Archive for category Unemployment

No, Americans Are Not All To Blame for the Financial Crisis

EITB?

Writing in The New Republic, Dean Starkman counters the narrative still being repeated by the PTB and the media. The claim that Everyone-Is-To-Blame (EITB) for crashing the economy is not true. Wall Street financiers and predatory lenders are the guilty parties. Consumers didn’t suddenly start committing fraud on a massive scale in 2004 – that was the mortgage industry.

Why blame the victims? Because six years after the fact, no significant Wall Street figure has been criminally prosecuted. That’s a good enough reason, if you’re one of the crooks who got away with it.

Writes Starkman:

I’m not suggesting that Wall Street has gotten a free pass on its role in the crisis. People get it, sort of. But we also grade on a curve that assumes that banks’ criminal or quasi-criminal conspiracies are par for the course, Wall Street just being Wall Street. …Borrowers who wound up underwater, by contrast, are pitiful at best. Either they were greedy or dumb or both. They really should have been more careful.

…Sorry, everybody was not to blame. “We” didn’t all do it.

UPDATE:
According to a new NBC News/Wall Street Journal poll, 65 percent of Americans say the country is “on the wrong track,” and 57 percent say they believe we’re still in a recession. Republicans actively pursue measures to worsen the economy for average Americans (e.g. austerity budgeting, refusing to extend unemployment insurance), in the hope that their sabotage will be rewarded at the polls in November. There’s something really wrong with the two-party system if they can get away with this.

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Unemployment Displaces Dysfunctional Government As Top Problem in the U.S.

Gallup Poll

Gallup:

WASHINGTON, D.C. — Americans have a new No. 1 problem. Nearly one in four Americans mention jobs and unemployment as the most important problem facing the country, up from 16% in January. The government and politicians had topped the list since the government shutdown in October.

For the moment at least, right-wing Republicans have stopped deliberately trying to plunge us into another Great Depression. Maybe we can do start doing something about the mess they created. Too bad Dems have given up trying to re-take the House of Representatives. Howard Dean wouldn’t have given up if he were still in charge.

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Capitalism is a Failing System

This editorial by Richard D. Wolff caught my attention:

Janet Yellen, the United States’ Federal Reserve’s new chair, and I were graduate economics students around the same time at Yale University. The professor who shaped the macroeconomics we learned was James Tobin. He taught us to be Keynesian economists: that is, to accept capitalism as the sole object and focus of our studies, to celebrate it as the best possible system and to preserve it against its own serious faults. Keynesian economics teaches that to secure capitalism’s blessings requires systematic government intervention in the workings of the economy.

So far, conventionally Keynesian and even neo-liberal.

No courses at Yale troubled Yellen or myself with any analyses of how exploitation lies at the core of capitalist production. We were never taught that the majority of industrial workers produce more value for employers than what employers pay them. We were prevented from encountering arguments examining how this idea of “more” (or, in economic terms, of a surplus) contributed fundamentally to the systemic inequalities that define capitalist societies.

Now we’re getting interesting:

Capitalism’s dysfunctions have led me to appreciate and independently learn what Marxian economics has to teach me, outside of Yale’s mainstream economics. Yellen and her cohorts avoided and bypassed all that.

Convinced that we can do better than capitalism, many have analyzed the incipient alternatives emerging from capitalism’s deficiencies, such as cooperatives, workers’ self-directed enterprises and others. For us, Occupy Wall Street represents a powerful surge against capitalism, yet another sign of the waning tolerance for a system that Yellen will try to preserve.

The whole article is worth a read.

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TPP Sidetracked?

Coporatocracy

While a major media news blackout provides cover, Congress is debating whether to give the president the authority to fast-track a massive free trade agreement, the secretly-negotiated Trans Pacific Partnership (TPP). Members of Congress haven’t even been able to read it even though corporate lobbyists have.

President Obama is at odds with Democrats in both houses of Congress concerning reauthorizing a procedure called the “trade promotion authority” (TPA), that would grant the White House power to submit free trade deals to Congress for an up-or-down vote without amendments. Senate Majority Leader Harry Reid is strongly against it.

House Minority Leader Nancy Pelosi has now publicly opposed giving President Obama fast track authority.

“We need transparency. We need a seat at the table to understand what they believe they are doing, so we can make it better. And if we don’t make it better, then we will not accept a path that is a job loser.”

TPP is part of the plan for global corporatocracy run by and for the 1 Percent. Unelected lobbyists and trade representatives are at the table, while representatives from the public at large and businesses other than huge monopolies, are conspicuously absent. From what little we know of the agreement, it would violate the U.S. Constitution, weaken environmental protections, and lead to more job losses, erosion of wages, and worsening inequality. TPP also threatens freedom of speech on the Internet because it would extend restrictive intellectual property laws and rewrite international rules on enforcement.

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The State of the Union is Desperate

State of the Union

Year after year in his annual address to Congress, President Obama describes the state of the Union as “strong.” That adjective doesn’t describe the increasingly desperate and shrinking American middle class.

According to the Pew Research Center, the proportion of Americans who identify themselves as middle class has dropped sharply in recent years.

The nationally representative survey of 1,504 adults conducted Jan. 15-19 found that the share of Americans who identify with the middle class has never been lower, dropping to 44% in the latest survey from 53% in 2008 during the first months of the Great Recession.

…Economists also report a lack of jobs growth in middle-skill, middle-income jobs. An analysis by the New York Federal Reserve Bank found that employment in middle-skill jobs increased by 46% from 1980 to 2009. Meanwhile, employment in low-skill jobs increased 110% and employment in high-skill jobs increased 100%. This phenomenon of “jobs polarization” is perhaps most assiduously studied by David Autor, an MIT economist. His research demonstrates that employment growth over the past three decades has steadily gravitated toward low-skill jobs.

Tonight, President Obama’s challenge is not to explain or sympathize with the plight of the middle class, but to tell us what he’s going to do –as President– to solve the problem of rising income inequality. Relying on Congress is not a plan!

UPDATE:
7 Ways Obama Can Actually Get Something Done
Obama’s Last State Of The Union: A Report Card

UPDATE: What’s Obama Going to Say About the Trans-Pacific Partnership?

Obama has been urging Congress to use its “fast-track authority” to sign off on the still-unfinished deal between 12 Pacific nations. If lawmakers agree to fast-track the measure, they wouldn’t be able to offer amendments and would have to take an up-or-down vote on whatever deal the administration eventually reaches. The TPP has the backing of corporate interest groups, but liberals have balked over its potential to undermine environmental, public health and labor standards, as well as ship U.S. jobs overseas. The White House has yet to find a House Democratic cosponsor for it.

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Americans Believe Our Economy is Broken

Unemployed

According to new polling by the Center for American Progress:

Nearly two in three Americans (64 percent) agree that “Most people who live in poverty are poor because their jobs don’t pay enough, they lack good health care and education, and things cost too much for them to save and get ahead.” By contrast, only 25 percent of Americans agree with a competing idea that “Most people who live in poverty are poor because they make bad decisions or act irresponsibly in their own lives.” Even white conservatives and libertarians prefer the structural explanation for poverty over the personal by a significant margin, 63 to 29 percent.

These results are not a surprise if you belong to the reality-based community. Economic conditions in this country are the worst since the Great Depression. Six years after the start of Bush’s Great Recession, there has been hardly any recovery at all for most Americans. According to research by Emmanuel Saez, an economics professor at the University of California at Berkeley, between 2009 and 2011 the top 1 Percent became 11.2 percent richer while the bottom 99 Percent got 0.4 percent poorer.

Long-term unemployment benefits expired for 1.3 million Americans on December 28. They were just a fraction of the 4.1 million people whom the Labor Department counted as unemployed for more than 26 weeks. Beyond the official long-term unemployed, more than 760,000 others are counted by the Labor Department as “discouraged,” meaning they have stopped looking for work (some economists think that the number may be higher).

It remains to be seen whether our broken political system can do much to fix our broken economy. Congress hasn’t even been able to agree on an extension of Emergency Unemployment Compensation, something that used to be routine.

UPDATE: Unemployment Is Falling For All The Wrong Reasons

One reason for the big drop in unemployment in December was that many, many people dropped out of the labor force — 347,000, to be exact. They stopped looking for work, which made them no longer “unemployed” in the eyes of the Bureau of Labor Statistics.

UPDATE: 50 Years Into The War On Poverty, Right-Wing Media Want To Give Up The Fight

Right-wing media have spent the last few years baselessly dismissing the decades-long push to alleviate poverty as not worth the fight, despite evidence showing that government efforts to reduce poverty have been successful.

UPDATE: Robert Reich: Today’s Jobs Report and the Scourge of Inequality

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Merry Christmas and Happy New Year From the GOP

Tomorrow, 1.3 million Americans will be immediately cut off from long-term unemployment insurance payments. According to the White House Council on Economic Advisers, an additional 3.6 million people will lose their benefits by the end of 2014. The expiration of benefits represents a critical blow to a program that lifted 1.7 million out of poverty in 2012.

Why? Republicans in Congress. Senator Rand Paul (R-KY) expressed the GOP position when he said that long-term unemployment benefits encourage unemployment. Of course, when there are three applicants for every job, the opposite is true.

More info:
The Media Calls Out Republican Grinches and Scrooges For Screwing Over the Unemployed
Robert Schlesinger: The GOP Embraces Its Inner Grinch

UPDATE:
Where the people losing benefits live, by state

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Magic Mirror

I love this song written by Leon Russell, which says:

Magic Mirror, if we only could, try to see ourselves as others would.

Briliant!

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Americans Say Dream Fading as Income Gap Widens

George Carlin American Dream

David J. Lynch on Bloomberg:

The widening gap between rich and poor is eroding faith in the American dream.

By almost two to one — 64 percent to 33 percent — Americans say the U.S. no longer offers everyone an equal chance to get ahead, according to a Bloomberg National Poll.

…The lack of faith is especially pronounced among those making less than $50,000 a year: By a 73 percent to 24 percent margin, they say the economy is unfair. Even 60 percent of those whose annual income is $100,000 or more bemoan the absence of a fair deal…

In the Bloomberg poll, 68 percent of Americans say the income gap is growing, while 18 percent say it is unchanged and 10 percent say it’s shrinking.

After 30 years of trickle-down economics, very few Americans can be fooled anymore. Democrats like President Obama have been forced to acknowledge the problem of extreme inequality, but what are they prepared to do about it?

The budget deal announced yesterday is the opposite of what we need. The Democratic Party sold out its own base to help Republicans maintain power.

More info: Robert Reich: The Time for Wealth Redistribution Is Now

UPDATE: Robert Reich: Raw Deal

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Are we at the beginning of a period of political instability and violence?

Peter Turchin seems to believe so – although he also says that it’s not pre-ordained.  I don’t have time for a deeper examination right now, but it’s worth delving these two articles.

A couple key passages:

The US elites, similarly, took the smooth functioning of the political-economic system for granted. The only problem, as they saw it, was that they weren’t being adequately compensated for their efforts. Feelings of dissatisfaction ran high during the Bear Market of 1973—82, when capital returns took a particular beating. The high inflation of that decade ate into inherited wealth. A fortune of $2 billion in 1982 was a third smaller, when expressed in inflation-adjusted dollars, than $1 billion in 1962, and only a sixth of $1 billion in 1912. All these factors contributed to the reversal of the late 1970s.

And this:

Three years ago I published a short article in the science journal Nature. I pointed out that several leading indicators of political instability look set to peak around 2020. In other words, we are rapidly approaching a historical cusp, at which the US will be particularly vulnerable to violent upheaval. This prediction is not a ‘prophecy’. I don’t believe that disaster is pre-ordained, no matter what we do. On the contrary, if we understand the causes, we have a chance to prevent it from happening. But the first thing we will have to do is reverse the trend of ever-growing inequality.

And finally this one:

How does growing economic inequality lead to political instability? Partly this correlation reflects a direct, causal connection. High inequality is corrosive of social cooperation and willingness to compromise, and waning cooperation means more discord and political infighting. Perhaps more important, economic inequality is also a symptom of deeper social changes, which have gone largely unnoticed.

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Federal Budget Deficit Cut By Half, ‘Grand Bargain’ Dead

Budget deficit graph
Source: Mother Jones

The federal government’s latest annual deficit was $680 billion, the smallest it’s been since 2008, according to Treasury Department data released Wednesday. Federal spending in 2013 totaled 20.8% of GDP, down from 22% the year before. The FY 2013 deficit was less than half the record $1.413 trillion figure inherited by the Obama administration from President George W. Bush. It’s becoming clear to everyone, not just economists, that deficits are not that hard to control. If we can fix the economy and get the rich to pay their fair share of taxes, deficit spending will vanish completely.

The so-called “sequester” austerity budget has effectively sabotaged our economic recovery, but at least it accomplished one good thing. Washington politicians are no longer talking seriously about a proposed “Grand Bargain” to cut Social Security and Medicare. Progressive blogs have labeled this the Grand Betrayal, an attack on the social safety net that has kept millions of Americans out of poverty.

TPM:

Paul Ryan killed any lingering hopes of a grand bargain within moments of the budget conference kickoff on Wednesday.

In his opening remarks, the Wisconsin congressman and chairman of the House budget committee laid down a firm marker against new taxes, which are essential to any major deficit reduction proposal that can pass Congress and be signed into law.

…His comments reflect the no-compromise mood of the GOP. That means the two chambers are unlikely to strike a major debt deal or reconcile the different budgets passed by the House and Senate earlier this year.

Party of NO, do your stuff!

OTOH it would be good if the 29-member budget conference committee can find some way to avoid another government shutdown on January 15 next year. Hopefully, that’s not too much to ask. They have until December 13 to reach a compromise agreement.

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Senator Elizabeth Warren on the Republican Shutdown of Government

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