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The Real Unemployment Scandal?
Discussing the latest US jobs report, Greg Ip of The Economist comments on jobless agonistes:
Hopes
had risen in the past week that America’s economic soft patch was
ending. They have just been doused with a bucket of cold water. The job
market showed further deterioration
in June from May, the government reported today. The number of
non-farm jobs rose a meager 18,000, lower even than May’s 25,000 number
(itself revised down from the original estimate). The two months
together mark a dramatic deceleration from the previous three when
payroll growth averaged 215,000 per month.
The unemployment rate,
meanwhile, rose for the fourth consecutive month to 9.2%, from 9.1% in
May. It was 8.8% in March. The economic recovery celebrated (if you
could call it that) its second anniversary on July 1st, and in that
time the unemployment rate has moved a lot while ending up almost
exactly where it began. America has made almost no progress closing the
output gap opened up by the recession. The
U-6 unemployment rate, which includes people who have given up looking
for jobs and part timers who want full time work, shot up to 16.2%
from 15.8% and the average duration of unemployment hit a new high of
39.9 weeks. More women than men lost jobs. Indeed, since the recovery began, women have fared worse than men, a reversal of the pattern during the recession, as a new Pew study documents. Still, the male unemployment rate rose more last month than the female rate.
Digging
deeper, the details grow worse. Hourly wages failed to rise and the
average work week shrank slightly—bad news for income and thus
purchasing power. The survey of households, from which the unemployment
rate is drawn, shows a much bigger plunge in employment, at 445,000,
than the payroll survey. The household survey is less reliable but is
still a useful check. It tells us the payroll report is not understating
the strength of the job market.
There is no good news in this
report; in the category of "could have been worse," private sector job
growth was better than the overall total, at 57,000 last month. Public
employment fell, for the eighth consecutive month, led by more layoffs
by state and local governments.
The best explanation for the sharp
slowdown in the jobs market is the confluence of bad luck that hit the
economy this spring: a sharp increase in petrol prices, a series of
natural disasters, and the Japanese tsunami and earthquake that
interrupted supply chains in electronics, automobiles and other
industries. Most of these temporary restraints have begun to lift. The
weather is back to normal, petrol prices are down 10% (nearly 40 cents
per gallon) from their peak, and Japan’s disruptions are ending.
Automobile production schedules are ramping up and the Institute of
Supply Management found that factory activity improved from May to June.
Manufacturing employment rose last month, albeit by only 6,000. Even
Greece seems, yet again, to have muddled through its latest confidence
crisis (but keep your eyes on much bigger Italy).
In all
likelihood, the employment data will improve in coming months as
consumer purchasing power and business spirits recover from the fuel
price surge. Yet as we argue in an article
in this week’s issue of The Economist, there is more to the
disappointing trajectory of the recovery than these temporary
restraints. America has only just begun
to deleverage and a McKinsey study has found that comparable episodes
in history have been accompanied by anemic growth and often a return to
recession. While America probably won’t fall back into
recession absent some new shock, its workers should get used to
stop-start growth punctuated with disappointments and soft patches.
Americans are not alone in this; Britain has experienced similar
disappointments and Spain’s outlook is even more anemic. Both share
America’s pre-existing condition of vastly overstretched household
balance sheets and the opportunistic infection of exploding government
debt.
While most of Europe is ahead of America in implementing
plans to arrest the rise in government debt as a share of GDP, America
is just beginning. In Washington, the mood surrounding negotiations
over an increase in the statutory debt limit took a turn for the better
this week as Republicans signaled flexibility on taxes and the
Democrats did likewise on entitlements. This may be good news
politically but it is ambiguous, and possibly bad, economically, if the
final deal front-loads, rather than back-loads, the pain. The steady
bleed of public sector jobs shows state and local government austerity
is already weighing heavily. Federal fiscal policy is scheduled to
tighten in January when a temporary investment tax credit and payroll
tax cut expire. Layering on more austerity would pummel an economy
still struggling to achieve a virtuous circle of jobs, income and
spending. Mr Obama is reportedly pushing to extend the payroll tax cut
for another year. That would be good, but that would not represent new
stimulus, merely a softening of the fiscal restraint already in train.
And
what about the Federal Reserve? Its second round of quantitative
easing (QE) was completed at the end of June. The consensus is that it
would have to see deflation looming to implement more. I think the bar
is lower than that. Ben Bernanke, the
Fed chairman, has always worried that rising unemployment could spark a
pernicious cycle of declining confidence and spending. If its recent
rise continues into the third quarter, expect to see Wall Street raise
the odds on QE3. It’s too soon to write the recovery off, but not too soon for contingency planning.
I'd
say the odds of another QE3 were slim prior to the latest jobs report
and they now stand at 50-50. If employment growth doesn't pick up
significantly over the next few months, QE3 is a done deal, and Wall
Street will celebrate by bidding up risk assets.
The real
structural problem in the US labor market is that there are really two
economies since the early 80s: the financial economy made up of bankers,
traders and money managers on Wall Street and the real economy made of
manufacturers but mostly of small businesses. The latter are struggling
while the former keep enjoying record bonuses. Nothing is trickling
down, and even if it is, it's so minute that it doesn't make a
difference. Even cash rich corporations are in no hurry to hire because
they're producing more with less and they've got no confidence that this
is a sustainable recovery.
And as TomDispatch associate editor Andy Kroll
points out, for all the verbiage about jobs that will be coming your
way, there’s one part of the American jobs crisis deserving screaming
headlines that the politicians won’t be talking about, the 60-year unemployment scandal:
Live in Washington long enough and you'll hear someone mention "east of the river." That's
D.C.'s version of "the other side of the tracks," the place friends
warn against visiting late at night or on your own. It's home to
District Wards 7 and 8, neighborhoods with a long, rich history. Once
known as Uniontown, Anacostia was one of the District's first suburbs;
Frederick Douglass, nicknamed the "Sage of Anacostia," once lived there, as did the poet Ezra Pound and singer Marvin Gaye. Today the area's unemployment rate is officially nearly 20%. District-wide, it’s 9.8%, a figure that drops as low as 3.6% in the whiter, more affluent northwestern suburbs.
D.C.'s divide is America's writ large. Nationwide, the unemployment rate for black workers at 16.2% is almost double the 9.1% rate for the rest of the population. And it's twice the 8% white jobless rate.
The
size of those numbers can, in part, be chalked up to the current jobs
crisis in which black workers are being decimated. According to Duke
University public policy expert William Darity, that means blacks are
"the last to be hired in a good economy, and when there's a downturn,
they're the first to be released."
That may account for the
soaring numbers of unemployed African Americans, but not the yawning
chasm between the black and white employment rates, which is no
artifact of the present moment. It's a problem that spans generations,
goes remarkably unnoticed, and condemns millions of black Americans to a
life of scraping by. That unerring, unchanging gap between white and
black employment figures goes back at least 60 years. It should be a
scandal, but whether on Capitol Hill or in the media it gets remarkably
little attention. Ever.
Indeed, nobody wants
to talk about the shockingly high unemployment rate among black
Americans because they've been largely written off. I'll tell you about
another scandal that nobody talks about, the unemployment rate of
disabled persons which is closer to 85%, and that's being generous.
I
take the rights of disabled people very seriously partly because I have
MS and it makes me extremely angry at how prejudiced employers are
towards disabled persons. One trader recently sent me an email telling
me the following:
no
offense, but that MS will likely be the preventing factor to your
being hired (large orgs fear large disability expense, small orgs can
ill afford any absence) - I know two guys with health issues (a guy who
is a cancer survivor with diabetes, another had a liver transplant)
and group benefits/life-insurance are a factor in them staying in
sub-optimal jobs....plus they save/invest like fiends since they are
parents with abbreviated life/mortality expectations
I wasn't offended at all and told him he's right, most organizations --
private corporations, federally chartered banks and even government Crown
corporations and government departments -- will treat people with a
serious preexisting condition as a liability (one day, I will expose
these organizations and their discriminatory practices). This is why I
decided to teach myself to be completely self-sufficient, focusing on
trading stocks, consulting and business ventures where I control my own destiny. No more sucking up to
anyone for a job! If you don't want to hire me because I have MS, that's your problem and I don't want to work for you!
Importantly,
my MS doesn't control me; I am feeling better than ever and will beat
this bloody disease because I'm the toughest SOB you'll ever meet. MS or no MS, I'll take on the world!
But that's not the case for many who are much worse off than I am and
can't fend for themselves. Many disabled are stuck collecting disability
insurance, living in poverty, all because they are ostracized
from a shallow society who only sees them as a liability. That's the
real unemployment scandal and anyone who thinks otherwise is an utter
fool who's never walked in their shoes and felt the stinging pain of
blatant discrimination.
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An amazingly large number of people have been brainwashed into believing that the poor have somehow ruined this country, while they happily pay taxes to fund the military industrial complex plus trillions in handouts to the top .1%. How about those cargo planes literally loaded to the top with pallets of hundred dollar bills that have "gone missing" in Iraq, Pierre. Bother you much? I don't feel any different having the gun put to my head to pay taxes to fund the Ferrari habit of the Blankfein types than I do paying taxes for a lazy poor person to fund their cheap brandy habit.
No an amazingly large number of people understand completely that idiots like you and Leo have empowered politicians to use the poor to steal from us to enrich themselves and their cronies. Your pathetic binary world where there exists only Republican and Democrat does not exist. What does exist is a bunch of corrupt motherfucking politicians who use any excuse to pick my pockets at the point of a gun. They don't even mind that they have corrupted some of the poor into useless lumps of shit who no longer have the pride to take care of themselves and to rise out of the morass.
Furthermore you fuckwits have further empowered those asshole politicians to attempt to build nations among savages, to rescue bankers who have made ridiculous bets on absurd propositions, to rescue piece of shit American companies who made ridiculous promises to overpaid stacks of union shit who couldn't put a good car together to save their life, to rescue school systems run by corrupt leftwing fools, yea you bleeding hearts have accomplished a bunch. Y'all have fucked over the greatest nation in history. Congrats.
I don't voluntarily build nations, I don't voluntarily rescue fuckwit bankers who make bad bets, I demand the right to choose whom I help, my charity is my fucking business...but you fuckers think you have the right to volunteer me for anything that strikes your fancy.
You pathetic whiners have others hold the gun that forces me to give my money to the bankers, savages, idiots and union workers to say nothing of the countless poor that your policies have corrupted. Pussies. But y'all are developing a problem. See folks like me are the ones who get shit done and for the longest time we were silent, we just grinned and bore the burden, that is changing, Atlas is Shrugging. We are getting angry and when finally we burst we, the most competent group in America, will take our revenge. We will be silent no more.
We brought a million to Washington DC. We cleaned up after ourselves. If we don't start seeing some serious change in DC we will be back and we will again clean up the motherfucking mess.
There is a vast difference between helping the poor and what we do now. Don't pretend they are similar. What we do now is help the government and only a fool thinks that is a good idea.
But I've been talking enough about me. What do you think about me? You are a joke. Did you vote for Reagan? Did you vote for Bush? Did you attend public school? Have you driven on a public road? Do you ever use public parks? What have you done in the last twenty years to call out the politicians you elected to end their corruption and who do you think corrupted them? Of yeah, business leaders with lots of money corrupted them. Okay, so let's turn the keys over to them and everything will be great. And of course, screw the poor. They deserve to die in the street because I am part of the "productive class" and they are leeches. What a pathetic excuse for a human being you are.
Fuckwit...are you fucking stupid? Are you REALLY going to ask me whether I went to public school? Yea motherfucker I went to a public school in the south where I watched race riots shut the school down for the first 2 weeks of my freshman year, I watched my leftwing teachers come to school loaded out of their fucking minds, I then witnessed those same motherfucking bitches 25 years later brag to me that they were now on the fucking school board. I watched desks fly out of second floor windows, I had knives brandished in my face, I had friends robbed walking down halls, I watched my father try to deal with the fact that I had to wake up at 5 in the morning so that I could do the early morning shift at school...because it was so fucking important to you liberal motherfucking assholes to ship a whole bunch of us white lower middle class kids halfway across the motherfucking earth so we could have the privilege of going to school with a bunch of African brothers who thought it sucked just as much as we did, but you liberal motherfucking assholes could pat yourselves on your fucking backs and say y'all had done a good thing. Yea fuck you. Promised myself the day the desk went flying out of the second floor window that my kids would NEVER see the inside of a public school as a student.
Am I supposed to be thankful to the government for that shit? Am I supposed to see some value in the government being responsible for education? For a few years now it has been popular sport for the leftwing to rant and rave about how much they hate folks like me and how much they wanted a fucking revolution...careful what you motherfuckers ask for.
If money for roads actually went to roads then you have a point. If parks where still maintained then you may have a point. The education I got in public school was worth less then nothing as I had to retrain myself how to learn and think.
Most Ayn Rand worshipers are narcissists, so let me make another point that may appeal to your own self-interest. If you take away the social programs that keep food on the tables of the average American Idol watching receipient of food stamps, it will be mere weeks before bands of armed men begin pilliging wealthy neighborhoods in search of treasure (and food). In a smaller, agraian society it may be possible to supplant government largesse with private charity, but in our society the gates of hell would open if we eliminated the social programs that Randers find so offensive. Forgetting that lots of people manage to rise out of poverty and become part of the cherished productive class due to the opportunities afforded by our (barely) socialist system because that is unimportant to you unless it is you who benefits, what do you think about the benefit of not having armed lynch mobs after your head?
Perhaps a revolution like the one you described could be beneficial. The food stamps will end whether we want them to or not. The feds are broke. Completely and utterly fucking broke. Welfare and warfare states fail due to economics. Rome fell after their republic became much like ours. They devalued their currency in order to pay for entertainment and food for the masses. Attempting to distract from the looting that was occurring by the connected and elite. It is unlikely many will awake so we can make adjustments to not hit the wall straight on. Free shit for everyone is great until it ends. These arguments about the morality of public welfare are irrelevant because we cannot afford it. It will end.
+1. Thank you for writing that PierreLegrand. Leo and Letthemeatrand are silly little liberals that are painful to read. They sound like college freshmen with their little designer glasses and who know all the answers to the worlds problems. All that they need is complete control of the evil capitalists and then all will be well.
I love the smell of hypocrites in the morning.
Well put.
+1
@LetThemEatRand, that's the best comment I've read on ZH ever!!! Bravo for telling it like it really is and fuck 'em if they don't like your comment!!
Btw, Pierre Legrand, tu es un grand idiot!!!!!!!
Great article, and it acted like a duck decoy in bringing out the sociopaths who would kill their own mothers and sell their corpses to science if there were profit in it.
Wow! We can do that?
Killed his own mother with a broken lawn chair.
http://youtu.be/FO0kRE5OTZI
edit>> not safe for work! f-words.
Just die the fuck already, leo, and put yourself out of our misery.
Why don't you slink back into whatever slimey hole you rot in, you miserly sock-puppet
Anyone who would stand up for this statist bastard leo and his mindless and sociopathic Keynesian bilge deserves to die with him. I will not apologize for condemning evil!
Hey Mr. A.
It's ok, it's just Leo... sooner or later he'll be facing a libel lawsuit for the comments he is posting.
As you yourself might be condemned.
Evil wins only if no one does anything about it.
akak,
Heading out to enjoy the sun and wonderful weather we're blessed with here in Montreal. Before I leave, I got one last message for you:
Leo,
You're a real class act...
Do you #uckin think that anyone who will have anything to do with you, will do so once they look at your blogs and the way you respond to people?
You can't live off of employment insurance for ever Leo...
At least you're in fashion. If you are so upset about poor people taking handouts, does it not upset you that most of your taxes (assuming you pay any) go directly to the top .1%? What about the moral hazard of the banks getting trillions in bailouts and taxpayer guarantees so they can continue paying themselves multi-million dollar bonuses? Keep blaming it on the poor and middle class. They have so much power in our society.
"Keep blaming it on the poor and middle class. They have so much power in our society."
They do ass wipe, and they have allowed themselves to be swindled by fraudulent liberal philosophies under the guise of helping the poor and middle class while doing everything they can to destroy them.
Here is a gem of an interview describing the sickness in liberal minds by your favorite objective realist Ayn Rand.....A woman after my own heart! ;-)
http://www.c-spanvideo.org/program/170069-1
Rand was among the most surgically percise liberal cover pullers of her time.
Ayn Rand is great if you have a small mind that prefers black and white thinking, and you are willing to believe theory over reality. As just one example:
ALAN GREENSPAN: I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms.
CHAIRMAN WAXMAN: In other words, you found that your view of the world, your ideology, was not right, it was not working.
ALAN GREENSPAN: Absolutely, precisely. You know, that's precisely the reason I was shocked, because I have been going for 40 years or more with very considerable evidence that it was working exceptionally well.
Just sifting through the bullshit.
*-U-N-T
Give me a break. Greenspan mismanaged Rand's philosophy under government auspices. Please give me another example that hasn't been misused to death.
Like I said, keep ignoring reality and don't let go of your simplistic ideology, and all will be just fine. Greenspan was the most powerful Rander in a generation at least. His admission that the philosophy failed in practice on a world-wide scale is not a footnote to be swept away merely because it is inconvenient. When left to their own devices, the people who tend to rise to the top of large entities (governments, corporations, churches, whatever), do selfish and greedy things that enrich themselves in the short-term while destroying everyone around them. Look at Enron, World Comm, the world's entire banking system, etc.
Greenspan was many things in speech, but few of those things in practice. You argue one second that men who rise to centers of power are historically of a certain moral fiber. Corrupt. At the same time you argue that only centers of power, which can write regulations and laws to govern our very lives are the only things that can protect us from abuse by corporations. Which is it. Either regulatory bodies are historically hijacked for the interest of corporations or they are our only hope. I would argue that regulations are used by the powerful and well connected to gain for themselves advantages that could not be gained in the free market of ideas.
Ah yes, if all else fails call out Rand's biggest advocate and the former hero of the movement, and say "he didn't really get it." He did get it and he lived by it. It didn't work. Show me a free market, and I will show you a robber baron who will come in and corrupt it and take control over it. That is the reality of the world.
Greenspan's claims are irrelevant. You clearly do not understand Rand's or free market arguments if you claim he encouraged anything resembling free markets. The very notion of a central bank is contradictory to free markets. Most of the institutions that grow up around central banks are anti free market because they derive powers from the central bank that free men would not give them. He became the head of an organization who claims they can centrally plan an economy to prosperity by manipulating bank regulations, the money supply and interest rates. This would be treachery to any man who claimed freedom as an economic philosophy. Frankly, Greenspan was full of shit and claiming that does not injure the argument for freedom.
Sorry to break it to you, but the "central bank" -- the Fed -- is a consortium of private institutions. They banded together and took the very central power that you find so offensive. Government does not create evil men, rather it sometimes is taken over by them. They do not go away if government goes away. Instead, they become stronger. Rand, in failing to recognize this simple fact, was an idiot.
Exactly. Politicians passed the Federal Reserve Act of 1913, at the behest of bankers. Bankers, without central power (politicians) could not have created this. You just made a great argument for anarchy in markets. Your argument goes as such " The evil corporations have taken over the government and are extracting wealth out of people. They are using corrupt politicians to enslave us. Clearly we need to make the government bigger!!!" Government is the cancer. It is illogical to allow it to spread. You cannot reform cancer. You must eliminate it.
It is your argument that is circular, not mine. You somehow believe that the same bankers who bribe and corrupt elected officials would not do exactly the same thing (only worse) with unelected business partners or private overseers. We have the ability to throw out corrupt politicians. Once the bankers are free of their government regulators and have onlyu non-elected like-minded people to deal with, they would do exactly what they are doing to us all now times 100. What would stop them? Rand's idealistic moral code?
Yes, they would bribe, cheat and steal. Despite your ham-fisted analysis, that is well and truly covered in Rand's work.
The difference is that in a truly free market, the can-kicking can only go so far before it hits the wall that is reality. They can form shady cabals all they like- but without actual producers in the mix, they can't actually survive. If they could, there would have been no use at all for TARP. All the dishonest banks would have died, and the next set could have tried their hand.
Instead, we have the government taking our money at proverbial gunpoint to ensure that their failures do not cause them any discomfort.
"They can form shady cabals all they like- but without actual producers in the mix, they can't actually survive."
I think this is among the more salient points Rand makes in the character of James Taggart.
This typifies the arrogance/ignorance/denial of the futility of the minds who refuse to grasp the reality that their thinking and their actions will cause their own annihilation.
Also, it could not be more aptly displayed as in the present political world stage.
I sometimes think that these parasitic minds have some form of deep seated self hatred of themselves because as James Taggart struggles with his own cognitive dissonance he cannot bare to see the absurdity of truth about himself. Insert Cherryl Taggart once she discovered who he really was she killed herself.
A true vicarious moment for James unconscious mind.
We as consumers would keep them in check. In this environment they would need our trust in order for us to deposit our savings with them. If we did not provide our capital they would have no business to speak of. Without fractional reserve banking or the central bank (counterfieting) they would have no place else to get capital besides consumers (us). Any banks or insurance groups that abused our trust would go out of business as soon as people withdrew their deposits. We cannot fire the FDIC or Federal Reserve by simply withdrawing funds. That is the difference.
And the three bankers have made private agreements with thousands of large and small employers (who get nice kickbacks) that your salary and 401K must be processed through their banks and all purchases at private retailers must be made through a credit card issued by one of the big three or you pay a much higher price for goods and services. Mysteriously, the small competitors that pop up who don't want to play ball end up swimming with the fishes. What now?
Evidently you have issues thinking creatively and cant imagine others thinking outside of the box to solve these problems either.
It's like arguing with a very religious person about the bible. I don't know what rock you've been living under the last 50 years, but our government IS the corporations you covet.
Did you just make the exact point I have been making? We do have fascism. Government and big business in collusion which is the root of our issues.
I am not even sure what argument you are attempting to make. Perhaps it is passed your bed time.
Also, I would suspect that LTER is of the parasitical persuasion vs. those of us that have come from generations of private manufacturing where creativity, productivity and making a profit are the order of the day.
Runt -- Tell the truth.... who purchased the computer on which you are typing right now. You, or your dad? And if you paid for it with a credit card/trust funded by your dad, the answer is "your dad." Be honest, if that's possible for you. Ayn Rand. What a fucking joke.
P.S. Government is necessary for the creation and enforcement of things like Wills and Estates. Otherwise, your dad dies and his stuff goes to his business partners or whomever else is the strongest to take it. Perhaps you would like to revise your Rand philosophy and carve out an exception for government programs where it comes to preserving your inheritance? Of course, whatever benefits you is good and just and right. Right?
Meaning what, you inherited wealth? That explains a lot.
Great thread and magnificent exchange! Thank you WT you have added some clarity to my original perspective.
Translation: "can't wait to shake your hand at the next cult meeting. I hear Tom Cruise is coming!"
Translation: "I have lost the argument and can resort to only ad-hominem nonsense."
Now that's funny. Because big corporations have corrupted government, you wish to cut out the middle man. Really?