Saturday, April 03, 2010

Tripping Over The Facts In The Victory Lap - Behind The Employment Numbers

The Administration was almost giddy with excitement Friday after the the Labor Department reported that companies in the U.S. created more jobs in March than at any time in the past three years.

Message? "The economic recovery is underway. Hooray for us!"

Advertised Fact:

- Payrolls increased by 162,000 workers, the highest number of workers going back to work since March, 2007.

Facts behind the Facts (harder to explain and so they haven't):

- The 162,000 worker increase included 48,000 temporary Census workers.

- The long-term unemployed (more than 27 weeks) rose to more than 6.5 million.

- The percentage of people unemployed for 27 weeks or more also rose to a record 44.1% of all jobless.

- Average earnings per hour dropped last month.

- The number of people working part-time increased because they couldn’t find full-time work.

- 20.3% of the U.S. workforce was underemployed in March, higher than in January and February.

The facts behind the facts make the victory lap the Administration is running filled with potholes, but for now they're taking their victory lap as if they didn't exist.

Friday, April 02, 2010

Sen. Lindsey Graham Predicts EFCA Is Back In Play

Speaking to business leaders at the Clemson (S.C.) Area Chamber of Commerce yesterday, Sen. Lindsey Graham (R-SC) touched on a number of the Obama Administration’s initiatives, including the Employee Free Choice Act.

Graham said, “We had Card Check pretty much tamped down,” but he warned, “It is going to come back up again.”

Looking at the political spectrum, it appears the White House feels they have momentum following the healthcare reform victory a couple weeks ago, and are going to push forward with much of the president’s stalled agenda.

The most recent move was instilling two new members to the National Labor Relations Board via recess appointments over the weekend; both labor lawyers with controversial records.

That was an easy move, only requiring the president’s signature. Trying to enact something like EFCA will take a lot more work from supporters to convince already nervous moderate and conservative Democrats to get behind it. We shall see. Based on early 2010 Senatorial race predictions, this may be the best shot to pass EFCA for at least two more years- something not lost on labor unions and the president.

Reprinted from: Projections Blog (

Thursday, April 01, 2010

Are We All Socialists Now?

When the Obama administration imposed limts on executive pay last year at companies the government had bailed out, many believed government's advertising -- just an attempt to protect the taxpayer from having to pay exorbitant salaries.

Little did we know (but should have known) that government was aiming to set a new standard for compensation across corporate America.

But now the truth emerges.

The government now wants to go well beyond companies it bailed out, but, in addition, wants to control what it deems is "risky behavior" in any business, regardless whether the taxpayer has a dog in the hunt.

Recent news of $1 billion paydays for a few hedge fund managers was just the populist boost the Administration needed to put Geithner in front of Congress demanding changes in corporate compensation and the not-so-implicit threat by Pay Czar Feinberg who restructured compensation practices at firms receiving exceptional federal assistance and set the amount paid to top executives at those companies. Feinberg in recent Congressional testimony said, "I think Wall Street and other companies would be well advised to follow the prescriptions I've laid out." And, he added, "true executive compensation reform" requires other steps, including far-reaching changes in how corporations are governed and how financial firms are regulated.

It is these "other steps," a euphemism for government control of corporate compensation, that is troubling. Indeed, the setting of compensation by government may be the poster child of socialistic practices.

For me, it is the shareholders, not the government, that has a vested interest in weighing in on executive compensation decisions. If I invest in a hedge fund and am willing to have my money leveraged and lost easily and quickly, that's my business. If, by chance, the hedge fund manager makes me rich, I don't care what he makes as long as it is in accordance with the deal we agreed upon -- one in which the government had no role because it had no investment.