severe if workers feel that they have lost
control over their situation — if they begin to feel trapped in their
current jobs. “That is the point when we would expect to see the worst
mental health outcomes,” Maynard said.<br />
<br />
In the current context, that is particularly disturbing. There is <a href="http://www.businessweek.com/magazine/content/11_26/b4234035499590.htm" target="_blank">some evidence</a>
that shows that during a recession, workers are less likely to quit
their current jobs, because they are less likely to believe that they
will be able to find another one. Before the recession, an average of
three million people quit their jobs each month; in September, that
number was slightly over two million.<br />
<br />
<span style="color: #0b3668; font-family: "georgia" , serif; font-size: 15px; font-weight: bold; line-height: 18px; text-decoration: none;">Lack of data</span> </blockquote>
<blockquote class="tr_bq">
While the understanding of the consequences of underemployment is
growing, many of the experts interviewed for this article said that
there is still a long way to go.<br />
<br />
“There is much less empirical research than we would like,” said
Pedulla. “Before we know how to respond effectively, we need to
understand the contours of the problem better.”<br />
<br />
<div class="pullquote align_right">
“In Europe,” said Portland State’s Berrin Erdogan, “underemployment is
treated as a social problem. We don’t even pay attention to it that
much.” </div>
</blockquote>
<blockquote class="tr_bq">
<div class="pullquote align_right">
</div>
One reason why so little research is done on underemployment is that
it is important to have what’s called a “longitudinal” data source to
draw from, which means data that follows individuals through time to
measure what effects result from changes in their situations.<br />
<br />
While the <span class="caps">U.S.</span> does have a few longitudinal
data sources, they are generally limited in the amount of information
they contain. Much of what is known comes from data from other
countries, especially in regard to mental health and to more subjective
measures like perceived well being.<br />
<br />
Longitudinal data collection is more expensive and more
time-consuming than normal survey studies, and while a few universities
have the resources to conduct them, the responsibility generally falls
to the government to provide the funding and support. Virick of the San
Jose State University said that the recession should have served as a
wake-up call to policy makers that this is an issue that demands
attention.<br />
<br />
“We haven’t had any kind of organized response to this,” she said. </blockquote>
<blockquote class="tr_bq">
According to Erdogan, the United States is paying much less attention
to the issue than European countries. “In Europe, underemployment is
treated as a social problem. We don’t even pay attention to it that
much.”<br />
<br />
<span style="color: #0b3668; font-family: "georgia" , serif; font-size: 15px; font-weight: bold; line-height: 18px; text-decoration: none;">Whose fault is it, really?</span><br />
<br />
Few people would suggest that mass underemployment is somehow the “fault” of the people who are underemployed.<br />
<br />
“Underemployment is now a structural feature of our society,” said
Newman of Johns Hopkins. “Structural problems demand structural
solutions.”<br />
<br />
Nevertheless, several researchers said that, in the United States,
there is a strong impulse for underemployed workers to blame themselves
for their situation, which is the source of many of the negative mental
health effects associated with underemployment.<br />
<br />
“If people don’t understand that there is a way that the system has
become rigged against them, they may start feeling like they’re to blame
for their issues,” said Anderson of the University of South Australia.<br />
<br />
Anderson said that appreciating the broader structures that created
underemployment was an important part of a strategy to avoid falling
into the trap of self-blame.<br />
<br />
“I like to hope that we’re starting to see people realize that the
ways the workplace has changed in the last few decades have not been
positive for most workers, and to try to change that” she said. </blockquote>
<blockquote class="tr_bq">
Newman agreed. Seeking to address the systemic causes of problems “can be a very healthy coping strategy,” she said.</blockquote>
"Underemployment is now a structural feature of our society." Truly tragic. The result of the wicked trifecta of impediments to prosperity that have been the modern Fed, federal government, and American hiring paradigm.<br />
<br />
Seth Mason, Charleston SC Seth Masonhttp://www.blogger.com/profile/08575833772160662853noreply@blogger.com0tag:blogger.com,1999:blog-2970607536107501923.post-59069284520554564862014-04-03T11:30:00.001-04:002017-10-02T11:22:31.744-04:00Another Biz Reporter Rips Applicant Tracking Systems<div class="separator" style="clear: both; text-align: center;">
</div>
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEikWaenZywbrKhFR7mBDyFRgzggZtBYG3trEq0pZMzJu39EKz4Colv1WyXPwyj854dDol4jikod6KBRWhTIfjjwNBoTtpXfK2Qj5xJaAxScwSs2hqqTZb-dCcQVAEv1HqVG2MIKLi6Dm_k/s1600/google-404-1299071983.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img alt="Seth Mason Charleston SC blog 5" border="0" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEikWaenZywbrKhFR7mBDyFRgzggZtBYG3trEq0pZMzJu39EKz4Colv1WyXPwyj854dDol4jikod6KBRWhTIfjjwNBoTtpXfK2Qj5xJaAxScwSs2hqqTZb-dCcQVAEv1HqVG2MIKLi6Dm_k/s1600/google-404-1299071983.jpg" title="Seth Mason Charleston SC blog 5" width="164" /></a>As many of you know, I firmly believe that HR hiring software--AKA "applicant tracking systems"--, which far too many American enterprises offer job seekers as their only port-of-entry, <a href="http://www.ecominoes.com/2014/02/pbss-ask-headhunter-blasts-applicant.html" target="_blank">exacerbate our nation's unemployment problem</a> and detract from companies' bottom lines (and therefore detract from the economy as a whole). So any article I come across that's critical of ATSes gets my attention.<br />
<br />
In this article, CIO's Meridith Levinson <a href="http://www.cio.com/article/701272/5_Insider_Secrets_for_Beating_Applicant_Tracking_Systems" target="_blank">describes applicant tracking systems as capricious and fundamentally-flawed</a>. She hammers home the fact that the expensive, unwieldy software American enterprises often "employ" <b>as their exclusive employment gatekeepers</b> arbitrarily reject potentially great employees. As you read the article, keep in mind that <a href="http://business.time.com/2012/08/29/just-how-underemployed-is-gen-y/" target="_blank">half of Americans ages 18-29 are either unemployed or underemployed</a>. Think about how younger Americans who have less experience (and therefore have fewer keywords and numbers on their applicant profiles) and who have a smaller professional network (not that that matters much when hiring managers direct applicants to their ATSes) might be at a significant disadvantage under this hiring paradigm. This is, after all, a paradigm in which even the most talented applicants are judged by poorly-designed computer software <i>based on experiential criteria only</i>. Remember, an ATS will always select someone with more degrees or experience over someone with more accomplishments. Why? Because <b>ATSes CAN'T IDENTIFY ACCOMPLISHMENTS.</b><br />
<br />
<div id="stcpDiv" style="left: -1988px; position: absolute; top: -1999px;">
Lou Adler, entrepreneur and best-selling author, best summarized this phenomenon in an article he <a href="http://www.linkedin.com/today/post/article/20130502173937-15454-there-are-only-four-jobs-in-the-whole-world-are-you-in-the-right-one" target="_blank">recently published on LinkedIn</a>:<br />
<blockquote class="tr_bq">
“Successful candidate will develop a new approach for reducing water usage by 50%,” is a
lot better than saying “Must have 5-10 years of environmental
engineering background including 3-5 years of wastewater management."</blockquote>
- See more at: http://www.ecominoes.com/2013/05/the-american-hiring-paradigm-is-broken.html#sthash.KkCw7bIz.dpuf</div>
Lest we forget what Lou Adler, entrepreneur and best-selling author, <a href="http://www.linkedin.com/today/post/article/20130502173937-15454-there-are-only-four-jobs-in-the-whole-world-are-you-in-the-right-one" target="_blank">recently stated on LinkedIn</a>:<br />
<blockquote class="tr_bq">
“Successful candidate will develop a new approach for reducing water usage by 50%,” is a
lot better than saying “Must have 5-10 years of environmental
engineering background including 3-5 years of wastewater management."</blockquote>
In this case, ATSes would always choose candidates with more years of experience over those with more accomplishments that would suggest the capability of reaching the goal of reducing water usage by 50%. In fact, many ATSes require applicants to list "responsibilities". Anyone can have responsibilities. Only a select (read: overlooked) few have bona fide accomplishments. <b>But the people most capable of identifying accomplishments relevant to the job, hiring managers, all too often go out of their way to conceal themselves from the applicant pool. </b>Anyway, on to the article:<br />
<blockquote class="tr_bq">
Applicant tracking systems are the bane of legions of job seekers.
These systems, which employers use to manage job openings across their
enterprises and screen incoming resumes from job seekers, <b>kill 75
percent of candidates' chances of landing an interview as soon as they
submit their resumes</b>, according to job search services provider <a href="http://www.preptel.com/" target="_new">Preptel</a>.<br />
<br />
The problem with applicant tracking systems, as many job seekers know,
is that they are flawed. Very flawed. If a job seeker's resume isn't
formatted the right way and doesn't contain the right keywords and
phrases, the applicant tracking system will misread it and rank it as a
bad match with the job opening, regardless of the candidate's
qualifications.<br />
<br />
<a href="http://www.bersin.com/" target="_new">Bersin & Associates</a>,
an Oakland, Calif.-based research and advisory services firm
specializing in talent management, confirmed the weaknesses of applicant
tracking systems. In a test conducted last year, Bersin &
Associates created a perfect resume for an ideal candidate for a
clinical scientist position. The research firm matched the resume to the
job description and submitted the resume to an applicant tracking
system from Taleo, arguably the leading maker of these systems. </blockquote>
Taleo is notorious for producing ridiculously buggy software. There used to be a <a href="http://taleosucks.blogspot.com/" target="_blank">great blog that described in detail the numerous functional problems with Taleo's products</a>. Some of these problems have been fixed with recent releases. Many have not. And the fundamental flaws persist, as they do with all ATSes: <br />
<blockquote class="tr_bq">
When Bersin & Associates studied how the resume rendered in the
applicant tracking system, the company saw that one of the candidate's
work experiences was lost entirely because the resume had the date typed
before the employer. The applicant tracking system also failed to read
several educational degrees the putative candidate held, which would
have given a recruiter the impression that the candidate lacked the
educational experience necessary for the job. The end result: <b>The resume
Bersin & Associates submitted only scored a 43 percent relevance
ranking to the job because the applicant tracking system misread it.</b></blockquote>
Every American hiring manager should read that last sentence. <br />
<blockquote class="tr_bq">
Josh Bersin, CEO and president of the firm, notes that since all
applicant tracking systems use the same parsing software to read
resumes, the results his company found would be typical of most systems,
not just Taleo's.<br />
<br />
The problems with applicant tracking systems beg the question: If
they're so flawed and if they filter out good candidates, why do
employers bother to use them? The answer is simple: Bersin says they
still make recruiters' lives easier. </blockquote>
Stop right there. American enterprises don't use ATSes to find the best potential employees. They use them <i>to make recruiters' lives easier</i>. Let's analyze that in terms of risk and reward: To reduce the workload of their recruiters, organizations <a href="http://www.bersin.com/Blog/post/Are-Applicant-Tracking-Systems-Now-a-Commodity-abc.aspx" target="_blank">spend billions of dollars annually</a> on buggy software that arbitrarily eliminates a significant number of talented applicants. Under that paradigm, <a href="http://www.ere.net/2013/05/20/why-you-cant-get-a-job-recruiting-explained-by-the-numbers/" target="_blank">up to 50% of new hires "don't work out"</a>. Does the end of convenience for HR workers justify a unquestionably broken means of hiring? Levinson goes on: <br />
<blockquote class="tr_bq">
Applicant tracking systems save
recruiters days' worth of time by performing the initial evaluation and
by narrowing down the candidate pool to the top 10 candidates whose
resumes the system ranks as the most relevant. Even if some good
candidates get filtered out, recruiters still have a place to start. </blockquote>
Better said, recruiters have a good "place to start" with the applicants who are lucky enough to win the ATS lottery and get through to a hiring manager. Those applicants may or may not be the best candidates.<br />
<br />
PBS's "Ask the Headhunter" Nick Corcodilos <a href="http://www.ecominoes.com/2014/02/pbss-ask-headhunter-blasts-applicant.html" target="_blank">said it best</a>:<br />
<blockquote class="tr_bq">
Unemployment
is made in America by employers
who have given up control over their competitive edge -- recruiting and
hiring -- to a handful of database jockeys who are funded by HR
executives, who in turn have no idea how to recruit or hire themselves.</blockquote>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEghMX8EsjFpZWmKrWehaXgBfug9x2s31AmM5sHDUbDsMz52Xlp6NBi-aKVbNj1gcZ-_0neEwrsMED14z4HGLBbOpe6OCgtp_mWg5p-pklgRo1G4Eg-r67pL7fP4BbrA1p1NGd8aUSpFcug/s1600/how-technology-killed-recruiting.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="664" data-original-width="960" height="221" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEghMX8EsjFpZWmKrWehaXgBfug9x2s31AmM5sHDUbDsMz52Xlp6NBi-aKVbNj1gcZ-_0neEwrsMED14z4HGLBbOpe6OCgtp_mWg5p-pklgRo1G4Eg-r67pL7fP4BbrA1p1NGd8aUSpFcug/s320/how-technology-killed-recruiting.jpg" width="320" /></a></div>
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Seth Mason, Charleston SC Seth Masonhttp://www.blogger.com/profile/08575833772160662853noreply@blogger.com0tag:blogger.com,1999:blog-2970607536107501923.post-5792000792932269742014-03-04T16:05:00.000-05:002016-12-21T21:32:02.578-05:00The Post-1990s Federal Reserve: Enemy Of The Middle Class<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiz84sHoK37Wo9ZTRhdAYw8x2YaaZCu6bjF99pO5DkaLvYoGjyohcQsOV0t7kcvsSejeK5V0dLur9kNd05vy1graO1aS274NY6fd0i9sTHB6pT8jc-1HRotq76mrYmly-irkHhk3I7Gsp4/s1600/middle-class.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img alt="Seth Mason Charleston SC blog 6" border="0" height="111" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiz84sHoK37Wo9ZTRhdAYw8x2YaaZCu6bjF99pO5DkaLvYoGjyohcQsOV0t7kcvsSejeK5V0dLur9kNd05vy1graO1aS274NY6fd0i9sTHB6pT8jc-1HRotq76mrYmly-irkHhk3I7Gsp4/s1600/middle-class.jpg" title="Seth Mason Charleston SC blog 6" width="200" /></a>One need not delve into hardcore economic research to reach the conclusion that the Fed is largely responsible for our country's economic woes. One need only have common sense and possess the ability to read charts.<br />
<br />
In the mid-1990s, Alan Greenspan's Fed began our central bank's tradition of pumping massive amounts of liquidity. Since that time, stocks and other assets typically held in large quantities by the wealthy have done--for the most part--very well. But, for middle class Americans, who rely on <a href="http://www.zerohedge.com/news/2013-06-18/david-stockmans-non-recovery-part-2-crash-breadwinners-and-born-again-jobs-scam" target="_blank">"breadwinner" jobs</a> for their livelihoods, the past 15 or so years have been a period of economic decline, the past 6 years a period of economic free-fall.<br />
<br />
Since peaking at around 67.5% in the late 1990s, the labor force participation rate has declined to 63%, the lowest level since the 1970s, when households rarely sent more than one member into the workforce. The S&P 500, on the other hand, has more than doubled:<br />
<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh6L22j1nH50FUQMdh7LX8FyxEBgn4V7lsofT1EimP6yOoPmyVKGaVGYH5Clbn1KkOviFF9fmkqaBuV8f8-6JpLRgPkS4udjwV5K7KqSEHEbqQZYglCrVvnsxOQxm3bwH03AQogWO26NSk/s1600/S&P+vs.+Labor+Force.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img alt="The Post-1990s Fed: Enemy Of The Middle Class - Labor Force Participation vs. Stocks" border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh6L22j1nH50FUQMdh7LX8FyxEBgn4V7lsofT1EimP6yOoPmyVKGaVGYH5Clbn1KkOviFF9fmkqaBuV8f8-6JpLRgPkS4udjwV5K7KqSEHEbqQZYglCrVvnsxOQxm3bwH03AQogWO26NSk/s1600/S&P+vs.+Labor+Force.png" title="The Post-1990s Fed: Enemy Of The Middle Class - Labor Force Participation vs. Stocks" /></a></div>
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Corporate profits and labor force participation also decoupled in the late 1990s. Today, there is little correlation between the two:</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjtQL9sHnzusjc9clFhoRYvgtNiFjnAIKNRrUXn1fwDDg9YBtJDbMaVnV-gDAsAabYkzTK5PIwLFhRRNdTWaJhjblVdhkrA8gWkCsJQELNj4wHCTz9bw5VxnOIaE35HnQ3wXbcYevKAO5k/s1600/Profits+vs.+Participation.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img alt="The Post-1990s Fed: Enemy Of The Middle Class - Labor Force Participation vs. Corporate Profits" border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjtQL9sHnzusjc9clFhoRYvgtNiFjnAIKNRrUXn1fwDDg9YBtJDbMaVnV-gDAsAabYkzTK5PIwLFhRRNdTWaJhjblVdhkrA8gWkCsJQELNj4wHCTz9bw5VxnOIaE35HnQ3wXbcYevKAO5k/s1600/Profits+vs.+Participation.png" title="The Post-1990s Fed: Enemy Of The Middle Class - Labor Force Participation vs. Corporate Profits" /></a></div>
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What's more, part-time jobs have been replacing full-time jobs since the Fed's tech bubble:</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjfXKxAhiqEcQFF8XWmhDtPhlqSy5lqFu34Xs9GVG84x_kxLk5v8OK7nefDbpkak0bbYDw1OrqsS_208pH8yMhHef8L2oF1aifF_wN230XoDNHwhOTk7oW7xYBC6OVN5fGriA25AdmtNJM/s1600/Full-Time-vs-Part-time-16-plus-since-2000.gif" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img alt="The Post-1990s Fed: Enemy Of The Middle Class - Part Time vs. Full Time Jobs" border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjfXKxAhiqEcQFF8XWmhDtPhlqSy5lqFu34Xs9GVG84x_kxLk5v8OK7nefDbpkak0bbYDw1OrqsS_208pH8yMhHef8L2oF1aifF_wN230XoDNHwhOTk7oW7xYBC6OVN5fGriA25AdmtNJM/s1600/Full-Time-vs-Part-time-16-plus-since-2000.gif" title="The Post-1990s Fed: Enemy Of The Middle Class - Part Time vs. Full Time Jobs" /></a></div>
<br />
<br />
And, since the late 1990s, real wages (adjusted for inflation) have been in decline:<br />
<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjJuFoNYsd3HbrjkO6sN82fTp8ONxZPX87I1YsJPElwI4TK9_-cEfybCqEProhK61cHvvh09dzP3bSRIYRSVNCW31r51K44AhIgEmmQ8kSVssFG-XL1S7jMevbSq9kZkcyEB3AbwrRbKA4/s1600/Change+in+Real+Wages.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img alt="The Post-1990s Fed: Enemy Of The Middle Class - Annual Change In Real Wages" border="0" height="371" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjJuFoNYsd3HbrjkO6sN82fTp8ONxZPX87I1YsJPElwI4TK9_-cEfybCqEProhK61cHvvh09dzP3bSRIYRSVNCW31r51K44AhIgEmmQ8kSVssFG-XL1S7jMevbSq9kZkcyEB3AbwrRbKA4/s640/Change+in+Real+Wages.jpg" title="The Post-1990s Fed: Enemy Of The Middle Class - Annual Change In Real Wages" width="640" /></a></div>
Seth Masonhttp://www.blogger.com/profile/08575833772160662853noreply@blogger.com0tag:blogger.com,1999:blog-2970607536107501923.post-29505187776040759862014-03-03T13:00:00.000-05:002016-12-21T21:32:53.971-05:00Capricious Mandatory Minimum Sentencing Hurting America's Future<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiW4BqiTKFmitUEmxsSIda9mIdaLqAkSpYAtFvBF_Oe-BaP6-g6W0PV8fBDz08NmTL4tKMQi5oT4yOv3YBbXqEg5c_2SaIIgnlZSNiKFj7kf55hidNW19Lj8yp8au6_6hJKY8NO-F8lnhE/s1600/Vampire-Prison-Script-Review.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img alt="Seth Mason Charleston SC blog 7" border="0" height="133" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiW4BqiTKFmitUEmxsSIda9mIdaLqAkSpYAtFvBF_Oe-BaP6-g6W0PV8fBDz08NmTL4tKMQi5oT4yOv3YBbXqEg5c_2SaIIgnlZSNiKFj7kf55hidNW19Lj8yp8au6_6hJKY8NO-F8lnhE/s1600/Vampire-Prison-Script-Review.jpg" title="Seth Mason Charleston SC blog 7" width="200" /></a><a href="http://famm.org/mandatory-sentencing/mandatory-minimums/" target="_blank">Mandatory minimum sentencing</a>, sentencing requirements imposed by state legislatures and the
Legislative Branch of the federal government, is a clear violation of the
principle of "separation of powers" that strips judges of their fundamental duty of administering justice considering the circumstances surrounding the cases they oversee. Mandatory minimum sentencing is infamous for being unfair to minorities, but <a href="http://ssdp.org/" target="_blank">it also harms a disproportionate number of young people of all races</a>. Each year, tens of thousands of young Americans are imprisoned and tens of thousands more lose their student aid eligibility due to capricious mandatory minimum sentences, mostly for minor drug offenses.<br />
<br />
Mandatory minimum sentences ruin the educational and economic opportunities of young Americans in a number of outrageous ways. Consider the following tragic stories:<br />
<ul>
<li><a href="http://www.drugpolicy.org/news/2013/10/parents-autistic-teen-entrapped-cops-sue-school-district" target="_blank">A 17 year-old student with special needs was given prison time</a> after <b>being pressured by an undercover police officer </b>to sell marijuana</li>
<li><a href="http://famm.org/clarence-aaron/" target="_blank">A 24 year-old college student was sentenced to life in prison</a> <b>for being present</b> at a drug transaction </li>
<li><a href="http://famm.org/stephanie-george/" target="_blank">A 26 year-old single mother of three was sentenced to life</a> after <b>allowing her boyfriend </b>to store cocaine at her house</li>
<li><a href="http://ssdp.org/campaigns/the-higher-education-act/" target="_blank">200,000 American college students have lost their financial aid eligibility</a> due to <a href="http://studentaid.ed.gov/eligibility/criminal-convictions" target="_blank">prison time from mandatory minimum sentences </a></li>
</ul>
Truly tragic. Fortunately, Alex Kreit, Associate Professor at Thomas Jefferson School of Law, is providing a free web-based program to equip participants with the knowledge and the tools they need to help end the injustice of mandatory minimum sentencing. You can find out more about Professor Kreit's program, part of the Learn Liberty Academy at The Institute for Humane Studies, by <a href="http://www.learnliberty.org/academy/course_details/mandatory-minimums/" target="_blank">visiting the program's registration page</a>.<br />
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Empowered by the education Professor Kreit provides, you can then work with organizations such as <a href="http://famm.org/" target="_blank">Families Against Mandatory Minimums</a> and <a href="http://ssdp.org/" target="_blank">Students for Sensible Drug Policy</a> to help end mandatory minimum sentencing.<br />
<br />
Seth Mason, Charleston SC </div>
Seth Masonhttp://www.blogger.com/profile/08575833772160662853noreply@blogger.com0tag:blogger.com,1999:blog-2970607536107501923.post-87621748621333533502014-02-03T17:07:00.001-05:002016-12-21T21:34:03.357-05:00PBS's "Ask the Headhunter" Blasts Applicant Tracking Systems<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhZZv6m6qMSEYmCcbteJ-gAja-aOmsViKoBp_757QB6aG7GiT-iy-okyv0pf-BngfkRj6TOWSECfaALPupXl3gOL2Hb-1RwfGMUygTRgkAXrP1blqIcQeylFxMm6YFEQgybpV6qPVcj_rI/s1600/middle+man.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img alt="Seth Mason Charleston SC blog 8" border="0" height="120" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhZZv6m6qMSEYmCcbteJ-gAja-aOmsViKoBp_757QB6aG7GiT-iy-okyv0pf-BngfkRj6TOWSECfaALPupXl3gOL2Hb-1RwfGMUygTRgkAXrP1blqIcQeylFxMm6YFEQgybpV6qPVcj_rI/s1600/middle+man.jpg" title="Seth Mason Charleston SC blog 8" width="200" /></a>I recently wrote an article <a href="http://www.ecominoes.com/2013/05/the-american-hiring-paradigm-is-broken.html" target="_blank">critical of American companies' tendencies to use applicant tracking systems</a> to seek keywords rather than allowing candidates to demonstrate potential added value to their bottom lines. I noted that the current hiring paradigm suffers a <a href="http://www.ere.net/2013/05/20/why-you-cant-get-a-job-recruiting-explained-by-the-numbers/" target="_blank">failure rate of up to 50%</a>.<br />
<br />
Today, ambitious job seekers have scant opportunities to walk into a company and make a pitch directly to a hiring manager. The personable aspect of hiring has been replaced with buggy software programs and cookie cutter online psychological exams that <a href="http://www.ere.net/2013/07/12/the-problem-with-personality-tests/" target="_blank">stigmatize creativity and innovative thinking</a>.<br />
<br />
Clearly, <a href="http://www.ecominoes.com/2013/05/the-american-hiring-paradigm-is-broken.html" target="_blank">the American hiring paradigm is broken</a>. PBS's "Ask the Headhunter" <a href="http://en.wikipedia.org/wiki/Nick_Corcodilos" target="_blank">Nick Corcodilos</a>
has been quite outspoken on the subject. Here's <a href="http://www.pbs.org/newshour/rundown/ask-the-headhunter-unemploymentmade-in-america-by-employers/" target="_blank">one of his most thoughtful articles</a>:<br />
<blockquote class="tr_bq">
Last week, I published the 500th edition of my weekly Ask The
Headhunter Newsletter, which I started in 2002. (Check the footer of
this column if you'd like to subscribe. It's free.) Why does the
newsletter keep going? Because America's employment system still doesn't
work, and employers are clueless about why. </blockquote>
<blockquote class="tr_bq">
The emperor still has no clothes, and that's a big part of why over
25 million Americans are unemployed or under-employed. (According to the
<b><a href="http://www.pbs.org/newshour/businessdesk/2013/10/more-than-25m-americans-still.html" target="_blank">Business Desk</a></b>, that's how many Americans say they want but can't find a full-time job.) Meanwhile, according to the <b><a href="http://www.bls.gov/news.release/jolts.htm" target="_blank">U.S. Department of Labor,</a></b>
3.9 million jobs were vacant in September.</blockquote>
<blockquote class="tr_bq">
HR executives have a special term for this 6:1 market advantage when they're trying to fill jobs today: They call it a <b><a href="http://corcodilos.com/blog/4375/half-assed-recruiting-why-employers-cant-find-talent" target="_blank">"talent shortage."</a></b><br />
<br />
<i>Gimme a break.</i><br />
<br />
Human resources executives run around in their corporate offices with
their eyes closed, throwing billions of dollars at applicant tracking
systems (ATSes) and job boards like Taleo, Monster.com and LinkedIn, and
they pretend no one can see they are dancing in circles buck naked. HR
keeps talking about a talent shortage, but the only talent shortage is
in the HR offices. HR executives need to learn how to match up the 3.9
million vacancies with some of the 25 million under-employed. </blockquote>
<blockquote class="tr_bq">
<i>What's going on</i>? </blockquote>
<blockquote class="tr_bq">
The economy is certainly one factor, but
businesses, the media and the federal government continue to ignore the
structural problems in our employment system. I'll tell you what I think
the main problems are.<br />
<br />
<div style="font-size: 18px;">
<b>Companies Don't Hire Anymore</b></div>
<div style="font-size: 18px;">
<br /></div>
Employers don't do their own hiring, and that's the number one
problem. They outsource their competitive edge (recruiting and hiring)
to third parties like Taleo, Kenexa, LinkedIn, Monster.com and
CareerBuilder. <b><a href="http://aimgroup.com/2013/02/07/u-s-newspaper-partners-boost-monster-bookings/" target="_blank">Monster</a></b> and <b><a href="http://investors.linkedin.com/releasedetail.cfm?ReleaseID=738977" target="_blank">LinkedIn</a></b>
alone sucked almost $2 billion out of the employment system in 2012.
These vendors offer little more than trivial technologies and cheap
string-search routines masquerading as "algorithms" for finding "hidden
talent" and "matching people to jobs."<br />
<div class="psol-include">
<div class="headline-frame">
<br /></div>
</div>
HR executives are spending billions on those systems, so why are
almost 4 million jobs vacant? Because these vendors sell databases --
not recruiting, not headhunting, not jobs, not hires and not
matchmaking.<br />
<br />
Somewhere, right now, the chairman of the board of some corporation
is pounding the podium at a shareholders' meeting, exclaiming, "People
are our most important asset!"<br />
<br />
Meanwhile, HR executives are funding programs that mingle their
companies' most important assets in databases shared with all their
competitors via a handful of applicant tracking systems that can't get
the job done.<br />
<br />
Heads-up to boards of directors: <i>Where is your competitive edge? Take control of your hiring again, like it matters!</i><br />
<br />
<div style="font-size: 18px;">
<b>Employers Don't Know How to Recruit</b></div>
<div style="font-size: 18px;">
<br /></div>
Here's how human resources departments across America "recruit." They
put impossible mixes of keywords about jobs into a computer. They press
a button and pay billions of dollars for a chance that Prince Charming
will materialize on their computer displays. When the prince fails to
appear, they double their bets and keep gambling. (Last year, companies
polled said just 1.3 percent of their hires came from Monster.com and
1.2 percent from CareerBuilder. See <b><a href="http://www.pbs.org/newshour/businessdesk/2013/08/ask-the-headhunter-is-linkedin.html" target="_blank">"Is LinkedIn Cheating Employers and Job Seekers Alike?"</a></b>)<br />
<br />
Meanwhile, in the real world, over 25 million people, many of them
immensely talented and capable of quickly learning how to do new jobs,
are ready to work.<br />
<br />
<i>Employers need to get away from their desks, remove the ATS
straps from around their necks, and go outside to actually find, meet,
recruit, cajole, seduce and convince good workers to come work for them.</i> </blockquote>
<blockquote class="tr_bq">
<div style="font-size: 18px;">
<b>The Employment System Vendors Are Lying</b></div>
<div style="font-size: 18px;">
<br /></div>
The big job boards and the ATSes tell employers that sophisticated database technology will find the perfect hire.<br />
<ul>
<li>"Don't settle for teaching a good worker anything about doing a job. Hire only the perfect fit!"</li>
<li>"We make that possible when you use more keywords for a job!"</li>
<li>"The database handles it all!"</li>
</ul>
When matches fail to appear, these vendors blame <b><a href="http://www.manpowergroup.us/campaigns/talent-shortage-2013/" target="_blank">"the talent shortage"</a></b> and contend that job seekers lack the specific skills employers need.<br />
<br />
Except that's a lie. <b><a href="http://corcodilos.com/blog/43/roasting-the-job-description" target="_blank">Job descriptions heavily larded with keywords</a></b> make it virtually impossible to find acceptable candidates. Wharton researcher Peter Cappelli <b><a href="http://whartonmagazine.com/issues/summer-2012/cappelli-why-good-people-cant-get-jobs/" target="_blank">tells</a></b>
about an employer that got 25,000 applicants for a routine engineering
position. The ATS rejected every single one of them. Every day that an
impossible job requisition remains unfilled, the employment system
vendors make more money while companies keep advertising for the perfect
hires.<br />
<br />
Millions of jobs are vacant, thanks to the empty promises of
algorithms. Ignoring the role of the systems behind this failure is a
costly mistake.<br />
<br />
<i>If the U.S. Congress wants answers about the jobs crisis, it
should launch an investigation into the workings of America's employment
system infrastructure, which is effectively controlled by a handful of
companies.</i><br />
<br />
<div style="font-size: 18px;">
<b>Employers Have No Business Plan</b></div>
<div style="font-size: 18px;">
<br /></div>
Employers claim job applicants <b><a href="http://www.nytimes.com/2013/10/09/business/economy/stubborn-skills-gap-in-americas-work-force.html" target="_blank">lack the requisite skills and talents</a></b> for today's jobs. But in <b><a href="http://whartonmagazine.com/issues/summer-2012/cappelli-why-good-people-cant-get-jobs/" target="_blank">"Why Good People Can't Get Jobs,"</a></b>
Peter Cappelli reports that they are wrong. The quality of the American
worker pool has not diminished. Rather, American companies:<br />
<ul>
<li>Don't want to pay market value to hire the right workers.</li>
<li>Don't want to train talented workers to do a new job.</li>
<li>Are content to keep using ATSes that don't get the job done.</li>
</ul>
Cappelli points out that employers believe they save money when they
leave jobs vacant because their accounting systems track the cost of
having workers on the payroll, but they fail to track the cost of
leaving work undone. Employers run the numbers, and they seem to come up
with <i>junk profitability</i>: Fewer Employees = Lower Costs = Higher Profits.<br />
<br />
Employers who believe this are misguided or downright foolish. They
should stop regarding workers as a cost, start treating them as
investments and ensure that each worker pays off in higher profits.<br />
<i>Employers should get a business plan and make their employment systems accountable.</i><br />
<br />
<div style="font-size: 18px;">
<b>America Counts Jobs, Not Profitable Work</b></div>
<div style="font-size: 18px;">
<br /></div>
The federal government tracks the number of people who have jobs and
the number of vacant jobs. But tallying jobs to assess the economy is
like counting chickens before they hatch. The federal government has no
idea which jobs or which work is actually profitable and contributing to
a healthy economy.<br />
<br />
It's no secret that the weekly employment figures are questionable
and misleading. The definitions of jobs and "who is employed" are so
manipulated that no one knows what is going on. </blockquote>
<blockquote class="tr_bq">
<i>It's time to re-think how companies find and pay people to do
work that produces profit. A better indicator of economic success would
be the measure of how profitable all the work in America actually is --
and how much profit is left behind on the table each month when work is
left undone.</i> </blockquote>
<blockquote class="tr_bq">
<div style="font-size: 18px;">
<b>People Must Stop Begging for Jobs</b></div>
<div style="font-size: 18px;">
<br /></div>
It's time for people to stop thinking about jobs, and high time to start thinking about <b><a href="http://www.asktheheadhunter.com/basics5.htm" target="_blank">how -- and where -- they can create profit</a></b>.<br />
<br />
For example, if I run a company, I'll hire you to do work -- if it
pays off more than what I pay you to do it. Today, few employers know
which jobs actually pay off. That's why you need to know how to walk
into a manager's office and demonstrate, hands down, how you will
contribute profit to the manager's business. That's right: Be smarter
than the manager about his own business. Stop begging for jobs. Start
offering profit.<br />
<br />
If you can't do that, you have no business applying for any job, in
any company. In the book "Fearless Job Hunting: The Interview -- Be The
Profitable Hire" (available in the <b><a href="http://www.asktheheadhunter.com/store/store.htm" target="_blank">Ask The Headhunter Bookstore</a></b>), I explain it like this:<br />
<blockquote>
A good employer wants to see what you can do. If he doesn't ask,
help him out and show him. It'll turn your interview into a working
meeting where you both roll up your sleeves, and during which the
employer can do a direct assessment of your worth to his business.
Here's how to say it: </blockquote>
<blockquote>
"Please lay out a live problem you'd want me to handle if you hired
me. I'll do my best to show you how I'd do the work so it will pay off
for both of us."</blockquote>
<i>Think you can generate lots of profit without working for someone
else? Then bet your future on your plan, and start your own business.</i><br />
<br />
<div style="font-size: 18px;">
<b>What Is Going On</b></div>
<div style="font-size: 18px;">
<br /></div>
Here's the simple truth: Unemployment is made in America by employers
who have given up control over their competitive edge -- recruiting and
hiring -- to a handful of database jockeys who are funded by HR
executives, who in turn have no idea how to recruit or hire themselves. </blockquote>
<blockquote class="tr_bq">
<i>American ingenuity starts with the individual who has an idea,
blossoms with a plan that will produce profit -- for yourself and your
boss and your customer -- and results in more money for everybody.</i> </blockquote>
<blockquote class="tr_bq">
So to be truly competitive, American employers must themselves do the
hard work of identifying, attracting, recruiting, hiring and further
training workers who can ride a fast learning curve without falling off.
Outsourcing these critical tasks dulls a company's competitive edge. </blockquote>
<blockquote class="tr_bq">
Business leaders, the media and the government must revisit their
assumptions that automated employment systems are the answer and that
the problem is with American workers. Until the structural problems with
these systems are addressed, those 3.9 million vacant jobs point to the
harsh truth that American employers are a leading cause of
unemployment.</blockquote>
"Unemployment is made in America by employers
who have given up control over their competitive edge -- recruiting and
hiring -- to a handful of database jockeys who are funded by HR
executives, who in turn have no idea how to recruit or hire themselves." I couldn't have said it better myself. The American hiring paradigm is broken indeed.<br />
<br />
Seth Mason, Charleston SCSeth Masonhttp://www.blogger.com/profile/08575833772160662853noreply@blogger.com7tag:blogger.com,1999:blog-2970607536107501923.post-79725238490802979982014-01-28T11:59:00.001-05:002016-12-21T21:51:49.607-05:00The Student Debt Crisis: Meet The Monster<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiOdfKyQQmfzbYWtdpfU0uFicALH5ELaF7TqOjUwdM7HC2WIqkzA04U6V2XWkReA9Na9meLCkUSg8QhmL9qN9P91q25FXP8zketBJnJ7TZATs9-8diLX3bF-f5bWvt_Kr3C9HcLMl1bp4U/s1600/Frankenstein-article1.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img alt="Seth Mason Charleston SC blog 9" border="0" height="130" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiOdfKyQQmfzbYWtdpfU0uFicALH5ELaF7TqOjUwdM7HC2WIqkzA04U6V2XWkReA9Na9meLCkUSg8QhmL9qN9P91q25FXP8zketBJnJ7TZATs9-8diLX3bF-f5bWvt_Kr3C9HcLMl1bp4U/s1600/Frankenstein-article1.jpg" title="Seth Mason Charleston SC blog 9" width="200" /></a></div>
Washington has shown little concern about the destructive potential of its next economic monster, America's ballooning student debt burden. Although the Financial Crisis should have taught the feds a thing or two about the perils of indiscriminate lending, Uncle Sam continues to invigorate his latest Frankenstein by lending to nearly any aspiring student for nearly any degree program (continuing to drive-up the cost of tuition in the process). And he has a perverse incentive to continue his reckless lending policies: <a href="http://www.usatoday.com/story/news/2013/06/16/us-government-projected-to-make-record-50b-in-student-loan-profit/2427443/" target="_blank">he's pocketing tens of billions of dollars annually from financially-strapped student loan holders</a>.<br />
<br />
But Washington better start considering the potential economic fury of its latest monster. <a href="http://www.asa.org/pdfs/corporate/delinquency_the_untold_story.pdf" target="_blank">Nearly half (41%) of student loan holders have been behind on their payments over the last 5 years</a>, and, last year, a full 12% of borrowers were in outright default on their student loans. <b>At the current rate of growth, the student loan default rate will eclipse the historic maximum default rate for home loans, 14%, by mid-2015.</b><br />
<br />
The mortgage crisis, of course, put us in this terrible economic condition in the first place.<br />
<br />
As a testament to the insufficiency of this seemingly-endless economic "recovery", the rate of default on student loans has grown steadily since the 2009 economic bottom, even as the default rates on other types of loans have begun to decline. (Article continues after chart.)<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi_TfSYAEqYmAib2V_b_f7s5bMwc4b0mBmPhZajfhjlM4iMG-tz-0Ri7d172TMguPCleIDZs-_rJDevRcJC2YQKNiT-oGhPN8YUfkaatmFhPTbQ5ua6INBTvYbNyTBXCdSIv0Rtf0fRbio/s1600/0114_StudentLoans.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img alt="The Student Debt Crisis: Meet The Monster - studen loan default rate chart" border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi_TfSYAEqYmAib2V_b_f7s5bMwc4b0mBmPhZajfhjlM4iMG-tz-0Ri7d172TMguPCleIDZs-_rJDevRcJC2YQKNiT-oGhPN8YUfkaatmFhPTbQ5ua6INBTvYbNyTBXCdSIv0Rtf0fRbio/s1600/0114_StudentLoans.png" title="The Student Debt Crisis: Meet The Monster - studen loan default rate chart" /></a></div>
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Here are some more unsettling facts about the student debt monster from Kyle McCarthy, contributor to the <a href="http://www.huffingtonpost.com/kyle-mccarthy/10-fun-facts-about-student-loan-debt_b_4639044.html" target="_blank">Huffington Post's college section</a>:<br />
<blockquote class="tr_bq">
<b></b><b>Seven Million Defaulted:</b><br />
<b><br />
</b>Out of the nearly 40 million borrowers, about <a href="http://www.usnews.com/news/articles/2013/08/06/half-of-outstanding-student-loan-debt-isnt-being-repaid" rel="nofollow" target="_blank">seven million have defaulted</a> on
these student debts. Translation: 7 million (or about 2 percent of the
population of the United States) have had their credit trashed as a
result of their student loans and can have <a href="http://finance.fortune.cnn.com/2012/05/10/student-loan-penalty/" rel="nofollow" target="_blank">25 percent in penalties</a> added onto their total student loan debts. To add insult to injury, about <a href="http://www.demos.org/blog/could-your-student-loans-make-you-unemployable" rel="nofollow" target="_blank">60 percent of employers</a> run
credit checks on applicants before hiring or promoting, making it close
to impossible for millions to get a higher paying job to actually repay
these debts.<br />
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<b><b>Average Student Debt Increases While Wages Decrease:</b></b><br />
<b><b><br />
</b></b>Since 1999, student debt has increased more than 500
percent. Unfortunately, average salaries for young people have not. In
fact, since 2000, the average salary for young people has <a href="http://www.policymic.com/articles/50853/take-action-and-tell-congress-dontdoublemyrate" rel="nofollow" target="_blank">decreased by 10 percent</a>. It's no wonder that we are seeing millennials delaying starting families, making <a href="http://younginvincibles.org/wp-content/uploads/2012/08/Denied-The-Impact-of-Student-Debt-on-the-Ability-to-Buy-a-House-8.14.12.pdf" rel="nofollow" target="_blank">car purchases and buying homes</a>.</blockquote>
Delayed life milestones create opportunity costs for the economy.<br />
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According to the non-profit American Student Assistance, the origin of student borrowers' repayment difficulties has been the <a href="http://www.asa.org/policy/resources/stats/" target="_blank">persistently-high unemployment and underemployment</a> caused by the Fed and federal government's last monster, <a href="http://www.ecominoes.com/2014/07/americas-undiagnosed-economic-cancer.html">the housing bubble</a>.<br />
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As a side note, a buddy of mine recently asked me why student loans aren't dischargeable
by bankruptcy like other kinds of loans. I told him that it's because
indebted students--unlike investment bankers--have little lobbying power in Dr. Frankenstein's laboratory on the Potomac.<br />
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Seth Mason, Charleston SC Seth Masonhttp://www.blogger.com/profile/08575833772160662853noreply@blogger.com8tag:blogger.com,1999:blog-2970607536107501923.post-33148570563331123582014-01-22T10:39:00.001-05:002016-12-21T21:52:31.376-05:00State Marijuana Legalization Approaching Critical Mass<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiC3pzrem4J0N-uG08hJvbWwCL3JjDsAM41iZPVEniWx91nvhD02LkggpUTkICpuuzH1wdt14IAAQrMh9oqtqOYGFrfFKF6UyiSK_8g8hJtW-Y0UhFD_oOOhvaueG4r67CtDK7o5FXPuWE/s1600/000-0131012614.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img alt="Seth Mason Charleston SC blog 10" border="0" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiC3pzrem4J0N-uG08hJvbWwCL3JjDsAM41iZPVEniWx91nvhD02LkggpUTkICpuuzH1wdt14IAAQrMh9oqtqOYGFrfFKF6UyiSK_8g8hJtW-Y0UhFD_oOOhvaueG4r67CtDK7o5FXPuWE/s1600/000-0131012614.jpg" title="Seth Mason Charleston SC blog 10" width="200" /></a>The push to legalize marijuana on the state level has been spreading like wildfire. In the course of 2 years, 20 states and the District of Columbia have legalized cannabis for medical use, and 2 states have legalized it for recreational use. Here's what the scoreboard looks like as of today:<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEimdHoCJbbgsm8N9rA3DdVyc4j9VvcqNDCycX7jerZ206-EtmocGTqEanftI-PGQhn7GmgBU_59_ko9f3VlUoz-cnpY4Lez6hZjCfrWk0Zq1u9fakOJHYdFHGM-57iz-uh05JW4HRil9vM/s1600/Screen+Shot+2014-01-22+at+9.13.05+AM.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img alt="State Marijuana Legalization Approaching Critical Mass - legalization map" border="0" height="360" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEimdHoCJbbgsm8N9rA3DdVyc4j9VvcqNDCycX7jerZ206-EtmocGTqEanftI-PGQhn7GmgBU_59_ko9f3VlUoz-cnpY4Lez6hZjCfrWk0Zq1u9fakOJHYdFHGM-57iz-uh05JW4HRil9vM/s1600/Screen+Shot+2014-01-22+at+9.13.05+AM.png" title="State Marijuana Legalization Approaching Critical Mass - legalization map" width="640" /></a></div>
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There's a "high" probability that, this year, 2 of the light-green states on the preceding map (Oregon and Alaska) will turn dark green as state legislatures in the Beaver State and The Last Frontier approve possession of cannabis for recreational use. Outright legalization in 2014 <a href="http://www.latimes.com/nation/la-na-marijuana-laws-20140120,0,4841538.story#axzz2r8WmByPp" target="_blank">is also a possibility in Maine, Vermont, New Hampshire, Rhode Island and Massachusetts</a>. Additionally, 6 states (<a href="http://medicalmarijuana.procon.org/view.resource.php?resourceID=002481" target="_blank">Kentucky, Ohio, Minnesota, Pennsylvania, New York, and Tennessee</a>) will consider bills this year to legalize medical marijuana. And get this: this year, <a href="http://www.waaytv.com/news/medical-marijuana-in-alabama/article_a213a1ba-822c-11e3-a206-001a4bcf6878.html" target="_blank"><b>even Alabama will consider a bill to decriminalize!</b></a><br />
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It's possible that, by year's end, more than half of the states will have either legalized or decriminalized marijuana.<br />
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As "purple" and "red" states start to embrace legalization or decriminalization, the building momentum will become unstoppable. At that point, Washington will have no choice to but to anger its Big Pharma financiers--<a href="http://www.globalresearch.ca/medical-marijuana-big-pharmas-campaign-to-eliminate-state-sanctioned-cannabis-competitors/5335738" target="_blank">who spend millions of dollars annually to lobby Uncle Sam to keep marijuana illegal</a>--and consider legalization on a federal level.<br />
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And that, my friends, will be a huge blow to crony capitalism and spell the beginning of the end of the <a href="http://www.ecominoes.com/2013/04/the-definitive-war-on-drugs-infographic.html" target="_blank">disastrous War on Drugs</a>.<br />
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Seth Mason, Charleston SC Seth Masonhttp://www.blogger.com/profile/08575833772160662853noreply@blogger.com3tag:blogger.com,1999:blog-2970607536107501923.post-21215501159110850092014-01-15T21:00:00.001-05:002016-12-21T22:13:45.779-05:00Jobs Depression Year 6: More Americans Worse Off Financially<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgwfYktj2Gb0oqRq85R3bYCzAlCqEwUSwaZiBwwqnsy130rTUl5jX1RE9EHWJXuwJPB1rnNZHZa9ycRUC04Zflm0DFZgoeWIHn-kfu5ZDrdDICiS-jdHK6Ws3vbRZcLDo2uhr7XRV_WRBg/s1600/med-1044-depression.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img alt="Seth Mason Charleston SC blog 11" border="0" height="143" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgwfYktj2Gb0oqRq85R3bYCzAlCqEwUSwaZiBwwqnsy130rTUl5jX1RE9EHWJXuwJPB1rnNZHZa9ycRUC04Zflm0DFZgoeWIHn-kfu5ZDrdDICiS-jdHK6Ws3vbRZcLDo2uhr7XRV_WRBg/s1600/med-1044-depression.jpg" title="Seth Mason Charleston SC blog 11" width="200" /></a>Gallup reports that, in the last year, more Americans have become worse off financially than better off. This revelation--five and a half years after the fall of Lehman--is just the latest evidence that our jobs depression continues. (Article continues after chart.)<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiAU1-AwPu7HiAmBvn3TzgP9PspfAvrNi1HbWLdN62EWGhhiiFCOp6xFl7wGjsvy9JbIm7OU81I35-tF6ebSg9Ifxb74VX79EUIVlqd7NfRrZsUlSl51ROMubtCagkhyphenhyphenFYe_JKaILiJmqc/s1600/_nznqqj5m0w1erbq74lrfq.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img alt="Depression Year 6: More Americans Worse Off Financially - change in financial situation" border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiAU1-AwPu7HiAmBvn3TzgP9PspfAvrNi1HbWLdN62EWGhhiiFCOp6xFl7wGjsvy9JbIm7OU81I35-tF6ebSg9Ifxb74VX79EUIVlqd7NfRrZsUlSl51ROMubtCagkhyphenhyphenFYe_JKaILiJmqc/s1600/_nznqqj5m0w1erbq74lrfq.png" title="Depression Year 6: More Americans Worse Off Financially - change in financial situation" /></a></div>
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For years, I've been calling this period of American history a jobs depression. Before calling me a Chicken Little for using the "D" word, please keep in mind that, while there's no official definition for "depression" in an economic sense, most economists call protracted periods of economic malaise "depressions".<br />
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And the last 6 years have <a href="http://www.ecominoes.com/2013/04/americas-economic-depression-in-5-charts.html">absolutely been a protracted period of economic malaise</a>.<br />
<br />
Years after the economy bottomed in 2009, the epidemic of long-term unemployment and underemployment continues to afflict the American workforce. Incredibly, 5 years into "recovery", <a href="http://www.zerohedge.com/news/2014-01-10/its-official-us-created-less-jobs-2013-2012" target="_blank">fewer jobs were created last year than the year before.</a> And, as has been the case throughout this depression, <a href="http://www.ecominoes.com/2013/06/no-recovery-for-breadwinning-jobs.html" target="_blank">the vast majority of jobs created last year were menial in nature</a>. Very few new "breadwinner" jobs.<br />
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Keep in mind that the unacceptably tepid jobs recovery that we have had has been merely a result of the inflation of the Fed's latest asset bubble. <a href="http://economictimes.indiatimes.com/news/international/business/us-federal-reserves-4-trillion-assets-draw-lawmaker-ire/articleshow/27548266.cms" target="_blank">The Fed's balance sheet just passed $4 trillion</a>...<b>that's 22% of the entire economy!</b> The Fed has been feigning healthy economic growth for years by inflating what <a href="http://finance.yahoo.com/blogs/daily-ticker/nouriel-roubini-bullish-now-mother-bubbles-begun-140143386.html" target="_blank">Nouriel Roubini is calling the "mother of all bubbles"</a>.<br />
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Seth Mason, Charleston SC Seth Masonhttp://www.blogger.com/profile/08575833772160662853noreply@blogger.com0tag:blogger.com,1999:blog-2970607536107501923.post-42373359669944653542014-01-10T12:40:00.001-05:002016-12-21T22:15:01.620-05:00More Bureau Of Labor Statistics Data Manipulation?<div class="separator" style="clear: both; text-align: center;">
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiSDj_tbxTlpXcHEAT2-WpzKW6FfL-4MqCPRXIrAcicw9rG2Tlof3DcZLzgtyNBEgjsvD7z_A5ahH3ZXX0zzZJTzAL1fAA8KWpTGI1YvGJhRM7euCNte6GODql4nuDPC52q0W5B2g38xmw/s1600/attention_manipulation1.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img alt="Seth Mason Charleston SC blog 12" border="0" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiSDj_tbxTlpXcHEAT2-WpzKW6FfL-4MqCPRXIrAcicw9rG2Tlof3DcZLzgtyNBEgjsvD7z_A5ahH3ZXX0zzZJTzAL1fAA8KWpTGI1YvGJhRM7euCNte6GODql4nuDPC52q0W5B2g38xmw/s1600/attention_manipulation1.jpg" title="Seth Mason Charleston SC blog 12" width="158" /></a>Last month, I predicted that the Bureau of Labor Statistics would remove from the workforce many of the 1.3 million Americans who lost their unemployment benefits this month. And <a href="http://www.csmonitor.com/USA/Latest-News-Wires/2014/0110/Why-6.7-percent-unemployment-isn-t-good-news" target="_blank">that's exactly what happened</a>. According to the BLS, <a href="http://www.weeklystandard.com/blogs/sessions-every-one-job-added-nearly-5-people-left-workforce_774106.html" target="_blank">5 people left the workforce for every job added last month</a>. And yet, the unemployment rate mysteriously fell from 7% to 6.7%. <br />
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The BLS, which <a href="http://www.theguardian.com/business/2013/nov/19/government-census-bureau-manipulated-jobs-fires" target="_blank">is under investigation for data manipulation</a>, <a href="http://www.ecominoes.com/2012/10/jobs-report-statistically-impossible.html">has been proven wrong before</a>. According to ZeroHedge, here's what the "headline" unemployment rate would look like if the bureau used the 30-year average labor force participation rate as opposed to its current 1970s rate. Keep in mind that this chart DOESN'T COUNT the tens of millions of UNDERemployed Americans. Lest we forget, <a href="http://www.ecominoes.com/2013/06/no-recovery-for-breadwinning-jobs.html" target="_blank">a woefully insufficient number of "breadwinner" jobs have been created</a> since the economy crashed.<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiUrUMARsjInGg5bOzfmP9sPzzliJKqTsoa535WRxjTXVE5ICsoLeceJRdW-nkRaA2SX42yhfBkthufRVNBDXEtcAgkqegPHdxNYbc0DgIDVff-UlNoWmsG0mw-nbfN6bFu4xXWYH_OWiQ/s1600/Difference+Unemployment+Rate.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img alt="More Bureau Of Labor Statistics Data Manipulation - real unemployment rate" border="0" height="394" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiUrUMARsjInGg5bOzfmP9sPzzliJKqTsoa535WRxjTXVE5ICsoLeceJRdW-nkRaA2SX42yhfBkthufRVNBDXEtcAgkqegPHdxNYbc0DgIDVff-UlNoWmsG0mw-nbfN6bFu4xXWYH_OWiQ/s1600/Difference+Unemployment+Rate.jpg" title="More Bureau Of Labor Statistics Data Manipulation - real unemployment rate" width="640" /></a></div>
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Using the 30 year average labor force participation rate, we get a headline unemployment rate hovering between 11 and 12 percent. And, again, that doesn't count the tens of millions of Americans working below their capabilities. Gallup <a href="http://www.gallup.com/poll/166775/payroll-population-rate-falls-december.aspx?utm_source=WWW&utm_medium=csm&utm_campaign=syndication" target="_blank">pegs the UNDERemployment rate at 17.2%</a>. Recalculating the underemployment rate using the 30-year average participation rate, we get a number closer to 20%.<br />
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The BLS, of course, has been crushing down the headline unemployment rate by crushing down the labor force participation rate, as evidenced by the following chart:<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiVg0n1Y9wHHdED-0bO_xcl_l3AFsDEJTcUG7I4jgPYFUs955KHxVas-phZlF4VRdDG3-00Nz5gDMO3Co-MgZpwOPPQ5vBrm8gTXsNJXlhU_kH4ggKqb9Y7fLANjZX8QrBAVizkYDsRcAE/s1600/unemployment-labor-force-participation-rate.gif" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img alt="More Bureau Of Labor Statistics Data Manipulation - unemployment vs. labor force participation" border="0" height="466" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiVg0n1Y9wHHdED-0bO_xcl_l3AFsDEJTcUG7I4jgPYFUs955KHxVas-phZlF4VRdDG3-00Nz5gDMO3Co-MgZpwOPPQ5vBrm8gTXsNJXlhU_kH4ggKqb9Y7fLANjZX8QrBAVizkYDsRcAE/s1600/unemployment-labor-force-participation-rate.gif" title="More Bureau Of Labor Statistics Data Manipulation - unemployment vs. labor force participation" width="640" /></a></div>
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Considering this next chart, it's highly unlikely that unemployment has dropped from 10% to 6% over the last few years, as the BLS has been reporting.<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi1d-vNWYwRtQ-WfLu9VztWlKBcXwsMcRm6y2bkMzMakdqFwHoRDdOy-rj6mvFt6gEzRqqUr7zJV5hUUWp8brKLVnRtPiXICtv_h8p0KLpBfQHc6Vcjw54qo39oDKA4Yxz2GC1jjbJnkoo/s1600/20140110_riot.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img alt="More Bureau Of Labor Statistics Data Manipulation - mean duration of unemployment" border="0" height="457" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi1d-vNWYwRtQ-WfLu9VztWlKBcXwsMcRm6y2bkMzMakdqFwHoRDdOy-rj6mvFt6gEzRqqUr7zJV5hUUWp8brKLVnRtPiXICtv_h8p0KLpBfQHc6Vcjw54qo39oDKA4Yxz2GC1jjbJnkoo/s1600/20140110_riot.png" title="More Bureau Of Labor Statistics Data Manipulation - mean duration of unemployment" width="640" /></a></div>
Seth Masonhttp://www.blogger.com/profile/08575833772160662853noreply@blogger.com0tag:blogger.com,1999:blog-2970607536107501923.post-21181862636676607262013-12-04T15:36:00.002-05:002016-12-21T22:16:03.046-05:00Evidence That The Fed Prints For Wall Street (Not Main Street)<div class="separator" style="clear: both; text-align: center;">
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjWv1fpJnlebv2ZuSLb-2B0nHtjAFmxhcbcv4s9aPM-afocFkolVgsG9koxcTUlO4eCf_R6I4dmhWqp-txnLceGZD1KOBm1NWrkRuUI13EIoqyez-MeeLhjf1YZ6PXf-Y9hrZ_yqFpQySY/s1600/money-printing-press.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img alt="Seth Mason Charleston SC blog 13" border="0" height="134" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjWv1fpJnlebv2ZuSLb-2B0nHtjAFmxhcbcv4s9aPM-afocFkolVgsG9koxcTUlO4eCf_R6I4dmhWqp-txnLceGZD1KOBm1NWrkRuUI13EIoqyez-MeeLhjf1YZ6PXf-Y9hrZ_yqFpQySY/s1600/money-printing-press.jpg" title="Seth Mason Charleston SC blog 13" width="200" /></a>Here's some compelling evidence that the Federal Reserve is looking out for Wall Street investors instead of the Main Street economy: S&P and GDP expectations have been inversely proportional since the Fed announced "Operation Twist" (a bond buying scheme) in October, 2011. As you can see on this chart from Bloomberg, Operation Twist has greatly benefited those whose incomes are strongly tied to the market. But, for the tens of millions of middle class Americans who were unfortunate enough to lose their financial standing after the bursting of the Fed's housing bubble, economic prospects haven't been looking so good.<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEii3ZT_ClRPfHGSzyr88wYJ-TIDYn0colWelIX-H-D_-o-EkomyV2fhmoFqPUQN0NJcdJKvkymXZJCi7-yrrlPa9T3V0W6y2ysiBtLdxQp7gpNhXxItVu8hacogI09e6Yr3nbOUtlpvMOE/s1600/20131203_eco1.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img alt="Evidence That The Fed Prints For Wall Street - S&P vs. GDP" border="0" height="334" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEii3ZT_ClRPfHGSzyr88wYJ-TIDYn0colWelIX-H-D_-o-EkomyV2fhmoFqPUQN0NJcdJKvkymXZJCi7-yrrlPa9T3V0W6y2ysiBtLdxQp7gpNhXxItVu8hacogI09e6Yr3nbOUtlpvMOE/s640/20131203_eco1.jpg" title="Evidence That The Fed Prints For Wall Street - S&P vs. GDP" width="640" /></a></div>
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On the other hand, the Fed's liquidity pumping has juiced the stock market like crazy throughout <a href="http://www.ecominoes.com/2013/04/americas-economic-depression-in-5-charts.html">this economic depression</a>. Every time the Fed has either announced or implemented a new liquidity pumping scheme, the market has risen. Every time
one of the Fed's schemes has ended, the market has
declined. The economy simply hasn't been strong enough to support the market without the Fed's help. But these actions aren't indefinitely sustainable, and they certainly aren't without long-term consequences.<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEip0oTW8mKwKCb0v5J-Dx-jN13bxrk6BN8qdHE8rmiIdazLS-bs93clpvgQu-xCT6-eb_WLs-Alogd5Z6kWt0yMkrfYpgGv5w5rnlpao-CYri91z5MfbhFg4NxjjpvyRjTyy6e-y6ppeds/s1600/QETimelineSept2012.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img alt="Evidence That The Fed Prints For Wall Street - S&P and QE" border="0" height="416" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEip0oTW8mKwKCb0v5J-Dx-jN13bxrk6BN8qdHE8rmiIdazLS-bs93clpvgQu-xCT6-eb_WLs-Alogd5Z6kWt0yMkrfYpgGv5w5rnlpao-CYri91z5MfbhFg4NxjjpvyRjTyy6e-y6ppeds/s640/QETimelineSept2012.jpg" title="Evidence That The Fed Prints For Wall Street - S&P and QE" width="640" /></a></div>
Seth Masonhttp://www.blogger.com/profile/08575833772160662853noreply@blogger.com0tag:blogger.com,1999:blog-2970607536107501923.post-30371066931008409322013-11-21T22:12:00.002-05:002016-12-21T22:17:03.793-05:00College Value Alert: Many "G.E.D. Jobs" Pay More<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhrEtz5zRUyOmE2sE4d2tOXo4MTmk9ffuGNNxHNcI6oCvKpdzItTiqhI90HpnSgujS_z1iytFRhpzRGa12MImD3Y5VxIT8tmOIFRiMEVdbP2ACPJ6b8enX2Bv0irzJeXJbrwnhG_-PkqQU/s1600/graduate_unemployment_humor_postcards-rdc87b732ac9943cbb631f38e07fc25d8_vgbaq_8byvr_512.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img alt="Seth Mason Charleston SC blog 14" border="0" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhrEtz5zRUyOmE2sE4d2tOXo4MTmk9ffuGNNxHNcI6oCvKpdzItTiqhI90HpnSgujS_z1iytFRhpzRGa12MImD3Y5VxIT8tmOIFRiMEVdbP2ACPJ6b8enX2Bv0irzJeXJbrwnhG_-PkqQU/s200/graduate_unemployment_humor_postcards-rdc87b732ac9943cbb631f38e07fc25d8_vgbaq_8byvr_512.jpg" title="Seth Mason Charleston SC blog 14" width="200" /></a>Higher education in this country <a href="http://www.businessweek.com/articles/2012-04-09/college-roi-what-we-found" target="_blank">has become a questionable investment</a>. Tuition inflation runs rampant, primarily because the federal government guarantees loans to nearly any aspiring student for nearly any degree program. Financial guru Karl Denninger, a frequent guest of ECOMINOES Radio, once told me that he paid for his college in the '70s by flipping pizzas. You absolutely can't do that today. (Nor could you, as a non-unionized blue collar worker with a stay-at-home wife, send 2 children to college like my grandfather did.)<br />
<br />
Not only does college in today's America often yield a negative return on investment; it often carries large opportunity costs. Instead of rolling the
dice on higher education, one could get on-the-job training and real life experience working one of the numerous well-paying skilled
labor jobs. Many of these jobs don't even require a high school diploma. From Bloomberg:<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgOfQwwU5sTh9NYvtw9Qwi-o20rJn3bEPwDyUTLLrXf6QaE1GA60xnx40UhQyrFBQih2hrUzOGI3Me0FPKX-GqILNzAHWUWQefXaAKnzLqOsPsgcenwvGcrMg4YmlpBK-o00fbIwRBSNs0/s1600/Best+non+HS+Jobs.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img alt="College Value Alert: Many "G.E.D. Jobs" Pay More - median salaries" border="0" height="464" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgOfQwwU5sTh9NYvtw9Qwi-o20rJn3bEPwDyUTLLrXf6QaE1GA60xnx40UhQyrFBQih2hrUzOGI3Me0FPKX-GqILNzAHWUWQefXaAKnzLqOsPsgcenwvGcrMg4YmlpBK-o00fbIwRBSNs0/s640/Best+non+HS+Jobs.jpg" title="College Value Alert: Many "G.E.D. Jobs" Pay More - median salaries" width="640" /></a></div>
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Granted, there are some unquantifiable benefits of attending college. Higher education can be an enriching life experience. But so can careers that offer on-the-job training and real world experience. </div>
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Seth Mason, Charleston SC </div>
Seth Masonhttp://www.blogger.com/profile/08575833772160662853noreply@blogger.com0tag:blogger.com,1999:blog-2970607536107501923.post-61560833524838319962013-08-30T02:55:00.000-04:002017-07-10T08:32:22.810-04:00Obama the Anti-War Candidate and War Hawk President<div class="separator" style="clear: both; text-align: left;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgBiW20emlo9xMxizRyLHkIg5GPc0R0yVlIY1nZmbeEfCkuA7F29C-0n53qJsXScQKxVkJF_RCwSx9fwJFy-fVcDak3NpkSsXXhpgrA-tXrdh4dB6e0zXxsFqdD-eAJYZ5F5vlHNw5H6zk/s1600/intelposts110404_obama_560.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img alt="Seth Mason Charleston SC blog 15" border="0" height="133" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgBiW20emlo9xMxizRyLHkIg5GPc0R0yVlIY1nZmbeEfCkuA7F29C-0n53qJsXScQKxVkJF_RCwSx9fwJFy-fVcDak3NpkSsXXhpgrA-tXrdh4dB6e0zXxsFqdD-eAJYZ5F5vlHNw5H6zk/s1600/intelposts110404_obama_560.jpg" title="Seth Mason Charleston SC blog 15" width="200" /></a>The following is my first attempt at making an impactful political video. In the video, you can see the stark contrast between President Obama's anti-war stances as a presidential candidate and pro-war stances as Commander-in-Chief. </div>
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<iframe allowfullscreen='allowfullscreen' webkitallowfullscreen='webkitallowfullscreen' mozallowfullscreen='mozallowfullscreen' width='320' height='266' src='https://www.youtube.com/embed/QsInwXCgZzA?feature=player_embedded' frameborder='0'></iframe></div>
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Only <a href="http://www.washingtonpost.com/blogs/worldviews/wp/2013/08/26/new-poll-syria-intervention-even-less-popular-than-congress/" target="_blank">9%-20% of Americans support U.S. military intervention in Syria</a>. It's the antithesis of politically expedient to send troops there. Not to mention a contradiction of Obama's firm anti-war stance as a senator and presidential candidate. The anti-war stance that won him the <i>Nobel Peace Prize</i>.</div>
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It's unfortunate that, now that he's been elected to the federal government's highest office, Obama has ascribed to the disastrous post-Cold War neoconservative, interventionist foreign policy that has needlessly harmed thousands of Americans in the Middle East. </div>
<br />
The following is a <a href="http://www.propublica.org/special/obama-vs-bush-on-national-security-timeline" target="_blank">timeline of Bush-era civil liberty-eroding federal programs</a>, most of which Obama administration has adopted in the name of the "War on Terror":<br />
<br />
<img alt="Obama the Anti-War Candidate and War Hawk President - Civil Liberties Erosion Timeline" border="0" height="393" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgEzyRUwsEMotG6Wj10avc7B3ogJT1ov-frXK7xuksL6Tj3nD5ITJqeD-P02Sc6WQyMywdzH7Jtz-ptM8oR5E639meFvwzLHbb_ZeqfDY6vOAGBUOdzA8I65dcG04mricYJXvzsVacHxAM/s640/Picture+63.png" title="Obama the Anti-War Candidate and War Hawk President - Civil Liberties Erosion Timeline" width="640" /><br />
<br />
As you can see, the Obama Administration has either continued or
grown most of the Bush-era programs. Yet, the Left, which took a firm stance against the Bush Administration's overreach in the name of the "War on Terror", has had little to say about Obama's. Andrew Kirell <a href="http://www.mediaite.com/online/congrats-everyone-you-voted-for-nsa-overreach-under-obama-and-bush-now-can-we-all-finally-end-it/" target="_blank">penned an excellent op-ed on the subject for Mediaite</a>:<br />
<blockquote class="tr_bq">
The news that the Obama administration’s National Security Agency is
collecting the telephone records of millions of US Verizon customers via
a top secret court order is astonishing and appalling on many levels.
But there is one thing it is not: Surprising. </blockquote>
<blockquote class="tr_bq">
In the post-9/11 world, the US government has increasingly found ways
to expand its surveillance capabilities through secretive court orders,
malleable standards, and blanket laws — seemingly without restraint. <a href="http://m.guardiannews.com/world/2013/jun/06/nsa-phone-records-verizon-court-order" target="_blank">This latest NSA news</a>, as broken by the venerable <b><a href="http://www.mediaite.com/power-grid/person/?q=Glenn+Greenwald">Glenn Greenwald</a></b>,
only serves to confirm what civil libertarians have long suspected: the
NSA has repeatedly engaged in massive surveillance of domestic
communications of millions of Americans, regardless of whether they are
suspected of a crime.<br />
<br />
Libertarians who struggled through the Bush years will recall how the
NSA had been secretly collecting the phone records of millions of
Americans, with the help of telecommunications giants like AT&T,
Verizon and BellSouth. “The NSA program reaches into homes and
businesses across the nation by amassing information about the calls of
ordinary Americans — most of whom aren’t suspected of any crime,” <i>USA Today</i> <a href="http://yahoo.usatoday.com/news/washington/2006-05-10-nsa_x.htm?csp=1" target="_blank">reported in 2006</a>, several years after Bush initiated the secretive program.<br />
<br />
Given Greenwald’s report, this all sounds eerily familiar. We now
have confirmation that Obama has continued, if not expanded, that exact
sort of egregious surveillance program. In fact, as Cato Institute’s <b>Julian Sanchez</b>
told Greenwald, this Obama incident perhaps goes further with an
“extraordinary repudiation of any pretence of constraint or
particularized suspicion.”<br />
<br />
This latest example of Obama overreach is sure to rankle the feathers
of conservatives already rightfully disturbed by the DOJ’s extensive
snooping on journalists and the IRS’s intentional targeting of tea party
organizations. While many of these same conservatives were rah-rah’ing
the expansion of the NSA and United States Foreign Intelligence
Surveillance Court during the Bush years, it is a pleasant change to see
them finally care about FISA. Welcome aboard.<br />
<br />
Now it’s up to the liberals who lauded Obama as the “anti-Bush” civil
liberties champion in 2008 to swallow their pride as well and take a
stand against this administration’s overreach, despite what they might
see as partisan opportunism coming from the right. </blockquote>
<blockquote class="tr_bq">
As the last 13 years have proven, regardless of who is in the White
House the security state will continue to expand. And it will take some
hypocrisy on both sides to finally end it.</blockquote>
"Now it’s up to the liberals who lauded Obama as the 'anti-Bush' civil
liberties champion in 2008 to swallow their pride as well and take a
stand against this administration’s overreach." I couldn't have said it better myself.<br />
<br />
Seth Mason, Charleston SC Seth Masonhttp://www.blogger.com/profile/08575833772160662853noreply@blogger.com0tag:blogger.com,1999:blog-2970607536107501923.post-58870875539304800752013-08-22T21:06:00.002-04:002018-01-08T19:36:02.232-05:00NSA, Section 215, And The Endangered 4th Amendment<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhDXDYLt4lgJ0OVGdYsY6618yvFu0g0w2EmXyUD1Un8KaSHQSidex8BcvBUcPR2JBiV9EptnB0K7qzbGP1v4K964lI7WGPDsKGCxh70HOHu4sVO9PEsh07QWjtJ_N7SyuN4-ueQGsAwNpc/s1600/constitution1-300x199.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img alt="Seth Mason Charleston SC blog 16" border="0" height="132" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhDXDYLt4lgJ0OVGdYsY6618yvFu0g0w2EmXyUD1Un8KaSHQSidex8BcvBUcPR2JBiV9EptnB0K7qzbGP1v4K964lI7WGPDsKGCxh70HOHu4sVO9PEsh07QWjtJ_N7SyuN4-ueQGsAwNpc/s1600/constitution1-300x199.jpg" title="Seth Mason Charleston SC blog 16" width="200" /></a>In
light of the continuously-developing NSA spying story, it's important
to look at how substantial the government's legal justification is for
its overreaching domestic surveillance policy and how said policy can
impact the lives of ordinary citizens who supposedly have "nothing to
hide".<br />
<br />
First, let's look at government's legal argument. Earlier this month, The Guardian released the <a href="http://www.guardian.co.uk/world/interactive/2013/jun/06/verizon-telephone-data-court-order" target="_blank">NSA order</a>
which compels Verizon to deliver customers' call information to the
agency on an "ongoing, daily basis". Since that time, a plethora of
additional information has come to light which demonstrates that the
size and scope of federal domestic spying policy goes far beyond the NSA
and Verizon. Nevertheless, the NSA Verizon order demonstrates how the
government uses <a href="http://www.aclu.org/national-security/section-215-patriot-act-foia" target="_blank">Section 215 of the Patriot Act</a> to trounce the Constitution. Indeed, the order references the highly-controversial section in <a href="http://www.aclu.org/blog/national-security/nsa-surveillance-order-explained-aclu" target="_blank">the very first line</a>.<br />
<br />
The ACLU has <a href="http://www.aclu.org/national-security/section-215-patriot-act-foia" target="_blank">come to the conclusion</a>
that Section 215 of the Patriot Act is the specific legal order that
authorizes the federal government to surveil the electronic
communications of ordinary Americans. This section, according to the
organization, enables the government to apply to the <a href="http://en.wikipedia.org/wiki/United_States_Foreign_Intelligence_Surveillance_Court" target="_blank">Foreign Intelligence Surveillance Court</a>--which NPR's <span class="st">Dina Temple-Raston</span> calls a <a href="http://www.npr.org/2013/06/13/191226106/fisa-court-appears-to-be-rubberstamp-for-government-requests" target="_blank">domestic spying "rubber stamp"</a>--to
obtain legal clearance to circumvent 4th Amendment protections. In
other words, the feds are granted permission to violate Americans' civil
liberties as per the rulings of an autonomous, opaque court system that<b> justified the existence of Section 215 in the first place!</b> The section, according to the ACLU:<br />
<blockquote class="tr_bq">
...authorizes
the government to obtain "any tangible thing" relevant to a terrorism
investigation, even if there is no showing that the "thing" pertains to
suspected terrorists or terrorist activities. This provision is contrary
to traditional notions of search and seizure, which require the
government to show reasonable suspicion or probable cause before
undertaking an investigation that infringes upon a person's privacy. </blockquote>
"Any tangible thing" means<b> ANY form of Americans' electronic communication, domestic or international.</b> That should be extremely concerning to everyone, irrespective of ideology and if one has "nothing to hide".<br />
<br />
So,
why, then, should someone who supposedly has nothing to hide be
concerned about Section 215 or federal domestic spying at all?<br />
<br />
"Nothing to hide" is a myth that's built
on certain false assumptions that are rarely--if ever-- considered when draconian
surveillance measures are being pushed. Toby Stevens of Computer Weekly <a href="http://www.computerweekly.com/blogs/the-data-trust-blog/2009/02/debunking-a-myth-if-you-have-n.html" target="_blank">characterizes these assumptions as continuity, context, control, and consistency</a>:<br />
<br />
<ul>
<li><b><i>Continuity</i></b>: When a large data gathering
exercise is started, the lifespan of the system will almost always be
greater than that of its instigators. The most benign and caring
government, authority or private company is inevitably subject to a
change of management, and if the new executive does not share their
moral stance, then data can be reused for very dangerous purposes. Those
who provided data believing they had nothing to fear may find that data
is misused in the future.</li>
</ul>
<br />
So, change of management--continuity--means that draconian laws can be abused by future regimes. I suspect that some
enterprising bureaucrats already use sensitive data gathered
in the name of the "War on Terror" to further political agendas. While
such abuse may be isolated today, it could become widespread in the
future.<br />
<br />
<ul>
<li><b><i>Context:</i></b> Those who use the NTHNTF
argument most commonly use it in the context of government collecting
information about individuals. In the information age, the idea of a
single entity holding that information does not hold true. The massive
pressures to share information within and beyond government mean that
information is constantly on the move. Sooner or later, information held
by the government will be shared across the government and with the
private sector.</li>
</ul>
<br />
Sensitive data gathered in the name of the "War on Terror" may
remain within the Department of Homeland Security and the FBI today,
but, eventually, they might be accessed by other government agencies or leak out to private
sector organizations that have the ability to disrupt ordinary citizens'
lives: credit bureaus, current or potential employers, etc.<br />
<br />
<ul>
<li><b><i>Control:</i></b> Whether through a sharing
agreement, aggregation of databases or simply leaving a memory stick in a
pub car park, information is always shared sooner or later. Information
security professionals always assume a system to be insecure, and plan
for when - not if - data is lost or corrupted.</li>
</ul>
<br />
Sensitive data gathered in the name of the "War on Terror" could
also be accessed by hackers, who could sell it or use it to intimidate
or blackmail.<br />
<br />
<ul>
<li><b><i>Consistency</i></b>: The most important issue is that of consistent use of accurate information across all authorities and all individuals.</li>
</ul>
<br />
The recent IRS scandal demonstrates that some enterprising bureaucrats can--and will--use sensitive data inconsistently
based on political agenda. Again, while such abuse may be isolated
today, it could become widespread in the future.<br />
<br />
The
government's legal justification for its overreaching domestic
surveillance policy and how said policy can impact the lives of ordinary
Americans are two issues of paramount importance in this period of U.S. history. We must demand that our elected officials rethink the existence of
the FISA court, revise Section 215 of the Patriot Act, and expunge
sensitive information gathered in the name of the "War on Terror".<br />
<br />
Seth Mason, Charleston SC
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<br />
In The Great Deformation, Stockman frequently notes that the post-Great Recession "recovery" has been nothing but rampant Fed-fueled asset speculation. In Chapter 31, the former budget director explains that, while the speculation has been a windfall for the wealthiest among us, it's done next to nothing to improve the atrocious job market:<br />
<blockquote class="tr_bq">
<b>After the US economy liquidated excess inventory and labor
and hit its natural bottom in June 2009, it embarked upon a halting but
wholly unnatural “recovery.”</b> The artificial prolongation of the
Bush tax cuts, the 2 percent payroll tax abatement and the spend-out of
the Obama stimulus pilfered several trillions from future taxpayers in
order to gift America’s present day “consumption units” with the
wherewithal to buy more shoes and soda pop.<br />
<br />
But there has been no recovery of the Main Street economy where it counts; that is, <b>no revival of breadwinner jobs and earned incomes on the free market</b>.
</blockquote>
<blockquote class="tr_bq">
What we have once again is faux prosperity. In fact, the current
Bernanke Bubble is an even sketchier version of the last one and
consists essentially of the deliberate and relentless reflation of
financial asset prices.<br />
<br />
<b>In practice, this amounts to a monetary version of “trickle down” economics.</b>
By September 2012, personal consumption expenditure (PCE) was up by
$1.2 trillion from the prior peak, representing a modest 2.2 percent per
year (0.6 percent after inflation) gain from the level of late 2007.
Yet half of this gain—more than $600 billion—reflected the massive
growth of government transfer payments, and much of the rebound which
did occur in private consumption spending was concentrated in the top
10–20 percent of households. In short, the Fed’s financial repression
policies enabled Uncle Sam to fund transfer payments for the bottom
rungs of society at virtually no carry cost on the debt, while they
juiced the top rungs with a wealth effects tonic that boosted spending
at Nordstrom’s and Coach.<br />
<br />
<b>The Fed’s post-Lehman money printing spree has thus failed to
revive Main Street, but it has ignited yet another round of rampant
speculation in the risk asset classes. </b>Accordingly, the net
worth of the 1 percent is temporarily back to the pre-crisis status quo
ante. </blockquote>
Conservatives often scoff at the phrase "1 percent". But it's absolutely true that <a href="http://www.ecominoes.com/2013/04/fed-liquidity-pumping-good-for-wealthy.html" target="_blank">Fed liquidity pumping has been great for the wealthiest Americans but bad for the rest of us</a>. The reason is simple: 1) inflation--a natural byproduct of liquidity pumping--is good for most investment classes but bad for nearly every other sector of the economy, and 2) the wealthiest among us have the majority of their net worth in investments that benefit most from inflation: equities, commodities, and real estate.<br />
<blockquote class="tr_bq">
Needless to say, successful speculation in the fast money complex
is not a sign of honest economic recovery: it merely marks the prelude
to another spectacular meltdown in the canyons of Wall Street next time
the music stops.</blockquote>
In the following subsection, Stockman details the sunset of American "breadwinner" jobs: <br />
<blockquote class="tr_bq">
<b>The precarious foundation of the Bernanke Bubble is starkly evident in the internal composition of the jobs numbers.</b>
At the time the US economy peaked in December 2007, there were 71.8
million “breadwinner” jobs in construction, manufacturing, white-collar
professions, government, and full-time private services. These jobs
accounted for more than half of the nation’s 138 million total payroll
and on average paid about $50,000 per year—just enough to support a
family.<br />
<br />
<b>Breadwinner jobs also generated more than 65 percent of
earned wage and salary income and are thus the foundation of the Main
Street economy.</b> Yet after a brutal 5.6 million loss of
breadwinner jobs during the Great Recession, a startling fact stands
out: less than 4 percent of that loss had been recovered after 40 months
of so-called recovery.</blockquote>
<blockquote class="tr_bq">
<b>The 3 million jobs recovered since the recession ended in
June 2009, in fact, have been entirely concentrated in the two far more
marginal categories</b> that comprise the balance of the national
payroll. More than half of the recovery (1.6 million jobs) occurred in
what is essentially the “part-time economy.” It presently includes 36.4
million jobs in retail, hotels, restaurants, shoe-shine stands, and
temporary help agencies where average annualized compensation was only
$19,000. This vast swath of the jobs economy—27 percent of the total—is
thus comprised of entry level, second earner, and episodic jobs that
enable their holders to barely scrape by.</blockquote>
The
<a href="http://www.bls.gov/news.release/empsit.nr0.htm" target="_blank">April jobs report</a> exemplifies the dearth of good jobs. While April is historically the
strongest month for hiring, this April saw a woefully insufficient
number of jobs created, <a href="http://www.ecominoes.com/2013/05/april-employment-increase-nothing-but.html" target="_blank">more than half of the new jobs</a> in either the hospitality industry (think: bartenders, waitresses,
etc.) or temp jobs. Again, that was in the <i>strongest</i> month for hiring 5
years after Lehman. <br />
<blockquote class="tr_bq">
<b>The balance of the pick-up (1.1 million jobs) was in the HES
Complex, which consists of 30.7 million jobs in health, education, and
social services.</b> Average compensation is slightly better at
about $35,000 annually and this category has grown steadily for years.
Its increasingly salient disability, however, is that it is almost
entirely dependent on government spending and tax subsidies, and thus
faces the headwind of the nation’s growing fiscal insolvency.<br />
<br />
When viewed in this three category framework, <b>the nation’s job picture reveals a lopsided aspect that thoroughly belies the headline claims of recovery.</b>
A healthy Main Street economy self-evidently depends upon growth in
breadwinner jobs, but there has been none, even during the bubble years
before the financial crisis. The Bureau of Labor Statistics (BLS)
reported 71.8 million breadwinner jobs in January 2000, yet seven years
later in December 2007—after the huge boom in housing, real estate,
household consumption, and the stock market—the number was still exactly
71.8 million.</blockquote>
Stockman is saying what I've been saying all along: the economy hasn't been "right" since the Fed's tech bubble burst in the early 2000s. He's saying that all we've seen in the new millennium has been cycles of artificial booms and busts built on shaky fundamentals that have never allowed a full recovery of the job market. Stockman elaborates on the shaky fundamentals in the concluding paragraphs of the subsection:<br />
<blockquote class="tr_bq">
<span style="text-decoration: underline;"><b>The faux prosperity of the Fed’s bubble finance is thus starkly evident.</b></span>
This is the single most important metric of Main Street economic
health, and not only had there been zero new breadwinner jobs on a
peak-to-peak basis, but that alarming fact had been completely ignored
by the smugly confident monetary politburo.<br />
<br />
<b>Alas, the latter was blithely tracking a feedback loop of its own making.</b>
Flooding Wall Street with easy money, it saw the stock averages soar
and pronounced itself pleased with the resulting “wealth effects.”
Turning the nation’s homes into debt-dispensing ATMs, it witnessed a
household consumption spree and marveled that the “incoming”
macroeconomic data was better than expected. That these deformations
were mistaken for prosperity and sustainable economic growth gives
witness to the everlasting folly of the monetary doctrines now in vogue
in the Eccles Building.<br />
<br />
<b>To be sure, nominal GDP did grow by 40 percent, or about $4
trillion, between 2000 and 2007. Yet there should be no mystery as to
how it happened.</b> As has been noted, total debt outstanding grew
by $20 trillion during that same period. The American economy was thus
being pushed forward by a bow wave of debt, not pulled higher by rising
productivity and earned income.<br />
<br />
Indeed, <b>the modest gain of 7.5 million jobs during those
seven years reflected exactly this debt-driven dynamic and explains why
none of these job gains were in the breadwinner categories. </b>Instead,
about 2.5 million were accounted for by the part-time economy jobs
described above. On an income-equivalent basis these were actually “40
percent jobs” because they represented an average of twenty-five hours
per week and paid $14 per hour, compared to a standard forty-hour work
week and a national average wage rate of $22 per hour. Thus, spending
their trillions of MEW windfalls at malls, bars, restaurants, vacation
spots, and athletic clubs, homeowners and the prosperous classes, in
effect, temporarily hired the renters and the increasing legions of
marginal workers left behind.<br />
<br />
Likewise, another 5 million jobs were generated in the HES (health,
education, and social services) complex. Here the job count grew by 20
percent, but it was mainly due to the fact that the sector’s paymasters -
<b>government budgets and tax-preferred employer health plans</b> - were temporarily flush.<br />
<br />
However, these, too, were <b>“debt-push” jobs that paid modest wages</b>.
While the steady 2.6 percent annual growth of HES jobs during the
second Greenspan Bubble did flatter the monthly employment “print,” <b>it
was possible only so long as government and health plans could keep
spending at rates far higher than the growth rate of the national
economy.</b></blockquote>
Fed-fueled rampant asset speculation inflated the housing bubble, which burst and crashed the economy, making the prospect of securing a "breadwinner" job but a dream for many intelligent, educated, perfectly employable Americans. Now, the Fed is enabling what <a href="http://en.wikipedia.org/wiki/Nouriel_Roubini" target="_blank">notable economist Nouriel Roubini</a> is calling the <a href="http://finance.yahoo.com/blogs/daily-ticker/nouriel-roubini-bullish-now-mother-bubbles-begun-140143386.html" target="_blank">"mother of all bubbles"</a>.<br />
<br />
Seth Mason, Charleston SC <br />
<i></i>Seth Masonhttp://www.blogger.com/profile/08575833772160662853noreply@blogger.com0tag:blogger.com,1999:blog-2970607536107501923.post-52281322997037528602013-06-06T20:35:00.003-04:002017-07-10T08:45:16.748-04:00Lindsey Graham Is The Defense Industry's Man<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiL0A2Ipqd5PRMXCs8L-XtBuJ0nbTfEfE-d_twkRqiriMlQzL_XIS9Zr73dEaPq-yoBYA6pFBtfC-qVtzY2XyUgiPEzBym6tk5g4GKpfBC2dAO2nJGHfZX48IXZawl0qxlTRcmEgsWdHHs/s200/lindsey_graham_0926.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img alt="Seth Mason Charleston SC blog 18" border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiL0A2Ipqd5PRMXCs8L-XtBuJ0nbTfEfE-d_twkRqiriMlQzL_XIS9Zr73dEaPq-yoBYA6pFBtfC-qVtzY2XyUgiPEzBym6tk5g4GKpfBC2dAO2nJGHfZX48IXZawl0qxlTRcmEgsWdHHs/s200/lindsey_graham_0926.jpg" title="Seth Mason Charleston SC blog 18" /></a>South Carolina's senior senator, Lindsey Graham, loves the "War on Terror". He told Fox and Friends this morning that he's<a href="http://www.politico.com/story/2013/06/lindsey-graham-nsa-tracking-phones-92330.html" target="_blank"> "glad" Verizon is turning over to the NSA phone records of average Americans</a>:<br />
<blockquote class="tr_bq">
I’m glad the NSA is trying to find out what the terrorists are up to overseas and in our country...I’m a Verizon customer. I don’t mind Verizon turning over records to the government if the government is going to make sure that they try to match up a known terrorist phone with somebody in the United States. I don’t think you’re talking to the terrorists. I know you’re not. I know I’m not. So we don’t have anything to worry about.</blockquote>
Senator Graham vehemently defends his favorite war. After learning that Rand Paul called the Verizon/NSA partnership a "an astounding assault on the Constitution", Senator Graham took to attacking libertarians:<br />
<blockquote class="tr_bq">
Sen. Rand Paul, he's a libertarian, and in Rand Paul's world you have almost no defenses against terrorists...I see the threat to our nation differently.</blockquote>
Indeed he does. Graham continues to support nearly every federal "War on Terror" initiative--no matter how invasive--, even though the<a href="http://www.theamericanconservative.com/articles/what-ever-happened-to-civil-liberties/" target="_blank"> erosion of civil liberties has become a "hot topic" among conservatives</a>. Perhaps one can better understand why he's such a strong advocate of controversial defense programs by looking at his top campaign contributors. From<a href="http://www.opensecrets.org/politicians/summary.php?cid=n00009975" target="_blank"> OpenSecrets</a>:<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjN7TlUH61vPXnuvJbSmfaU8sUlJVu6tlAHYFEe9WzQUhwnuAlUV2JU8u4Y_Tl14tNmZfQ_jKlDJqFDrAqrpfpMyGUahOdumJ-_KCdxc95Eqeu7uua51sLoZSsDLELBBnOGWRZBimN305I/s1600/Screen+Shot+2015-01-08+at+4.53.42+PM.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img alt="Lindsey Graham Is The Defense Industry's Man" border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjN7TlUH61vPXnuvJbSmfaU8sUlJVu6tlAHYFEe9WzQUhwnuAlUV2JU8u4Y_Tl14tNmZfQ_jKlDJqFDrAqrpfpMyGUahOdumJ-_KCdxc95Eqeu7uua51sLoZSsDLELBBnOGWRZBimN305I/s1600/Screen+Shot+2015-01-08+at+4.53.42+PM.png" title="Lindsey Graham Is The Defense Industry's Man" /></a></div>
<br />
4 of Graham's top 5 contributors from 2007 to 2012 have profited greatly from the senator's favorite war. SCANA is a major<a href="http://profiles.smartprocure.us/organization/scana-energy-marketing" target="_blank"> Department of Defense supplier</a>. Nelson Mullins, et al. is a law firm that<a href="http://www.nelsonmullins.com/areas-of-law/government-contracts" target="_blank"> specializes in DoD procurement contracts</a>. Motley Rice, LLC is a law firm that<a href="http://www.motleyrice.com/anti-terrorism-and-human-rights/9-11-families-united-to-bankrupt-terrorism" target="_blank"> specializes in "War on Terror" litigation</a>. And<a href="http://www.fool.com/investing/general/2013/03/06/post-sequester-boeing-wins-815-million-in-defense.aspx" target="_blank"> Boeing is one of the nation's largest DoD vendors</a>.<br />
<br />
Seth Mason, Charleston SC
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<br />
Terrestrial music radio is hemorrhaging listeners, and <a href="http://www.thembj.org/2011/02/the-pressure-mounts-on-terrestrial-radio/" target="_blank">many under-performing music stations are switching to the relatively-more popular news/talk format</a>. In other words, the demand for news/talk programming is increasing. <br />
<br />
While demand for news/talk programming is increasing, terrestrial news/talk radio as a whole, <b>which is currently dominated by conservative hosts</b>, is <i>losing</i> listeners. According to RadioInsights, <a href="http://www.radioinsights.com/2012/06/is-newstalk-radio-in-trouble.html" target="_blank">more than half of news/talk stations lost market share in each of the last 3 years</a>. News/talk listenership has been flat for years: the format has approximately the same number of listeners today as it had in 2007.<br />
<br />
The conservative-dominated terrestrial news/talk format also has a less-than-optimal distribution of listeners by age group. According to Arbitron, listeners of the format are getting older, <a href="http://stateofthemedia.org/2012/audio-how-far-will-digital-go/audio-by-the-numbers/" target="_blank">and the majority already age out of the key 25-54 demographic</a>:<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjYKnKR781j0marV2PbqEbK2hcFv0lAJB49xRtNANiMF37HEhf9TckxUrV_-279CPqxnbW60_dRUXorqzDNIhMC0KnFSsVVAbqY44Dh3NajUKhE3EdQY_SfxcpD-X9AqVxhyphenhyphen8l3zxWALCM/s1600/Picture+62.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img alt="Tremendous Opportunity For Libertarian Talk Radio - Conservative Talk Age Distribution" border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjYKnKR781j0marV2PbqEbK2hcFv0lAJB49xRtNANiMF37HEhf9TckxUrV_-279CPqxnbW60_dRUXorqzDNIhMC0KnFSsVVAbqY44Dh3NajUKhE3EdQY_SfxcpD-X9AqVxhyphenhyphen8l3zxWALCM/s1600/Picture+62.png" title="Tremendous Opportunity For Libertarian Talk Radio - Conservative Talk Age Distribution" /></a></div>
<br />
The majority of libertarians, on the other hand, are young--and therefore more valuable--to advertisers.<br />
<br />
Libertarian talk has great potential in the online format as well as on terrestrial radio. While terrestrial radio is losing listeners, Internet radio is rapidly gaining listeners, and <a href="http://www.emarketer.com/Article/Internet-Radios-Audience-Turns-Marketer-Heads/1009652" target="_blank">the number of listeners of online radio is expected to equal that of terrestrial radio in the next few years</a>. The online talk radio format is better suited to libertarians than conservatives, as the former tend to be younger and more tech-savvy than the latter.<br />
<br />
Seth Mason, Charleston SC Seth Masonhttp://www.blogger.com/profile/08575833772160662853noreply@blogger.com0tag:blogger.com,1999:blog-2970607536107501923.post-85790807964753251892013-05-05T22:10:00.002-04:002017-07-10T08:47:49.726-04:00The American Hiring Paradigm Is Broken<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjoGsT_aq4Y-o0KUPaCopvmQ0pRRehFD0RkuFj2GrLEd0e3PfVyPkmF804O57hiqRX-MFugp-8dVf3-KZO8Jog0POon5vc0xxq8VRjbNtjoelyacnzjjdb9x8A7YIe9NUCP3ULIeR3swvg/s1600/broken_system.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img alt="Seth Mason Charleston SC blog 20" border="0" height="133" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjoGsT_aq4Y-o0KUPaCopvmQ0pRRehFD0RkuFj2GrLEd0e3PfVyPkmF804O57hiqRX-MFugp-8dVf3-KZO8Jog0POon5vc0xxq8VRjbNtjoelyacnzjjdb9x8A7YIe9NUCP3ULIeR3swvg/s200/broken_system.jpg" title="Seth Mason Charleston SC blog 20" width="200" /></a>Central banking has made a mess of the economy, and <a href="http://www.cnbc.com/id/100529511" target="_blank">increasingly onerous jobs-killing federal legislation has impeded hiring</a> and thus has impeded economic recovery. But the Fed and Washington aren't the only vectors of the nation's continued economic malaise. The American hiring paradigm is also to blame.<br />
<br />
With few exceptions, hiring managers at mid to large-sized American organizations offer job seekers but one port-of-entry: buggy, unwieldy <a href="http://en.wikipedia.org/wiki/Applicant_tracking_system" target="_blank">applicant tracking systems</a> (AKA "talent management systems"), which pitiable job seekers must wrestle online. Under this paradigm, robots judge applicants based on experiential demands with little regard to the applicants' potential to add value to their organizations' bottom lines. Lou Adler, entrepreneur and best-selling author, summarized this disconnect in an article he <a href="http://www.linkedin.com/today/post/article/20130502173937-15454-there-are-only-four-jobs-in-the-whole-world-are-you-in-the-right-one" target="_blank">recently published on LinkedIn</a>:<br />
<blockquote class="tr_bq">
"Successful candidate will develop a new approach for reducing water usage by 50%" is a
lot better than saying “Must have 5-10 years of environmental
engineering background including 3-5 years of wastewater management."</blockquote>
Correct. But ATSes can't judge applicants based on successes. Clearly, organizational leaders should spearhead searches for candidates in their fields of expertise. Tragically, a great many talented candidates are stonewalled before they even get a chance to make their cases to a decision maker. Consider the following <a href="http://finance.yahoo.com/" target="_blank">anecdote from Yahoo! Finance</a>:<br />
<blockquote class="tr_bq">
I'm a technical Product Manager. I've launched about ten big products.
This is all I do. I work for technology companies. I got laid off in
September, and I applied for a job online yesterday afternoon.</blockquote>
<blockquote class="tr_bq">
Last night at ten p.m. I received an auto-responder message back from
the employer. It said that I wasn't chosen to move forward for the
product manager job I had applied for. I was surprised, but those things
happen. The auto-responder message said that I'd be notified of any
other job openings that are a closer fit to my background.<br />
<br />
I got another auto-responder message from the same company early this
morning. They sent me another job opening. Guess what kind of job it
was? <b>It was a food service job in their company lunchroom.</b><br />
<br />
The <b>RECRUITER</b> who had the product manager opening on her desk told me
why I'd been rejected by the company's careers website. She told me that
she gets so many unsuitable resumes through the company careers portal
that she set the parameters to <b>Reject All Resumes</b>. Every single person
who applies through the site the way I did gets a no-thanks message.
Because the company's job-posting system asks for a default -- they
require the recruiter to direct those rejected applicants somewhere,
that is -- she set it up to send every rejected person all the new job
openings that are posted for any job in the company. That's why I got
the food service job. </blockquote>
Instead of forcing talented applicants to contend with ridiculousness such as this, hiring managers should take the lead in determining which applicants could best add value to their organizations. Robots can never replace the judgement of organizational leaders, no matter how "well-programmed" they are. Not surprisingly, the current ATS-centric American hiring paradigm <a href="http://www.ere.net/2013/05/20/why-you-cant-get-a-job-recruiting-explained-by-the-numbers/" target="_blank">has a failure rate of up to 50%</a>, according to ERE Recruiting Intelligence, a prominent HR industry analyst.<br />
<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjBeJFboO_iDkqw5HmXxxtgCX0vRH_-LMKyhdO0v3ifVowkBI5yj604HTOUFqsO5uAt2AWTrM5E0HEkB_DtDtEwPlHETR3Q6nChG0uSuvASwNbcEP5QJkqZNZyvTs3Nlw8M2DQdI1X6O3w/s1600/LARGErobots-reading-resume-ats-recruiting-infographic.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjBeJFboO_iDkqw5HmXxxtgCX0vRH_-LMKyhdO0v3ifVowkBI5yj604HTOUFqsO5uAt2AWTrM5E0HEkB_DtDtEwPlHETR3Q6nChG0uSuvASwNbcEP5QJkqZNZyvTs3Nlw8M2DQdI1X6O3w/s1600/LARGErobots-reading-resume-ats-recruiting-infographic.png" /></a></div>
Seth Masonhttp://www.blogger.com/profile/08575833772160662853noreply@blogger.com1tag:blogger.com,1999:blog-2970607536107501923.post-36846268464049458572013-05-03T14:26:00.000-04:002017-07-10T08:52:51.987-04:00April Employment Increase: Nothing But Menial Jobs<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjhjpFgb3gaWi8T60I2H4voN1Yh5sLqcbL69gbWr0mjTeyU4CbwaaxRXBa7pqI-1aoVBiWs_QmHdowDx1fatyGbs6Jl_FW0U7-2o8nBW9d0eR-hVNI85hGxL5ux0TnZEB4q4LRem4yF-eg/s1600/images.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img alt="Seth Mason Charleston SC blog 21" border="0" height="136" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjhjpFgb3gaWi8T60I2H4voN1Yh5sLqcbL69gbWr0mjTeyU4CbwaaxRXBa7pqI-1aoVBiWs_QmHdowDx1fatyGbs6Jl_FW0U7-2o8nBW9d0eR-hVNI85hGxL5ux0TnZEB4q4LRem4yF-eg/s200/images.jpg" title="Seth Mason Charleston SC blog 21" width="200" /></a>Readers of this blog know that <a href="http://www.ecominoes.com/2013/03/the-labor-force-participation-lie.html" target="_blank">Washington's employment data should be scrutinized</a>. The Bureau of Labor Statistics is notorious for crushing down the labor force participation rate in order to make it appear that the unemployment rate is falling, and the agency's survey methodology is fundamentally-flawed, <a href="http://www.huffingtonpost.com/2013/07/19/unemployment-rate-wrong_n_3619152.html">according to a former BLS leader</a>. But, even if you take the government's word on unemployment as the "Gospel truth", a 50,000-150,000 monthly net increase in jobs--as Uncle Sam has been reporting for years--is woefully insufficient. At this rate of increase--with the unemployment rate dropping by a tenth of a percent each month--, it would take until 2017 to get back to the lower end of the "full employment" range. And that's IF the economy has no additional difficulties and WITH the help of a crushed-down labor participation rate. And, that's if you consider 5% unemployment and 10% underemployment "full employment".<br />
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But the raw jobs numbers don't tell the full story anyway. What does it matter if 50,000 or 150,000 or even 1,000,000 jobs are created each month if the jobs are menial in nature? And make no mistake: we've been seeing for years little but a monthly increase in low-wage, low-skill jobs. The <a href="http://www.bls.gov/news.release/empsit.nr0.htm" target="_blank">April jobs report</a> showed more of the same.<br />
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The overwhelming majority of jobs created last month were in leisure and hospitality (waiters, bartenders, hotel employees, etc.) and temp jobs. Industries that actually produce something, whether it be information or physical goods, actually lost jobs:<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj14y08Gciw8tqltsd2IJ6J7_nj-cgZMJoAJ_5fc-6hIJ_7w2CFxuH1DUa4NTBaxId5Q8PVM7MeT00evI3mseevDi4iX3GweaOYJgEYNNeBaXaQriWLDXSrj6MH3bfPHvckETeIlLcE8NA/s1600/April+Jobs.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img alt="April Employment Increase: Nothing But Menial Jobs - Jobs By Industry" border="0" height="394" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj14y08Gciw8tqltsd2IJ6J7_nj-cgZMJoAJ_5fc-6hIJ_7w2CFxuH1DUa4NTBaxId5Q8PVM7MeT00evI3mseevDi4iX3GweaOYJgEYNNeBaXaQriWLDXSrj6MH3bfPHvckETeIlLcE8NA/s640/April+Jobs.jpg" title="April Employment Increase: Nothing But Menial Jobs - Jobs By Industry" width="640" /></a></div>
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There was a net decrease in jobs for Americans of prime working age, i.e. there was a net decrease in "career" jobs. But there was a net increase in jobs for Americans of prime restaurant worker and Walmart greeter ages:<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhL58DJTeRdOkpoyxX4DtVby00Qy4JotENGeTaf3Xq8qP5LayE4NownjUeL5GrkEVRoUo46_822Hyx5u6i_OKGwv7L9C40qXaxI382vTIJx6xaD8ZU7rUbBky78rUrrXCerlcjCnvrkvf4/s1600/Jobs+By+Age+Group.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img alt="April Employment Increase: Nothing But Menial Jobs - Jobs By Age Group" border="0" height="526" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhL58DJTeRdOkpoyxX4DtVby00Qy4JotENGeTaf3Xq8qP5LayE4NownjUeL5GrkEVRoUo46_822Hyx5u6i_OKGwv7L9C40qXaxI382vTIJx6xaD8ZU7rUbBky78rUrrXCerlcjCnvrkvf4/s640/Jobs+By+Age+Group.jpg" title="April Employment Increase: Nothing But Menial Jobs - Jobs By Age Group" width="640" /></a></div>
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In fact, the number of jobs for Americans of prime working age (i.e. career age) has been flat since the economy collapsed:<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj6yd6Zvi0BNUBtTng2lEQzWx4_YdARnaO1Z8MulnYs_IyRwPoFZB_gtU2PfnG2hH-X69d2Eb6MC4Xfl7NcjBPq9Ep2w6d_QjuANjL16VgtcEmCjcxAqAwHY9Ak09UViDTbQSZodBZ-0_w/s1600/Youngs+vs+Old_0.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img alt="April Employment Increase: Nothing But Menial Jobs - Retirees Remaining In The Workforce" border="0" height="404" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj6yd6Zvi0BNUBtTng2lEQzWx4_YdARnaO1Z8MulnYs_IyRwPoFZB_gtU2PfnG2hH-X69d2Eb6MC4Xfl7NcjBPq9Ep2w6d_QjuANjL16VgtcEmCjcxAqAwHY9Ak09UViDTbQSZodBZ-0_w/s640/Youngs+vs+Old_0.jpg" title="April Employment Increase: Nothing But Menial Jobs - Retirees Remaining In The Workforce" width="640" /></a></div>
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Seth Mason, Charleston SC Seth Masonhttp://www.blogger.com/profile/08575833772160662853noreply@blogger.com0tag:blogger.com,1999:blog-2970607536107501923.post-52671968476440294892013-04-30T23:04:00.000-04:002017-07-10T08:54:27.991-04:00The New, Bigger Housing Bubble In 4 Charts<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg561R9-4gcIX1AzSGD4jjGINYmkZJAgTup-HRkYhUm5gbkx_AJYDTNO6FaXGTKJJ9Mco-i1fjffPs6LQgPmhzAb3FcYy3PwGgu8KmXd0j6VUdUhdqhALaCVwI7a-aTAD1jSH_Vm_sjFb8/s1600/images.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img alt="Seth Mason Charleston SC blog 22" border="0" height="136" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg561R9-4gcIX1AzSGD4jjGINYmkZJAgTup-HRkYhUm5gbkx_AJYDTNO6FaXGTKJJ9Mco-i1fjffPs6LQgPmhzAb3FcYy3PwGgu8KmXd0j6VUdUhdqhALaCVwI7a-aTAD1jSH_Vm_sjFb8/s200/images.jpg" title="Seth Mason Charleston SC blog 22" width="200" /></a></div>
Federal Reserve Chairman Ben Bernanke's "solution" to the country's economic woes, a <a href="http://finance.yahoo.com/blogs/daily-ticker/nouriel-roubini-bullish-now-mother-bubbles-begun-140143386.html" target="_blank">new, even larger asset bubble</a>, is becoming evident in several sectors of the economy, from <a href="http://finance.yahoo.com/news/market-savior-stocks-might-50-125751851.html" target="_blank">equities</a> to real estate. The following charts suggest that the bubble the Fed is inflating in the housing market will eclipse the last one, which was big enough to <a href="http://www.ecominoes.com/2013/04/americas-economic-depression-in-5-charts.html">plunge the country into an economic depression</a> when it burst.<br />
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First, the year-over-year increase in home prices since 2008 has been steeper than the YoY during the last housing bubble:<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgQ5Ur8rP5wZ88GIpfgXWLZ3xVhOUpgIMxLzpLYn1iXfx-dvXTPuD3w8ULrFRpZh8Pk30QVILsjEdXPUdZN5bjWctFX9GM4diVQIBnfqAIbSwMKQOtvIy9PKQYuMaBoWhKZsO-ce-bsR4s/s1600/home+prices.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img alt="The New, Bigger Housing Bubble In 4 Charts - Home Prices Chart" border="0" height="442" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgQ5Ur8rP5wZ88GIpfgXWLZ3xVhOUpgIMxLzpLYn1iXfx-dvXTPuD3w8ULrFRpZh8Pk30QVILsjEdXPUdZN5bjWctFX9GM4diVQIBnfqAIbSwMKQOtvIy9PKQYuMaBoWhKZsO-ce-bsR4s/s640/home+prices.png" title="The New, Bigger Housing Bubble In 4 Charts - Home Prices Chart" width="640" /></a></div>
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Second, the inversely proportional decrease in mortgage standards and increase in demand for mortgages has been starker than it was during the last bubble:<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiwwFPxEDMqMlFvko2wNdxtKCrYwG2JnHVNPf2gTnZACgqYL_u02ZhOfRP6Md_1PO7xmB7uuyM17BMlhg84FCRj9d6y35zKq1dJqQgaN-aWAzfFpQ96dd2vf9F6AKi2tdGfT0So2ydHnig/s1600/loan+standards.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img alt="The New, Bigger Housing Bubble In 4 Charts - Mortgage Demand Chart" border="0" height="534" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiwwFPxEDMqMlFvko2wNdxtKCrYwG2JnHVNPf2gTnZACgqYL_u02ZhOfRP6Md_1PO7xmB7uuyM17BMlhg84FCRj9d6y35zKq1dJqQgaN-aWAzfFpQ96dd2vf9F6AKi2tdGfT0So2ydHnig/s640/loan+standards.png" title="The New, Bigger Housing Bubble In 4 Charts - Mortgage Demand Chart" width="640" /></a></div>
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Third, apartment and condo starts have been skyrocketing at a rate far eclipsing that of the last bubble:<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhl2Ouww6oUHdu7XBw08LIpHC_uVJ2l1CQTjmUuVGcsFZdvmYiqh-8d1N6q1g14tYEtxKdULwDE2hLoxIhJF4BOeENA2w2Yaiax3LYpjdrwoVz6WTfIQ2wMahQ8spFqFLlFiweSUpM2c5E/s1600/multifamily+starts.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img alt="The New, Bigger Housing Bubble In 4 Charts - Multifamily Construction Chart" border="0" height="442" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhl2Ouww6oUHdu7XBw08LIpHC_uVJ2l1CQTjmUuVGcsFZdvmYiqh-8d1N6q1g14tYEtxKdULwDE2hLoxIhJF4BOeENA2w2Yaiax3LYpjdrwoVz6WTfIQ2wMahQ8spFqFLlFiweSUpM2c5E/s640/multifamily+starts.png" title="The New, Bigger Housing Bubble In 4 Charts - Multifamily Construction Chart" width="640" /></a></div>
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Fourth, investors are throwing cheap, Fed-provided money at housing at a rate far exceeding that of the last bubble:<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiSF49Mf4JqSyPSbwUwa9ovw90Nqtr6tnPLikVMJRE8bGGWxb5EAVbXQVXRH89ys30MYaXokC2Ni5fdz4NremkgrovKF36Rlc6n5BGaF_WzjfwRaftUdMHilbxpcpXkrsQqCGY6a6pysQM/s1600/residential+investment.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img alt="The New, Bigger Housing Bubble In 4 Charts - Residential Investment Chart" border="0" height="486" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiSF49Mf4JqSyPSbwUwa9ovw90Nqtr6tnPLikVMJRE8bGGWxb5EAVbXQVXRH89ys30MYaXokC2Ni5fdz4NremkgrovKF36Rlc6n5BGaF_WzjfwRaftUdMHilbxpcpXkrsQqCGY6a6pysQM/s640/residential+investment.png" title="The New, Bigger Housing Bubble In 4 Charts - Residential Investment Chart" width="640" /></a></div>
Seth Masonhttp://www.blogger.com/profile/08575833772160662853noreply@blogger.com0tag:blogger.com,1999:blog-2970607536107501923.post-40112444424965873492013-04-29T13:29:00.000-04:002016-12-16T17:35:16.238-05:00Libertarian Talk Radio: It's A Matter Of Differentiation<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhAGrlU23GTU9hiwwWMQal2mLlEv5VJZzRlkt0Mm7V4SaGKXLoOMAO9aJt4WMPWcmYLj0KPg6cb2IKSfMK3Bhw3ZXtvCHSV64FY2PqtaI7vc468axENY3OdzYFaZiYnulJk1RqZfKgz89U/s1600/ratings.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img alt="Seth Mason Charleston SC blog 23" border="0" height="101" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhAGrlU23GTU9hiwwWMQal2mLlEv5VJZzRlkt0Mm7V4SaGKXLoOMAO9aJt4WMPWcmYLj0KPg6cb2IKSfMK3Bhw3ZXtvCHSV64FY2PqtaI7vc468axENY3OdzYFaZiYnulJk1RqZfKgz89U/s200/ratings.jpg" title="Seth Mason Charleston SC blog 23" width="200" /></a>I recently wrote about how libertarianism is growing and how <a href="http://www.ecominoes.com/2013/04/libertarian-talk-radio-if-you-build-it.html" target="_blank">conservatives, terrestrial talk radio's bread-and-butter demographic, are becoming more libertarian</a>. In the article, I argued that there's a growing under-served demand for libertarian terrestrial talk radio. Today, I'd like to add to that argument from another perspective, that of differentiation.<br />
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Fox News, the only television news provider gearing to those on the right side of the political spectrum, enjoys <a href="http://tvbythenumbers.zap2it.com/2013/04/26/cable-news-ratings-for-thursday-april-25-2013/179710/" target="_blank">strong ratings</a> for the simple fact that it's the only conservative news alternative. (Fox Business is a business news--not "news news" network.) As you can see in the following graphic, most television news clusters around the left side of the political spectrum. Fox News, on the other hand, enjoys a monopoly on the right.<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg86LHlkaNZsBUe4akSLm5HoQ4Zs5H76W0ypZ2a7SympOuQwm2V4zCmuLmRH6wxl9NSRSQZWhTjQyECeG_k00ljmaqJH8E5ZlfZ3mibxlHY3o52BKTEeyTmp8chkhMw4VdSUdXwm3Erfao/s1600/Media+Bias.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img alt="Libertarian Talk Radio: It's A Matter Of Differentiation - Television News Bias" border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg86LHlkaNZsBUe4akSLm5HoQ4Zs5H76W0ypZ2a7SympOuQwm2V4zCmuLmRH6wxl9NSRSQZWhTjQyECeG_k00ljmaqJH8E5ZlfZ3mibxlHY3o52BKTEeyTmp8chkhMw4VdSUdXwm3Erfao/s640/Media+Bias.png" title="Libertarian Talk Radio: It's A Matter Of Differentiation - Television News Bias" width="640" /></a></div>
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The same principal applies to political talk show hosts on terrestrial radio. As you can see in this graphic, most hosts cluster around the social conservative/neoconservative side of the conservative political spectrum. There's only one prominent host on the libertarian side of the spectrum, Dennis Miller, and his show doesn't get particularly good ratings. <br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg6sL6nDq4Q97rCZ4y3fzNfWcx-MXRvV9IT8YZgPqNyfG2qVQ14oKQAgVVH9VtL5oTv8tuY1HfzcCGplgM9Gqy5Zj46Vwbt59hll7MF1nrz2Bqh47dzynZ0j3bMmsOQFIqj6Gn0bIReGoY/s1600/Media+Ideology.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img alt="Libertarian Talk Radio: It's A Matter Of Differentiation" border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg6sL6nDq4Q97rCZ4y3fzNfWcx-MXRvV9IT8YZgPqNyfG2qVQ14oKQAgVVH9VtL5oTv8tuY1HfzcCGplgM9Gqy5Zj46Vwbt59hll7MF1nrz2Bqh47dzynZ0j3bMmsOQFIqj6Gn0bIReGoY/s640/Media+Ideology.png" title="Libertarian Talk Radio: It's A Matter Of Differentiation" width="640" /></a></div>
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The previous 2 graphics, combined with the changing political landscape on the Right, suggest that it's time for program directors to put more libertarians on the air.<br />
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Seth Mason, Charleston SC Seth Masonhttp://www.blogger.com/profile/08575833772160662853noreply@blogger.com0tag:blogger.com,1999:blog-2970607536107501923.post-3073636535182180782013-04-25T21:57:00.000-04:002016-12-16T17:36:18.341-05:00Libertarian Talk Radio: If You Build It, Ratings Will Come<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEimPTiDtOTLEPPvTvecmynQZcjIIQCzguQXwQH-KPidHhT81VimsFQjG1GtVUwfgUaX4dWhClxmJ-GZ-Hljj4sVvZ4jsLHnNSj0OQIJydDr94N7Rgo6fqgOi8bWQTwtn3LmmYcCB-p_kA8/s1600/talk+radio+mic_headphones.gif" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img alt="Seth Mason Charleston SC blog 24" border="0" height="159" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEimPTiDtOTLEPPvTvecmynQZcjIIQCzguQXwQH-KPidHhT81VimsFQjG1GtVUwfgUaX4dWhClxmJ-GZ-Hljj4sVvZ4jsLHnNSj0OQIJydDr94N7Rgo6fqgOi8bWQTwtn3LmmYcCB-p_kA8/s200/talk+radio+mic_headphones.gif" title="Seth Mason Charleston SC blog 24" width="200" /></a></div>
Terrestrial talk radio's key demographic, conservatives, are <a href="http://dailycaller.com/2013/03/17/george-will-what-i-did-see-at-cpac-was-the-rise-of-the-libertarian-strand-of-republicanism/" target="_blank">becoming more libertarian</a>. However, there are few libertarian hosts in terrestrial talk radio. Program directors would be wise to air more of them.<br />
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According to <a href="http://www.gallup.com/home.aspx" target="_blank">Gallup</a>, an increasing number of Americans describe themselves as "conservative", terrestrial talk radio's bread-and-butter political ideology:<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjZ9xwMTZ3OCtXZS7QCkPSx0fDa8WxaehkpjAqKp-lIckBGpUWHLI9T-vsO8Gswax4laCiLwdgZRfniBc3k8tAqAprHwViw2xMDKssJgqPJxLGKTU0Huf8f49oZ-QlXEhckQ4L9k9vgX8U/s1600/conservative.gif" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img alt="Libertarian Talk Radio: If You Build It, Ratings Will Come - US Political Ideology" border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjZ9xwMTZ3OCtXZS7QCkPSx0fDa8WxaehkpjAqKp-lIckBGpUWHLI9T-vsO8Gswax4laCiLwdgZRfniBc3k8tAqAprHwViw2xMDKssJgqPJxLGKTU0Huf8f49oZ-QlXEhckQ4L9k9vgX8U/s1600/conservative.gif" title="Libertarian Talk Radio: If You Build It, Ratings Will Come - US Political Ideology" /></a></div>
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However, a decreasing number of conservatives identify with "traditional values":<br />
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On the other hand, also according to Gallup, an increasing number of Americans consider themselves "libertarian":<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgYxlFhvn5vhM4b0OOFo8VT9eEU2YPVCOYKvI5pnCGHqlSulSj_dl81UerFSm44ICOCx2BW6FmPCjLfHdHdJ07JOgo-CAx5RT-CWrebrZ6WTSYOB1bnsPyIdI55tcXoY_gV6KAjuHAjdxQ/s1600/libertarianchart.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img alt="Libertarian Talk Radio: If You Build It, Ratings Will Come - Libertarians In The Electorate" border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgYxlFhvn5vhM4b0OOFo8VT9eEU2YPVCOYKvI5pnCGHqlSulSj_dl81UerFSm44ICOCx2BW6FmPCjLfHdHdJ07JOgo-CAx5RT-CWrebrZ6WTSYOB1bnsPyIdI55tcXoY_gV6KAjuHAjdxQ/s1600/libertarianchart.jpg" title="Libertarian Talk Radio: If You Build It, Ratings Will Come - Libertarians In The Electorate" /></a></div>
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And, today, nearly 60% of Americans share some libertarian views:<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjzz8FaK5OQb6s89zrHWZt88Gpm1ilmsrE57DvX7sFgK1UU6NYbywmfVvzZbevmt19TGnzv4lb5poepo7wB9lAFyUU10xrnx9pGJf8C4h9wIKbqrHiFciLb80HT9vYL_4P4QM-SBaQorkM/s1600/Picture+105.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img alt="Libertarian Talk Radio: If You Build It, Ratings Will Come - Number Of Libertarians" border="0" height="384" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjzz8FaK5OQb6s89zrHWZt88Gpm1ilmsrE57DvX7sFgK1UU6NYbywmfVvzZbevmt19TGnzv4lb5poepo7wB9lAFyUU10xrnx9pGJf8C4h9wIKbqrHiFciLb80HT9vYL_4P4QM-SBaQorkM/s640/Picture+105.png" title="Libertarian Talk Radio: If You Build It, Ratings Will Come - Number Of Libertarians" width="640" /></a></div>
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However, there are only a <a href="http://en.wikipedia.org/wiki/Talk_radio#Politically_oriented_talk_radio" target="_blank">handful of libertarian hosts</a> in terrestrial talk radio. This suggests there's a growing under-served demand. <br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhxjINVufpjep0C5MHhgYBP5NqsCtJIYNKXSdEOPKWzW_3pMLnxn2wf7MsoyqsCLXVvKI1XwRR5zXeMEPAOgO3gDKkw1JCXhywqzaKF-8gHMgUIh-duPFBCP5XIzui5wXfiSZXhQTfNocw/s1600/audiencechart_april13.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img alt="Libertarian Talk Radio: If You Build It, Ratings Will Come - Talk Radio Ratings" border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhxjINVufpjep0C5MHhgYBP5NqsCtJIYNKXSdEOPKWzW_3pMLnxn2wf7MsoyqsCLXVvKI1XwRR5zXeMEPAOgO3gDKkw1JCXhywqzaKF-8gHMgUIh-duPFBCP5XIzui5wXfiSZXhQTfNocw/s1600/audiencechart_april13.jpg" title="Libertarian Talk Radio: If You Build It, Ratings Will Come - Talk Radio Ratings" /></a></div>
Seth Masonhttp://www.blogger.com/profile/08575833772160662853noreply@blogger.com1tag:blogger.com,1999:blog-2970607536107501923.post-63805668695718506302013-04-23T21:37:00.001-04:002016-12-16T17:37:34.461-05:00Fed Liquidity Pumping Good For Wealthy, Bad For Rest<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhxHypcXhQIEJhU5bEm4TOEWAqw7sxIHC58ijyDpnTDvXOBYajDekoQvT8Qoy2C-XUf8AeQfb8Ox2h9FWwa1XQKoBfYLeJ_e_WhNjH6DDRcskfvkkkkpsRBjjqmi4FvG0hOjXTztV5NJ-s/s1600/lobbying-630x286.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img alt="Seth Mason Charleston SC blog 25" border="0" height="90" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhxHypcXhQIEJhU5bEm4TOEWAqw7sxIHC58ijyDpnTDvXOBYajDekoQvT8Qoy2C-XUf8AeQfb8Ox2h9FWwa1XQKoBfYLeJ_e_WhNjH6DDRcskfvkkkkpsRBjjqmi4FvG0hOjXTztV5NJ-s/s1600/lobbying-630x286.jpg" title="Seth Mason Charleston SC blog 25" width="200" /></a>The premise is simple: the wealthy have a disproportionate amount of their net worth in investments, and the Fed has been <a href="http://finance.yahoo.com/news/market-savior-stocks-might-50-125751851.html" target="_blank">propping up the stock market</a> and <a href="http://finance.yahoo.com/blogs/daily-ticker/nouriel-roubini-bullish-now-mother-bubbles-begun-140143386.html" target="_blank">inflating asset bubbles</a>. Therefore, the price inflation-driven economic recovery has been robust for the richest 7% and weak to non-existent for everyone else. And never forget, wealth and exposure to inflation are inversely-proportional. In other words, those with less money spend a greater percentage of their incomes on essentials--food, energy, etc.--whose prices have been rising as a result of the asset bubble. From <a href="http://www.pewsocialtrends.org/2013/04/23/a-rise-in-wealth-for-the-wealthydeclines-for-the-lower-93/" target="_blank">Pew Research</a>:<br />
<blockquote class="tr_bq">
During the first two years of the nation’s economic recovery, the
mean net worth of households in the upper 7% of the wealth distribution
rose by an estimated 28%, while the mean net worth of households in the
lower 93% dropped by 4%, according to a Pew Research Center analysis of
newly released Census Bureau data.<br />
<br />
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgPNJL5IJjs4QxzGr4HXwqV_CoG3zYu5ScjdQ-lOxB78wZsnH0qg_LQH5GP_rfF49OZnqs2Do0BM7ecsvT7I2gRMWxF6SfoC0L_FUT92cwZw4RC28H6RFEELt6CQtixUNGPj75bO939rK8/s1600/wealth-recovery-0-1.png" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img alt="Fed Liquidity Pumping Good For Wealthy, Bad For Rest- Change In Net Worth" border="0" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgPNJL5IJjs4QxzGr4HXwqV_CoG3zYu5ScjdQ-lOxB78wZsnH0qg_LQH5GP_rfF49OZnqs2Do0BM7ecsvT7I2gRMWxF6SfoC0L_FUT92cwZw4RC28H6RFEELt6CQtixUNGPj75bO939rK8/s320/wealth-recovery-0-1.png" title="Fed Liquidity Pumping Good For Wealthy, Bad For Rest - Change In Net Worth" width="212" /></a>From 2009 to 2011, the mean wealth of the 8 million households in the
more affluent group rose to an estimated $3,173,895 from an estimated
$2,476,244, while the mean wealth of the 111 million households in the
less affluent group fell to an estimated $133,817 from an estimated
$139,896.<br />
<br />
These wide variances were driven by the fact that the stock and bond
market rallied during the 2009 to 2011 period while the housing market
remained flat.<br />
<br />
Affluent households typically have their assets concentrated in
stocks and other financial holdings, while less affluent households
typically have their wealth more heavily concentrated in the value of
their home.<br />
<br />
From the end of the recession in 2009 through 2011 (the last year for
which Census Bureau wealth data are available), the 8 million
households in the U.S. with a net worth above $836,033 saw their
aggregate wealth rise by an estimated $5.6 trillion, while the 111
million households with a net worth at or below that level saw their
aggregate wealth decline by an estimated $0.6 trillion.<sup class="footnote"><a href="http://www.pewsocialtrends.org/2013/04/23/a-rise-in-wealth-for-the-wealthydeclines-for-the-lower-93/#fn-16900-1" id="fnref-16900-1">1</a></sup> </blockquote>
<blockquote class="tr_bq">
<div class="separator" style="clear: both; text-align: center;">
<a href="http://www.pewsocialtrends.org/files/2013/04/SDT-2013-04-wealth-recovery-0-2.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img alt="Fed Liquidity Pumping Good For Wealthy, Bad For Rest - Household Net Worth" border="0" class="alignright size-full wp-image-16903" src="http://www.pewsocialtrends.org/files/2013/04/SDT-2013-04-wealth-recovery-0-2.png" height="356" title="Fed Liquidity Pumping Good For Wealthy, Bad For Rest - Household Net Worth" width="187" /></a></div>
Because
of these differences, wealth inequality increased during the first two
years of the recovery. The upper 7% of households saw their aggregate
share of the nation’s overall household wealth pie rise to 63% in 2011,
up from 56% in 2009. On an individual household basis, the mean wealth
of households in this more affluent group was almost 24 times that of
those in the less affluent group in 2011. At the start of the recovery
in 2009, that ratio had been less than 18-to-1. </blockquote>
<blockquote class="tr_bq">
(The focus in this report on the upper 7% of households rather than
some other share of high wealth households reflects the limits of the
tabulations published by the Census Bureau. The boundaries of its
wealth categories dictated the split of households analyzed in this
report.)<br />
<br />
Overall, the wealth of America’s households rose by $5 trillion, or
14%, during this period, from $35.2 trillion in 2009 to $40.2 trillion
in 2011.<sup class="footnote"><a href="http://www.pewsocialtrends.org/2013/04/23/a-rise-in-wealth-for-the-wealthydeclines-for-the-lower-93/#fn-16900-2" id="fnref-16900-2">2</a></sup>
Household wealth is the sum of all assets, such as a home, car, real
property, a 401(k), stocks and other financial holdings, minus the sum
of all debts, such as a mortgage, car loan, credit card debt and student
loans.<br />
<br />
During the period under study, the S&P 500 rose by 34% (and has
since risen by an additional 26%), while the S&P/Case-Shiller home
price index fell by 5%, continuing a steep slide that began with the
crash of the housing market in 2006. (Housing prices have slowly started
to rebound in the past year but remain 29% below their 2006 peak.) </blockquote>
<blockquote class="tr_bq">
The different performance of financial asset and housing markets from
2009 to 2011 explains virtually all of the variances in the
trajectories of wealth holdings among affluent and less affluent
households during this period. Among households with net worth of
$500,000 or more, 65% of their wealth comes from financial holdings,
such as stocks, bonds and 401(k) accounts, and 17% comes from their
home. Among households with net worth of less than $500,000, just 33% of
their wealth comes from financial assets and 50% comes from their home.<br />
<br />
<img alt="Fed Liquidity Pumping Good For Wealthy, Bad For Rest - Change In Assets" class="alignright size-full wp-image-16904" src="http://www.pewsocialtrends.org/files/2013/04/SDT-2013-04-wealth-recovery-0-3.png" height="365" title="Fed Liquidity Pumping Good For Wealthy, Bad For Rest - Change In Assets" width="409" /><br />
<br />
The
Census Bureau data also indicate that among less affluent households,
fewer directly owned stocks and mutual fund shares in 2011 (13%) than in
2009 (16%), meaning a smaller share enjoyed the fruits of the stock
market rally. Likewise, fewer had individual retirement accounts (IRAs)
or Keogh accounts (22% in 2011 versus 24% in 2009) and the same share
had 401(k) or Thrift Savings Plan accounts (39% in both years). Among
affluent households, there was also a decline in the share directly
owning stock and mutual fund shares during this period (59% in 2011
versus 62% in 2009), but a slight increase in the share with IRAs or
Keogh accounts (70% versus 68%) and a larger increase in the share with
401(k) or Thrift Savings Plan accounts (65% versus 61%).<br />
<br />
Overall, net worth per household in the U.S. in 2011 made up nearly
all the ground it had lost since 2005—$338,950 versus $340,252 in 2005,
the latest pre-recession data published by the Census Bureau. (Total
household wealth doubtless rose for a period after 2005 before falling
precipitously during the Great Recession of 2007-2009 and rebounding
since then. However, no household wealth data are available from the
Census Bureau for the years between 2005 and 2009, so it is not possible
to pinpoint when, or at what level, the peak in wealth per household
occurred.)<br />
<br />
Looking at the period from 2005 to 2009, Census Bureau data show that
mean net worth declined by 12% for households as a whole but remained
unchanged for households with a net worth of $500,000 and over.
Households in that top wealth category had a mean of $1,590,075 in
wealth in 2005, $1,585,441 in 2009 and $1,920,956 in 2011.<sup class="footnote"><a href="http://www.pewsocialtrends.org/2013/04/23/a-rise-in-wealth-for-the-wealthydeclines-for-the-lower-93/#fn-16900-3" id="fnref-16900-3">3</a></sup></blockquote>
<br />
Seth Mason, Charleston SC Seth Masonhttp://www.blogger.com/profile/08575833772160662853noreply@blogger.com0