No One Really Gets His or Her News From The Internet

Charlie Arlinghaus

August 7, 2013

As originally published in the New Hampshire Union Leader

In the spirit of carrying coals to Newcastle, I write a newspaper column today on the importance of newspapers to the public square. More specifically, I fear the effect on public policy and the public debate of the continuing decline of newspapers. For all the bluff and bluster so many of us have about new media and technology, the skeletal underpinning of almost all news today is news gathering that comes from the old fashioned, grandfatherly, dead tree, black and white broadsheets we love to ridicule.

As newspapers began to flourish in the 1800s, they became a historical archive of who we are. The history of almost any single event, trend, or period of development can be traced by simply researching the records scratched out on a daily basis in papers right and left, high-brow and low-brow, sensational, and staid.

As radio and, particularly, television became more important people became immersed in media sources that added sound and pictures to the less exciting printed word. Some of that change was reflected in language. The words journalism (which describes a written periodical) and press (the means of producing those written words) began to be replaced by media (which is simply a plural of mediums of communication).

Through the changes and the excitement of television anchors with nice hair, though, much of the underlying work, the more detailed background work that might inform a shorter visual piece, came from an industry that relied on humans gathering information, sifting through it, and explaining it in longer form printed pieces that still managed to encompass a historical record.

I had the interesting experience five or six years ago of sitting in a radio studio, waiting to go on the air, and reading a local newspaper sitting on the desk. About two-thirds of the front page was highlighted and I noticed that the pre-taped news report was taken word for word from the page without credit. The listener thought he got his news from the radio but it was gathered by the newspaper.

Through the rise of broadcast media, newspapers continued to thrive. For many years, a typical newspaper was supported by about 80% advertising revenue and 20% circulation revenue. For more than a half century revenues kept rising from about $20 billion nationally in 1950 to a peak of $65 billion fifty years later.

Then the bottom fell out with modest decline and a collapse during the recession. Today revenues are about what they were in 1950 ($22 billion in 2012). The last few years have seen very small declines in revenue so perhaps things are stabilizing. Certainly things are changing. Online revenues are now 15% of ad revenues. One major paper, The New York Times, has changed its payer mix to 50% ads/50% circulation though that model may be unique to that product.

What is still true is that newspapers remain the most important part of our public square with no obvious replacement available. Many people are quick to tell you that they get all their news from the internet and so have no use for papers. But they’re wrong.

Most blogs, facebook aficionados, and other new media opinion leaders take news gathered by someone else and recast or interpret it. The person who gathered the news you reposted, respun, or re-reported was employed, in most cases, by the supposedly archaic newspaper. Few internet opinion influencers of either right or left go to the hearing, the council meeting, file the public information request, or interview the newsmaker directly. So, perhaps 80-90% of the information being used to form opinions come from the fewer and fewer newsroom employees who remain.

It’s all well and good to claim “I get my news from twitter” but there are few events which your twitter feed covers and even then there are some limitations to capturing nuance and detail in 140 characters.

It is natural for me to fret about the loss of opinion collection and news gathering. I write down my thoughts on a weekly basis for “old media” and re-pontificate those scribblings regularly over the airwaves and the newfangled intertubes. But you should worry too.

The blogger you like to read and your favorite twitter smart aleck needs the information that he or she can react to or battle wits against. Bloviating politicians get windier when no one is there to listen to and report on their more ridiculous output. Think of the mischief they can get into if no one is watching.

Worst of all, without some poor guy just out of journalism school to take our place, we might have to attend all those meetings or read the state’s financial reports ourselves.

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Unemployment drops in July…for all the wrong reasons

Josh Elliott-Traficante

August 2013

According to the data released by the Bureau of Labor Statistics, the unemployment rate dropped by .2 percentage points, to 7.4%. The Establishment Survey Data showed the creation of 161,000 non-farm pay roll jobs. On the surface it looks like a fairly decent report: unemployment down and job growth, while not stellar, is enough to keep up with natural population growth.

Digging into the data however, what once may have been a mediocre report quickly turns gloomy. The drop in unemployment was not the result of people getting jobs; rather, they gave up looking for work and left the workforce entirely. The number of unemployed decreased by 263,000 while the number of those no longer in the labor force increased by 240,000.

This decline was reflected in the .1 percentage point drop in the critical labor force participation rate to 63.4. The labor force participation rate has been hovering close to record lows for the better part of the last year. The rate had climbed .3 points over the last several months, showing some, albeit minor, improvement. Whether the drop in July is just a temporary setback from the improving trend of the last few months, or a return to just ‘skipping along the bottom’ remains to be seen.

The other measures of unemployment saw drops in their rates, [U-4: 8.2% to 8.0%]  [U-5: 9.1% to 8.8%]  [U-6: 14.3% to 14.0%] however, these too can be attributed to the contraction of the labor force, not economic growth.

Since those no longer in the workforce do not count towards the unemployment rate, what would the rate look like if they were? If they were counted as unemployed and taking into account historical norms, the unemployment rate for July would be 8.5%. (Follow the link for an explanation of the methodology http://www.jbartlett.org/what-is-the-real-unemployment-rate)

Looking at the Establishment Survey Data, the areas seeing the biggest growth were Retail Trade (+ 46,800) and Food and Drink Services (+38,400). While job growth is always a good thing and hiring in these sectors are indicative of growing consumer confidence, jobs in these sector are largely part time positions. Job losses were minor and scattered over several, non-related sectors, indicative of issues within certain sectors and not of the economy at large.

Despite the optimistic appearance of a .2 percentage point drop in the unemployment rate, the drop is a sign of economic weakness, not strength.

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Our Future Depends On Rewarding the Boring

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Charlie Arlinghaus

July 24, 2013

As originally published in the New Hampshire Union Leader

The hardest thing for any government to do is to pay attention to the long term. The system creates incentives for politicians to focus on short term solutions and ignore long term outlooks. The inability to look beyond this morning’s political fight defines the dysfunctional entity that passes for a federal government but has also crept into our state politics as well.

Policy is made by elected officials, usually in two year increments. Whether the particular elected official serves for just two years or longer, he or she is nonetheless focused on the next biennial election. Things that will turn out beneficial five or six years from now are of less interest.

The federal budget is case study in short term thinking. Every federally elected official believes that the United States should balance its budget. But there is no actual requirement to balance the budget so they don’t. As a result the country’s debt has grown every year since 1957 — growing from $5.8 trillion to $16.9 trillion just in the last twelve years.

Automatic spending reductions were enacted because no elected officials could possibly withstand the electoral onslaught of any reduction in the growth of spending. Mind you, the reduced increases (or automatic cuts depending on your perspective) wouldn’t come anywhere close to balancing the budget. Nonetheless they were portrayed as draconian austerity which no politician could withstand.

The benefits of balancing the budget would accrue over time as they kept us from a fate similar to some European nations whose fiscal house has collapsed. That sort of benefit is long term and subtle. The pain of even the smallest reductions is considered too much to openly advocate. So an automatic reduction is crafted that politicians can all be annoyed with but that does their job for them.

At the state level, we don’t have any such option. The federal politicians are incapable of balancing the budget because they don’t have to. At the state level, we have to. We may not shrug our shoulders and run a deficit. The budget must balance. But even in that construct, some decisions are passed off.

An example of what we can’t avoid was the 2011 state budget. One elected official explained to me “we spent every dime had. We just didn’t spend any we didn’t have.”

Whatever cuts were made, were dictated not by a policy choice but budget necessity. There was an argument over whether revenue projections were set high enough (the final budget was as close to spot on as they come). However, once that number was determined every dime was spent and no more.

Previous budgets had been at higher levels through the introduction of borrowing and two federal bailout programs for state budgets. Those sources were gone and the budget had to come back to reality. Many politicians knew they would be politically attacked for it and they were. But the new balance formed the basis of the next budget too.

There are two areas, though, were the incentives don’t align: state debt and infrastructure.

The state’s debt skyrocketed in the period from 2007-2011 after having been steady for more than a decade under governors of both parties. The debt explosion saw the state’s debt climb from $654 million to $939 million in just four years. New Hampshire’s debt is still good by national standards and the growth has slowed since. But it was easier for some politicians to borrow money than to not spend it. New Hampshire should guard against that Washington mentality.

Transportation spending is also an incentive problem. In general terms, we don’t raise enough money to pay for maintaining the current system of roads. Pavement conditions deteriorate more and more each year (replacing costs a lot more than maintaining) and our bridges were rated 41st worst in the country by the libertarian Reason Foundation.

Gas tax receipts are almost identical to what they were 10 years ago before adjusting for inflation even though spending increased 72%. Gimmicks have made up the difference – the turnpike paid $100 million to the highway fund for a few miles of highway and accelerated the payments over a few years. In addition, a temporary and regressive motor vehicle surcharge plus a one-time federal stimulus grant plugged holes temporarily.

The difficulty is that bridges last 75 to 100 years and no one can campaign on “we completed routine maintenance that will extend the bridge’s life to 2040.” It benefits some guy running 30 years from now but does nothing for me.

Sound fiscal management is boring and boring doesn’t win elections. I wish it did.

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NH Unemployment Falls to 5.2% in June

Josh Elliott-Traficante

The unemployment rate in New Hampshire fell by one tenth of a percentage point in June to 5.2%, representing a decrease in the number of unemployed by 1400. The number of jobs created according to the Household Survey however was only 250, meaning the balance of the no longer unemployed (1,150) left the workforce. While the size of the state’s labor force has rebound since the depths of the recession, the last 6 months have seen a series of declines.

Whether this is a short term pull back or the sign of a larger trend remains to be seen. While it is true that New Hampshire is a “graying” state, the dip as of late is too large and too rapid to be attributed to the aging of the labor force.

Turning to the Establishment Survey Data, 1,900 non-farm jobs were created in the month of June. Sectors seeing the largest gains were Durable Goods Manufacturing (+600), Financial Activities (+700) and Accommodation and Food Services (+1,700). Retail Trade (-600), Professional, Scientific and Technical Services (-600) and State Government (-900).[i]

The cities do not seem to have fared as well this month, with all four losing jobs: Manchester     -500, Nashua -500, Rochester-Dover -600 and Portsmouth -200.

[i] This ‘loss’ seems to be a partial correction from last month’s gain of 1300 state government jobs

 

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Business friendly: A Good State Budget Development

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Grant D. Bosse

July 9, 2013

As originally published in the Concord Monitor

Gov. Maggie Hassan was flanked by Republican and Democratic leaders as she signed into a law a much-needed update of New Hampshire’s Business Corporation Act. There were no great ideological issues at stake. The bill brings New Hampshire government up to date on handling technical corporate practices, such as domicile and dissolution.

The legislation was a top priority for the New Hampshire Business and Industry Association and was expertly guided through the State House by Republican Sen. Jeb Bradley. The new code goes into effect in January.

Business owners should also be happy for a change that didn’t happen. Gov. Hassan has hoped to delay two popular tax reforms approved by the last Legislature in order to boost tax revenues in her proposed budget.

Last year, Republicans and Democrats overwhelmingly approved increasing the business income threshold for paying the Business Enterprise Tax. They also extended the ability of businesses to carry forward BET payments against the Business Profits Tax. These small changes in the tax code benefited struggling small firms and those just starting to show a profit.

Hassan would have reinstituted the lower BET threshold just months after it went up and put off the carry-forward for two years. That would have meant a tax increase of $17 million on small business, and it would have undermined confidence in New Hampshire government.

The private sector doesn’t like high taxes, but it despises uncertainty. Repealing these two modest tax reforms would have sent a horrible signal to anyone looking to start a business in New Hampshire just to fuel a small increase in state spending.

In a year when partisan rhetoric overstated minor policy differences, it’s nice to see Republicans and Democrats working together to make New Hampshire more welcoming to business owners.

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There is a Right Way to Do Something Stupid

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Charlie Arlinghaus

July 17, 2013

As originally published in the New Hampshire Union Leader

There is a right way and a wrong way for the government to do something stupid. It won’t surprise anyone that the current administration in Washington has chosen the wrong – and almost certainly illegal – way while New Hampshire managed to do a whole host of silly things but in the right way.

Routinely, governments find that laws previously passed are quite inconvenient and get in the way of something they are trying to do (or not do) today. But they don’t want to repeal the law for the future, they just don’t want to follow it this year.

That happened recently with the byzantine federal health care law. Those following closely will recall that the law includes mandates to purchase health insurance for both individuals and for businesses. Implementing the law has taken longer and been more complicated than some administrators had expected.

Citing concerns about the complexity of the requirements under the law, the administration unilaterally suspended for a year the portion of the law that applies to businesses. They didn’t ask Congress to pass a temporary repeal. They merely announced that they will cease to enforce a law of the land for a year –businesses get this break, individuals are still out of luck. Apparently the law is too complex for businesses to follow but perfectly fine for individuals.

Businesses with more than 50 employees, the ones to whom the law applies, are only a few percent of all firms but they account for 72% of employment.

While I think delaying the very complex law is reasonable, I would have delayed for both businesses and individuals just to be fair. But, a much more important point, administrators do not have the authority to pick and choose which laws they will enforce or not. If a law making the tax rate 35% passes, can the IRS announce it will only enforce the first 30%? If Congress chooses to require airbags on new cars, would it be OK for the transportation secretary to announce that they won’t actually enforce that?

Administrations can request laws be repealed or suspended but they may not choose to enforce or not laws they disagree with. If a Republican had replaced the current president, would it have been acceptable for him to not try to repeal ObamaCare but instead just announce he won’t be enforcing it? Of course not.

In New Hampshire, we pass temporary restraints on laws all the time. But the governor doesn’t decide to just enforce it. Instead the legislature passes a law temporarily suspending another one.

For example, technically we have a law that requires surpluses left at the end of the two-year cycle to be deposited into a “rainy day fund” – in theory to allow the extra in good years to be a reserve to balance out small revenue shortfalls in bad times. But every budget for the last five has suspended that law.

After state reserves had been drained from $188 million to $17 million by 2003, then-Gov. Craig Benson set of a goal of building the state’s operating reserving back to a more prudent $100 million. Benson’s $82.2 million surplus would have brought the state’s reserves to $99.5 million had the law been allowed to work. Instead, the next governor and next legislature passed a law suspending the rainy day fund law so the surplus would be available for them to spend.

The surplus turned out larger than they thought so they put some of it and some of the $51 million surplus two years later aside but they kept and spent a total of $61 million that should have been set aside for the rainy day that was on their doorstep.

The Republican legislature that decried this sort of practice in 2011 nonetheless passed a law preventing $17 million from going in the rainy day fund and the current divided government hangs on to that $17m and an additional $39m surplus the last budget generated. At this point, it isn’t clear why we have a rainy day fund at all.

As annoying as I find the bipartisan effort to neuter the state’s rainy day fund, our governors and legislatures do it legally. This was never done by executive fiat. Instead, the law was duly suspended by passing another law as opposed to administration in Washington which is just refusing to enforce the laws they are elected to administer.

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June Unemployment Report: Rate Unchanged at 7.6%

 Signs of a recovery, but a long way to go

Josh Elliott-Traficante

The June unemployment rate remained unchanged at 7.6%. While the ranks of the unemployed grew by 17,000, the increase was not large enough to change the rate. The number of those not in the workforce grew by 12,000, but those classified as wanting a job fell by 132,000.

The critical labor force participation rate increased by one tenth of a point to 63.5%, marking three straight months of improvement. While this rate, a reflection of the large numbers of people who have left the workforce due to the recession, is still at 30 year lows, incremental increases are an encouraging sign.

At the same time however, the unemployment rates that capture some of those discouraged workers who gave up looking for work increased. The U-5 rate increased from 8.0% to 8.2%, the U-5 from 8.8% to 9.1% and the U-6 from 13.8% to 14.3%.

Another discouraging sign was the drop in the number of full time works with a corresponding spike in full time workers. The number of full time employees fell by 240,000, while the number of part time workers grew by 360,000. Part time employment has been surging since March of this year, while full time employment was also growing (at least until June), albeit at a much slower rate.

The reasons for the growth in part time employment over full time employment have been attributed to both a fear on the part of employers over the strength of the recovery and the reluctance to hire full time employees due to the extra costs incurred from the Affordable Care Act or Obamacare.

Turning to the Establishment Survey Data, 195,000 non-farm jobs were added. Sectors seeing the largest gains were Construction (+13,000), Retail Trade (+37,100) and Food Services (+51,700). Seeing the biggest losses were Manufacturing (-6,000) [although automobile manufacturing was +5,000], Government (-7,000), and Transportation and Warehousing (-5,000).

The Establishment Survey Data reflects the surge in part time workers mentioned above. The areas of biggest growth, Retail Trade and Food Services, are sectors where the vast majority of the jobs are part time, entry level positions, not full time jobs.

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NH Unemployment Drops to 5.3%

Josh Elliott-Traficante

According to New Hampshire Employment Security, the unemployment rate for the state in the month of May fell to 5.3%, a drop from 5.5% in April.

This drop reflects a 1350 fewer unemployed New Hampshire residents. The Household Survey data also found that 1800 jobs were created and the labor force grew by 450.

All of this is good news, in particular the fact that the labor force is growing. This indicates that people are no longer leaving the workforce due to a lack of work, which has been a hallmark of the long recovery.

According to the Establishment Survey, 2,500 non-farm jobs were created in May, with 1,400 of those being in the private sector. Sectors seeing the biggest gains were Arts, Entertainment and Hospitality (+1,200), Accommodation and Food Service (+800), and State Government (+1,300)[i]

Seeing the biggest losses were Wholesale Trade (-600) and Educational Services (-300)

Greater Manchester lost 300 jobs in May, Nashua and Portsmouth each gained 800, while Rochester-Dover shed 400.

 

[i] Note: This number conflicts with the actual number of hires by the state. See http://www.jbartlett.org/nh-fills-over-400-vacant-positions-despite-hiring-freeze for more details.

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Unemployment Upticks to 7.6% in May

The national unemployment rate grew to 7.6% in May, up from 7.5% in April. That increase translates to 101,000 additional unemployed persons.

Though the unemployment rate did increase, the crucial Labor Force Participation Rate saw a slight increase from 63.3% to 63.4%, reflecting a drop of 231,000 of those considered ‘not in the labor force.’ This means that people who had left the work force due to a lack of jobs, are now returning and looking for work.

However, those who did not finding work quickly are now counted as unemployed causing the unemployment rate to go up as well.

Paradoxically, this could be taken as good news, since it means that means that the long term unemployed (or some of them at any rate) feel strongly enough about their chances of finding a job, that they have started to look again.

Taking into account historical baselines, if all of those people not in the workforce, but would like a job were counted in the official unemployment rate, the rate would be 8.7%

Turning to the establishment data, the country added 175,000 non-farm payroll jobs in May. Sectors seeing the largest gains were Retail Trade (+27,000), Temporary Help Services (+25,600) and Healthcare (+11,400) and Food Services and Drinking Places (+38,100).

Growth in the Healthcare field is constant, especially with an aging population, so payroll jobs in that sector does not say much about the economy as a whole.

The growth in Food Services and Retail Trade, while large in real terms, is actually consistent with the growth seen over the past two years. Retail Trade in particular is still well short of pre-recession highs.

Temporary Help Services (i.e. temp jobs) have seen greater than average growth over the past year. There are at least two possible causes for this: employers have a need for more workers, yet are unsure about future growth so they are hesitant to bring on full time employees or they have concerns over the implementation of the Affordable Care Act.

Seeing the largest losses were Federal Government (-14,000), Hospitals (-5,900) and Manufacturing (-8,000).

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Screeching Lies at Each Other Does Not Count as Debate

Charlie Arlinghaus

May 15, 2013

As originally published in the New Hampshire Union Leader

Don’t believe anything you read about the New Hampshire budget. It might be a good idea not to believe anything read in any political story. Communications “professionals” on either side of a debate excel only in screeching and grotesque exaggeration. Debate in politics in increasingly composed of two people saying things neither of them believes and no one is expected to take seriously but they hope may fool a few activists who already agree with them. Lost in the ridiculous caterwauling is anything vaguely resembling a fact.

If we are to believe political staff, the debate over the budget is between one group making dishonest claims and an extremist cabal with a secret plan to destroy state government.

As an example, New Hampshire Republicans hailed good economic news last week not by touting their success in the past but by attacking Democrats “who for months have spread false and dishonest claims about a potential budget shortfall.” Those “dishonest claims” were based on the fact that revenues were $41 million behind budget. The dishonest claim was perpetrated by the Governor, House Democrats, House Republicans, Senate Democrats, Senate Republicans, the Legislative Budget Office, and me.

Apparently, while every budget observer in the state was fooled by math, the one guy who wrote this screed alone saw clearly and knew when no one else did that a fabulous two months were coming even if it was unexpected by the rest of us. Good thing he remained silent so he could attack us later. Actually, most of us are excused apparently for just being stupid – we aren’t included in accusation of dishonesty so he must presume we were too stupid to know that the two anomalous months were coming and that lawsuits would be settled on the precise timing they were settled. The omniscient release writer only attacks “Democrats” for being dishonest. They apparently are smarter than the rest of us or it wouldn’t be dishonesty would it?

In reality, no one takes anything these people say seriously. Thanks to the internet, they don’t even waste paper in fax machines anymore. Their laughable screeds can be deleted unread.

Speaking of laughable screeds, The Democratic release writers are no better. There’s a lot of material here that is fairly predictable but let me mention the typical budget release which attacks “Jeb Bradley and his Tea Party Caucus” because they have “devastated essential services for thousands.”

You can divide the GOP broadly into conservatives and moderates with the Tea Party as a subset of conservatives Yet Jeb is and has always been quite well known as a moderate. So why make such a ridiculous identification. Well Jeb is perceived as an opponent to Sen. Shaheen next year so they want to confuse people about him and use him as a piñata for everything they don’t like. Nothing wrong with that per se, it just makes the average reader wonder about the accuracy of what might come next and well it should.

The “devastate essential services” charge is easier to peddle because so many people are innumerate. But simple math does refute the charge.

The supposedly horrific 2012 budget estimated revenues correctly (in fact, almost precisely with two months left to go). It then spent that amount of money according to the opposite priorities the Democrat release writer says. Compared to the budget 6 years prior (the budget closest to the same amount as 2012), a 30% increase in debt spending (and debt is a decision made by prior legislatures which is non-negotiable) left $1.2 billion to be spent by the general fund if revenue estimates were right (and it turns out they were).

The slightly larger half of the budget goes to Health and Human Services. Those human service priorities were actually 4.4% higher than 2006. Whatever differing priorities you and I might have, the services we each consider essential are probably in the this HHS half of the budget The actual spending reductions necessary to balance the budget came from the slightly smaller half of the general fund budget outside of HHS. This “rest-of-the-budget category was down 11%.

That hardly sounds like “balancing the budget on the backs of the needy and disabled.” Furthermore, the portion of the HHS budget that goes for mental health and the developmentally disabled (considered the most critical populations in the minds of both political parties) was up 34%. But somehow that gets translated into Republicans hate the disabled and poor people.

Many conservatives and liberals are more than willing to engage in an honest debate about priorities. But generally speaking we are drowned out by the writers of ridiculous screeds who never let reality get in the way of invective.

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