Unemployment Rate Drops, In This Case Sucks, As Economy Staggers

The nation's unemployment rate dropped to 9.5%, the government reported Friday, the lowest level since June 2009.

That is terrible, depressing news when you consider 652,000 left the labor force after failing to find jobs. About 1.3 million of the 6 million unemployed have exhausted their unemployment benefits.

The data released by the Labor Department Thursday and Friday in many sectors indicates to me that what gains we made as an indirect result of Congress's $787 billion stimulus package in March 2009 has evaporated as money and programs run out.

Employers cut 125,000 jobs in May and the federal government 225,000 temporary Census takers. Private businesses hired 83,000 new workers, up from 41,000 in April.

"It could have been worse, but it wasn't good," said Nigel Gault, chief U.S. economist at IHS Global Insight, an economic forecasting firm. "It's adding to the evidence that growth has slowed." 

Factory orders which had been nudging upward for five months dipped 1.4%. 

Here are word bites I culled from the financial reports:

-- The nation still has 7.9 million fewer private payroll jobs than it did when the recession began. It takes about 125,000 new jobs a month to keep up with population growth.

-- Counting those who have given up their job searches and those who are working part time but would prefer full-time work, the underemployment rate edged down to 16.5 percent from 16.6 percent in May. 

--The number of pending home sales plunged 30% in May from April, to the lowest level since at least 2001, an industry group reported Thursday, reflecting a larger-than-expected fallout from the expiration of the federal tax credit for home buyers.

"The general tone has darkened over the past month," said Sophia Koropeckyj, an analyst at Moody's Economy.com, which this week estimated the odds of a return to recession at 1 in 3, up from the previous estimate of 1 in 4.

A happier forecast:


-- After a series of strong economic data early this year, recent reports have been more mixed, but that hasn't altered the fundamental outlook for the economy, said Ken Matheny, a senior economist at Macroeconomic Advisers, a forecasting firm based in St. Louis.


"It hasn't shaken our belief for a solid, sustainable recovery," he said, noting that business investment remained solid and consumer spending was holding up fairly well.

Back to the gloomier side:


-- By all accounts, the broader economy has been recovering since last summer, powered by government stimulus funds and an upturn in manufacturing. But the rate of growth has fallen from 5.6% in the fourth quarter of last year to half that pace in the first three months of this year.

-- The reports renewed fears among economists that the housing market could be headed for more trouble now that the home-buyer tax credit is no longer fueling the real estate market.


The National Assn. of Realtors' pending home sales index, based on the number of contracts signed to buy previously owned homes in the U.S., dropped to 77.6 in May from 110.9 in April. It was the lowest point since the index was created in 2001.


Lawrence Yun, the trade group's chief economist, said June and July's numbers were also likely to be sluggish. But if pending sales don't begin rising by August, the housing market could be headed for a more prolonged decline, he said.


"We need to see a steady rise in that figure," Yun said.


To a large extent, the housing market depends on the job market – because to buy a home, people need to have money coming in and the confidence that they won't lose that income.


 "The housing market just can't stay on stimulus medicine forever," Yun said. "What is really needed is jobs."


-- Investors' willingness to lock up their money in bonds at such low rates  -- 2.92% for 10-year Treasury notes -- typically is a sign that they expect the economy to slow sharply.

A beleaguered President Obama did his best Friday to brighten a gloomy forecast by announcing a nationwide project to expand broadband Internet access in rural areas. He said it would create 5,000 private sector construction jobs in the short term and ultimately benefit "tens of millions" of people. 

And where does that money come from? The remaining portions of the $787 billion stimulus package.

Criminal Cartels Shootout Leaves 21 Dead

 Shortly after President Obama in a highly political speech Thursday said the U.S.-Mexican border is the safest in 20 years, 21 persons were killed in a gun battle between rival drug and immigrant trafficking gangs.

Although the shootout occurred 12 miles south of the Arizona border, residents north of the border fear the motive for this kind of violence spills into the United States in other forms.

One aspect of such collateral damage is Phoenix being turned into the kidnapping capital of the U.S., second only to Mexico City, according to Arizona Sen. John Kyl.

Politics notwithstanding, border security can only be measured to the extent of what happens just south of the border is contained from spreading north.

Compared to Mexico, the sporadic murder of one Arizona rancher, the increased violence in kidnapping and shakedowns for ransom, the uptick in drug smuggling arrests are a clear and present danger to those that live in the Southwest.

The degree the Mexican criminal cartels go to protect their trade is blood curdling. Since 2006, the Mexican drug cartels have murdered 23,000 people, including 4,300 in Ciudad Juarez, which borders El Paso, Texas.

The 21 killed near Hermosillo Thursday illustrates the more recent confluence of drug and human trafficking gangs because the area is a prime corridor for crossing the border into the United States.

Sonora state prosecutors confirmed the number killed. They said nine were arrested, including six who suffered gunshot wounds. Seven rifles were confiscated, they said.

Mexico's El Dario newspaper said police seized 19 high-powered weapons and 11 late-model vehicles.

Not to be outdone and typical of the daily violence along the 1.993-mile border was the drive-by shooting death of Chihuahua state assistant attorney general Sandra Salas Garcia and one of her bodyguards.

Salas was responsible for evaluating the work of prosecutors and special investigations units in Chihuahua working out of her office in Ciudad Juarez.

Elections in 12 Mexican states will be held Sunday. On Thursday, the decapitated head of Hector Murgia, a candidate for Ciudad Juarez mayor representing the opposition PRI party, was found on the doorstep of his home.

Yes, this is Mexico's problem. But the winners of these turf battles use the power and profits to supply the United States with drugs and cheap labor, their most lucrative market.

Real or imagined, that's how American border residents perceive it. And that's why they snicker when the president says the border is the safest in 20 years.


As a result, the knee-jerk countermeasures the border state governments take is not surprising.

Obama Pitches Immigration Reform, Mucha Suerte El Presidente

One thing President Obama is not is accused of being incapable of walking and chewing gum at the same time. The president has so many major platters on his agenda it dwarfs the size of a picnic table jammed with plates of enchiladas and tamales at a Mexican fiesta.

For the first time in 18 months as president, Obama Thursday delivered a major speech calling for immigration reform legislation.

It fulfills a campaign promise to his Hispanic supporters. He called for a path to citizenry for an estimated 11 million illegal immigrants, a road his opponents describe derisively as amnesty.

Obama also signaled to Hispanics not to get their hopes up if the legislative package -- he did not spell out with specifics or set a timetable -- won support from enough Republicans.

Translation: Democrats in his own party don't want to touch this hot-button issue with a fork. They have enough problems in the November midterms without being saddled with immigration.

The Los Angeles Times:


“We can create a pathway for legal status that is fair and reflective of our values and works,” Obama said in his speech at American University. “The question now is do we have the courage and political will to pass a bill through Congress and finally get it done.
“I’m ready to move forward. But the fact is without bipartisan support we cannot solve this problem. We cannot pass comprehensive reform without Republican votes. That is a political and mathematical reality.”

Obama politically was mugged into itching the scab known as immigration reform. The 50 million Hispanic population in the U.S. represents a large percentage of his base of support.

In May, national attention was heaped on Arizona when its Republican Legislature passed a law rubber stamped by Gov. Jan Brewer that made it illegal to step foot in the state without proper documentation of national origin.

That law and more passed in Arizona and other states were embarrassing for it meant they were taking matters in their own hands in areas usually reserved for the feds.

“The border is more secure today than at any time in the last 20 years,” the president said in his speech.

Assertions such as that drive his opponents nuts, especially those who live near the Mexican border and have to live daily with what they consider a heinous problem.

Not to mention residents in interior states from the Rockies to New England who view the predominately Hispanic work force as a drain on their health and safety public services.

As late as Monday, Hispanic lawmakers who have criticized Obama for being lethargic on the issue, met with Obama and his people in the White House. The Times article said they left pleased.

In the past, Obama said the illegal immigrants who have permanently settled in the United States need to go to the "back of the line," pay a fine, learn English and then submit to the citizenship process.

Whatever path immigration reform takes, it must include border and interior enforcement, employer sanctions and a streamlined resolution what to do with families who want to live here permanently.

For a president who prides himself in mastering details of complex issues, he was not exactly forthright saying the border today is more secure than in the past 20 years.

He was spot on in that arrests along the 1,933-mile border from California to Texas are down 54%, from 1,171,396 to 540,865, between 2005-2009.

At the same time, U.S. Border Patrol agents increased from 9,891 to 17,408. Last week, Homeland Security chief Janet Napolitano, a former Arizona governor, increased assignment to the Tucson sector to 3,318 agents, the most of any sector along the border.

The decrease is not in itself increased Border Patrol officers, says T.J. Bonner, president of the union representing 17,000 agents. It reflects a downturn in the U.S. economy beginning as early as 2007.


Bonner in an article in the Free Republic Wednesday is quoted that the sharp increase in drug seizures has coincided with a steady decline in apprehensions, indicating to him that the agency cannot handle both problems at once.

He said once the economy recovers, the illegal entry tide will rise again. His agents apprehend about one out of three persons illegally crossing the border.

Speaking as a cop true to his profession:

 “Are we anywhere close to border security? No, we’re not. True border security means that no thing and no person crosses that border without our permission.”
What few people realize is that the Obama administration has kept a low profile in targeting employers who hire illegal immigrants, a weapon that strikes at the heart of the problem.

Two immigration attorneys co-authored this report on the California Employment Attorney website:

In the past nine months, 65 employers have been arrested and 109 companies have been fined a total of about $3 million. The government has also notified more than 1,600 companies nationwide of plans to audit their records, and has already begun hundreds of inspections. 

The Obama policy is a stark contrast to the Bush administration which they said:

(C)onducted work-site raids that targeted employees rather than employers. Although thousands of illegal workers were prosecuted, few employers were held accountable for their hiring practices and new illegal immigrants replaced those who were deported. 

What the attorneys are advocating to their clients is joining E-Verify, a voluntary electronic program that checks whether new hires are authorized to work in the United States. They said about 1,400 new businesses each week join, with enrollment in June of about 17,000 employers in California and 204,000 nationwide.

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EPILOGUE

I wish Obama luck. I don't think he has his heart in it, politically. Under current laws, enforcement of employer sanctions will work if it is applied with the same mindset as Bonner, the union boss. Think of the outcry when homeowners are fined and tossed in the pokey when arrested for hiring illegal workers hanging around the Home Depots and other drive-by places of "employment." If you drain the pool, the horses will not come to drink.

(Cartoon from Insights on Law & Society)

Nancy Pelosi, The Straw Lady Republicans Love To Hate

Even before she became Speaker of the House, Nancy Pelosi was a lightening rod for the Republican attack machine, the epitome of a liberal, free-spending Democrat from -- gasp -- San Francisco.

In my family and circle of friends in California, Pelosi is the face of all what is wrong with Democratic liberals for she is seen as an elitist, environmental tree hugger, bleeding heart, anti-war activist, big government advocate and, worst of all, from a city that harbors illegal immigrants and honors homosexuals.

When I ask for specific examples of legislation Pelosi favors, they can name none. My friends and family are not dumb. Those on the right of the political spectrum are following the Republican propaganda machine. Ditto heads.

When I point out to them that as Speaker, Pelosi never lost a vote on any piece of major legislation, they are not in awe.

"With that majority behind her," one family member suggested, "Tweedle Dee and Tweedle Dumb could pass any cocklemanie thing they so desired."

In today's politics, vilifying one's opponent is staple as if displaying cartoons of Pelosi, Sen. Majority Leader Harry Reid and President Barack Hussein Obama will turn their cause to triumph at the polling booths.

What turned me on to this discussion is a story in Thursday's Washington Post, a new attack ad by the Republican National Committee and a months-old YouTube clip in TV ads used by Republican candidates in a few "red" states.

It features what the Post described as "a colossal tax-dollar-engorged monster who ravages small towns and must be brought down by Republican ray guns." The cartoon version is called "Attack of the 50-Foot Pelosi."

There's a variety of versions of the message the ad offers.

In North Carolina, House candidate Harold Johnson, according to the Post:

"If you're a small-business owner," Johnson says, "you get up every morning and you put your helmet on, because you think that Nancy Pelosi is going to come into your bedroom and hit you over the head with a baseball bat." 

My reaction: At least she was honest enough to wait until he awakened.

Pelosi has what is known in advertising markets as a high "Q" rating and the mere mention of her name in Republican circles triggers a Pavlovian response.

 "If you go to almost any grass-roots event and you mention the speaker's name," said Bill Flores, a Republican who is challenging Rep. Chet Edwards (D-Tex.), "you will get a huge response from the audience." Which is why, by Flores's estimate, he manages to drop Pelosi's name into his speeches about as often as he does President Obama's. 

I suspect the hidden motive of Republicans is, in male chauvinistic terms, penis envy or subliminal jealousy.


Her success in pushing health, energy, financial and stimulus bills through the House is a crowning achievement, described by political analyst Charles Cook and most congressional observers as "the most powerful speaker we've seen in modern history."

The question becomes if these ads the ilk of a 50-foot Pelosi translate to success on election day, the answer is no.

Before former House Speaker Newt Gingrich self destructed, the Democrats cast him in the same vilified cartoonish freak as Republicans are doing today with Pelosi. Reid, et. al.

Steve Elmendorf, a strategist for the Democrats during Gingrich's rein said "It's very hard in any of these races to make it about the congressional leadership."

For the Post interview, I was amused that Gingrich turned his bag of intellectual expertise to that of neutral political observer.

Gingrich warned that campaigning against the Democrats — even one as unpopular with Republicans as Pelosi — is no substitute for offering voters some idea of how the GOP would govern if Republicans won back the House. "People who think that all the Republicans should do is just yell 'no' are just plain wrong," he said.