Job Report 5.9% – Why the Malaise? The Numbers Game

Editor’s Note – Once again we have a ‘Jobs Report’ emerge with mixed messages, but is it truly mixed?  The September report came out this morning and showed growth and on that positive number, we are sure we will hear Obama continue to brag about the longest cycle of job growth in our entire history.

A crisis in confidence, we are in a malaise akin to the Carter years when the last low in the participation rate was as low as it is today.
A crisis in confidence, we are in a malaise akin to the Carter years when the last low in the participation rate was as low as it is today.

That sounds wonderful, but why is there such malaise and melancholy among working and non-working families alike? There are several reasons, and even though we post an article from CNBC/Politico, they correctly point out some very salient points you will not hear Obama ever talk about. Three aspects jump out at us, and this is a continual point we have been making for years.

Where is the growth in salaries? What about the continual rise in the number of people who have given up and the participation rate has fallen to a 30 year low? Last, what kind of jobs are being created, especially since Obama Care has forced so many employers to cut hours to stay viable?

The administration lauds job growth, but Americans do not just need subsistence jobs, they need to resurrect their careers, or create one. Holding down two part time jobs to keep food on the family table is not the American dream.

Careers, gained through expensive education and on-the-job experience growth have been lost or closed down to so many. Earning potential is a thing of the past under the current paradigm of work. This is a “a recovery that the vast majority of Americans barely feel.”

We not only have a ‘crisis of confidence‘, we have a ‘malaise’ ala Jimmy Carter.

Jobs report underscores Obama’s economic dilemma

By Ben White – CNBC

The September jobs report perfectly captured the frustrating nature of the current economy, showing a healthy gain of 248,000 positions and a reduction in the jobless rate to 5.9 percent but no gain at all in hourly wages.

The report also highlighted the vexing and possibly unsolvable problem for President Barack Obama and the Democrats who want to take credit for measurable improvements in the economy from the rancid depths of 2009 but can’t effectively cheerlead a recovery that the vast majority of Americans barely feel.

Speaking at Northwestern University, President Obama highlighted what he said were clear improvements in the economy since he took office. Video by Reuters on Publish Date October 2, 2014. Photo by Doug Mills/The New York Times.
Speaking at Northwestern University, President Obama highlighted what he said were clear improvements in the economy since he took office. Video by Reuters on Publish Date October 2, 2014. Photo by Doug Mills/The New York Times.

In most respects, the September report was quite strong. August’s soft number got revised up to 180,000 and July was boosted to 243,000 from 212,000. History tells us September could get revised higher as well.

But there was a soft underbelly as well.

The size of the labor force dropped by nearly a hundred thousand putting the participation rate at a more than three-decade low of 62.7 percent. Before the recession the rate was 66 percent.

Even more troubling, average hourly wages actually dropped a penny to $24.53. The so-called U6 jobless rate, which takes into account involuntary part-timers and those too frustrated to look, is still at a very high 11.8 percent.

Obama’s economic dilemma was on full display this week when aides touted a big presidential speech on the economy at Northwestern University’s Kellogg School of Management. The speech was intended to show voters who give the president dismally low marks on the economy that Obama was on the case while highlighting all the improvements over six years ago.

But the speech, which included a tired recitation of previous proposals that went nowhere on Capitol Hill, fell completely flat. In fact, the only real headlines out of the address were generated by Republicans crowing over Obama’s remark that: “I am not on the ballot this fall. … But make no mistake: these policies are on the ballot. Every single one of them.”

Democratic candidates in competitive Senate races are running as fast they can away from the president and his low approval ratings. But now GOP ad makers have a perfect sound bite to run in Arkansas, Louisiana, North Carolina, Alaska, Iowa and elsewhere tying Democrats directly to the president.

How Obama could have made such a rhetorically boneheaded move is hard to comprehend.

Polls show the public has largely rejected Obama’s stewardship of the economy. They also show that the economy is the No. 1 issue in the midterms. The last thing the party wants are voters in battleground states making their decisions based on Obama’s economic record. But now they may do exactly that and at the president’s own request!

It seems like it is probably time for the White House to give up on the idea that the president will get much credit for where the economy is right now. Most of the policies that had significant impact—the stimulus and the bank bailouts—are well in the past. Since the 2010 midterms, Obama has little to show on trade deals, tax reform, immigration reform or any of the other big-ticket items that could move the economic needle and drive up wages and the pace of growth.

The White House argues that Obama tried on a lot of these items by sending proposals to the Hill. All fair and true. But people don’t really care about what you tried to do (and in many instances the White House didn’t try very hard). They care about what you actually did.

But there may yet be hope on the horizon for beleaguered Democrats hoping to maintain control of the Senate. According to Politico’s Maggie HabermanHillary Clinton is preparing a midterm political blitz to aid Democratic candidates in Kentucky and other swing states.

The Clinton brand is much stronger than the Obama brand right now, particularly on the economy where voters still recall the Bill Clinton years quite fondly. Hillary Clinton may have some heavy foreign policy baggage from the Obama years but she is not tied to people’s ill feelings about the president’s job on the economy.

Hillary Clinton can also make the midterms about the Democratic Party’s future, not the last six years of painful, plodding, poorly distributed economic growth. That may not turn out to be enough to keep the GOP from picking up the six seats needed to retake Congress’s upper chamber. But it’s certainly preferable to Democrats than making the election all about Obama.

—By Ben White. White is Politico’s chief economic correspondent and a CNBC contributor. He also authors the daily tip sheet Politico Morning Money [politico.com/morningmoney]. Follow him on Twitter@morningmoneyben.

Obama trade deal usurps more power, breaks more promises

Editor’s Note – Once again the Obama administration is circumventing Congress and the American people. The ‘king’ keeps adding to his power, and if not for leaks, we may never have known. The Executive Branch grows again…

Here is the document that was leaked: Agreement Terms Document

Obama Trade Document Leaked, Revealing New Corporate Powers And Broken Campaign Promises

By Zach Carter – Huffington Post

WASHINGTON — A critical document from President Barack Obama’s free trade negotiations with eight Pacific nations was leaked online early Wednesday morning, revealing that the administration intends to bestow radical new political powers upon multinational corporations, contradicting prior promises.

The leaked document has been posted on the website of Public Citizen, a long-time critic of the administration’s trade objectives. The new leak follows substantial controversy surrounding the secrecy of the talks, in which some members of Congress have complained they are not being given the same access to trade documents that corporate officials receive.

Obama with the Pacific area leaders of the new free trade agreement

“The outrageous stuff in this leaked text may well be why U.S. trade officials have been so extremely secretive about these past two years of [trade] negotiations,” said Lori Wallach, director of Public Citizen’s Global Trade Watch in a written statement.

Sen. Ron Wyden (D-Ore.) has been so incensed by the lack of access as to introduce legislation requiring further disclosure. House Oversight Committee Chairman Darrell Issa (R-Calif.) has gone so far as to leak a separate document from the talks on his website. Other Senators are considering writing a letter to Ron Kirk, the top trade negotiator under Obama, demanding more disclosure.

The newly leaked document is one of the most controversial of the Trans-Pacific Partnership trade pact. It addresses a broad sweep of regulations governing international investment and reveals the Obama administration’s advocacy for policies that environmental activists, financial reform advocates and labor unions have long rejected for eroding key protections currently in domestic laws.

Under the agreement currently being advocated by the Obama administration, American corporations would continue to be subject to domestic laws and regulations on the environment, banking and other issues. But foreign corporations operating within the U.S. would be permitted to appeal key American legal or regulatory rulings to an international tribunal. That international tribunal would be granted the power to overrule American law and impose trade sanctions on the United States for failing to abide by its rulings.

The terms run contrary to campaign promises issued by Obama and the Democratic Party during the 2008 campaign.

“We will not negotiate bilateral trade agreements that stop the government from protecting the environment, food safety, or the health of its citizens; give greater rights to foreign investors than to U.S. investors; require the privatization of our vital public services; or prevent developing country governments from adopting humanitarian licensing policies to improve access to life-saving medications,” reads the campaign document.

Yet nearly all of those vows are violated by the leaked Trans-Pacific document. The one that is not contravened in the present document — regarding access to life-saving medication — is in conflict with a previously leaked document on intellectual property (IP) standards.

“Bush was better than Obama on this,” said Judit Rius, U.S. manager of Doctors Without Borders Access to Medicines Campaign, referring to the medication rules. “It’s pathetic, but it is what it is. The world’s upside-down.”

The Office of the U.S. Trade Representative insists that while broad standards require many medical patents and IP rules that would increase the price of medications, the U.S. intends to work with countries involved in the Trans-Pacific talks to ensure that the agreement does not restrict access to life-saving drugs.

USTR was not immediately available to comment on the newly leaked investment chapter of the Trans-Pacific deal, and has previously stated that it cannot comment on the terms of an allegedly leaked document.

That statement is belied somewhat by recent American efforts in other international negotiations to establish controversial medical patents that grant companies long-term monopolies on life-saving medications. Those monopolies increase drug prices, which impede access to medications, particularly in developing nations. The World Health Organization and dozens of nonprofit public health groups have objected to the standards sought by the Obama administration. Two United Nations groups recently urged global governments not to agree to trade terms currently being advocated by the Obama administration, on the grounds that such rules would hurt public health.

Such foreign investment standards have also come under fire at home, from both conservative sovereignty purists and progressive activists for the potential to hamper domestic priorities implemented by democratically elected leaders. The North American Free Trade Agreement, passed by Congress in 1993, and a host of subsequent trade pacts granted corporations new powers that had previously been reserved for sovereign nations and that have allowed companies to sue nations directly over issues.

While the current trade deal could pose a challenge to American sovereignty, large corporations headquartered in the U.S. could potentially benefit from it by using the same terms to oppose the laws of foreign governments. If one of the eight Pacific nations involved in the talks passes a new rule to which an American firm objects, that U.S. company could take the country to court directly in international tribunals.

Public Citizen challenged the independence of these international tribunals, noting that “The tribunals would be staffed by private sector lawyers that rotate between acting as ‘judges’ and as advocates for the investors suing the governments,” according to the text of the agreement.

In early June, a tribunal at the World Bank agreed to hear a case involving similar foreign investment standards, in which El Salvador banned cyanide-based gold mining on the basis of objections from the Catholic Church and environmental activists. If the World Bank rules against El Salvador, it could overturn the nation’s domestic laws at the behest of a foreign corporation.

Speaking to the environmental concerns raised by the leaked document, Margrete Strand Rangnes, Labor and Trade Director for the Sierra Club, an environmental group said, “Our worst fears about the investment chapter have been confirmed by this leaked text … This investment chapter would severely undermine attempts to strengthen environmental law and policy.”

Basic public health and land-use rules would be subject to challenge before an international tribunal, as would bank regulations at capital levels that might be used to stymie bank runs or financial crises. The IMF has advocated the use of such capital controls, which would be prohibited under the current version of the leaked trade pact. Although several countries have proposed exceptions that would allow them to regulate speculative financial bets, the U.S. has resisted those proposals, according to Public Citizen.

Trans-Pacific negotiations have been taking place throughout the Obama presidency. The deal is strongly supported by the U.S. Chamber of Commerce, the top lobbying group for American corporations. Obama’s Republican opponent in the 2012 presidential elections, Mitt Romney, has urged the U.S. to finalize the deal as soon as possible.

This post has been updated to include comment from the Sierra Club.