Nearly 95 million Americans aren't working: The government's unemployment rate is just a bullshit number

During the First World War, it is said. the British military kept three separate casualty lists: one list to deceive the public, a second list to deceive the War Office, and a third list to deceive itself.

We could say much the same thing about the government's official unemployment rate.  The Bureau of Labor Statistics (BLS) claims the nation's unemployment rate is only 4.7 percent, less than half the rate in Europe and about half what it was when Obama came into office.  "We cut unemployment in half, years before a lot of economists thought we could," President Obama boasted recently to a crowd in Indiana.

The BLS unemployment rate is just a bullshit number

But nobody believes that. Everyone knows the government's official unemployment rate is just a bullshit number.

Even the government admits the unemployment rate is higher if we include people who are working part-time involuntarily and the people who have given up looking for work. But including those people in the analysis still understates how bad the employment situation is.

In fact, when we ponder how many American adults are simply not working, we get a clearer understanding of the employment picture.  A few days ago, BLS reported that 94,708,000 American adults are not in the labor force--37 percent of the entire American adult population.

Of course, not all of these people are unemployed. Millions are retired, millions are pursuing post-secondary education, and millions are not working  because they are disabled and receiving disability benefits. Obviously, not all non-working Americans are suffering.

But a lot of non-working Americans are suffering. Millions of Americans are unemployed or underemployed, millions gave up looking for work and elected to take early retirement at reduced benefits. And there are millions who are still in the labor force but are working at substandard wages, including a lot of college graduates who hold jobs that don't require a college degree.

Signs of economic decline are everywhere

Although Obama takes credit for leading the nation out of the 2008 recession, the standard of living for millions of Americans continues to decline.  As the Brooking Institution paper noted in 2012, median wages for male workers have gone down precipitously in recent years.  In constant dollars, median wages for American men have slipped  by 19 percent since 1970.

Although the Obama administration insists that the economy is creating new jobs, that's probably bullshit as well. BLS reported last week that 38,000 new jobs came on line in May, a dramatic decline from an average of 178,000 a month over the first three months of 2016.  But a Brookings analysis, using a different form of measurement, claims the economy actually lost 4,000 jobs last month.

 And more and more people are on food stamps--1 out of 7 Americans are now receiving food-stamp assistance. That's 45 million people--up from around 28 million when Obama took office.  Do these numbers suggest that the economy is in recovery?

And then there's the student-loan crisis

And then there's the student loan crisis.  Approximately 43 million Americans owe 1.3 trillion in student-loan debt.  Although  the Department of Education's three-year default rate is only around 10 percent, that's just more bullshit.  By encouraging people to obtain economic hardship deferments, the government has artificially kept default rates down, because people with deferments aren't counted as defaulters even though they aren't making loan payments.

But of course people who accepted deferments are seeing their loan balances go up because interest continues to accrue. Now the only way they can service their loans is by signing up for 20-year income-base repayment plans.

The true student-loan default rate is probably 25 percent; and it's 50 percent for people who took out loans to attend for-profit colleges. And even this estimate may be too low.

Millions of Americans are suffering and they're  foaming with rage

In short, millions of Americans are suffering. They know the economy is deteriorating; they know their standard of living is going down. They know Barack Obama despises ordinary Americans--the poor stiffs who live in fly-over country and still go to church on Sundays.

And ordinary Americans are foaming with rage.

The political and media elites think they can keep a lid on all this anger, that they can persuade a majority of Americans to vote for Hillary and prolong the status quo. They think Americans are listening to Anderson Cooper and Don Lemon when they paint Trump as a racist and a bigot on CNN. They think columnist Froma Harrop will persuade her readers that Bernie Sanders is a racist.

But I've got news for the elites. The people who are angry aren't listening to CNN. They aren't reading Froma Harrop. The elites may succeed in crowning Hillary Clinton as the next queen of post-modern America, but the pundits will never tamp this anger down. It's real, it's ugly, and it's permanent.

References

Alan Bjerga. Food Stamps Still Feed One in Seven Americans Despite Recovery. Bloomberg News, February 3, 2016. Accessible at http://www.bloomberg.com/news/articles/2016-02-03/food-stamps-still-feed-one-in-seven-americans-despite-recovery

Christopher Goins, 44.7 Million Americans Now on Food Stamps--More than at Any Time Under Bush, CNS News, February 3, 2012. Accessible at http://cnsnews.com/news/article/447-million-americans-now-food-stamps-more-any-time-under-bush

 Michael Greenstone and Adam Looney. The Uncomfortable Truth About American Wages. Brooking Institution, October 23, 2012. Accessible at http://www.brookings.edu/research/opinions/2012/10/22-wages-greenstone-looney

Susan Jones, Record 94,708,000 Americans Not in Labor Force; Participation Rate Drops in May. CNS News, June 3, 2016. Accessible at http://www.cnsnews.com/news/article/susan-jones/record-94708000-americans-not-labor-force-participation-rate-drops

Matthew Boesler. More College Grads Finding Work, But Not in the Best Jobs. Bloomberg.com, April 7, 2016. Accessible at http://www.bloomberg.com/news/articles/2016-04-07/more-college-grads-finding-work-but-not-in-the-best-jobs

Nicholas Wells and Mark Fahey. What's the REAL unemloyment rate? CNBC.com, January 8, 2016. Accessible at http://www.cnbc.com/2016/01/08/

Jonathan Wright. Amidst unimpressive official jobs report for May, alternative measure make little difference. Brookings Institution, June 3, 2016. Accessible at http://www.brookings.edu/blogs/jobs/posts/2016/06/03-amidst-unimpressive-official-jobs-report-for-may-alternative-measures-wright?utm_campaign=Brookings+Brief&utm_source=hs_email&utm_medium=email&utm_content=30258460&_hsenc=p2ANqtz-8wODcWxeX-Vo8PGswc2439RPH_hV1yCM05S_knJvJmuSfYUbz-xh1mWd76dc0m2GG5fhL55iubJxPERM_sbHc3qH5Hfg&_hsmi=30258460

Bill Kristol wants David French to run for president against Trump and Hillary: Don't bring a knife to a gun fight

Bill Kristol, Editor of Weekly Standard, is promoting David French, a National Review writer, to run for president as an independent against Donald Trump and Hillary Clinton.

What a terrible thing to do to Mr. French. It's like throwing a puppy into a nest of crocodiles.  And isn't Donald having enough fun already? Do we really need to give him another person to belittle and ridicule?

On the other hand, French is a Presbyterian as is Trump; and Hillary is a Methodist. I would love to see these candidates debate theology.

St. Catharine College and Dowling College are closing: "After us, the deluge."

After us, the deluge.  I care not what happens when I am dead and gone.

Marquise de Pompadour

Just this week, two small colleges announced they are closing: St. Catharine College, a Catholic institution in Kentucky; and Dowling College, a private school on Long Island.  

Clearly, a lot of small private colleges are in trouble. Last autumn, Moody's Investor Service predicted a sharp increase in the number of college closures, forecasting that 15 would close in 2017. I think Moody's is far too optimistic. By 2017, I think we will see three or four colleges shutting down every month.

What's going on? Several things.

Small colleges have priced themselves out of their markets. First, many small non-elite colleges have priced themselves out of their markets. Tuition has been rising every year for the past 20 years, and even obscure little colleges now charge students from $30,000 to $35,000 a year, just for tuition. For years, students and their parents passively submitted to yearly tuition hikes; but no more. Mom and Pop aren't willing to pay $100,000 for Suzie or Johnny to get a bachelor's degree from an undistinguished private college.

It's true that small private colleges are heavily discounting their tuition--almost 50 percent for first-time freshmen. And it is true that students can take out student loans to pay for their college tuition. But families are not sure whether they will get a tuition discount big enough to fit their budgets or whether they are getting as good a discount as another family gets. They've lost trust in the integrity of the admission process.

And young people have finally begun reading the newspapers and are waking up to the fact that student-loan debt can be a financial death sentence for graduates who don't quickly find good jobs. They have become wary about enrolling at a little college named after a saint they've never heard of. Who in the hell is Saint Scholastica  anyway?

Onerous federal regulations have raised operating costs. So price is a factor.  But there is another reason why small colleges are closing. Federal regulation have become too onerous for small schools to manage. They simply cannot afford to comply with ever more burdensome regulations that spew out of the Department of Education.  The Department's 2011 "Dear Colleague" letter on sexual harassment triggered a flurry of new college regulations, policies, and training programs to meet DOE's heightened standards for complying with Title IX. DOE's new transgender restroom rules will cost colleges money, and the rules will be a real headache for the little religious colleges that pride themselves on their traditional moral values.

Here's an example of how colleges are being subject to more and more federal regulation. Virginia Tech suffered a horrible tragedy when a deranged gunman massacred more than thirty students in 2007. The University was sued for negligence after the incident, but the Virginia Supreme Court ruled that Virginia Tech was not liable under Virginia tort law.

But the Department of Education concluded that Virginia Tech violated the Clery Act in the way it alerted students about an ongoing threat and assessed a fine against the University. The fine wasn't large compared to Virginia Tech's overall budget, but the University spent a lot of money defending against DOE's charge, and it will spend even more trying to make sure it does not run afoul of the Clery Act again.

Virginia Tech is big enough and rich enough to deal with DOE's mandates, but hundreds of small colleges don't have the resources for dealing with the ever growing complexity of the federal regulatory environment.

St. Catharine College is a case in point. It got squeezed by DOE, which held up its federal student aid money based on some technical issue. The college sued but apparently didn't get relief. This week it announced its closure, which it said was triggered by DOE sanctions.

Small liberal arts colleges are headed for extinction and there is no way to revive them.  Small colleges have implemented all sorts of strategies to keep their enrollments up and maintain their revenues. Many have tried to reinvent themselves by hiring marketing firms to enhance their images and juice their enrollments.

By and large, this strategy has failed. Let's face it: hiring a marketing firm to design an edgy college logo or a catchy slogan is no remedy for the massive problems facing the nation's small liberal arts colleges.

I don't see any way to revive the small liberal arts college. Their tuition rates are too high, and offering heavy discounts has not lured middle class students into small-college classrooms.

Moreover, the Department of Education does not care whether it is regulating small colleges out of business. The DOE minions probably gave each other high fives when they heard St. Catherine is closing its doors.

Nor is there any way for colleges to walk away from their total dependence on federal student aid and the federal regulations that come with it. The colleges drank the Kool Aid of federal student-loan money, and their is no antidote.

If you are an administrator or a professor at a small college and you are nearing retirement, perhaps you don't care about the demise of liberal arts colleges. As Marquise de Pompadour put it: "After us the deluge.  I care not what happens when I am dead and gone." But a young person with a new Ph.D. would be a fool to try to build a career by taking a job at a small liberal arts college. 

References

Another Small Private Closes Its Doors. Inside Higher Ed, June 1, 2016. Accesible at https://www.insidehighered.com/quicktakes/2016/06/01/another-small-private-closes-its-doors-dowling-college?utm_source=Inside+Higher+Ed&utm_campaign=a0fafeb056-DNU20160601&utm_medium=email&utm_term=0_1fcbc04421-a0fafeb056-198564813

Paul Fain. The Department and St. Catharine.  Inside Higher Ed, June 2, 2016. Accessible at https://www.insidehighered.com/news/2016/06/02/small-private-college-closes-blames-education-department-sanction?utm_source=Inside+Higher+Ed&utm_campaign=3d1c6eed79-DNU20160602&utm_medium=email&utm_term=0_1fcbc04421-3d1c6eed79-198565653

Lyndsey Layton. Virginia Tech pays fine for failure to warn campus during 2007 massacre. Washington Post, April 16, 2014. https://www.washingtonpost.com/local/education/virginia-tech-pays-fine-for-failure-to-warn-during-massacre/2014/04/16/45fe051a-c5a6-11e3-8b9a-8e0977a24aeb_story.html

Kellie Woodhouse. Closures to Triple. Inside Higher Education, September 28, 2015. Accessile at https://www.insidehighered.com/news/2015/09/28/moodys-predicts-college-closures-triple-2017

Jerry Brown endorses Clinton: Governor Moonbeam takes a fall for Crooked Hillary

I've long been a fan of Jerry Brown, Governor of California. He is 78 years old now, but he was 36 years old when he was elected Governor of California back in 1974--the youngest governor of the state in over a hundred years. Brown was a progressive politician then--Governor Moonbeam they called him. I admired his politics when I was a youth, and I would have voted for him if I'd been given an opportunity back when he ran for President in 1976.  He once dated Linda Ronstadt, and I gave him a lot of points for that.

But like the movie character Peter Pan, played by Robin Williams, Jerry grew up, and he started listening to what the grownups say. Now, one week before the California primary election, Jerry comes out for Crooked Hillary.

I feel sorry for Jerry Brown. He had a chance to make an important moral statement but he choked. He did what the Democratic political bosses wanted him to do.

Surely Jerry knows the old world is passing away. The status quo won't last forever. Jerry could have joined the Sanders revolution and remained true to the ideals of his younger days.

But Jerry Brown lost his nerve. At this crisis point in American history, Jerry turned out to be just an old man.

Jerry Brown: Unfortunately, Peter Pan grew up

Jerry and Linda Ronstadt: Those were the days

References

Jerry Brown. Open Letter to California Democrats and Independents, May 31, 2016. http://www.jerrybrown.org/an_open_letter_to_california_democrats_and_independents

Barney Frank, World Class Sleaze, Accuses Bernie Sanders of McCarthyism

Barney Frank, former Congressman from Massachusetts, will be one of Hillary Clinton's Super Delegates at the Democratic Convention. Indeed, Frank is on the Convention's Platform  Committee. That fact that Barney Frank is a Hillary partisan is reason enough to be a Bernie Sanders supporter.

Most people have forgotten that Barney Frank paid for sex with a male prostitute, hired the guy to be a personal assistant and then turned a blind eye while the prostitute ran a prostitution ring out of Frank's apartment.  (Frank claimed he did not know his apartment was being used for prostitution, and he may have been telling the truth.) And all of this while Frank represented the state of Massachusetts in Congress. The House of Representatives reprimanded Frank, not for hiring a prostitute, but for writing a misleading letter to the prostitute's probation officer. Oh yes. And Frank used his congressional privilege to fix more than 30 of the prostitute's parking tickets

You don't have to believe me.  Read about it in the New York Times and other respected newspapers.

Frank was on the House Financial Services Committee in 2005, when he downplayed concerns about the bubble in the housing industry. Millions of Americans suffered losses in the financial downturn of 2008, but not Frank. As  Liz Peak  reported in 2011, Frank did quite well during the financial crisis and retired from Congress comfortably fixed: 

As a steward of the nation’s purse during the financial crisis Mr. Frank may not have succeeded, but he did quite well personally. Unusually, Mr. Frank’s personal finances sailed right through the downturn. In 2006 he reported assets valued between $525,020 and $1.6 million; by 2010 Mr. Franks’ net worth had soared to between $1.9 million and $4.6 million, with nary a down year in between. No wonder he can afford to retire. 

 And now Frank, speaking as a Super Delegate for Hillary Clinton, has the effrontery to accuse Bernie Sanders--the only decent person left in the presidential race--of McCarthyism!

Barney Frank is one of roughly 400 Democratic Party insiders who have profited from politics while the American economy spirals downward. And Frank's vote as a Super Delegate is worth more than a coal miner's vote in the West Virginia primary or a Walmart clerk's vote in the Oklahoma primary.

The media elites--all self-proclaimed progressives--have closed their eyes to Hillary's cronyism and self-dealing and have thrown their support to Bernie's opponent.

But I have a message for all Hillary's media lap dogs who are disparaging Bernie Sanders--Frank Bruni, Froma Harrop, Cokie and Steve Roberts, etc. etc. etc. Hillary Clinton will not be the next president of the United States.  And the public will remember the journalists who were confronted with a choice between sleaze and decency during the 2016 presidential campaign and who chose to support sleaze.

Barney Frank, a Hillary Super Delegate, Accuses Bernie Sanders of McCarthyism

  
References

 Allan Gold. Frank Acknowledges Hiring Male Prostitute as Personal Aide. New York Times, August 25, 1989. Accessible at http://www.nytimes.com/1989/08/26/us/rep-frank-acknowledges-hiring-male-prostitute-as-personal-aide.html?pagewanted=all

Mark Finkelstein. Hillary Fan Barney Frank Accuses of Bernie Sanders of 'McCarthyism."MRC Newsbusters, April 6, 2016. Accessible at http://newsbusters.org/blogs/nb/mark-finkelstein/2016/04/06/hillary-fan-barney-frank-accuses-bernie-sanders-mccarthyism

Froma Harrop, Bernie Sanders and Racism Lite. Seattle Times, May 19, 2016. Accessible at http://www.seattletimes.com/opinion/bernie-sanders-and-racism-lite/

Frances Romero. Sinful Statesman Barney Frank. Time Magazine, June 8, 2011. Accessible at http://content.time.com/time/specials/2007/article/0,28804,1721111_1721210_1883878,00.html

A Timeline of Politicians and Prostitutes. U.S. News & World Report, March 11, 2008. http://www.usnews.com/news/articles/2008/03/11/a-timeline-of-politicians-and-prostitutes

Liz Peek. Barney Frank Won't Have To Worry About Money In Retirement. Fox News, December 2, 2011. Accessible at http://www.foxnews.com/opinion/2011/12/02/barney-frank-wont-have-to-worry-about-money-in-retirement.html

Cokie and Steve Roberts. Bernie Sanders plays a dangerous game. Baton Rouge Advocate, May 30, 2016, p. 5B.  Also accessible at  http://kpcnews.com/opinions/other_columnists/kpcnews/article_ac1c34ff-ce96-5376-89c8-26841b44436a.html

Navient Solutions and Student Assistance Corporation stung for violating the Telephone Consumer Protection Act: 727 automated phone calls to student debtor's mother!

Navient Solutions, Inc. and Student Assistance Corporation (SAC) got stung last month by a federal district court for violating the Telephone Consumer Protection Act. Navient made 249 automated collection calls to Willie McCaskill, a student debtor's mother.  Co-Defendant Student Assistance Corporation made another 478 automated calls to McCaskill's phone number.

As explained by the court, McCaskill is entitled to $500 for each violation, which adds up to $363,500.  In addition, the court will hold a trial to determine whether the defendants violations were wilful, which would entitle to McCaskill to treble damages. Let's hope she wins.

Navient and SAC asserted a goofy defense, which the court rejected. They argued that McCaskill "gave express consent" to being called about her daughter's debt. The court pointed out that Navient presented no evidence showing that McCaskill knowingly released her phone number to the debt collectors or that she had had any contact with them before they started calling. As if any mom would agree to getting bombarded with hundreds of phone calls from her daughter's creditors.

SAC and Navient also argued that McCaskill and her daughter were in an agency relationship, and that the daughter had legal authority to consent to the phone calls on her mother's behalf. But this is what the daughter testified:

You don't give out my mom's number, which is her business. I handle my own business, she handles her own business .. . .She stay over there, and I stay over here.

The court ruled that the defendants identified no evidence that questioned the daughter's testimony. Accordingly, the court granted McCaskill summary judgment on her TCPA claims.

Who is Navient Solutions anyway? Here's how it introduces itself on the web:

Although our name is new, our business is not. For more than 40 years we learned, evolved, and led in loan management, servicing and asset recovery as Sallie Mae^®. And now, we continue to lead as Navient, a company dedicated to helping our clients and the people we serve along the path to financial success.

Navient also says "it is committed to fulfilling our role as an active corporate citizen with integrity and transparency." And oh yes. Navient is big into philanthropy, boasting that "[w]e recognize the importance of corporate philanthropy by giving back to our own communities and encouraging employees to volunteer."

Navient sounds like a model corporate citizen.  But if all Navient says about itself is true, why did it make 249 harassing telephone calls to a student debtor's mother?

References

McCaskill v. Navient Solutions, Inc., No. 8:15-cv-1559-T-33TBM (M.D. Fla. April 6, 2016).

Free tuition for first-time freshmen at good private liberal arts colleges: Why the hell not?

Small liberal arts colleges are in trouble all over the United States. They're having a heck of a time attracting students, as families respond more and more negatively to outrageous tuition prices. Let's face it: not many people want to pay $100,000 to obtain a degree from a nondescript liberal arts college in Nowhereville, Indiana,

In a desperate effort to attract warm bodies, liberal arts colleges have been discounting their tuition drastically for first-time freshmen, behaving more and more like rug sellers in an Arab bazaar.  (I apologize if I made a politically incorrect observation.) For the past several years, the discount rate has gone ever upward; and last year, private liberal arts colleges discounted tuition for first-time freshman by nearly 50 percent! And they discounted tuition for undergraduates as a whole by more than 40 percent.

All commentators agree: this trend can't go on forever.  And colleges can't reverse course by simply lowering their tuition rates because they would be admitting that they've been overbilling their clients. As one observer noted, if you've been selling Toyotas for $30,000 apiece, how can you explain why you now only charge $20,000?

But what about this? Why don't small private liberal arts colleges--the ones that still have good reputations--offer applicants free tuition for the first year to everyone who enrolls?

Think about it. Colleges have already cut tuition by 50 percent on average for freshmen, and they're still having trouble meeting their enrollment targets. And once they get the little rascals in the door, they still have to discount tuition by more than 40 percent.

If a college offered free tuition for freshman, there would be two good consequences. First, the college would get more applicants and a higher percentage of applicants who are accepted would actually enroll. And second, the college could be more selective because the overall quality of the applicant pool would improve.

Of course, such a move would have to be planned carefully. Here's how I would do it:

1) The college making the  offer would promise to admit students based on published academic criteria--without regard to race, class, gender, or sexual orientation. Applicants would know that their credentials were being judged transparently based solely on academic considerations.

2) Students who accept the offer would agree to attend the college a second year and pay the full tuition price if the college didn't offer a sophomore-year discount.

3) Colleges making this offer would assign their best faculty members to teach freshmen so that students who enrolled would have a top-notch freshman year and thus would be more likely return as sophomores. No more crowding a couple of hundred freshmen into theatre-style classrooms to be taught by an inexperienced graduate assistant or a burned-out gas bag who should have never gotten tenure.

This is a risky strategy I know. But colleges are already charging freshmen half price, and many are still seeing their enrollments decline. If offering a free year led to a 50 percent bump in freshman enrollment, that would absorb a good deal of the cost of this strategy if those students could be retained as sophomores, juniors and seniors.

One thing for sure--college administrators are playing a losing game right now. They can't go on giving big tuition discounts to favored students using secret criteria that families don't understand. They can't rely on public relations firms, perky recruiters, and billboard advertising to juice their enrollments.

The public has figured out that a liberal arts degree from an obscure private college is overpriced. To bring back the paying customers, the colleges must offer value. What better way to communicate value than by giving new students a year of free tuition and then offering a first-class educational experience?

Or is that too simplistic?

References

Rick Seltzer. Discount rates rise yet again at private colleges and universities. Inside Higher Ed, May 16, 2016. Accessible at https://www.insidehighered.com/news/2016/05/16/discount-rates-rise-yet-again-private-colleges-and-universities.