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H-1b: US workers being fired AND forced to train foreign replacements

by 1389AD ( 47 Comments › )
Filed under Economy, unemployment at April 12th, 2015 - 9:00 pm

1389 Blog has been following this story since 2007.

Are you an American citizen in the STEM (Science, Technology, Engineering, and Mathematics) fields? Do you ask why nothing happens when you reply to a job advertisement? Check this out:

PERM: Fake Job Ads defraud Americans to secure H-1b green cards for foreigners

Uploaded on Jun 16, 2007 by programmersguild
Immigration attorneys from Cohen & Grigsby explains how they assist employers in running classified ads with the goal of NOT finding any qualified applicants, and the steps they go through to disqualify even the most qualified Americans in order to secure green cards for H-1b workers. See what Bush and Congress really mean by a “shortage of skilled U.S. workers.” Microsoft, Oracle, Hewlett-Packard, and thousands of other companies are running fake ads in Sunday newspapers across the country each week.

Fox: Senators seek probe of claims US workers fired, forced to train foreign replacements

(h/t: Weasel Zippers)

A popular visa program allegedly is being misused by U.S. companies to lay off thousands of American workers and replace them with foreign labor.

And, adding insult to injury, many of the laid-off workers allegedly have been forced to train their replacements, in what one anonymous whistleblower called a “humiliating” experience.

The allegations have caught the attention of a bipartisan group of senators — including immigration hawk Sen. Jeff Sessions, R-Ala., and the No. 2 Senate Democrat, Illinois’ Dick Durbin — who are calling for a federal probe. A letter sent by 10 senators urging an investigation specifically cited reports of the firing and hiring practices at Southern California Edison, California’s second-largest utility. The incidents are concentrated in the IT field, and involve American workers being replaced by H-1B visa holders.

“A number of U.S. employers, including some large, well-known, publicly-traded corporations, have reportedly laid off thousands of American workers and replaced them with H-1B visa holders,” the senators wrote.

In the letter to Attorney General Eric Holder, Homeland Security Secretary Jeh Johnson, and Labor Secretary Thomas Perez, the senators urged the departments to “investigate the unacceptable replacement of American workers” to see whether laws were broken.

The H-1B program is supposed to be used to bring in, on a temporary basis, skilled workers with highly specialized skills not readily available in the U.S. They are often used in the technology sector to bring in engineers and computer programmers.

Further, U.S. employers can hire foreign workers for up to six years and must pay them the same rate they would pay other workers with similar qualifications, or the prevailing wage for that job and location, whichever is higher. This is done to prevent foreign workers from depressing U.S. wages and from being exploited.

But reports have surfaced that the replacements are happening at an alarming rate. And former Southern California Edison workers have complained to lawmakers that they were replaced by less-skilled workers at lower costs.

Anonymous workers who were displaced by the visa holders also submitted written testimonials to lawmakers detailing their firings. Several claimed they were forced to train their replacements, and threatened with losing their severance if they did not.

“We had no choice in this,” one anonymous worker who claimed to have been one of those let go from Southern California Edison, said in a letter. The worker described how when the two vendors were picked – Infosys and TCS, both major Indian companies – SCE employees were told to “sit with, video chat or do whatever was needed to teach them our systems.”

If they did not cooperate, according to the testimonial, “we would be fired and not receive a severance package.”

Another worker described this process as “humiliating.”

“DHS will respond directly to members of Congress,” an agency spokesperson told FoxNews.com on Saturday. “Still, it is important to note that U.S. businesses use the H-1B program to employ foreign workers in occupations that require highly specialized knowledge in fields such as science, engineering and computer programming.”

In a statement, Southern California Edison said it abides by the law and will cooperate with any investigation that concerns the issues mentioned in the senators’ letter.

The company explained that it’s reducing its information technology department from 1,400 to 860. Of those left, 97 percent are permanent California residents and 3 percent are on H-1B visas.

Southern California Edison said it’s contracting with IT vendors to fulfill certain contracts and that most of those workers are permanent U.S. residents and aren’t working under H-1B visas.

“By transitioning some IT operations to external vendors, along with SCE eliminating some customized functions it will no longer provide, the company will focus on making significant, strategic changes that can benefit our customers,” Southern California Edison’s emailed statement read.

But the senators, in their letter, raised several questions about how the replacements were being done. They said it appears the workers are often not employees of the U.S. company laying off workers – but are contractors working for foreign-owned IT consultants.

The H-1B program stipulates that applicants must have a valid “employer-employee relationship” – and the senators questioned whether that was the case here.

They also asked whether the companies “engaged in prohibited citizenship status discrimination” (against American citizens); and whether the visa petitions showed “any evidence of misrepresentation or fraud.”

Continue reading…

One of the few good things – albeit far more than a day late and a dollar short – that Dick Durbin has done thus far was to sign on to this investigation. May that good deed account to the salvation of his immortal soul.

I was forced out of IT work when the market dried up in 2008 on account of the economic collapse precipitated by the Democrat takeover of Congress, compounded by outsourcing, offshoring, and the H-1b visa. I retrained myself in newer IT skills, but as a female over 50 years of age without current business experience using those skills, I was unable to find employment in the IT field. I have taken an entirely different career path since then, and would be uninterested in returning to IT even if H-1b were to be repealed tomorrow.

Can We Add Agency Law To Our Growing List Of Grievances?

by Flyovercountry ( 94 Comments › )
Filed under Economy, Fascism, Progressives, Regulation, Tranzis at March 5th, 2015 - 8:58 am

Tip of the hat to The Daily Caller whose video I did not embed here due to their insistence upon the usage of autoplay, something I view as evil. Please click here, for their story, complete with a recorded phone conversation in which an apologetic banker gets to tell a business owner who had held an account at said bank for over a decade, that the government had forced his account to be frozen for no other reason than the fact that the government no longer appreciates his industry’s contribution to our economy.

Yes, Operation Choke Point is an evil perpetrated by Barack Obama and Eric Holder. The fault dear Brutus however does not lie in our stars that we are underlings, but in ourselves. There are many who would point to the 60’s as the beginning of the Progressive’s gaining their stranglehold on our nation. Some point to FDR and the, “New Deal,” as that beginning point. I’ve heard that our troubles with the progressive movement date back to Woodrow Wilson and his Presidency. However, I would like to point out that the Sixteenth and Seventeenth Amendments did far greater damage, even before Wilson took his position as our Chief Executive. (I realize that the Seventeenth Amendment became part of our Constitution about a month after Wilson’s Inauguration, but it was ratified before Wilson actually took office.) Many experts in our nation’s history will state that Teddy Roosevelt was the first Progressive to affect our national agenda, and granted he gave us a big push in that disastrous direction, and redefined the Executive Branch, but he was not where it all began. This all started with the Interstate Commerce Act of 1887. This was the first victory of the Progressive Movement, and it has grown into the behemoth that allows Barack Obama to act as a man elected to be our emperor, rather than our President.

For those who are not familiar with it, the Interstate Commerce Act of 1887 established our very first Federal Agency. This agency was vested with the ability to create its own rules, its own authority to enforce those rules, and its own system to adjudicate the process for any who wished to push back against the decisions of the agency. Quite literally, we had managed to create an entity that had contained within its scope of operation, a body that was vested with all of the powers of governance, thus doing away with the separation of powers. Since that date in our history, any and all legislation has been written purposefully vague, only ever including a desired outcome, with the specific rules to be determined later by either an existing federal agency, or through the creation of a new federal agency. It is With this wonderful exercise of genius that the destruction of our Constitutional Protections began. Agency Law was created with the establishment of the ICC in 1887. It should also be noted here, that it took almost exactly five years for the agency purportedly designed to keep the railroad men from becoming too powerful for the liking of those who lobbied for this legislation, to be peopled entirely with those, “robber barons,” so feared and vilified that the agency was thought necessary. Funny how that works out.

Once that happened, what we see today, even though it has taken 128 years to get here, became inevitable. Give Barack Obama credit for this at least. He saw the potential to simply ignore the U.S. Constitution afforded to him by this set of circumstances, and has taken full advantage of it. All he needs to do is suggest or ask that one of the agencies situated under the federal umbrella, write some additional rules to add to the scope under which they operate, and he pretty much can enact unilaterally anything he wishes to codify as law. Yes, technically such efforts can be overturned by our Judicial Branch, and indeed many of these actions have been thus far. However, our Judicial Branch moves too slowly to monitor or even address every such indiscretion. Even if it were capable of keeping up, Agency Law itself has become so ingrained in our society, such Judicial oversight and pushback has itself become all too rare.

In our history, there have been two Presidents who’ve tried earnestly to do something to put an end to, or at least reign in this system run amok. The first was Richard Nixon, and I’m sure you all remember what happened to him for his efforts. The second was Ronald Reagan, who also failed, and in fact discussed that failure as being his lasting regret.

So far, 26 states throughout the fruited plains have formally adopted ballot initiatives in favor of an Article V Convention for the purpose of proposing and debating Constitutional Amendments. I am most definitely in favor of this. By the way, many of the Liberals in our nation are as well, since they’re convinced that they would be able to alter the First Amendment to, “correct,” the Citizens United Decision.

One amendment that I’d like to see come to fruition would be something to put an end to Agency Law. Consider for one moment what this system has allowed for a President with dictatorial ambitions to do in only the short amount of time from early November until now. Barack Obama has rewritten our Immigration law, repealed the Second Amendment, pledged to unilaterally raise our taxes, promised to confiscate our 401k’s, threatened to fire the entirety of the retail financial services industry, instituted cap and trade, inflicted net neutrality, signed some very questionable treaties without the requisite Senatorial Consent, changed existing law, and all of this done with the statement that he gave Congress the chance to do what he wanted before he did it alone.

Don’t blame the Bamster however. While his actions are bad enough, it was we the people who didn’t realize that gridlock was itself a perk, gifted to us by the founding fathers, rather than a problem as proclaimed by the low information voting crowd. Barack Obama is merely the messenger, who has alerted us to a huge problem, and one that hopefully we can figure out how to correct.

Ronald Reagan campaigned on a platform that included ending the Department of Education and the Department of Energy. If the single most popular President in the modern era could not rid us of the two most unpopular facets of the federal behemoth, as he’d promised to do while campaigning, then what chance would anyone have to actually do something about reducing the size and scope of government? We keep talking about the symptoms, meanwhile, the cancer grows free. Something must be done to reign this monster in, and unless Agency Law itself is addressed, nothing will be successful.

Cross Posted from Musings of a Mad Conservative.

Mars Attacks: Net Neutrality and a Very Dark Puzzle

by Mars ( 157 Comments › )
Filed under American Exceptionalism, Barack Obama, Blogmocracy, Business, Censorship, Communism, Cult of Obama, Economy, Education, Fascism, Free Speech, government, Guest Post, History, Liberal Fascism, Marxism, Political Correctness, Politics, Progressives, Regulation, Socialism, taxation, Technology at February 27th, 2015 - 1:40 pm

I have been noticing for a very long time now that there seems to be a cohesive puzzle being assembled by the left in regards to the internet. Through time I’ve been able to pick up the pieces of this puzzle, but today with the imposition of new regulations under the guise of Net Neutrality the puzzle becomes much clearer. I believe that the Net Neutrality regulations are the “frame” of this puzzle. Here are some of the pieces of collected through the years, see if you can see the same picture I do.

2011

http://www.wired.com/2011/06/internet-a-human-right/

http://www.dailytech.com/Obama+Reveals+National+WiFi+Plans+Claims+it+Will+Cut+Deficit+by+10B+USD/article20887.htm

2015
http://www.wctv.tv/home/headlines/Obama-Pitching-More-Access-to-Fast-Internet-288518261.html

http://gizmodo.com/fcc-redefines-broadband-to-bring-you-faster-internet-1682516928

And now the new Net Neutrality regulations.

Through speeches since his election Obama has referred to a Free and Open Internet constantly, with stress on the word free. Many time there have been references to poor people who can’t afford internet. This coupled with everything else I posted above paints a dark picture for the future. One of the stumbling blocks for the people who want everyone to have access to the internet has been the fact that the average paying customer has been offended at the idea of people getting “broadband” speeds for free while everyone else has to pay for them. By changing the definition of broadband, the FCC has just managed to open up a huge amount of speed variations that they can now force companies to give away while not calling them broadband.

Second, by reclassifying broadband the FCC can force companies to meet a minimum standard for broadband service, which will require a complete reworking of the internet infrastructure. Where will this money come from ? Well, I figure the government will suddenly appear to save the day the way they did with the banks. There will be massive strings attached. The worst part is this money they will be handing out will already have come from the companies themselves in the form of the new utility taxes and regulatory fees that come with Title II reclassification of a utility. (The speech writes itself, I can already see Obama pontificating on this very subject. “90% of this country are getting below broadband speeds,………. this is a problem,………… a problem that can only be fixed…. by investing in the American Infrastructure”. /insert applause from mindless drones./ “The people of this country…….. deserve better……….and I intend to see that that happens.” As we all know “investing in the American infrastructure is left speak for massive tax hikes.)

There is even more to this than my little conspiracy theory.

Net Neutrality is a horror story in it’s own right. Who here is old enough to remember the Ma Bell monopoly that the government created out of the depression and allowed to run wild until the late 70’s? Well here is someone who does. He’s a member of the FCC’s own commision, Commissioner Ajit Pai.

http://www.fcc.gov/article/doc-332260a5

h/t Calo

In his oral dissent Commissioner Pai lays out exactly why this is such a dangerous set of regulations, and exactly what this means for the future of internet service. It’s not pretty, higher prices, slower speeds, less competition. It’s all there. And the best part? The regulations weren’t even written by the commission. The White House itself created a shadow FCC to write the rules they were going to impose. Here’s some of the people invited in to the White House to regulate the rest of us.

What the press has called the “parallel FCC” at the White House opened its doors to a plethora of

special-interest activists: Daily Kos, Demand Progress, Fight for the Future, Free Press, and Public

Knowledge, just to name a few. Indeed, even before activists were blocking Chairman Wheeler’s

driveway late last year, some of them had met with executive branch officials. But what about the rest of

the American people? They certainly couldn’t get White House meetings. They were shut out of the

process. They were being played for fools.

And the situation didn’t improve once the White House announced President Obama’s plan and

“ask[ed]” the FCC to “implement” it. The document in front of us today differs dramatically from the

proposal that the FCC put out for comment last May. It differs so dramatically that even zealous net

neutrality advocates frantically rushed in recent days to make last-minute filings registering their concerns

that the FCC might be going too far. Yet the American people to this day have not been allowed to see

President Obama’s plan. It has remained hidden.

This brave commissioner and the other republican on the commission attempted to get this regulation put out in the public eye where everyone could see it and review what it actually entailed. They were rejected by the 3 socialists on the commission. Make no mistake this set of regulations came DIRECTLY from the White House. Once again the President is making rules where he does not have the authority to do so. As an interesting aside to this, within Commissioner Pai’s dissent he shows a whole bunch of evidence and statements detailing how this is going to destroy small ISP companies. Some of the ISP’s that are about to be destroyed…the very Municipal (ie government) ISP’s he was lavishing praise on not long ago.

http://ctmirror.org/2015/01/14/white-house-pushes-fast-affordable-internet-praises-manchester-bristol-in-p/

To really see what is happening take a look at this thank you letter from the Electronic Frontiers Foundation, one of the groups at the forefront of trying to impose Net Neutrality.

https://www.eff.org/deeplinks/2015/02/fcc-votes-net-neutrality-big-win

What makes this letter interesting is not it’s general obsequiousness but the fact that they acknowledge that there is a vague statement in the regulations that would allow the FCC to pretty much do anything it damn well pleased, up to and including censoring content. (This is the same statement the the EFF has been trying to get them to drop since the regulations were first discussed.) It should also be noted that a year ago when the Chair of the FCC was trying to put into place much more limited rules over Net Neutrality, the EFF itself stated that the FCC had NO AUTHORITY TO DO SO.

The fact remains that the Net Neutrality regulations were a great bait and switch perpetrated on those that pay little attention to what is actually going on. I hope the gamers and video streamers that have been worshiping this disaster enjoy their new slower, much more expensive internet plan. Our only hope at this point is that the courts act on this takeover. (I nearly said unprecedented but I would have been wrong. This is exactly the same as FDR’s takeover of the telecom industry in 1934.)

Strangely enough, probably the best statement on Net Neutrality comes from the Secretary General of the European People’s Party.

EUROPE GETS IN ON THE ACTION: The secretary general of the largest party in the European Parliament is adding to the chorus around net neutrality. Antonio López Istúriz-White of the center-right European People’s Party over the weekend chided President Obama for lambasting European regulations while at the same time calling for tough net neutrality rules from the FCC.

“The president’s position is riven with contradictions,” Istúriz-White wrote in a Financial Times op-ed. “He promotes burdensome regulations at home that could put the development of the Internet on ice in an attempt to protect one set of actors in the ecosystem. In another breath he calls on Europe to follow the very same successful U.S. model he wants to jettison to make life in Europe easier for that very same group of Over The Top players!”

http://thehill.com/policy/technology/overnights/233548-overnight-tech-pressure-building-ahead-of-net-neutrality-vote

Why indeed, does the President want to stifle progress and development at home, while promoting the opposite abroad?

A Good Start, Make Him Veto It!

by coldwarrior ( 184 Comments › )
Filed under Economy, Energy, Open thread, Politics at February 24th, 2015 - 7:00 am

Get the Democrats ON RECORD!

Congressional Republican leaders are expected to send President Obama legislation authorizing construction of the Keystone XL pipeline on Tuesday, The Hill reports.

While the bill passed Congress more than a week ago, Republican leaders delayed sending it to the White House in order to prevent Obama from carrying out his veto threat while Congress was out of town.

Senate Majority Leader Mitch McConnell, House Speaker John Boehner and many other Republicans have urged Obama to reconsider his promise to veto the bill, pointing to estimates that it could create as many as 40,000 jobs.

Some members of Obama’s own party have indicated that they too think his veto threats are a mistake. Defying the president, 28 Democrat House members on Jan. 9 voted in favor of passage of legislation authorizing the Keystone pipeline which passed by a 266 to 153 vote.

One day before that vote, three top leaders of the moderate Blue Dog Coalition of House Democrats sent a letter to President Obama urging him not to veto the pipeline legislation.

“The Blue Dog Coalition stands ready to work with you and Congressional leaders to provide stringent oversight of construction and operation of the Keystone XL Pipeline, but we cannot miss this opportunity to create good paying jobs and put America on the path to be less reliant on oil from our foes,” wrote Democrat Reps. Kurt Schrader of Oregon, Jim Cooper of Tennessee and Jim Costa of California.

Support from Democrats was not strictly limited to the center of the party, as progressives such as Assistant Leader James E. Clyburn of South Carolina and Sheila Jackson Lee of Texas joined Republicans in voting for Keystone.

The legislation passed the Senate by a vote of 62-36 on Jan. 29, with nine Democrats crossing party lines to support the project.

In arguing for delay, the administration has said that congressional action would undercut the ongoing process underway for the transnational pipeline which is being overseen by the State Department.

Saturday Lecture Series: Vector Autoregression and Oil

by coldwarrior ( 38 Comments › )
Filed under Academia, Economy, Energy, Open thread, saturday lecture series at February 14th, 2015 - 7:00 am

Good Morning, All! Welcome to the Blogmocracy’s Applied and Experimental Econometric Modeling Lab and wood-fired pizza joint. Today we will discuss Vector Autoregression and it’s uses.

Vector Autoregression (VAR) is a very powerful prediction system used in the Voodou of Econometrics. You will need to have your entrails and chicken parts in good working working order and a proper Hounfour at the ready to attempt the VAR.

 

First you need an Autoregression model. In AR the output variable depends on its own previous values. It is a time series model that can attempts to predict the variable (prices) by their value before when a ‘shock’ occurred. So, if Demand changed and changed the price, demand is the shock that changes the price. Any change in that varible of ‘demand’ can then be predicted for the future in levels of shock by price of the good.

The notation AR(p) refers to the autoregressive model of order p. The AR(p) model is written

 X_t = c + \sum_{i=1}^p \varphi_i X_{t-i}+ \varepsilon_t .\,

where \varphi_1, \ldots, \varphi_p are parameters, c is a constant, and the random variable \varepsilon_t is white noise.

At this point it is appropriate to throw the chicken bones on the floor and divine what you will happen to your neighbor next time he parks in your spot…that spot that you shoveled all of the global warming from…

VARs allow multiple evolving variables such as demand, supply, and any other thing that can and has happened that effected what you are studying. how does supply and demand effect the price of oil? A look into the past allows predictability into the future.

A VAR model describes the evolution of a set of k variables (called endogenous variables) over the same sample period (t = 1, …, T) as a linear function of only their past values. The variables are collected in a k × 1 vector yt, which has as the i th element, yi,t, the time t observation of the i th variable. For example, if the i th variable is GDP, then yi,t is the value of GDP at time t.

A p-th order VAR, denoted VAR(p), is

y_t = c + A_1 y_{t-1} + A_2 y_{t-2} + \cdots + A_p y_{t-p} + e_t, \,

where the l-periods back observation yt−l is called the l-th lag of y, c is a k × 1 vector of constants (intercepts), Ai is a time-invariant k × k matrix and et is a k × 1 vector of error terms satisfying

  1. \mathrm{E}(e_t) = 0\, — every error term has mean zero;
  2. \mathrm{E}(e_t e_t') = \Omega\, — the contemporaneous covariance matrix of error terms is Ω (a k × k positive-semidefinite matrix);
  3. \mathrm{E}(e_t e_{t-k}') = 0\, for any non-zero k — there is no correlation across time; in particular, no serial correlation in individual error terms.[1]

A pth-order VAR is also called a VAR with p lags. The process of choosing the maximum lag p in the VAR model requires special attention because inference is dependent on correctness of the selected lag order.[2][3]

You may now go to your Vodouisant and light the candle and pray to Simbi to intervene for you to Bondye, then pull out your CJ Voodoo doll and bind his fingers so he can’t get to his Cheetos.  See, Voodou and Econometrics are easy and fun!

So, we can attempt to predict the future by what has happened in the past by showing the relationship that variables have had on the thing that we want to study.

 

Goldman: Here’s Why Oil Crashed—and Why Lower Prices Are Here to Stay

Oil prices have gotten crushed for the last six months. The extent to which that was caused by an excess of supply or by a slowdown in demand has big implications for where prices will head next. People wishing for a big rebound may not want to read farther.

Goldman Sachs released an intriguing analysis on Wednesday that shows what many already suspected: The big culprit in the oil crash has been an abundance of oil flooding the market. A massive supply shock in the second half of last year accounted for most of the decline. In December and January, slowing demand contributed to the continued sell-off. Goldman was able to quantify these effects.

The Culprit Is in Blue

Goldman’s model is simple on its face, looking at just two variables over time: the price of oil and the value of U.S. stocks (as measured by the S&P 500). The idea is that the stock market is a pretty good indicator of economic demand. So when stocks move in tandem with oil prices, demand is in the driver’s seat. When the price of oil moves in the opposite direction of stocks, the shock is coming from supply.

It’s a bit more complicated than that—for the statistically inclined, Goldman uses a “vector autoregression with sign restrictions”—but you get the idea. In the following chart, they split apart the effects of demand shocks (left) from supply shocks (right).

Demand & Supply

The chart on the left shows what you might expect: strong demand leading up to a precipitous decline during the recession beginning in late 2008. The supply chart on the right shows a shock of undersupply in late 2007, leading to years of relatively steady supply expectations. Oversupply shocks picked up, beginning in 2012, as U.S. shale-oil production exceeded expectations, culminating in a piercing shock of oversupply last year that sent markets reeling.

The big take-away: “[T]he decline in oil has been driven by an oversupplied global oil market,” wrote Goldman economist Sven Jari Stehn. As a result, “the new equilibrium price of oil will likely be much lower than over the past decade.”

 

If your predictions are then confounded, you may send Uncle Gunnysack out to take care of that uncooperative neighbor. Have a great Saturday!

 

Belief In Global Warming Is A Threat To Our National Security

by Flyovercountry ( 105 Comments › )
Filed under Economy, Progressives, Regulation at February 13th, 2015 - 7:00 am

Political Cartoons by Glenn Foden

A couple of days ago, I wrote a post which highlighted the dangers of forcing law enforcement authorities to misappropriate resources by investigating fallacious reports alleging criminal activity. Unfortunately, the Liberal practice of deflecting attention from real problems and towards make believe problems does not end at the borders of law enforcement. It continues into just about every other aspect of our societal existence. The most dangerous of those places of course, at least from an existential point of view, is our National Security.

While we all thought this scene from the movie, “Up,” was cute,

I think we can all agree that it’s no way to run a railroad.

The day before Barack Obama’s most recent bit of Kabuki Theater, AKA this year’s State of The Union Address, NASA and the NOAA trumpeted their, “finding,” that 2014 was the warmest year, ever! You remember 2014 don’t you. Some of us recognize it as the year that ended a month and a half ago. It’s also the year when we first heard the phrase, “Polar Vortex.” That was the Environmentalist’s way of explaining to those of us who make up the sloped forehead, knuckle dragging, anti-science crowd, why it was so freaking cold from mid December through mid April. I also, possessing an adult memory and all, remember bitching about how there was a palpable lack of good swimming days over the summer, seeing as how that season was also freakishly cool as well. So, and I’m only asking the question here, when exactly was it the warmest year ever?

As it turns out, I wasn’t the only one who found the claim to be suspicious. About ten minutes after the politicos at NASA and the NOAA made the claim, real scientists began refuting it. The purpose of the lie however achieved its objective, which was to bolster Barack Obama’s poll numbers for his theatrical performance, and convince Americans, if only for a day or two, that our big problem is with Global Warming, and not with those Islamic Thugs hell bent on waging a war against us.

Of course, lost in all of those refutations linked to above is the small fact that both NASA and the NOAA have been caught recently actually fudging the very data that they’d used to confirm those computer models that predict the demise of all life on our Planet to begin with. The official purpose for fudging the data? Glad you’ve asked. It of course, and you really can’t make this stuff up, was so that the confirmation bias used in the predictive models created to make the case that we’re doomed would actually reflect that doom, rather than the reality that the whole thing is a con game with us, meaning you and me, cast in the role of the mark.

Get that? They created a theory based solely on a computer model, then fudged data to confirm the computer model, and told us to be scared because the real data was somehow flawed when it didn’t confirm the computer’s predictions, which just has to be right, because science.

As important as the whole scam is however, is the reason behind the scam, as well as what other nefarious purposes it has become useful for. Yesterday, I was literally inundated with snippets of President Zero’s Vox interview. Apparently, The Bamster sat down with the folks at hard core lefty talking points dissemination central, and managed somehow, to cause them to scratch their heads with his refusal to accept reality. According to the Obama Administration, Global Warming is having a greater effect upon the daily lives of Americans than any other threat faced by our nation today. So, let ISIS alone you riders of the proverbial, “High Horse,” because not only was Islamic Aggression defeated by those evil Crusades 1000 years ago, (which by the way was the actual reason why those wars were waged,) but whether we know it or not, Capitalism threatens our very existence today, or something.

Never mind the fact that every other period of warming throughout world history had heralded wild expansions in economic activity, improvements in living standards for all of man kind, and unprecedented wealth creation. It is a make believe danger which necessitates our very real misappropriation of considerable resources, so that we may pretend to thwart for the good of the Unicorn infested Universe inhabited by our man child President, said make believe danger. What should worry you is that our Chief Executive has made it an absolute point, and he’s not even bothering with any pretense any longer, to deflect our national attention away from real danger in order to scare us with something completely fabricated. Each drone used by the EPA to fly over a farmer’s private property in search of some new puddle to protect after a rain storm is one less drone available to fly over territory controlled by ISIS to protect Americans against maniacs who’ve made human sacrifice a part of their Friday religious ritual.

But hey, why worry so much about what reality holds? All we really need to do to confront our problems in the Unicorn infested Universe is tweet out some cleverly worded hashtag. This is of course preferable to those violent solutions which as any fool will tell you, only begets violence in return. Just ask anyone who’s met a member of the Religion of Peace lately how true that particular bit of sophistry happens to be. Will the last free American please turn out the lights?

Cross Posted from Musings of a Mad Conservative.

Dr Doom Explains The Economic Situation

by coldwarrior ( 105 Comments › )
Filed under Academia, Economy, Open thread at February 3rd, 2015 - 7:00 am

Prof Roubini, the first economist to predict the collapse of 2008, explains why there will be slow growth and near deflation. Please take a few minutes and read the article at the below link:

 

An Unconventional Truth

…One result of this global monetary-policy activism has been a rebellion among pseudo-economists and market hacks in recent years. This assortment of “Austrian” economists, radical monetarists, gold bugs, and Bitcoin fanatics has repeatedly warned that such a massive increase in global liquidity would lead to hyperinflation, the US dollar’s collapse, sky-high gold prices, and the eventual demise of fiat currencies at the hands of digital krypto-currency counterparts.

None of these dire predictions has been borne out by events. Inflation is low and falling in almost all advanced economies; indeed, all advanced-economy central banks are failing to achieve their mandate – explicit or implicit – of 2% inflation, and some are struggling to avoid deflation. Moreover, the value of the dollar has been soaring against the yen, euro, and most emerging-market currencies. Gold prices since the fall of 2013 have tumbled from $1,900 per ounce to around $1,200. And Bitcoin was the world’s worst-performing currency in 2014, its value falling by almost 60%.

To be sure, most of the doomsayers have barely any knowledge of basic economics. But that has not stopped their views from informing the public debate. So it is worth asking why their predictions have been so spectacularly wrong.

The root of their error lies in their confusion of cause and effect. The reason why central banks have increasingly embraced unconventional monetary policies is that the post-2008 recovery has been extremely anemic. Such policies have been needed to counter the deflationary pressures caused by the need for painful deleveraging in the wake of large buildups of public and private debt.

In most advanced economies, for example, there is still a very large output gap, with output and demand well below potential; thus, firms have limited pricing power. There is considerable slack in labor markets as well: Too many unemployed workers are chasing too few available jobs, while trade and globalization, together with labor-saving technological innovations, are increasingly squeezing workers’ jobs and incomes, placing a further drag on demand…

Simply put, we live in a world in which there is too much supply and too little demand. The result is persistent disinflationary, if not deflationary, pressure, despite aggressive monetary easing.

The inability of unconventional monetary policies to prevent outright deflation partly reflects the fact that such policies seek to weaken the currency, thereby improving net exports and increasing inflation. This, however, is a zero-sum game that merely exports deflation and recession to other economies.

All of this adds up to a recipe for continued slow growth, secular stagnation, disinflation, and even deflation. That is why, in the absence of appropriate fiscal policies to address insufficient aggregate demand, unconventional monetary policies will remain a central feature of the macroeconomic landscape….

If the Lie is BIG Enough…

by coldwarrior ( 9 Comments › )
Filed under Academia, Economy, Special Report, unemployment at January 26th, 2015 - 7:42 pm

I knew that this paper was in the works, it was just a matter of time before it hit.

Study: 2014’s Employment Boom Almost Entirely Due to the Expiration of Unemployment Benefits Obama Wanted to Renew

Those who’ve listened to President Obama’s speeches over the past couple months have heard him boast that 2014 has seen impressive improvements in the labor market — the best year in job creation since 1999, he points out, and he’s right. But there’s no obvious explanation for why 2014 has been, by a good margin, the best year of a weak jobs recovery. The president has naturally credited his policies (without any justification). But what if 2014’s jobs boom is mostly thanks to the expiration of a program that the Obama administration and Democrats fervently pushed to renew?

That’s the finding of a new NBER working paper from three economists — Marcus Hagedorn, Kurt Mitman, and Iourii Manovskii — who contend that the ending of federally extended unemployment benefits across the country at the end of 2013 explains much of the labor-market boom in 2014.

About 60 percent of the job creation in 2014, 1.8 million jobs, they find, can be attributed to the end of the extended-benefits program. That’s a huge amount, and suggests that long-term unemployment benefits, while there’s a good charitable case for them, could have played a big role in the ongoing lassitude of our labor market. (Indeed, an earlier working paper from a few of the same authors argued that extended benefits raised the unemployment rate during the Great Recession by three percentage points; see a summary of that paper here.)

So what was the program Democrats wanted to renew? States run their own unemployment-insurance programs, which provide around 26 weeks of benefits to people who’ve lost jobs and are looking for new ones. But during the recent recession, as they have in other downturns, Congress repeatedly authorized federal extensions that allowed people to draw benefits for much longer. At the end of 2013, the Senate narrowly passed a renewal of the program, but the House never took it up and the extensions, already much longer than any previous recession had seen, expired.

This created something of a “natural experiment.” States had unemployment-insurance programs of widely varying length — they ranged from 40 weeks up to 73, roughly — but after the end of the federal extensions at the start of 2014, the duration of benefits in almost all states went back to around 26 weeks.

The paper uses that shift to examine how expiring benefits might have affected the labor market, and they find that the expiration of extended benefits produced a big boost to job creation, labor-force participation, and hiring. It’s a dramatically different result than what the White House and Democrats were predicting at the end of 2013: The Obama administration was predicting that the drop-off in stimulative spending from the expiration would cost 240,000 jobs, while the NBER paper finds that it created 1.8 million jobs.

The authors don’t think this happened the way you think it might: It’s not so much that the cut-off drove individuals on benefits back to work, but more that less-generous benefits actually spurred job creation on a macro level, getting employers to hire and drawing into the labor force people who hadn’t been looking for a job. They don’t lay out how that worked, but in their October 2013 paper, argue that extended unemployment benefits artificially boosts wages — when they expire, employers then boost job openings and start hiring people.

Of course, the usual caveats apply: This is not a perfect experiment at all, and the paper, while very rigorous, can’t get past the fact that it’s just crunching numbers about macro trends. And there are some concerns with the authors’ county-level data, though they try to make up for that.

The simplest form of the analysis was just looking at states that had long benefit terms versus short ones. In 2013, job creation was worse in more generous states than the national average; in 2014, after those states dropped their much more generous programs, it was much better than the national average:

There’s a lot more analysis they did, which I won’t get into — but to untangle related effects, they look at neighboring counties in states with different unemployment regimes, etc.

Now, this is just one paper and it involves some fancy econometrics, but it answers an unresolved question — why 2014 saw the labor market perk up (there’s also a possible end-of-austerity explanation, but it’s the labor market, not the economy overall, that’s really improved noticeably).

It should prompt passionate supporters of the extended unemployment-insurance program to consider whether it made as much sense as they thought. Even conservative economists, such as Michael Strain, pushed for the extension of long-term benefits. The length and scale of benefits during the Great Recession was unprecedented, but advocates for the program argued that this was necessary so long as unemployment, and especially long-term unemployment, remained historically elevated. Besides the moral case for supporting the unemployed, the market-friendly case for extending benefits is that one has to be searching for a job to get them. Cut the benefits, and you’ll see the long-term unemployed drop out of the labor force for good, the argument went. (It’s extremely hard to tell what did happen with these people when benefits expired, and the NBER paper here doesn’t comment on that.)

Advocates for extended benefits also argued that it was just an effective form of stimulus for the economy, because recipients spend their benefits immediately. That was always a pretty lame case, since the program’s value to the economy in spending terms — in the Obama White House’s generous estimation, 240,000 jobs in 2014 – would probably be outweighed if either side’s arguments about the labor-market effects proved mostly true. Indeed, if the new NBER paper is right, letting benefits expire produced 7.5 times as many jobs as the White House said it would cost.

The general economic consensus has always been that unemployment insurance slightly boosts the unemployment rate. Even liberal economists accept this, although they lampoon the idea that people might prefer benefits to working (that isn’t the point, Paul — people act at the margin). But we still have unemployment insurance, of course, because we want a safety net for people in the event of job loss. That just has to be balanced against the costs that the program imposes on the labor market. The new NBER paper doesn’t find that those costs in general are much higher than economists generally assume; rather, it suggests that the benefits of reining in long-term programs can be quite substantial.

There was always good reason to think this is the case: One of the many differences between American and European labor markets is that most of the latter have unemployment benefits systems of effectively unlimited duration — and much higher levels of structural unemployment.

All of that is very nice, except they don’t take this into consideration:

 

As you can see from the graph linked in the above paragraph, Real Unemployment is at almost 24%. Those who no longer have benefits no longer count for the NBER or the White House. Once your benefits are exhausted, you cease to be counted. That is why the real number of unemployed goes up in reality while for the government it goes down. There is a 20% spread between reality and what the government claims to be.

Energy and Interest Rates

by coldwarrior ( 142 Comments › )
Filed under Economy, Open thread at January 14th, 2015 - 7:00 am

This article ties the the two together in a nice bow:

Government borrowing costs tumble

Government borrowing costs tumbled on Tuesday as the spectre of exceptionally low inflation, driven downwards by the collapse in oil prices, loomed over advanced world economies.

Yields on government bonds – which move inversely with prices – fell across Europe amid mounting scepticism about the ability of central banks to lift inflation in the face of crude oil’s sharp decline.

The falling yields also reflected a growing conviction among investors that central banks will delay still further any official interest rate hikes.

Yields on five-year UK Gilts fell below 1 per cent – their lowest level for more than a year – after official data showed UK annual inflation was just 0.5 per cent in December, a 15-year low. Meanwhile, German five-year yields have been hovering around zero since the start of the year.

US 30-year yields have also fallen closer to historic lows recently, although they edged higher on Tuesday. UK Gilts also rebounded later in the day.

The collapse in crude oil prices, which on Tuesday approached six-year lows, is proving a mixed blessing for central banks. While lower energy costs should stimulate economies, in continental Europe in particular they risk creating damaging deflation pressures — expectations of further general price falls that prompt consumers and businesses to shelve spending decisions, weakening growth.

“Bond markets are taking the view that central banks won’t be able to reverse the deflationary trend triggered by falling oil prices,” said Trevor Greetham, director of asset allocation at Fidelity Worldwide Investment.

“It is all about central banks pushing inflation expectations higher,” said Joachim Fels, chief economist at Morgan Stanley “I think they have already lost a lot of credibility.”

In Japan, yields on five year government bonds also fell, touching zero for the first time. That decline highlighted the stranglehold the Bank of Japan enjoys on the bond market, with its aggressive quantitative easing or large scale asset purchase programme aimed at pushing Japanese inflation higher.

Buying by the BoJ had already pushed yields on debt of up to four years’ duration into negative territory.

Analysts said negative Japanese government bond yields – which mean investors are guaranteed to lose money – reflected the extraordinarily tight market conditions caused by the BoJ in its headlong pursuit of its 2 per cent inflation target.

Gauges of markets’ long-term inflation expectations watched closely by central banks have fallen sharply this week. In the US, they have dropped below even the exceptionally low levels seen after the collapse of Lehman Brothers investment bank in 2008. A comparable eurozone yardstick showed inflation rates over five years starting in five years’ time were expected to average less than 1.5 per cent – a record low.

Markets have pushed out the expected date of a first US Federal Reserve interest rate hike until at least September — and do not expect the Bank of England to act until next year. The first eurozone rate hike is expected only in 2020, according to Barclays data.

 

Krugman Slapped Down Again

by coldwarrior ( 54 Comments › )
Filed under Economy, History, Inflation, Open thread at January 13th, 2015 - 7:00 am

Sadly, Economist Paul Krugman has sold his once powerful and brilliant mind to the left in NYC. He shills almost daily for propaganda rag of a paper not really read out here in Flyover Country, the New York Times.

Below is one of my favorite economics stories. How Volker and Reagan slew the Inflation Dragon. It’s one of those things where I get to say, “I don’t need any links, I saw it with my own eyes”.

 

To whit:

Volcker, Reagan & History

By Robert Samuelson – January 12, 2015

WASHINGTON — It’s important to get history right — and economist and New York Times columnist Paul Krugman has got it maddeningly wrong.

Krugman recently wrote a column arguing that the decline of double-digit inflation in the 1980s was the decade’s big economic event, not the cuts in tax rates usually touted by conservatives. Actually, I agree with Krugman on this. But then he asserted that Ronald Reagan had almost nothing to do with it. That’s historically incorrect. Reagan was crucial.

In nearly four decades of column-writing, I can’t recall ever devoting an entire column to rebutting someone else’s. If there were instances, they’re long forgotten. But Krugman’s error is so glaring that it justifies an exception. It’s also a subject about which I know something, having written a book on it: “The Great Inflation and Its Aftermath: The Past and Future of American Affluence.” This column draws from that book.

For those too young to remember, here’s background.

From 1960 to 1980, inflation — the general rise of retail prices — marched relentlessly upward. It went from 1.4 percent in 1960 to 5.9 percent in 1969 to 13.3 percent in 1979. The higher it rose, the more unpopular it became. People feared that their pay and savings wouldn’t keep pace with prices.

Worse, government seemed powerless to defeat it. Presidents deployed complex wage and price controls and guidelines.

They didn’t work. The Federal Reserve — custodian of credit policies — veered between easy money and tight money, striving both to subdue inflation and to maintain “full employment” (taken as a 4 percent to 5 percent unemployment rate).

It achieved neither. From the late 1960s to the early 1980s, there were four recessions.

Inflation became a monster, destabilizing the economy and destroying trust in national leadership. The Gallup Poll routinely asks respondents to select “the most important problem facing the country.” From 1973 to 1981, the “high cost of living” ranked No. 1. People lost faith in the future, as they have now.

Krugman’s story is simple. The Fed is “largely independent of the political process” and, under chairman Paul Volcker, “was determined to bring inflation down,” he wrote. “It tightened policy, sending interest rates sky high, with mortgage rates going above 18 percent.” The result was “a severe recession that drove unemployment to double-digits but also broke the wage-price spiral.”

Indeed. By 1982, the gain in consumer prices had dropped to 3.8 percent. Volcker crushed inflation.

Story over? Not really.

What Reagan provided was political protection. The Fed’s previous failures to stifle inflation reflected its unwillingness to maintain tight-money policies long enough to purge inflationary psychology. Successive presidents preferred a different approach: the wage-price policies built on the pleasing (but unrealistic) premise that these could quell inflation without jeopardizing full employment.

Reagan rejected this futile path. As the gruesome social costs of Volcker’s policies mounted — the monthly unemployment rate would ultimately rise to a post-World War II high of 10.8 percent — Reagan’s approval ratings plunged. In May of 1981, they were 68 percent; by January 1983, 35 percent.

Still, he supported the Fed. “I have met with Chairman Volcker several times during the past year,” he said in early 1982. “I have confidence in the announced policies of the Federal Reserve.”

This patience enabled Volcker to succeed, though it took about two years of tight money. It’s doubtful that any other plausible presidential candidate, Republican or Democrat, would have been so forbearing. During Volcker’s monetary onslaught, there were many congressional proposals, backed by members of both parties, to curb the Fed’s power, lower interest rates or fire Volcker. If Reagan had endorsed any of them, the Fed would have had to retreat.

What Volcker and Reagan accomplished was an economic and political triumph. Economically, ending double-digit inflation set the stage for a quarter-century of near-automatic expansion (indeed, so automatic that it bred the complacency that led to the 2008-09 financial crisis — but that’s another story). Politically, Reagan and Volcker showed that leaders can take actions that, though initially painful and unpopular, served the country’s long-term interests.

But their achievement was a joint venture: If either hadn’t been there, the outcome would have been much different.

There was no explicit bargain between them. They had what I’ve called a “compact of conviction.” Volcker later said of Reagan: “Unlike some of his predecessors, he had a strong visceral aversion to inflation.” So did Volcker. Both believed the country could not flourish with high inflation. Both acted on that faith.

Volcker needed presidential support, because the Fed’s formal “independence” is highly qualified by political realities. The Fed, Volcker has said, “has got to operate … within the range of understanding of the public and the political system.” Reagan widened that range.

To exclude him from this narrative is not history. It’s fiction.