Morning Report – Productivity and Costs 11/6/14

Markets are up this morning as initial jobless claims hit a new low. Bonds and MBS are down. ECB President Mario Draghi said policy makers were ready to implement further stimulus measures if economic conditions warrant, which pushed up stocks worldwide.

Initial Jobless Claims came in at 278k, the lowest since 2000. Consumer Comfort ticked up as well.

In other economic data, nonfarm productivity rose 2% in Q3, while unit labor costs only rose .3%. These two statistics explain both (a) the profitability of the S&P 500 and the lackluster economy. In all fairness, however raises aren’t usually negotiated in the summer months, so we’ll have to see if we get a big jump in Q1.

That said, the productivity and unit labor cost numbers perfectly reflect what Tuesday’s election was about – frustration that wages are going nowhere, even as productivity rises. Is the reason for this due to businesses being jerks, a lousy labor market, or technology? Depends on your politics.

Lenders got a break last Monday as a Federal district court in Washington DC ruled against HUD’s disparate impact claim, which says a lender is guilty of lending discrimination if the numbers don’t match the population, even if they had no intent to discriminate. This was a very left-wing take on discrimination, and was intended to create lending quotas. Next stop is the Supreme Court, which might be the end of the whole thing.

27 Responses

  1. George Will’s column today was written in part by Brent:

    Abolish the Consumer Financial Protection Bureau. This creature of the labyrinthine Dodd-Frank law violates John Locke’s dictum: “The legislative cannot transfer the power of making laws to any other hands. . . . The power of the legislative . . . [is] only to make laws, and not to make legislators.” The CFPB is empowered to “declare,” with no legislative guidance or institutional inhibitions, that certain business practices are “abusive.” It also embodies progressivism’s authoritarianism by being, unlike any entity Congress has created since 1789, untethered from all oversight mechanisms: Its funding, “determined by the director,” comes from the Federal Reserve.

    That was number one in his list of thing Republicans should do immediately. He also slipped in two sentences on the Keystone XL pipeline just to make sure the Koch checks keep showing up.

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    • yello:

      He also slipped in two sentences on the Keystone XL pipeline just to make sure the Koch checks keep showing up.

      It is quite interesting to me how liberals project their own obsessions onto conservatives.

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  2. interesting conversation with an energy guy this morning on XL.
    said “we have millions of miles of pipeline in this country. why this one is sucking up all the air in the room escapes me.”

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    • nova:

      why this one is sucking up all the air in the room escapes me.

      Earth hater.

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    • Somewhere along the line the Koch Brothers (to invoke that shibboleth again) managed to make Keystone XL some sort of conservative litmus test. It’s not the pipeline itself anymore but the very principle of it. Of course, the reverse can be argued with whacko environmentalists as the boogey man.

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  3. “managed to make Keystone XL some sort of conservative litmus test.”

    You have that backwards. It’s the environmental groups that have made it a litmus test ever since James Hanson’s statements about burning the Canadian tar sands as “game over” for the environment were made.

    http://www.nytimes.com/2012/05/10/opinion/game-over-for-the-climate.html

    http://www.slate.com/blogs/moneybox/2014/01/24/keystone_xl_is_a_huge_organizing_success.html

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    • You have that backwards.

      Thanks for making the argument I said could be made. Either way it is now a fight over nothing that has significance way over its real importance. The pipeline is now the Quemoy and Matsu of the modern age.

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      • I got a big kick out of a headline today over at NRO:

        Everything is Bigger in Texas – Like For Instance Wendy Davis’ Loss

        There was also this little bit of schadenfreud:

        Davis’s former Texas senate seat, which she gave up to run for governor? It now belongs to Republican Konni Burton. She is a tea-partier, and pro-life.

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    • jnc:

      Matt Taibbi is back at Rolling Stone:

      He apparently got booted from First Look because of harrassment allegations from a co-worker. Taibbi and harrassment? Who could possibly have imagined?

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  4. Alex Pareene on the Taibbi harrassment allegations:

    Having worked closely with Matt since he hired me, I witnessed no behavior on his part that I would characterize as “abusive,” and his hostility was reserved for his superiors, not his subordinates. He certainly was no more “combative” than any number of other editors I’ve worked with, including Intercept editor-in-chief John Cook. I also categorically reject the allegation that there was a gendered component to his managerial issues. We were successfully working to address those issues when First Look once again stepped in to fuck things up.

    An interestingly worded statement.

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    • My original may be somewhat of an overstatement. I guess he did not actually get “booted”, but instead resigned, his reason being the loss of control/freedom that he was originally promised, which came in the wake of the harassment allegations.

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      • his reason being the loss of control/freedom that he was originally promised,

        I’ve interpreted the story as being that Taibbi was trying to make a Vox vertical play and office politics blew it up in his face so he’s tucked his tail between his legs and crawled back to Rolling Stone. Which is fine. He was a rockstar there.

        As for his article, while the human interest angle is good, NPR had a different whistleblower a couple of months ago explaining how the SEC was actually running interference for, rather than prosecuting the TBTF banks. One of the worst examples of regulatory capture and/or Stockholm Syndrome in recent memory. So he’s not breaking new ground except for getting a source inside the Vampire Squid.

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  5. The definitive post mortem on the Wendy Davis loss:

    Davis probably never had a modicum of a chance to win the Texas governor’s race. The 2014 election turned out to be another wave election that cost Democrats the U.S. Senate, governor’s races in heavily Democratic states and competitive legislative races across the land, including here.

    But for more than a year, Democrats were crowing that with a well-funded turnout operation, Davis was the kind of candidate who could at least move the needle for the bedraggled party, which hadn’t won a statewide election since 1994. In one sense they were correct: She moved the needle, all right — backward.

    Her campaign was doomed from the start as she was a sacrificial lamb for a stronger future candidate but her tone-deaf wheelchair ad was the final nail in the coffin.

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  6. @yellojkt: “That was number one in his list of thing Republicans should do immediately. He also slipped in two sentences on the Keystone XL pipeline just to make sure the Koch checks keep showing up.”

    I’d extoll the virtues of the Keystone XL pipeline if they wanted to cut me a check. It’s awesome! Now I need them to start paying me.

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  7. @yellojkt: “Harassment” is a great way to get rid of people you don’t like. Because any tense work environment is going to have harassment. Although conservatives can always argue that, when it happens to liberals, they are merely being hoisted by their own petard.

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  8. It’s the “emotional abandonment” of workplace divorces.

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  9. @scottc1

    “Earth hater.”

    Why shouldn’t I hate the earth? What has it ever done for me? Nothing. No oil in the backyard, no rich veins of gold. Bah! All it does is whine. Ozone, acid rain, CFCs, blah, blah, blah!

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  10. Hey, all. If you haven’t seen Jeff Sutton’s opinion for the 6th Circuit upholding marriage as marriage, he apparently has been reading old ATiM debates. At least, I feel justified in saying I said it all (and more) long before he did.

    “Any other approach would create line-drawing problems of its own. Consider how plaintiffs’ love-and-commitment definition of marriage would fare under their own rational basis test. Their definition does too much because it fails to account for the reality that no State in the country requires couples, whether gay or straight, to be in love. Their definition does too little because it fails to account for plural marriages, where there is no reason to think that three or four adults, whether gay, bisexual, or straight, lack the capacity to share love, affection, and commitment, or for that matter lack the capacity to be capable (and more plentiful) parents to boot. If it is constitutionally irrational to stand by the man-woman definition of marriage, it must be constitutionally irrational to stand by the monogamous definition of marriage.

    “Plaintiffs have no answer to the point. What they might say they cannot: They might say that tradition or community mores provide a rational basis for States to stand by the monogamy definition of marriage, but they cannot say that because that is exactly what they claim is illegitimate about the States’ male-female definition of marriage. The predicament does not end there. No State is free of marriage policies that go too far in some directions and not far enough in others, making all of them vulnerable — if the claimants’ theory of rational basis review prevail”

    His opinion isn’t all I wish it were, but to compare his careful, reasoned treatment with the thoughtless, fallacious polemics of the 7th, 4th, 9th, and 10th is refreshing. What he demonstrates is how dishonest and frankly absurd are the arguments that marriage as marriage has no rational basis.

    As I’ve said, half the country–the half that thinks that–has literally lost its powers of reason. Sutton and Cook thankfully have not. He clearly wrote for Anthony Kennedy as his audience. We’ll see whether it does any good.

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    • QB:

      That’s great news.

      I can respect a political judgement that favors SSM even if I don’t agree with it. But these constitutional arguments calling for judicial imposition of SSM are so transparently dishonest, disingenuous and a-constitutional, I sincerely believe that any judge that rules in their favor should be immediately subject to impeachment on grounds of either blatant incompetence or deliberate abdication of their duty.

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  11. Sutton’s opinion, based as it is on traditional notions of marriage over millennia would seem to make him more partial to recognizing polygamous marriages over same sex marriages since the former have also been part of nearly all major religions at one point or another.

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    • yello:

      Sutton’s opinion, based as it is on traditional notions of marriage over millennia would seem to make him more partial to recognizing polygamous marriages over same sex marriages since the former have also been part of nearly all major religions at one point or another.

      Not as a legal matter. From a legal point of view Sutton’s opinion suggests he would be “partial” to having both issues resolved by elected reps rather than by the judiciary.

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  12. I’d say it boils down to the idea that if you are going to bring “rational basis” into it at all then the definition of marriage is an exercise in arbitrary line drawing and there’s no particular reason that the judiciary is the appropriate institution to be doing the arbitrary line drawing versus the elected branches.

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    • jnc:

      …and there’s no particular reason that the judiciary is the appropriate institution to be doing the arbitrary line drawing versus the elected branches.

      I’d go further and say that there is every reason that the judiciary is very much an inappropriate institution to be doing the line drawing.

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  13. “yellojkt, on November 6, 2014 at 1:43 pm said:

    …Either way it is now a fight over nothing that has significance way over its real importance. The pipeline is now the Quemoy and Matsu of the modern age.”

    Not if you actually believe that James Hanson knows what he’s talking about.

    You are just trying to get ahead of the implications of Obama actually approving it.

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    • You are just trying to get ahead of the implications of Obama actually approving it.

      I’ve always figured it was a fait accompli and that Democrats just need to get something for it, preferably a countervailing environmental protection goal such as a carbon tax or tougher power plant emission controls.

      Like

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