Blogs

Chart of the Day: Net New Jobs in June (Sucks, Sucks, Sucks)

| Thu Jul. 2, 2015 10:12 AM EDT

The American economy added 223,000 new jobs last month, 90,000 of which were needed to keep up with population growth. This means that net job growth clocked in at 133,000 jobs and the unemployment rate fell to 5.3 percent.

Unfortunately, this isn't the mediocre news it looks like. It was all bad news. Essentially the entire decrease in the unemployment rate was due to 432,000 people leaving the labor force, reversing an increase of 397,000 last month. Because of this, the labor force participation ratio declined by 0.3 percentage points to 62.6 percent, the lowest number in recent history.

Oh, and we had downward revisions of 60,000 jobs in April and May. And hourly wage growth of production and nonsupervisory workers was up by a measly 2 cents, a nominal increase of 0.1 percent. Adjusted for inflation, that's a decrease of about 0.3 percent.

I don't know how to dress this up. The net number of new jobs was OK, if not spectacular, but the rest of the report is just dismal. The number of people actually employed dropped by 56,000, labor force participation has tanked, and real wage growth was negative. If anyone else can put lipstick on this pig, they're welcome to try. It looks pretty gruesome to me. The only good news I can take out of it is that this is only a single month's data, which jumps around quite a bit. Maybe next month will be better.

Advertise on MotherJones.com

Wow, That's a Yooge Crowd to See Bernie Sanders

| Thu Jul. 2, 2015 9:29 AM EDT

Sen. Bernie Sanders (I-Vt.) called for a "political revolution" at a campaign rally at Veterans Memorial Coliseum in Madison, Wisconsin, on Wednesday night, and just a few people showed up:

 

Sanders' campaign estimated the crowd at about 10,000 people, the largest rally by any candidate during the 2016 campaign. Granted, it's not even 2016 yet, but Sanders has continued to draw massive crowds everywhere he has gone (5,000 people in Denver; 300 people in an Iowa town of 240). It's not necessarily a barometer for public support—Hillary Clinton still holds a comfortable lead in national polls—but it does show that his popularity stems from something much deeper than just good name recognition.

Obama Just Gave the World the Perfect Guacamole Recipe

| Wed Jul. 1, 2015 5:09 PM EDT

The internet freaked out this afternoon after the NYT suggested we put peas in our guacamole. What is this, Soviet Russia?

Then IJR's Justin Green tweeted at President Obummer about it and he answered!

 

Obama is right. Peas in guacamole is disgusting.

Finally, a Little Good News on the California Drought Front

| Wed Jul. 1, 2015 3:47 PM EDT

Finally, some good news on the California drought beat: Californians reduced their residential water usage in May by a whopping 29 percent compared to the same month in 2013, according to a report released today by the State Water Resources Control Board. That's the steepest drop in more than a year.

Californians may have been inspired to reduce their water use by the mandatory, statewide municipal water cut of 25 percent that Gov. Jerry Brown announced in April, though those cuts didn't go into effect until June. (Those 25 percent reductions did not apply to agriculture, which uses an estimated 80 percent of the state's water, though some farmers have faced curtailments.)

"The numbers tell us that more Californians are stepping up to help make their communities more water secure, which is welcome news in the face of this dire drought," said State Water Board Chair Felicia Marcus in a press release. "That said, we need all Californians to step up—and keep it up—as if we don’t know when it will rain and snow again, because we don't."

In May, California residents used 87.5 gallons per capita per day—three gallons per day less than the previous month. Big cities that showed the most dramatic cuts include Folsom, Fresno, and San Jose. But water use by area varies drastically, with places known for green lawns and gardens, like Coachella and Malibu, using more than 200 gallons per person per day. Outdoor water usage is estimated to account for about half of overall residential use.

Officials are cautiously optimistic. Board spokesman George Kostyrko says Californians "did great in May and we are asking them to keep doing what they are doing and work even harder to conserve water during these critical summer months and beyond."

Justice Department Investigating Whether Airlines Work Together to Keep Prices High

| Wed Jul. 1, 2015 2:58 PM EDT

The Justice Department is looking into whether airlines are cooperating to deliberately "work at a slower pace" in order to keep airline prices high, the Associated Press reports on Wednesday.

A department spokesperson confirmed the investigation but declined to list which airlines were subject to the probe. The potential "unlawful coordination" orchestrated by major airlines comes amid questions of why airline ticket prices have remained high despite plummeting oil prices and more fuel efficient aircrafts.

Following news of the probe on Wednesday, all U.S. airline stock prices took a dive.

There's More to Kumbaya Than Just Getting Liberals and Conservatives to Agree

| Wed Jul. 1, 2015 2:44 PM EDT

Tim Lee lists four pro-growth policy reforms that he thinks liberals and conservatives can agree on:

  1. Let developers in coastal cities build more
  2. Boost high-skilled immigration
  3. Reform copyright and patent laws
  4. Liberalize occupational licensing rules

In theory, I suppose these could be areas of bipartisan agreement. But without throwing too much sand in the gears just to make a nuisance of myself, we should take a look at why all four of these things are so firmly going nowhere even though liberals and conservatives allegedly hold common cause on them. Here we go:

  1. Coastal cities. The problem here is that this is a pretty low priority for both liberals and conservatives. They just don't care that much, and they certainly don't care enough to fight the nonpartisan power bloc that unfailingly—and rabidly—opposes this: current residents of coastal cities. This is mainly a local issue, not a state or federal issue, and the fastest way for any local pol in LA or San Francisco to get tossed out of office is to propose lots of new high-rise residential buildings that will (allegedly) bring tons of traffic and crime into the community, and probably drive down current property values. So the game just isn't worth the candle. Plus, conservatives have to watch out for the tea-party crazies who think high-rises are part of an Agenda 21 plot from the UN to make us all live like rabbits in government-controlled urban warrens. Or something.
  2. High-skill immigration. There are people who oppose this—primarily high-skill citizens who don't really want lots of new competition—but that's not the big problem. Mainly this is a political football. Sure, liberals and conservatives agree on this particular part of immigration reform. But liberals don't want to unilaterally agree to it. They want it to be one of the bargaining chips for broader immigration reform. After all, if they preemptively agree to all the stuff conservatives already support, they have no leverage for eventually negotiating a comprehensive bill that includes some stuff conservatives don't support. So for the time being, it's being held hostage and that shows no signs of changing soon.
  3. Copyright and patent. I dunno. For a policy that liberals and conservatives allegedly agree about, we sure haven't seen much action on it. Quite the contrary, in fact. Most Republicans and about a third of Democrats just approved fast-track status for the TPP treaty, which, among other things, enshrines American-style copyright and patent law on everyone who's part of the treaty. Once that's in place, we couldn't change our laws in any meaningful way even if we wanted to. And frankly, I've seen very little evidence that either Republicans or business-oriented Democrats really want to. They're too interested in currying favor with IP owners to bother with an issue that will win them virtually no votes from anyone on Election Day.
  4. Occupational licensing rules. This one, finally, is a bit of a mystery to me. I agree that it's not an inherently partisan issue, but in a way, that's the problem. It's also not a hot-button issue, which means neither party is really willing to fight back against it. On the other hand, taxidermists, animal trainers, bartenders, funeral attendants, and so forth are willing to fight for it since it restricts entry and raises wages in their profession.

There's a common theme to all four of these issues: there are special interests who care a lot about them, but no real benefit for working politicians to reach across the aisle and fight back. In theory, they might have similar attitudes on these four items, but why bother doing anything about it? No one is jamming their phone lines about this stuff and no one is voting for or against them based on their positions. If activists want action on this kind of googoo stuff, they have to figure out a way to make the public care. Once they do that, they'll have at least a fighting chance of getting politicians to care too. Until then, don't get your hopes up.

Advertise on MotherJones.com

Greece Is Just a Few Days Away From Unconditional Surrender to Germany

| Wed Jul. 1, 2015 1:24 PM EDT

Apparently the Greek prime minister is blinking:

In a letter sent on Tuesday to the creditors — the European Central Bank, the International Monetary Fund and other eurozone countries — Mr. Tsipras said Greece was “prepared to accept” a deal set out publicly over the weekend by the creditors, with small modifications to some of the central points of contention: pension cuts and tax increases. In the letter, released publicly on Wednesday, Mr. Tsipras linked Greece’s acceptance of the terms to a new package of bailout aid that would need to be negotiated.

The development initially raised the prospect of progress in resolving a financial crisis that has sent shudders through global markets and deeply strained European unity. President François Hollande of France called for talks in the hopes of getting a deal by the weekend, saying, according to Agence-France Presse: “We need to be clear. The time for a deal is now.”

But other European leaders, fed up with Mr. Tsipras and in no mood for quick compromise, dashed any hopes of an immediate breakthrough.

Chancellor Angela Merkel of Germany responded by repeating her position that there should be no further negotiations until Greece holds the referendum on Sunday.

In other words, Merkel is not even willing to grant Tsipras a few meaningless face-saving concessions. Why? I think Merkel believes she now holds all the cards and has no reason to make any concessions at all, no matter how small. And I suspect she's right. In the end, the Greek public will be unwilling to back Tsipras in Sunday's referendum and will vote to accept the European deal as is. The potential catastrophe of default and leaving the euro is just too scary for most of them to contemplate.

So Tsipras will be out and Europe will effectively have total control of Greek finances. After six months of cage rattling, the Greek revolt will be over and future governments will simply have to accept whatever pain Merkel wants to deal out. At that point, with Tsipras gone, it's actually possible she'll agree to a few concessions here and there. Policy issues aside, there's little doubt that Merkel's personal contempt for Tsipras has done a lot to cement her hard line toward Greece.

So that's my prediction. Unless Tsipras caves completely beforehand, the referendum will be held on Sunday and Greeks will vote to stay in the euro and accept Germany's terms. It will basically be an unconditional surrender.

Santorum Holding Onto Debate Stage By His Fingernails in Latest CNN Poll

| Wed Jul. 1, 2015 12:03 PM EDT

Fox News will be sponsoring the first Republican debate on August 6, and they have decided to limit the stage to the top ten candidates. The lucky winners will be the ones who "place in the top 10 in an average of the five most recent, recognized national polls leading up to Aug. 4."

So how is everyone doing so far? CNN is certainly a recognized national poll, so they'll be part of the eventual winnowing. And their most recent poll shows Jeb! at the top followed by Trump, Huckabee, Carson, and Rand Paul. The bottom three candidates—Christie, Cruz, and Santorum—could easily lose a point or two just due to statistical churn, to be replaced by Jindal, Kasich, and Fiorina.

I'm looking forward to the Trump-Christie showdown for the Annoying Loudmouth Award, and to the Carson-Cruz showdown for the Looneybin Award—though both men have been disappointingly circumspect lately, hedging their beliefs as if they really wanted to win this thing.

But there's still a chance of Rick Perry melting down in amusing fashion. That should make the whole thing worth watching.

Obama Announces Plan to Open Embassies in Cuba and United States

| Wed Jul. 1, 2015 11:41 AM EDT

On Wednesday, President Obama announced that the United States and Cuba have agreed to open embassies in Washington and Havana to formally reestablish diplomatic ties after more than 54 years of broken relations.

"This is a historic step forward in our efforts to normalize relations with the Cuban government and people and begin a new chapter with our neighbors in the Americas," Obama said.

"We don't have to be imprisoned by the past," he added. "When something isn't working we can and will change."

Obama said Secretary of State John Kerry will also be traveling to Havana later this summer to "proudly raise" the American flag over the new embassy.

Wednesday's announcement, which follows last month's move by the United States to remove Cuba from a list of states sponsoring terrorism, is another historic step in normalizing relations between the two countries. Shortly before the president's press conference, the Foreign Ministry of Havana also announced that diplomatic ties with Washington would be fully restored by July 20.

Atlanta Fed Says Workers Finally Benefiting From Recovery

| Wed Jul. 1, 2015 11:17 AM EDT

Here's some potentially good news. There are various way of tracking wage growth (with or without benefits, employer survey vs. worker survey, nonsupervisory vs. everyone, etc.), and the Atlanta Fed has introduced a new wage index constructed from the Current Population Survey. In theory, this should provide reliable data with a large sample size and will be available monthly. The good news is that their index shows nominal wage growth increasing at a fairly healthy 3.3 percent per year:

Wage growth by this measure was essentially unchanged from April and 1 percentage point higher than the year-ago reading. The current pace of nominal hourly wage growth is similar to that seen during the labor market recovery of 2003–04 and about a percentage point below the pace experienced during 2006–07, which was the peak of the last business cycle.

Other wage measures will be released later this week. With inflation still well under control, this is good news for workers, and potentially bad news for Fed watchers, who hope they won't use it as an excuse to raise rates. We'll see.