December 2011

The Great Worker Shortage Lie is Alive and Well

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Corporate offshore outsourcing lobbyists are on a roll, going on talk shows and writing propaganda plants as articles. White papers are falling like snow where even labor economics equations are manipulated. Every day we hear pure statistical fiction and politicians tout corporate lobbyist provided talking points, even in GOP debates. Why? Corporations are demanding more immigration and foreign guest worker Visas to displace Americans, repress wages, technology transfer and offshore outsource further.

Inflation Indicator CPI Is Zero for November 2011, 3.4% for the Last 12 Months

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The November Consumer Price Index, which measures inflation, had no change, or zero from last month. The flat line was caused by a -1.6% energy decrease for the month. Food increased 0.1%. Gas alone decreased -2.4% in a month and food at home, or groceries, decreased -0.1%. Eating out increased 0.3%. Core CPI, or price increases minus food and energy costs, rose 0.2%.

Fannie & Freddie Executives Sued by SEC

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nunrulerThe SEC had sued Fannie Mae and Freddie Mac executives with securities fraud, three years after the fact. The fraud charges are about lying to investors over subprime loans.

They knew and approved of misleading statements claiming the companies had minimal holdings of higher-risk mortgage loans, including subprime loans.

This is a civil case, not a criminal one. Most interesting while going after some ex-executives the SEC lets Fannie and Freddie off the hook. Nothing happens to the two GSEs now.

Fannie Mae and Freddie Mac each entered into a Non-Prosecution Agreement with the Commission in which each company agreed to accept responsibility for its conduct and not dispute, contest, or contradict the contents of an agreed-upon Statement of Facts without admitting nor denying liability. Each also agreed to cooperate with the Commission's litigation against the former executives.

The case is being filed in New York State and the three former executives from Fannie Mae are Chief Executive Officer Daniel H. Mudd, former Chief Risk Officer Enrico Dallavecchia, and former Executive Vice President of Fannie Mae's Single Family Mortgage business, Thomas A. Lund.

Freddie Macs sacrificial lambs are Chairman of the Board and CEO Richard F. Syron, former Executive Vice President and Chief Business Officer Patricia L. Cook, and former Executive Vice President for the Single Family Guarantee business Donald J. Bisenius.

Industrial Production Down -0.2%, Capacity Utilization Down for November 2011

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The Federal Reserve's Industrial Production & Capacity Utilization report shows a -0.2% decrease for November 2011 Industrial Production. This report is also known as output for factories and mines. Manufacturing alone dropped -0.4%. October's industrial production stayed the same +0.7%.

 

A Return to 2008 Levels - Initial Unemployment Claims were 366,000 for week of December 10th, 2011

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Initial weekly unemployment claims for the week ending on December 10th, 2011 were 366,000. The DOL reports this as a decrease of 19,000 from last week. The previous week was revised, from 381,000 to 385,000, an increase of 4,000. The week of May 31st, 2008, initial unemployment claims were 365,000, which makes today's initial claims a 3 and a half year low.

China Puts Huge 22% Tariff on U.S. Autos

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China just slapped a huge 22% tariff on some U.S. auto imports. Reuters:

China will impose punitive duties of up to 22 percent on large cars and SUVs exported from the United States, China's Commerce Ministry said on Wednesday, the latest in a series of trade disputes between the world's two largest economies.

Why? Because China wants to develop it's own domestic luxury SUV industry. China already imposes an outrageous 25% tariff on U.S. truck imports. This makes the total tariffs on SUVs 47%!

While the New York Times claims China is skimpy sales, we beg to differ. GM sells more autos in China than in the United States.

What this really means is GM and other SUV U.S. manufacturers will move production offshore....to China. In other words, to sell SUVs, trucks in China, this outrageous tariff will force U.S. manufacturers to offshore outsource even more jobs simply to continue selling their products in that country and gain access to China's markets.

China's claim the U.S. is dumping SUVs in China is absolutely pure fiction. As it is, a 25% tariff on trucks is obscene considering China is killing this country with imports and the second largest economy in the world.

Stupid Corporate Welfare Tricks

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corp welfareGood Jobs First has released a new study which shows most state's corporate tax incentives and subsidies don't work to create jobs and pay living wages. Corporations are getting subsidies and tax breaks and instead of requirements to support the State's labor force, 43% of these subsidies are glorified corporate welfare. State corporate subsidies cost $11 billion a year and $7 billion worth of them do not require job creation and living wages. From the report, Job Creation and Job Quality Standards in State Economic Development Subsidy Programs:

  • Fewer than half (98) of the 238 programs impose a wage requirement on subsidized employers, and only 53 of those wage standards are tied to labor market rates, which are a more effective benchmark for economic development than fixed amounts that can stagnate in the manner of the federal minimum wage.
  • Only 11 of the wage requirements serve to raise overall wage levels by mandating rates that are somewhat above existing market averages for the geographic area or industry sector.
  • Wage requirements, which can be found in 42 states, vary enormously—from just above the federal minimum wage to more than $40 an hour in certain circumstances for a handful of programs. Using the lower end for those with ranges, the average of the hourly wage requirements is $14.76; the median is $11.82.

Job JOLTS - There are 4.25 Official Unemployed Per Job Opening in October 2011

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JOLTS stands for Job Openings and Labor Turnover Survey. The October 2011 statistics show there were 4.25 official unemployed people hunting for a job to every position available*. There were 3,267,000 job openings for October 2011, a decrease of -3.38%, from the previous month of 3,377,000.

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