Posts filed under “Really, really bad calls”
Invictus here. Been a while. Been a bit busy and, frankly, not much to say of late.
As a general rule, I’d say that folks should refrain from posting on things they know nothing about. The old saying (Abraham Lincoln, I believe, Mark Twain, according to commenters’ citations, attribution in dispute) comes to mind, “Better to keep your mouth shut and let people think you’re a fool than open it and remove all doubt.”
Erick Erickson should not write about the economy, as he has demonstrated yet again that his knowledge of things economic is, to put it politely, somewhat lacking.
Just a while back, Mr. Erickson incorrectly claimed that “after the 2003 tax cuts, the unemployment rate fell to the lowest level since World War II. Let me repeat that: the Bush economic program created the lowest unemployment level ever.” Of course, the rate had been lower in just the last decade, under Bill Clinton. And that fact was quite easily ascertainable via mouse click at BLS.gov or the St. Louis Fed. I mean, really, we’re talking unemployment rate here, not some esoteric metric no one’s ever heard of and can’t research. I don’t believe a correction has yet been posted on that particular item, nor am I holding my breath.
Not quite outdoing that egregious error, but giving it his best shot, Mr. Erickson came up with this gem regarding last week’s nonfarm payroll report:
The number Mr. Obama will want us to pay attention to is private sector job growth. According to the government, private sector jobs went up and the growth of unemployment is attributed to those census workers leaving their jobs.
At least National Review got it right:
The unemployment rate climbed to 9.6 percent as a result of many new entrants into the labor market (about half a million workers).
That the unemployment rate went up was a function, as NRO pointed out, of new entrants into the work force. This is captured in the Household Survey, from which the unemployment rate is calculated. It had nothing, zero, zilch, nada to do with “census workers leaving their jobs.” Those losses were captured in the Establishment Survey. And I would challenge Mr. Erickson to point to the government attributing the rise in the unemployment rate to jobless census workers.
Undaunted, he ventures on:
When unemployment was going down, it did so because of the hiring of the 500,000 census workers and Mr. Obama and his band of merry socialists were cheering the numbers as a sign of good news.
No, the unemployment rate did not go down because of census worker hiring. Again, that was captured in the Establishment Survey. The unemployment rate is derived from the Household Survey. It had gone down for the opposite reason that it just went up — people had been leaving the labor market. This concept of two surveys and which one captures what is really not all that challenging. Or at least I didn’t think it was.
Live by the temporary census worker jobs. Die by the temporary census worker jobs.
Except it simply did not go down that way.
Mr. Erickson should endeavor to write about topics on which he is a bit more knowledgeable, though I haven’t the foggiest as to what that might be.
In this morning’s NYT column — Lehman’s Last Hours — Andrew Ross Sorkin wrote: “But what is clear is that the politics of the moment played a factor — or at least was discussed among senior and junior staff — in the decision not to lend to Lehman Brothers, perhaps the greatest mistake of the…Read More
Amongst the items coming out of the FCIC hearings last week were new docs that revealed exactly how over-reliant LEH was on daily, short term funding to cover their longer terms costs. It was a recipe for disaster, a trailer park in search of a tornado. Here is the WSJ: “In looking last week at…Read More
I have been arguing for the government to step away from propping up the housing market for several years now. It seems that economists are finally catching up with the idea. Today’s NYT has an article, titled Housing Woes Bring New Cry: Let Market Fall. Only I would argue its not new at all, and…Read More
We know the major ratings agencies suck. We know their business model was payola. We know they sold ratings for cash, committed fraud on structured product investors. We know they hid significant modeling errors, and then hid these problems from the public and regulators. Might their free ride be coming to an end? The SEC…Read More
“Lehman was forced into bankruptcy not because it neglected to act responsibly or seek solutions to the crisis, but because of a decision, based on flawed information, not to provide Lehman with the support given to each of its competitors and other nonfinancial firms in the ensuing days.” -Richard S. Fuld Jr., Lehman Brothers former…Read More
We have had a god-awful run of Housing data. New and Existing Home Sales, Defaults and Foreclosure data, even the Case Shiller report — all have been utterly horrific. In light of this, I want to make the following announcement: Attention RE Agents! The National Association of Realtors are doing you a terrible disservice. Consider…Read More
I am watching Squawk Box around 6:30am as I get dressed this morning. The conversation turns to various incentives in Germany, where firms are actually paid not to lay people off in a downturn. (Firms cut hours, but keep most of their staff). The lower German unemployment rate of 7% has less people with financial…Read More
What ever happened to the theme that Mortgage Defaults were driving consumer spending? Forget the anecdotes, I am compelled to point out that defaults, foreclosures and walkaways are at record levels, and retail sales have fallen dramatically. I am just asking . . .
Everyone knew that Existing Home Sales were going to stink the joint up today — but I just had to laugh when I read the NAR commentary; The headline along was priceless: July Existing-Home Sales Fall as Expected but Prices Rise. Too bad they don’t cover other events: “Lincoln attends theater opening; leaves early with…Read More