Why Our Unemployment Numbers Are Bogus

 The Welfare-Industrial Complex | Power Line (powerlineblog.com)

Given the government narrative, it seems incredible that people are not ecstatic about the low unemployment rate of 3.7% .As the Biden administration keeps complaining, "the press just isn't reporting how good things are"! You know that old media bias against all the good things Democrats do!

Drill into the nation’s 3.7% unemployment rate, and you’ll find a growing welfare-industrial complex beneath the seemingly strong labor market. Government, social assistance and healthcare account for 56% of the 2.8 million net new jobs over the past year, and for nearly all gains in blue states such as New York and Illinois.

Go read the linked post on Power Line. 

Meaningless Millionaires

We hear a lot about "wealth", and "wealth inequality" today. 

As I've often repeated in my blogging, zero remains zero and inflation creates more wealth inequality as a "base".  If the top income last year was $100, and it is $1000 today, we have 1x the inequality. Any growing economy increases income inequality. 

A million dollars today is the equivalent of $390K in 1990. There tends to be a lot of talk about "millionaires" (or billionaires), which is the Deep/Administrative State misleading you. Of COURSE there is more numeric "inequality", but that is far from "the story" because there are a ton of factors involved.  "Poverty" for a family of 4 today is $26k, but since the state is at war with families, there are not many stable families of 4, and FAR fewer without the complexities of divorce, addiction, etc 

If you go look at the linked charts, you can see how much Vietnam, Jimmy Carter, and now Biden have cost us ... especially those of us who at one time had "nice pensions". 

On top of that, government subsidies bump the actual living conditions higher, and to be "poor" in American likely means you are obese, have a nice color tv, high speed internet, a lot of subsidies, and probably a car. (80% of poor Americans have access to a car). Compared to the rest of the world, poverty in America is somewhere between rich and middle class elsewhere. (gee, why don't we have a Southern border?)

In order to be the equivalent of a 1990 millionaire today, you need to have $2,270,826, or basically $2.3 million. 

The average cumulative  inflation since '92 is 127%, however it varies from 200% in Seattle to 104% in St Louis. 

I have no interest in being an inflation expert, but my guess is that housing is the big reason for the difference in cities. My son paid $750 a month for an efficiency dump in Denver, and $750 for a nice one bedroom in a complex with a pool, exercise area, good parking, and a nice neighborhood in Des Moines. Basically 2x as good for the same money. 

So a billionaire today is really worth $390 million in 1990 dollars. Certainly nobody is going to have much pity on someone worth $390 million, nor even on someone worth $390k in 1990 dollars. The point is (as always) take what the government and media (but I repeat myself) tell you with a BIG grain of salt! 

You need $10 today to buy what a buck would buy in 1960. For those of us born in the 50's or 60's, that might explain a bit about how "we don't feel rich", though the numbers on our bank accounts look like we "should" be. 

Who loves inflation? Debtors, of which the government is the gorilla in the room paying back their debt with ever more worthless dollars. Have a billion dollar debt in 1990? Pay it off today with the equivalent value of $390 million today! 

As our government rulers continually show us, it is great to be king! 

Inflation Can't Go On Forever

 https://www.politico.com/news/magazine/2021/12/28/inflation-interest-rates-thomas-hoenig-federal-reserve-526177

Here is a little article showing some of the famous economists that have stated versions of the title of this blog. 

A cursory look at recent history is that we are somewhat on a repeat of the Sorry Seventies unfortunately including a hapless president rivaling and maybe even exceeding Jimmy Carter in his incompetence. 

I grew up with my dad constantly assuming that we would have a return to the 1930's when he grew up. He always was looking for the next depression, and to him, it never happened because the periods of decline were much less severe than the 1930's. I like to say that history doesn't repeat, but it does rhyme.

From 1966 to 1982, the stock market was flat.

In January of 1966 the Dow Jones Industrial Average hit a level of 990. It would continue trading in a range of roughly 600 to 1,000 over the following 17 years. It once again reached 990 in December of 1982 before finally breaking out and heading higher.

That certainly isn't a "depression", but were something like that (or worse) to repeat, it would change a lot of Boomers lifestyles. 

Between 2008 and 2014, the Federal Reserve printed more than $3.5 trillion in new bills. To put that in perspective, it’s roughly triple the amount of money that the Fed created in its first 95 years of existence. Three centuries’ worth of growth in the money supply was crammed into a few short years. The money poured through the veins of the financial system and stoked demand for assets like stocks, corporate debt and commercial real estate bonds, driving up prices across markets. Hoenig was the one Fed leader who voted consistently against this course of action, starting in 2010. In doing so, he pitted himself against the Fed’s powerful chair at the time, Ben Bernanke, who was widely regarded as a hero for the ambitious rescue plans he designed and oversaw.

Extraordinary events tend to have extraordinary results ... often results that are at least unexpected in some quarters.