Sharks Attack at the Smell of Blood
Kyle Hodgens / Powerhouse Profits -- There's blood in the water. It looks as though the economy fell and scraped its little knee- then decided to go for a dip in shark infested waters.
But, alas to the chagrin of the eternal sharks and bottom feeders it's just a scratch and not the mortally wounded fish they'd been hoping for.
So instead of frantically thrashing about let's take a sober look at how to keep the sharks at bay and send them once again to their cold murky waters.
I'm sure that you've read the July payroll numbers - and I'm sure you've seen the colloquy of Harvard, Princeton and Stanford economic professors on TV preaching the gospel according to Marx. But please, I urge you to take this with a grain of salt.
Because you have to remember:* The economy was in terrible shape back in April when 288,000 jobs were added to the non-farm payroll (they had to revise this upward).
* It was on its death bed in the first quarter when real GDP increased 4.5%... the fastest growth in thirty years (they had to revise this upward).
* And the good doctor was about to declare the economy moribund when the unemployment figure rang in at 5.5% (Once again this had to be revised - downward this time). That's .1% lower than Clinton's 1996 "year of prosperity".
So you can bet that when one of these figures comes in lower than expected it's going to be heralded by every doom-and-gloomer from the top of the Empire State Building (my staff is doing some research for me - I have a sneaking suspicion that's the headquarters of The New York Times).
But these crafty intellectuals may have formed a new game plan… instead of beating a dead horse they've turned 180 degrees.
This time it might be a neat little trick to overestimate their numbers - you know so that when they don't come in as high as they predicted the economy must surely headed for the gutter - maybe that'll work... because after all they are the experts.
But there is one thing that academia and pseudo-intellectuals never understood and that is that when power (money) is put back into the hands of the people that earned it, it has a profoundly positive effect on the economy, at the end of the day its tax cuts and self reliance that power a growing economy - NOT the government.
But back to the numbers:
The establishment survey concludes 32,000 payrolls were added in the month of July. Terrible right? Not so fast, because this figure does NOT include the household survey showing a creation of 629,000 jobs.
Now to be fair this survey is more volatile because it’s smaller than the establishment survey, BUT this is the only survey that includes the self-employed and independent contactors - you know, entrepreneurs, the very people that fuel the economy!
So what the actual payrolls added for last month, or for the last two years for that matter are somewhat ambiguous, falling somewhere between the establishment and household surveys. But one thing is clear. With an unemployment rate of just 5.5% (just to give you a historical reference, it was thought for thirty years impossible for unemployment to fall below 5.9% the "natural" rate of unemployment) it appears we're nearing full capacity.
Not too bad for the worst economy since Herbert Hoover.
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