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Morning Commentary

Taking a Spin
By Charles Payne, CEO & Principal Analyst
4/10/2014 6:26 AM

Question of the Week

How much of the war on women is real and how much is divisive hype?

Post your answer below.

What goes up must come down
spinnin' wheel, got to go 'round
Talkin' 'bout your troubles, it's a cryin' sin
Ride a painted pony, let the spinnin' wheel spin

-Blood, Sweat & Tears

On a day where the (Victim of the Day) wheel stopped on women, the world's most powerful woman on this planet was the 5 feet, 3 inches tall, chair of the Federal Reserve, Janet Yellen. For me, it was not just the continued effort to appease Wall Street while tapering off quantitative easing, but it was her tightening grip on the monetary agency. We knew the Fed would try to have its cake and eat it too, but lately there has been a louder-than-normal dissent.

So, the question coming into the day is how unifying would the message of the Fed be, as it takes the tiniest of steps to reduce the most extraordinary measures upon which it has ever embarked.

There it was in the minutes of the March 18-19 meeting:

With respect to forward guidance about the federal funds rate, all members judged that, as the unemployment rate was likely to fall below 6-1/2 percent before long, it was appropriate to replace the existing quantitative thresholds at this meeting.

All the members of the Fed agreed to move away from its previous threshold of 6.5% unemployment as a trigger for changing policy course. This is a big deal, since that number could hit relatively soon, although the better news would be that the rate was moving higher, as more people bought back into the notion of hitting the bricks and finding a job. Nevertheless, the Fed could not take any chances. The great epiphany moment, when everyone decided to find a job, has been very elusive thus far.

Since the truth is unless people buy into that idea, then there's a chance a person could view employment as taking an economic step back by missing all those juicy quick benefits of cooling their heels on the sidelines by climbing that proverbial ladder, making the unemployment rate mean nothing.  The real rate is still north of 10% and the long-term unemployed rate is stubbornly near four million people. It is odd that the Fed played that unemployment game in the first place.

Wheel of Victimhood

Soon, those long-term unemployed persons will be back in the spotlight with talk of yet another long- term benefit payout. However yesterday, it was all about inequality and women. The "Equal Pay Day" bill (S. 84) of the 113th Congress failed to pass the Senate, sparking the debate on the 'War on Women.' The bill was a gimmick and at the end of the day, another devised act meant to cover for a lackluster economy. While much has been made this week about women earning $0.77 for every dollar a man earns, other parts of the story remain untold.

I must admit I was surprised when the Washington Post commemorated the White House because while still earning less than men, women made a little more than 77%. There are some legitimate issues and there are pockets of bona-fide inequality, but the solution is not a bogus bill, but an honest assessment with the appropriate application of pressure. Pew Research actually found that the wage gap was mostly a function of women dropping out of the workforce to care for children then coming back after their male counterparts had moved up the ranks.

Pew also found in addition, age played a major role in the work place; that the gap was $0.84 overall, and $0.93 for younger women.

Wheel of Fortune

Despite all the efforts of the Fed, their easy money hardly had the impact on Main Street they hoped. In February, there was an $18.9 billion jump of non-revolving credit (auto and school loans), but credit card debt was down $2.42 billion, as Americans simply refuse to get into hock as they were before the crash.

The wheel keeps spinning, and while the laws of gravity ensure that what goes up must come down in the stock market, it does not have to stay down. Nonetheless, the Fed has to find a way to unwind its reckless moves, while at the same time the Federal government must whittle down that $17 trillion mountain of debt. I suspect that both would be easy in an environment where money was flowing from the pockets of earners, rather into the pockets of those being paid to watch the parade from the sideline. The Fed thinks it can stay accommodative (read keep rates at zero) as long as there is no inflation.

If people are not working, paychecks are not increasing, and jobs are not materializing, then there cannot be too much money chasing too few goods and services. Hence, no inflation and the Fed can take a spin of that wheel of chance that its balance sheet will not collapse, and take the entire nation down with it. Ride that painted pony...

Today's Session

According to the Department of Labor, initial claims during the week ended April 5th totaled 300,000, decreasing from the 332,000 revised figure reported for the prior week and landing below the Street's estimate of 325,000. The initial claims' four-week moving average was 316,250, decreasing from the prior week's average of 321,000. Despite the fact that the result was the lowest since the week of May 12, 2007, when initial claims clocked in at 297, interestingly equity markets have not even flinched. And we should note that initial claims data is one important economic leading indicator.


Comments
Well..."what differance does it make?"

Ken Frost on 4/10/2014 9:44:43 AM
80% hype, 20% reality, Of the 20% 80% is caused by the women themselves thinking they have a special right to special treatment.

Mike C on 4/10/2014 10:14:56 AM
The ladies are bored and have to find
something to gripe about. The whole
subject is ridiculous.It's all about the
Dems finding a issue for the fall elections.We give it to them every time
we talk about abortions.......

Thomas R. Wayne on 4/10/2014 10:33:45 AM
Every great lie is based on a splinter of truth. This splinter of truth often shows up on the lips of the lying politician in the form of a true anecdote which supports his hypothesis although it is the exception rather than the rule.

I think everyone over 40 has a story of how some woman got a raw deal on pay or employment because she was a woman. And, if we think about it, we have many stories of how men got similar raw deals. Further, many of those stories of men getting raw deals involve special dispensation for less competent women simply because they were women.

My story of a woman facing employment discrimination was with my wife, who was told 30+ years ago that she got the lowest raise in the department and the worst performance rating because "she was a woman and didn't need the money, the men had families to support and did need the money." The performance review was lowered to justify the pay difference.

Of course, no manager would be so bold or honest in these days of unbridled litigation. Back then, instead of suing, most everyone would just take their services elsewhere. But, we did have the vocal complainers. There was one woman who had that old sign on her desk about woman working twice as hard to get half the credit. Of course, noone ever saw her put in a full day of work. She talked the talk, but never walked the walk of earning her pay.

Over the years, I have seen far more cases of women getting paid more than earned than of less (relative to male counterparts). With the stories of pay discrimination and government intrusion comes lower standards. The lower standards lead to too many lower performers with vocal complaints that they are mis-treated. And they ride the noise to higher pay while the special attention serves to do nothing other than make that class of citizen less competent due to facing lower standards for too long. This is true for sex, ethnicity, race, and every other division among people.

In reality, the best cure for discrimination is competition within the free enterprise system. Those that give the best pay to the best performers will eventually have the best profits and win in the marketplace. When governments interfere with artificial incentives, the result before long is always harm to the group government claimed to want to help.

Bob G on 4/10/2014 10:34:17 AM
Real Equality Equal PAY YES

But there are JOB Police Prison there are most women who do not pass the Test Men do !These exam like strength and endurance aredone with Fraud I KNOW AND SEEN. These Women should get LOWER PAY.
Like Office job Police and Prison Men should get lower pay.
STICK TO THE FActs and result

Josef Brunner on 4/10/2014 10:42:56 AM
The so-called "war on women" reminds me of the communist line, "Workers of the world unite. You have nothing to lose but your chains." And, of course, the workers ended up with bigger, fatter, heavier chains, proving once again that the best way to exploit, control, and dominate any group is to organize and claim to rescue it. We've taken women out of the home and deprived nearly two generations of the nurturing, educating, encouraging, challenging influence of full-time Moms, who, in fact, contribute more to the future growth of the country and the economy by raising great kids. Even single Moms do this. Just count all the greats that came from difficult backgrounds yet still made it big, including Bill Clinton, Barack Obama, Colin Powell, Cary Grant, Oprah Winfrey, and many others. Now we've had the experience of 50 years of women's liberation, and the outlook for the next generation is grim. Already 30% of the entire generation under 45 has been aborted. No wonder they are angry. Nothing wrong with Moms going back to work after giving their kids a good start. My mother certainly did that, and expected the same kind of belief in hard work that she had. Guys like Sharpton, Jackson et al ran the same kind of war on the black community. It will take a whole new kind of leader to save the next generation. I think I see them coming over the next hill, but I hope and pray they are not too late.

Dennis Howardm on 4/10/2014 10:45:03 AM
It is easy for political people and unions to paint everyone with the same brush. Not everyone is the same nor do they work the same. There was a time when people were paid based on what they produced not whether they ere male, female, black, white or green. Today some people expect to be paid the the same for just showing up. Employers need all employees to work to their potential or the company fails and no one gets paid.

Jack Martz on 4/10/2014 11:00:38 AM
Political HYPE !

James P.Johnson,Jr. on 4/10/2014 11:02:47 AM
It is a bunch of crap like everything else the dems accuse us of. But it works! Some of it sticks. They do not fight fair. Time to realize that. We lost the last election because we were too nice. Acivists get things done. We need a million person march on DC for the middle class, vets, retirees-of all races. Thank you for all you do in speaking out.

David Olson on 4/10/2014 11:50:05 AM
99% liberal hype, if women would work that much cheaper companies would quit hiring men. They have nothing to run on his Fall and are trying to change the subject.

John Prentice on 4/10/2014 12:02:54 PM
The phrase war on is the most ridiculous insensitive and childish play on words in history. War has anger ,division and hate. War on men? War on money? War on whatever you want to appeal to a voter. Tired of the phrase! Everyone has a different situation and need in the workplace. If you are good at what you do you will be compesated regardless of your sexual makeup. The government can not climb the ladder of sucess for you. You have to earn it! I will hire anyone and pay them their worth for the value they bring to the business.

Dan Balich on 4/10/2014 12:13:15 PM
Maybe company's pay women a litte less is to compensate for the fact that a woman with little or no evidence can file a sexual harassment suit and get paid off because it's cheaper than litigating it even if you can prove it's not true.by the way I have seen it many times

Charles Brown on 4/10/2014 12:38:06 PM
Mostly hype. When actual information is added so the comparisons are apples to apples there is little to no difference in pay between men and women, I heard $.04/hour men above women, have not verified. The WH own female staff as well as congress (both house) is being discriminated against when you couch the difference in pay the way our Progressive friends do. I guess as a business owner I discriminate as well, just hired a new field technician at $14.00/hr. Now before we figure that he makes as much as our Customer Service Representative, how is female, remember he is in the field exposed to greater dangers, elements (hot summers & cold winters) much more physical demands and brutal work conditions at times. Our CSR, not so much and by the way, she is very happy with her job and working conditions.

If politicians would work at bettering our country and improving the economy we would all be better off. Both parties are guilty of playing politics but the left has refined it to an art form and in the last 20 plus years has become down right nasty and mean, to say nothing about the lying, can you say Debbie Wassermann Schultz!!!

Love your take on the market, government and society. I am a fan.

Bob Prince on 4/10/2014 12:47:49 PM
Charles,
It is simply about equality of talent and work ethic. Regardless of sex, race, sexual orientation, party affiliation, etc., if you can do the job you should be paid accordingly. And my friend, that
is not the case. And it should be. So stop the confusing rhetoric and changing of the subject.

Harold Sader on 4/10/2014 1:22:34 PM
When Bill Russell was asked if he would have a gay player on his basketball team his response was "Can he play?"

Harld Sader on 4/10/2014 1:26:37 PM
Diversion...pure and simple.

Gail on 4/10/2014 3:07:23 PM
the more we make things equal the less equal they are.

lupe on 4/10/2014 3:14:35 PM
Women must learn to take responsibility for themselves, and speak up for things like higher pay. You can't take the victim stance, crying for help, while simultaneously arguing that you are equal to and as competent as your rescuer.

Patricia Flynn on 4/10/2014 3:43:06 PM
Most of the war on woman is political hype. All you have to do is audit the candidate or political party hyping it and see how they treat the woman on their staff to uncover the real culprits.

Doug Beaver on 4/10/2014 4:57:03 PM
99%
When all is totaled and dissected, women, on balance, are employed in jobs that simply do not pay as much as men. There are many reasons for this, not the least of which is an employers quest for clarity for the future. For all the hard-working women out here...Please do not take offense. The bottom line is..male employees DO NOT TAKE AS MUCH TIME OFF. Maternity leave, sick days for themselves or their children, bad-weather days because school is closed, and so on.
I am not passing judgment. Rather, I am simply stating facts. Until women improve their 'we can count on you to be here when scheduled" performance, employers will continue to be reluctant to pay an equal wage for identical work.

chares haselberger on 4/10/2014 5:03:17 PM
100% hype

JIm Philipp on 4/10/2014 6:09:56 PM
100% hype

Steve on 4/12/2014 10:56:46 AM
 

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