Tuesday, February 6, 2018

LONG ISLAND | Jobs Grow Just 0.4%

December 2017 Job Growth, Nassau-Suffolk – 0.4%.
Source: BLS (bls.gov), Feb. 6, 2018.

February 6, 2018 – If JOBS-JOBS-JOBS is the standard, the first year of the new Administration in Washington, D.C. has failed Long Island.

Nassau-Suffolk added only 4,900 nonfarm payroll jobs from December 2017 to December 2018, according to data released today by the BLS.


The growth rate of 0.4 percent is one-third of NY State's rate of job growth for the period, and less than half the rate of job growth in the entire tristate New York metro area. It is less than one-sixth of the growth rate in the other major area component outside the core New York City metro area, i.e., Dutchess and Putnam counties.

So what has the Republican Congressman representing Long Island's Eastern Half been doing about bringing jobs to Long Island? His latest post on the topic on his official website was during his last campaign year, 2016.

(For a general summary of Zeldin's political positions, go hereHe rode in on the howdahs of the Tea Party Republicans. His votes and public statements peg him as a "libertarian conservative", an oxymoron since conservatives are anti-libertarian on social policies.

Zeldin thinks that Suffolk County, which depends on clean water and air for its tourism and leisure-living businesses, and was clobbered by the Meltdown of 2008, needs less environmental and financial regulation.

That doesn't seem to have worked so well for Suffolk County.

His New Idea in 2016 was...

  • Make It Easier to Pollute and Rip Off Financial Customers by allowing Congress to block regulation of the environment and financial fiduciaries. 
  • Make Environmental and Financial Regulation Harder for the Executive Branch to implement!
Read below, in its entirety, Zeldin's proposal in March 2016 for creating jobs on Long Island.

March 15, 2016  
Press Release 
Op-ed Written by Congressman Lee Zeldin (NY-01)
During my first 14 months in Congress, I have constantly heard from business owners on Long Island sharing stories about how various examples of bureaucratic red tape out of Washington has made it increasingly difficult to create more good paying, private sector jobs. The Department of Labor “Fiduciary Rule,” the EPA’s effort to put the motorsports and custom car industry out of business, and the attempt of federal regulators to impose overzealous Dodd-Frank regulations on auto lenders are just three of many new federal agency regulations that harm the business climate on Long Island and throughout our nation. As each new rule is passed, we are reminded of why it is so important for Congress to pass the Regulations for the Executive in Need of Scrutiny (REINS) Act (H.R. 427).
Under the REINS Act, every major rule or regulation with an economic effect of $100 million or more annually would be required to be specifically approved by the House and Senate, in addition to the President, before the rule takes effect. This legislation is about smart policy and balance of power. Here are three brief examples of why the REINS Act is so important:
Example #1: Many Long Islanders, when seeking something as critical as life insurance or retirement savings advice, want to go to a trusted broker who is a part of their local community. Planning for retirement and managing a family’s investment portfolio to save for college or buy a new home is an essential piece of the American dream. The Department of Labor, through its “fiduciary rule,” is shutting down that dream by overregulating independent financial advisors and life insurance brokers out of business. By imposing regulations and fees meant for larger, multi-billion dollar Wall Street firms, the one-size-fits all approach proposed by federal regulators would kill an industry that is run by small entrepreneurs and built on personal relationships. By the Labor Department’s own admission, in 2010, those individuals who did not seek or have access to investment advice suffered over $100 billion in financial losses through investment mistakes, which could have easily been avoided with the appropriate level of consultation. Saving for retirement is of crucial importance to American families and access to professional financial advice should not be hindered by an unnecessary regulation put in place by unelected agency bureaucrats creating rules that carry the force of law.
Example #2: The Clean Air Act has been a resounding success and in Congress I have been an outspoken advocate for clean air and clean water on Long Island [???]. The EPA is attempting to go around Congress, ignoring the Constitution by creating new interpretations of this law, which would hurt small and medium sized businesses. Current rules proposed by the EPA would effectively shut down the motorsports and car modification industry by imposing the same level of regulations meant for power plants and other major industries. By banning certain modifications made to cars and motorcycles, and applying these misguided regulations retroactively, hobbyists, who have invested countless time and money into their cars, would suddenly be in violation of a set of federal regulations that were never vetted by their representatives in Congress. Small and medium sized businesses on Long Island, like American Racing Headers, that supply specialty automotive parts to customers nationwide, are already seeing a reduction in business as a direct result of the threats surrounding these new rules. 
Example #3: The indirect auto loan market just surpassed $1 trillion, making it one of the most essential, and competitive financial markets in our economy. In a misguided change of policy, based on flawed statistics, the Consumer Financial Protection Bureau (CFPB) is attempting to shut down transparency in the auto lending market by mandating new standards that they falsely believe will increase fairness in the market. Consumers on Long Island should not be cut off from needed credit due to arbitrary government regulations. A transparent and competitive auto lending market means consumers will get the best rates, but bureaucrats in Washington want to impose strict Dodd Frank financial regulations meant for Wall Street that would shut down the indirect auto loan market so essential to main street Long Island. 
What has always made America so great has been the opportunity to succeed through hard work and dedication, but unfortunately today, economic opportunity is being stripped away with oppressive taxes and burdensome red tape on America’s businesses. President Obama’s first seven years have brought forth 468 regulations deemed “economically significant rules”, and that’s with just under a year still to go. (CEI) The Fiduciary Rule, the attack on the motorsports industry by the EPA, and the CFPB’s attempted overregulation of auto-lending, are just three of the rules that have made it harder for business owners to succeed in today’s economy.
To address this issue, I proudly voted for the REINS Act when it passed the House last year, as well as other essential pieces of legislation to shut-down job killing red tape. This critical legislation would give Congress more oversight over the most broad and harmful regulations being implemented by federal agencies. Allowing the executive branch to implement major regulations, without Congressional oversight or input, will only further hurt the ability of our job creators to expand and create more good paying jobs. Americans should demand that Congress take the REINS to help grow our economy.  [End of Zeldin Op-Ed]

If this is the best that Zeldin can come up with to create jobs on Long Island, no wonder jobs have grown only 0.4% during the year. Long Island needs better ideas.


Monday, February 5, 2018

DOW DROP | Why Now? Top Ten Reasons

Here is the Dow at 3:24 pm. It fell from a high of 25,521 to a low of 23,924,
a record intraday drop of 1,607 points.
The intraday Dow suffered a record point drop of more than 1,600. 

It recovered somewhat, ending the day with a record point drop for the day of 1,175, more than 4 percent.

I am collecting "explanations". Take your pick. Send me an email* on which ones you believe and I will re-rank these reasons to reflect a consensus. 
*john@cityeconomist.com

1. Treasury bond yields have risen sharply in recent weeks. So smart money is betting on higher interest rates. 
2. Outgoing Fed Chair Janet Yellen announced before she retired that the Fed is committed to raising interest rates, so maybe you didn't have to be quite so smart to see this coming.
3. Just a Flash Crash, computer-driven like 2010. Relax, folks, this is a buying opportunity, says one commentator. (But after-hours trading for the first hour showed more selling.)
4. Hey, the market was overvalued, maybe by 20 percent. We knew this was coming.  Investors were just cashing in after the rally in stocks since the GOP victory in November 2016.
5. Friday BLS data showed rise in hourly earnings  for workers. Fed said it saw signs of inflation – i.e., it read the BLS data same as we did.
6. The BitCoin et al. Bubble.
7. Baby Boomers who are retired or are getting ready to are gradually exiting stocks, using the old rule of "100 minus your age" in stocks. Their problem has been where to put their money while they wait for interest rates to rise; rising rates offer more opportunities.
8. A new Fed Chairman creates uncertainty. GOP tax cuts will increase the deficit but mostly won't put money in hands of people who will spend it.
9. A stagnant economy may be in the cards.
10. May be the beginning of a long-overdue corrective bear market.

PBS has since published a list of the Top Five reasons the market is crashing. I have edited the list above slightly after reading this article. 

Sunday, February 4, 2018

ART BIZ | Vero Beach, Fla., Feb. 9-11, 2018

Vero Beach Insider Interview on Feb. 9-11 Exhibit
The Vero Beach Insider is a radio show that focuses on female entrepreneurs in the Vero Beach, Florida area.

The January 31, 2018 show celebrates the Feb. 9-11 Fourth Annual "Art on the [Marsh] Island" Show.

Marsh Island is on the mainland end of the Wabasso Bridge, which my wife and I call the Five-and-Dime Bridge because is it State Road #510. (Get it? 5 and 10?) It connects the Barrier Island with Sebastian, Florida.

We went to this show last year and it was worthwhile. The whole Marsh Island development is of interest.

To listen to the interview, click here and start listening at the 9-minute mark. And don't forget to come to the show on February 9-11. See you there, maybe.

Friday, February 2, 2018

JOBS | Average Increase Nov-Jan, 192,000

Nonfarm Payroll (BLS)
Total nonfarm payroll employment rose by 200,000 in January. However, the net increase in total nonfarm payroll employment was revised down for November-December:
  • The November increase was revised down from 252,000 to 216,000.
  • The December increase was revised up from 148,000 to 160,000.
  • The net change was that gains in payroll jobs in November and December combined were 24,000 fewer than previously reported.
  • After revisions, job gains averaged 192,000 per month over the last 3 months. A moving average is more reliable for payroll job changes. Each month, prior data is revised based on additional reports and recalculation of seasonal factors. Noise in the reported numbers is especially likely during the annual BLS benchmark process at the end of each  year.
Employment continued to trend up in construction, food services and drinking places, health care, and manufacturing:.
  • Construction added 36,000 jobs in January, with most of the increase occurring among specialty trade contractors (+26,000). Employment in residential building construction continued to trend up over the month (+5,000). Over the year, construction employment has increased by 226,000.
  • Food services and drinking places employment continued to trend up in January (+31,000). The industry has added 255,000 jobs over the past 12 months.
  • Health care continued its long and steady record of adding jobs in January (+21,000), with a gain of 13,000 in hospitals. In 2017, health care added an average of 24,000 jobs per month.
  • Manufacturing continued to add jobs (+15,000). Durable goods industries added 18,000 jobs. Manufacturing has added 186,000 jobs over the past 12 months.
  • Other major industries were little changed, including mining, wholesale trade, retail trade, transportation and warehousing, information, financial activities, professional and business services, and government.
The average workweek for all employees on private nonfarm payrolls declined by 0.2 hour to 34.3 hours in January. In manufacturing, the workweek declined by 0.2 hour to 40.6 hours, while overtime remained at 3.5 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls edged down by 0.1 hour to 33.6 hours.

In January, average hourly earnings for all employees on private nonfarm payrolls rose by 9 cents to $26.74, following an 11-cent gain in December. Over the year, average hourly earnings have risen by 75 cents, or 2.9 percent. Average hourly earnings of private-sector production and nonsupervisory employees increased by 3 cents to $22.34 in January.

The January unemployment rate was 4.1 percent for the fourth consecutive month. The number of unemployed persons was 6.7 million, changed little over the month. Full data are at www.bls.govAmong major worker groups, the unemployment rate for Blacks increased to 7.7 percent in January, and the rate for Whites declined to 3.5 percent.

In January, 1.7 million persons were marginally attached to the labor force, little changed from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.

Among the marginally attached, there were 451,000 discouraged workers in January, little changed from a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.2 million persons marginally attached to the labor force in January had not searched for work for reasons such as school attendance or family responsibilities.

Monday, January 29, 2018

COMPTROLLER'S OFFICE | 3rd FOCEA VB Reunion, 2018

FOCEA meets again at Citron Bistro, Vero Beach, Florida. L to R: Eric Wollman,
John Tepper Marlin. Photo by Alice Tepper Marlin.
January 28, 2018 – On this date, Eric Wollman, the founder of FOCEA, the Former Office of the [New York City] Comptroller Employees Association, paid his annual visit to Vero Beach, Florida. This is our 3rd annual reunion.

Last year we had with us former 1st Deputy Comptroller Steve Newman (http://bit.ly/2EkNo01). This year it was back to the two of us.

Eric and I had lunch with Alice Tepper Marlin at Citron Bistro on the Barrier Island of Vero Beach, off A1A near the Indian River Shores Village Hall.

Eric attends the annual Uniformed Services Patch Collectors' meeting in Titusville, Florida, and then drives down to visit on his way to relatives farther south. I asked him whether FOCEA would continue to exist now that he himself is retired and was heart-broken to discover that in his own retirement Eric is losing touch with retirees.

Can anything be done?  Meanwhile, I will continue to post on informal FOCEA get-togethers, such as the one with my successor as Chief Economist, Frank Braconi, last year (http://bit.ly/2Gv2hhi).

Here is a story from Eric Wollman about the retirement this month of Yvette Hibbert, whom I knew well at the Comptroller's Office:





Sunday, January 28, 2018

DOLLAR COLLECTIBLE | 1928 Series, Woodin Signature

L to R: Asst Sec James Douglas, Treasury Sec Will
Woodin, and Bur of Engraving Dir Alvin Hall.
 From The Highland Recorder, Monterey, Va.,
March 31, 1933. 
January 28, 2018 – When Treasury Secretary Will Woodin took office on March 5, 1933, the banking system of the United States was frozen.

This March 5 will be the 85th anniversary of the collapse of the banking system.

Some states were issuing scrip because so many panicked customers were taking cash out of the banks that their tills and safes were empty, and their reserves had often dwindled to below the insolvency mark.

Someone suggested to the new Treasury Secretary that he should issue Federal scrip. Reportedly he figured out  while he was playing the guitar for relaxation, that greenbacks were Federal scrip, if they weren't gold or silver certificates. There was no need to call a new issue "scrip". There just had to be a lot of greenbacks printed, fast.

Will Woodin personally supervised the printing of greenbacks to make sure that banks were not short of cash and currency. Rather than delay even a day by starting a new 1933 series, he issued a 1928 Series with his signature on it, even though the bills were printed in 1933. The 1928 Series has a red Treasury seal.


1928 Series dollar bill, signed by Woods and Woodin (as were all of the 1928 Series 
dollar bills with the red seal). From the author's coin and currency collection.

These 1928 dollar bills are the last notes to have been issued with a red Treasury seal. A circulated 1928 Series is sold for an estimated average of $75, depending on condition. An uncirculated note is sold for $200-$500 (says AntiqueMoney.com). One with a serial number that begins with a star instead of a letter is called a Star Note and is sold for about $2,000 circulated and $15,000 or more uncirculated.
This is an example of one of the 1928 Series Star Notes. These are rare, offered for
$15,000 and up if uncirculated..
Woodin worked round the clock making sure the new currency was printed right. Then he had cameras rolling to show the trucks leaving the Bureau of Engraving and Printing for the big-city banks.

FDR declared a Bank Holiday for the four days March 6-9, 1933. The Emergency Banking Bill was passed through both Houses of Congress in four hours in a special session called for March 9. It was  immediately signed into law by FDR. The Bank Holiday was continued for four more days, until Monday, March 13. One-third of the banks opened right away. The others had to be examined for solvency. But panic disappeared. Someone was in charge. 

The next day, FDR introduced the Economy Act, which cut veterans' pensions to balance the budget and was unpopular among Democrats. This was not a Keynesian action, unlike most of FDR's other moves in 1933, but it passed both Houses of Congress with the support of many Republicans. It passed the Senate on March 20 only because it was immediately followed by a popular bill that partly ended Prohibition.

The 73rd Congress stayed in session for its first year until June 18, 1933. Three major pieces of legislation were passed in June – the Securities Act on June 5, the Glass-Steagall Banking Act on June 12, and NIRA (which established the brilliant Public Works Agency and the less successful NRA) on June 16. 


Treasury Secretary Steve Mnuchin, poses in 2017 with a sheet of
new $1 notes bearing his signature; his wife is at his side.