Labor Participation Rate Drops To Lowest Since 1978; People Not In Labor Force Rise To Record 92.3 Million


Re-Post from ZEROHEDGE
Tyler Durden's picture

It is almost as if the Fed warned us this would happen. In a note released yesterday, a Fed working paper titled “Labor Force Participation: Recent Developments and Future Prospects“, looked at the US labor force and concluded that “while we see some of the current low level of the participation rate as indicative of labor market slack, we do not expect the participation rate to show a substantial increase from current levels as labor market conditions continue to improve.” But don’t blame it on the greatest recession/depression since 1929: “our overall assessment is that much – but not all – of the decline in the labor force participation rate since 2007 is structural in nature.”

Well that’s very odd, because it was only two months ago that the Census wrote the following: “Many older workers managed to stay employed during the recession; in fact, the population in age groups 65 and over were the only ones not to see a decline in the employment share from 2005 to 2010 (Figure 3-25)… Remaining employed and delaying retirement was one way of lessening the impact of the stock market decline and subsequent loss in retirement savings.”

So yeah… sounds like most of the decline in the participation rate is not structural in nature and is merely a response to what everyone but the 1% sees as the biggest – and ongoing – economic devastation perhaps in history, papered over conveniently for the 1% with trillions in liquidity injections.

In any event, no matter how you spin it, today’s data was bad: because not only did the headline data disappoint, the labor force participation rate dropped once again to 62.8% from 62.9%, matching the lowest since 1978, as a result of the people not in labor force rising once again, and hitting a new all time high record of 92,269,000, up 268,000 from the prior month. In fact, in August the number of people not in the labor force increased by nearly double the number of people who found jobs, which as we reported previously, was only 142K.

 

Putting it another way, since the start of the depression in December 2007, the number of people not in the labor force has increased by 13.0 million. The number of jobs added: 768,000.

Average:

5

LEADING KEYNESIAN ECONOMIST USES THE ‘D’ WORD


These numbers are real I track them every month and the “D” word is coming and soon.

This Unprecedented Monetary Experiment Will End Very Badly


As both a trained economist and engineer I can see that This is 100% true. the difference between most engineering is time frames engineering issue work in very short time frames like a car is good for between 100,000 and 150,000 miles before repairs start become an issue. In economics these things can take several generations to work out so the politicians can fool you for a relatively long time before it all falls apart.

The Obama Economy: Over a Third of Americans Dealing with Collection Agencies


This makes sense from what I see driving around Cleveland, Ohio USA. There are two America’s forming one the upper and upper middle classes and two all the rest with the elimination of the old middle class. The old middle middle class was forces out of their jobs in ’08/’09 as they were mostly over 55/50 and were able to survive selling off things and going on disability. This created the drop in the labor participation rate that we have seen from 66.2% in late ’07 to 62.8% at present. Those people not working but should be by age and ability went from 77.5 million in ’07 to 92.1 million today. These people are finding it harder and harder to survive and therefore falling behind on their payments.

John Hussman: “Make No Mistake – This Is An Equity Bubble, And A Highly Advanced One”


Good work here pay attention!

How Progressivism got Started


In the Battle Between Woodrow and Wilson, Wilson Lost. So Did the World.

Re-Post from Gary North’s Specific Answers – July 24, 2014

Judge Andrew Napolitano has written a book, Theodore and Woodrow. It is on the first decades of the 20th century, when the Progressive movement captured American politics. Except for the 1920’s — Harding and Coolidge — Progressivism has never surrendered political control in the United States.

I spoke with him on July 22, at Mises University, the annual week-long training program for undergraduates, which is sponsored by the Ludwig von Mises Institute. He was presenting a week-long series of lectures on the Constitution and the free market. The students get very good training on how the United States Constitution has been reinterpreted over the years, especially during the Progressive era.

I gave him some background that almost nobody knows. The essence of the battle for constitutional interpretation in the 20th century is found in the names “Woodrow” and “Wilson.”

THOMAS WOODROW WILSON

Woodrow Wilson’s full name was Thomas Woodrow Wilson, but he never went by Thomas. He always went by Woodrow. Woodrow is a strange name for a little boy to have. It is certainly a strange first name. As a middle name, it was okay, because it was his mother’s maiden name. So is my middle name. But I do not call myself by this middle name.

Woodrow Wilson’s father was Joseph Ruggles Wilson. He was the senior permanent bureaucrat in the southern Presbyterian Church in the late 19th century. He maintained the position of Stated Clerk for a third of a century. He was part of what was known as Old School Presbyterianism. This was the most conservative theological faction in 19th-century America — the true hard-liners. They were committed to a long document, the Westminster Confession of Faith (1648), plus two other documents, the Shorter Catechism in the Larger Catechism. These are the most detailed creedal documents in American history.

The position of the Old School was this: in order to become an elder in the Presbyterian Church, you had to swear your allegiance to these three long, highly detailed documents. A candidate for eldership was allowed certain reservations or exceptions, but these had to be approved by the presbytery, the regional bureaucratic structure. This applied to teaching elders (ministers/preachers) and ruling elders (laymen who had votes in the local congregation and the presbytery). In terms of Constitutional language, these were “original intent” interpreters of the foundational documents, i.e., the strict constructionists.

In contrast to the Old School was the New School. New School Presbyterians were much looser with regard to the rigor by which they enforced ministerial allegiance to the documents. The New School became dominant in the North after the Civil War, but not in the Southern Presbyterian Church. There, the Old School was dominant from the denomination’s creation in 1861, when the Civil War began, until the early 20th century.

There was a third group. These were the liberals. The liberals hid under the loose-construction confessional umbrella of New School Presbyterianism, but they in fact had almost no use whatsoever for any of the creedal documents. In order to get ordained, and then get lifetime salaries as ministers, they crossed their fingers. That is why I titled my book, Crossed Fingers. The subtitle is straightforward, How the Liberals Captured the Presbyterian Church. I specifically was referring to the Northern Presbyterian Church, but the same tactics were used by liberals in the middle the 20th century to capture the Southern Presbyterian Church. The two denominations reunited in 1983. The resulting denomination is liberal.

Woodrow Wilson’s mother had a brother, James Woodrow. James Woodrow was by far the most prominent liberal in the Southern Presbyterian Church in the late 19th century. He was a believer in theistic evolution. He openly stated his views, which was the cause of battles against him. His nephew Woodrow agreed with him. He was repeatedly brought to trial and officially sanctioned at the church’s national level, but the church never succeeded in removing him. He taught alongside his brother at Columbia Theological Seminary, the main seminary of the denomination. It trained ministers.

Woodrow was a Ph.D. in science (Heidelberg University). In 1884, he began to teach that the Bible’s account of man’s creation was not inconsistent with Darwin’s view. The furor grew. In 1886-87, the seminary shut down for a year because of the controversy. Yet it never fired him. He finally retired in 1905. The seminary then officially rescinded its previous criticisms. He was totally victorious. (For a detailed account of this controversy, click here.) He became the president of South Carolina College in 1891. Finally, in 1901, the denomination capitulated completely. He was elected as the moderator of the Synod of Georgia.

When Wilson became president of Princeton University in 1902, replacing an Old School minister, Francis Patton, he oversaw a complete transformation of the university. It began to teach straight Darwinism in its science courses — not a trace of theistic evolution.

James Woodrow died in 1907.

CONSTITUTIONAL GOVERNMENT

In Wilson’s book, Constitutional Government (1908), he came out in favor of implementing a Darwinian view of evolution to civil government. In 1906, he wanted to run for President in 1908 as the Democratic Party’s nominee. He had an ideological problem. He had been a Hamiltonian throughout his classroom career: a believer in a strong central government. The Hamiltonian vision was associated with the Republican Party generally, and after 1909, with Theodore Roosevelt’s Progressives specifically.

This was not the tradition of the Democratic Party in 1906. The Jeffersonian-Jacksonian tradition was laissez-faire. Bryan’s radical Populism had abandoned this tradition in 1896, but Populism was totally hostile to any elitist oligarchy–the essence of Hamiltonianism and, in Bryan’s eyes, the Republican Party.

The Democratic Party had nominated conservative lawyer Alton B. Parker in 1904, a defender of the gold standard, who lost so badly to Roosevelt that some of the Party’s leaders were ready to abandon the old Andrew Jackson-Grover Cleveland-Whig liberalism tradition. Bryan despised this tradition; he called it “Clevelandism.” Bryan was correct when he wrote in a letter, immediately after Parker’s defeat, “The defeat was so overwhelming that we are not likely to hear much more–for some years at least–of the reorganizers. The Democratic Party will now have a chance to become a real reform party.” Regionally, the Democratic Party was moving toward Progressivism throughout the first decade of the twentieth century, even in the South, but the national party did not clearly position itself as Progressive until after Taft’s defeat of Bryan in 1908.

Constitutional Government praised the presidency as the central political office: head of the party. This was a self-conscious break from the Constitution’s view of the office. The Constitution does not mention political parties, and the Framers had hated political factions in 1787. Wilson, having switched to Progressivism, had to undermine this older political faith. He turned to Darwin as the solution.

The framers had been Whigs because they had been Newtonians, he correctly argued. This Newtonian Whig worldview is incorrect, he insisted, and so is the Constitutional order that assumes it. “The government of the United States was constructed upon the Whig theory of political dynamics, which was a sort of unconscious copy of the Newtonian theory of the universe. In our own day, whenever we discuss the structure or development of anything, whether in nature or in society, we consciously or unconsciously follow Mr. Darwin; but before Mr. Darwin, they followed Newton. Some single law, like the law of gravitation, swung each system of thought and gave it its principle of unity” (pp. 54-55). The checks and balances built into the Federal government by the Constitution are now a hindrance to effective political action, he said. This language of balances reflects mechanism. We need to overcome this mechanical way of thinking, Wilson wrote.

The trouble with the theory is that government is not a machine, but a living thing. It falls, not under the theory of the universe, but under the theory of organic life. It is accountable to Darwin, not to Newton. It is modified by its environment, necessitated by its tasks, shaped to its functions by the sheer pressure of life. No living thing can have its organs offset against each other as checks, and live. On the contrary, its life is dependent upon their quick cooperation, their ready response to the commands of instinct or intelligence, their amicable community of purpose. Government is not a body of blind forces; it is a body of men, with highly differentiated functions, no doubt, in our modern day of specialization, but with a common task and purpose. Their cooperation is indispensable, their warfare fatal. There can be no successful government without leadership or without the intimate, almost instinctive, coordination of the organs of life and action (pp. 56-57).

I pointed out to Napolitano that “Wilson the Progressive” was the product of “Woodrow, the evolutionist.” Uncle James completely overcame the influence of his father.

CONCLUSION

Woodrow Wilson was the spiritual son of James Woodrow. He adopted his uncle’s position, theistic evolution, and then went beyond it academically: Darwinian evolution–no God, no purpose, no miracles. He then adopted Progressivism, which was the statist version of social Darwinism. (I discuss the transition from free market Darwinism to statist Darwinism in Appendix A of my book, Sovereignty and Dominion.) By 1900, it had replaced the free market social Darwinism of Herbert Spencer in the thinking of American intellectuals.

In the theological battle between Woodrow and Wilson, Woodrow won.

Ideas have consequences. This includes theological ideas.

The Rot Within, Part II: Inflation Is Not “Growth”


As a degreed economist I 100% agree with this; and I will add that Milton Friedman a Noble laureate economist proved definitely that is was the Federal Reserve that created the Great Depression (not the market crass of ’29) and by extension it was the same ineptness of the FED that created the housing bubble and crash of ’08 not the banks. The FED is now in the process of creating a sovereign debt bubble that is close to bursting and it will be worse than ’08. Keynesian economics is nothing more than a Ponzi scheme!

The Rot Within, Part I: Our Ponzi Economy


I can tell you with 100% certainty that this is 100% correct, I’m a degreed economist and engineer. I have studied this problem in detail since the late ’90s and I would say its even more dire than implied here — but we’ll see what the next part shows!

As Falls America, So Falls The Rest Of The World


Obama is fundamentally changing not only America but the entire world; sadly its not going to be better, but much worse!

Industrial Production Drops, Misses By Most Since January


This lack of “real” growth not the funneling of money into the market is the underlining problem we have have in out country. And that stems from so much of our production being exported to China, India and Indonesia. Most would blame business but that would not be completely fair as they had no choice as we the citizens demanded cheap goods at the same time we demanded high wages. It doesn’t seem to me that the two are compatible unless the government controls the input.  Sadly they did not as the surplus money went into funding the Treasure but buying T-bills and buy doing so the politicians had more money to play with and give us free stuff.  That works only as long as the exporters allow it to happen — right now they are telling us they no longer want to do this and are changing the international system of exchange.  That is going to be very very bad for us.

For the 3rd month in a row, Industrial Production missed expectations as hopes and dreams of follow through in Q2 remain dashed on the shores of hard data. IP rose 0.2% (missing the 0.3% expectation) and May’s jump was downwardly revised to 0.5%. What is stunning is that Industrial Production has slowed its gains from the polar-vortex Q1 into a much more economically frigid Q2. Capacity Utilization also missed expectations. Perhaps most worrying is the manufacturing industry’s mere 0.1% gain in June – the slowest increase since January.

Industrial Production missed for 3rd month in a row…

 

As Manufacturing tumbled…

Charts: Bloomberg

 

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Does this look like a Q2 recovery bounce that is strong and supportive of 3% GDP growth?