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Where Is the Economy Going? Sideways, Mostly.
Raymond Richman, 4/11/2014

As we noted on this site in January, the outlook for the economy looked bad for the economy. The number of claims for unemployment insurance unadjusted was quite high but one had to consider the much lower seasonally adjusted numbers as the table below shows. The range of the unadjusted figures for the weeks ending 12/28/13 to l/18/14 was between 411,678 and 532,698 but the seasonally adjusted figures were in a much lower range of 300,000 to 326,000. So we had to wait and see. From March 15, 2014, the unadjusted figures dropped below 300,000, quite good figures, really, and the seasonally adjusted figures were slightly higher ranging from 300,000 to 326,000.

Initial Claims for Unemployment Insurance
Seasonally Adjusted and Not Seasonally Adjusted
Week Ending Adjusted Change Unadjusted Change
4/15/14 300,000 -26,000 298,393 +8,858
3/29/14 326,000 +11,000 289,535 +21,214
3/22/14 315,000 -5,000 268,321 -3,005
3/15/14 320,000   285,316  
         
1/18/14 326,000 +1,000 411,678 -121,020
1/11/14 325,000 -5,000 532,698 +64,665
1/4/14 330,000 +15,000 486,033 +34,384
12/28/13 315,000   451,649  

Nearly all commentators have been repeating the administration line that the economy is improving. Indeed, the recent reduction in unemployment insurance claims would seem to support administration claims. But the behavior of the stock markets during the past few weeks betrays the fact that investors are skeptical. While speculators and traders in the stock markets have no direct effect on employment and growth, investors in manufacturing, housing, commercial buildings, transportation, and communications hold in their hands the keys to economic growth.

Unfortunately, the administration has embraced few programs that contribute to growth. It has spent nearly six years on Obamacare which on balance will not create a single job. It has already had and will increasingly have a negative effect on growth. It increased the premiums for health insurance for every household earning more than $80,000 leaving them with less money to spend on other goods and services. The middle class is not only subsidizing the premiums of lower-income households but is paying for the administration’s social policies, financing contraception and abortion, pre-existing conditions, health care for “children” under 26, sexually transmitted diseases resulting from promiscuity among homosexuals, et al. The minimum wage has discouraged the hiring of teen-agers and other unskilled workers. It has done nothing about the foreign trade deficits which have cost millions of American manufacturing jobs.

What we have going for growth in the economy is a dynamic oil and gas producing sector which the administration in it subservience to its environmental-fanatics lobby is doing its utmost to stifle, as though climate warming was our principal problem not unemployment and economic stagnation. The pipeline which would have given thousands of good-paying jobs and created additional thousands of job in sectors manufacturing and supporting jobs is still in limbo. The EPA has in effect banned coal-mining except for coal produced for export. Thousands of miners have lost their good-paying jobs and efficient coal-burning utilities have been forced to shut down. Instead, electric utilities have been forced to buy expensive wind and solar energy. Tax payers have been forced to subsidize not only the plants themselves but hybrid and electric automobiles, etc., etc..

We’ll have to wait a bit longer to enjoy economic growth. 

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  • [An] extensive argument for balanced trade, and a program to achieve balanced trade is presented in Trading Away Our Future, by Raymond Richman, Howard Richman and Jesse Richman. “A minimum standard for ensuring that trade does benefit all is that trade should be relatively in balance.” [Balanced Trade entry]

    Journal of Economic Literature:

  • [Trading Away Our Future] Examines the costs and benefits of U.S. trade and tax policies. Discusses why trade deficits matter; root of the trade deficit; the “ostrich” and “eagles” attitudes; how to balance trade; taxation of capital gains; the real estate tax; the corporate income tax; solving the low savings problem; how to protect one’s assets; and a program for a strong America....

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  • In Trading Away Our Future   Richman ... advocates the immediate adoption of a set of public policy proposal designed to reduce the trade deficit and increase domestic savings.... the set of public policy proposals is a wake-up call... [February 17, 2009 review by T.H. Cate]