Last month the US added 200,000 new jobs, and the official unemployment rate dropped to 8.5%. This is a big deal, because as a rule of thumb the US needs to add about 150,000 new jobs each month just to keep up with population growth. So, roughly speaking, 200,000 new jobs means that not only did we manage to accommodate all the new workers entering the labor force, but also that about 50,000 people who previously had been unemployed were able to get a job.
Yay, us.
There's still a long way to go, and all the usual caveats about potential future crises still apply (I for one am still keeping a wary eye on Europe), but good news on the employment front is fairly rare these days and I'm happy to have an opportunity to remark on something positive for a change.
Showing posts with label unemployment. Show all posts
Showing posts with label unemployment. Show all posts
Saturday, January 7, 2012
Thursday, December 22, 2011
New Rule: Screw "Continuity"
I was listening to the December 5th Majority Report podcast earlier today, and Sam Seder had Ari Berman on as a guest. Berman had recently returned from the UK, and he reported that Prime Minister Cameron and the other UK leaders had recently given a series of speeches in which they basically said they were doubling down on the “austerity plan” that has been so contractionary and has actually made economic matters worse in the UK and throughout Europe.
Of course, Paul Krugman has been railing about the austerity kick that so many have been on lately, both in Europe and here in the United States, and repeatedly has wondered why political leaders remain so cocksure that eventually, someday, maybe even someday soon . . . everything will start working out as planned and things will actually start getting better. They keep doubling down on this program, Krugman complains, despite the fact it flies in the face of all accepted macroeconomic theory and despite the fact it keeps repeatedly not working.
And then I remembered this piece by Matthew Yglesias, about Confessions of the “Old Wizard”: the Autobiography of Hjalmar Horace Greeley Schacht. Schacht was Currency Commissioner and President of the Reichsbank during the Weimar Republic, went on to also become the Minister of Economics under Hitler before being forced out of the government, and then took part in the German resistance to Hitler. He was acquitted at Nuremberg.
Schacht successfully ended the Weimar Republic's period of hyperinflation by simply refusing to print more money. But the real point of Yglesias’s column is that only Schacht or somebody else brought in to replace the former President of the Reichsbank, Rudolf Havenstein, could have made the decision to stop printing marks and thus end hyperinflation. The reason for that is because Havenstein already had committed himself to printing marks in order to meet Germany’s WWI reparation payments, and were he to stop printing marks after the resulting hyperinflation had wrecked the economy then that would have been an implicit admission that his previous policy had been monstrously wrongheaded.
What Yglesias is getting at is that institutions that have grossly mismanaged public policy have a difficult time changing course because the people responsible for managing those institutions do not wish to admit they have made egregious mistakes. For example,
[i]f the Federal Reserve Open Market Committee were to take strong action at its next meeting and put the United States on a path to rapid catch-up growth, all that would do is serve to vindicate the position of the Fed's critics that it's been screwing up for years now. Rather than looking like geniuses for solving the problem, they would look like idiots for having let it fester so long. By contrast, if you were to appoint an entirely new team then their reputational incentives would point in the direction of fixing the problem as soon as possible.
One of the things Obama’s critics like to carp about is that for a guy running on a bad economy bequeathed to us by the Republican party, a guy who campaigned on hope and change . . . Obama kept basically the same economic team in place after he took over for the sake of “continuity.” (Tim Geithner? Ben Bernanke?) After all, how can we change our game plan if we keep the same strategists?
But as Yglesias points out, the situation may be far worse than mere sclerotic institutionalism. For example, why does Bernanke keep signaling that the Fed is unwilling to allow inflation to grow, even though doing so will boost the economy and help get more people back to work? Well, it could be that he really believes his policies eventually will be vindicated, and it could be that he just doesn’t care about the United States’ high, high unemployment rate and really thinks that keeping a tight rein on our non-existent inflation is more important.
But it could also simply be that Bernanke is incapable of changing policy even if he wanted to, because the cost to him personally – to admit that his past actions were mistaken – would be too severe.
New Rule: When things have gotten screwed up, it is alway, always better to fire the people who did the screwing up and to bring in a new team than it is to keep those same screw-ups around to provide a comforting sense of “continuity.”
Friday, November 4, 2011
Oh! The Stupid Things I Hear! No. 3
Goddammit.
So I’m listening to the Diane Rehm “Friday News Roundup” (the BBC’s Katty Kay filling in for Diane) this morning and the initial topic is the new jobs report, which shows that 80,000 jobs were added last month: 104,000 new private sector jobs, offset by a loss of about 24,000 public sector jobs.
First I hear Ron Elving, senior Washington editor for NPR News, make the incredibly stupid claim “that’s not bad, but it’s not great either.” No, that’s friggin terrible. Look . . . the United States needs to add about 150,000 new jobs every month just to stay even with population growth. So a jobs report showing that we created about ½ that amount last month means that October was utterly horrible. Telling the American public that “we added 80,000 jobs” without putting that figure into context is just journalistic malpractice.
But far, far worse was what Elving said next.
Saturday, September 17, 2011
Let's Go Back to Hooverville!
Unemployment and poverty in the United States is setting the stage for riots, New York Mayor Michael Bloomberg warned on a weekly radio show.
Speaking on WOR [yesterday], the Independent mayor made the unusually negative warning, but avoided direct criticism of Democratic President Barack Obama for a 9.1 percent national unemployment rate, saying Obama had inherited it “over long periods of time,” the New York Daily News reported.
Referring to riots earlier this year in Cairo and Madrid by tens of thousands of people unable to find jobs, Bloomberg said "You don't want those kinds of riots here."--UPI (emphasis added)
Oh, I beg to differ . . . .
Monday, July 11, 2011
Gaming Out the Debt Limit Negotiations
(Because Estabon Ferlingetti VI demanded it)
For a lot of different reasons, it is obviously insane that the House GOP has resorted to extortion by threatening to block an increase in the nation’s debt limit unless its demands for spending cuts are met. Every person who actually understands the situation agrees that the economic consequences would be disastrous should America end up defaulting on its public debts. Toby Ziegler explains:
This is why even John Boehner and Mitch McConnell have acknowledged that the nation’s debt limit must be raised before the August 2nd drop-dead date. “Must” – not “should.” Toby Ziegler's assessment of what will occur should the United States default of its debt obligations may have been dramatic, but it wasn't far off the mark. <:p>
Tuesday, July 5, 2011
GOP Has Been Openly Scamming Dems for 30 Years Now
Last Thursday Massachusetts Governor Deval Patrick sparked some commentary in the liberal blogosphere by penning a Washington Post op-ed in which he described attending his 25th college reunion back in 2003. The reunion also was attended by Grover Norquist, the GOP’s chief “no new taxes” enforcer and hatchetman, who apparently made some statements about how the Republicans intended to maintain a de facto permanent Republican majority in the federal government.
What surprised and saddened me is that Norquist’s statements 8 years ago would cause even the slightest stir today. Republicans have been pulling the scam Norquist described then for more than 30 years. What is more, they have been telling us that this is the scam they have been pulling. Have we just failed to pay attention?
Thursday, June 9, 2011
Also, Too
UPDATED BELOW
Following up a bit on yesterday's deconstruction of David Brooks and his disingenuous attempt to frame the Democratic and Republican approach to Medicare as a philosophical choice between "bottom-up" engineering and "top-down" central planning . . .
It occurred to me that the right wing in this county has a sort of schizophrenic take on how to address economic problems. On the one hand, they are filled with rhetoric about how "small businesses" and "entrepreneurs" are the heart and soul of our economy, and that if we only unleash the forces of the Free Market then those forces will solve any problem we might have cleanly and efficiently, without involving the government or any kind of central planning.
On the other hand, despite this rhetoric it seems pretty clear that they don't really believe in bottom-up solutions to anything when it comes to the economy. No matter the economic situation, whether boom or bust, whether the government runs a surplus or a deficit, their prescription is always the same: more and more tax cuts for the wealthy, large corporations and financiers, less and less corporate and financial regulation. And the justification is always the same too: these are the people and entities who create jobs and drive the economy. Not the people at the bottom, not the working class or the hard-working middle class -- nope, true wealth is generated by the wealthy at the top. Especially the banksters.
Sadly, the Democratic party leadership has bought into this idea nearly as much as the Repubicans have. Matt Taibbi warned us long ago to keep in mind that Wall Street financiers provided the largest part of Obama's presidential campaign donations, and despite Wall Street's public wailing whenever Obama says something that hurts their delicate feelings, Wall Street has made out pretty well under Obama. After nearly crashing the global financial system the banksters received what amounted to a strings-free bailout, and profits are now higher than ever on Wall Street, as are salaries and bonuses -- all at the same time the rest of America is still suffering through the worst economy since the Great Depression. And it doesn't strike me that this is entirely the result of political payback for campaign contributions. I get the sense that Obama really has bought into the idea -- as has pretty much everybody in the leadership of both parties -- that it is the Titans of Wall Street who are the fundamental drivers of our economy.
I think this is exactly wrong. America's FIRE (finance, insurance and real estate) economy is now the largest sector of our national GDP, but that doesn't mean it produces any actual wealth. Money is shifted around and interest is paid on debt, but no actual goods or services get produced by the FIRE economy. Nor does it employ a lot of people. Back when GM was the largest company in America that meant a lot of actual people were employed, both because automobile manufacturing was a (relatively) labor-intensive industry -- someone had to work the assembly lines -- and because all the suppliers to GM were also labor-intensive. But you don't need a 40,000 member workforce to shift money between electronic accounts. So while the vast amount of money that GM generated back in the 50's and 60's necessarily was spread out among many employees, all of whom then spent it themselves and thereby kept tons of other people employed, we don't have that with the FIRE economy. Now vast amounts of money are concentrated in the hands of relatively few people.
But the real wealth of any society resides in its natural resources and the goods and services that society can produce; while this wealth may end up concentrated in a few hands at the top level of society, actual wealth always -- always -- is created from the bottom up.
Whenever I think about this subject I am always reminded of feudal Japan. The Samurai class may have had all the wealth and the power in that society, but it didn't generate that wealth. The wealth was generated by the rice farmers at the bottom of society -- a circumstance recognized in Japan by the fact that up until the mid-19th century taxes were paid, not in money, but in actual bushels of rice. That -- the basic ability to feed its people -- was recognized as the nation's real wealth.
But I watch the fiscal and monetary decisions being made by our government today, and I don't get the feeling that anyone in charge really believes any longer that it is the great mass of people, toiling day in and day out, that actually created the wealth our society now has.
When the Fed is less concerned about doing something to bring down unemployment than it is about making sure inflation doesn't hurt the creditor class, when Republicans insist on shifting taxes away from the already wealthy because "they create the jobs" (a patent lie), when the salvation of the bond market is obviously more important to both parties than is our educational system, our infrastructure, our health care or -- as near as I can tell -- pretty much anything at all . . . .
Well, I get the sense that the people we put in charge really think that their job consists in making sure that the other elites in our society are basically free to do what they please because they are the only ones who "really matter." The rest of us -- the non-wealthy -- seem to be regarded more or less as livestock that can be herded, occasionally put to use (when the "real people" need consumers, debtors, or cannon fodder) but can also generally be safely ignored. The reasoning seems to be that if the richest of us are taken care of, then the rest of us will somehow naturally be taken care too.
How do they think that works? I dunno, but they seem to believe it. Maybe they think it's magic, or just a natural law of some sort. In any event, it is the epitome of a top-down approach to the economy and it seems to have infected everyone with a grip on any of the levers of power in this country.
UPDATE: In his column today Krugman hits on many of the same points I made here, albeit in a more erudite and slightly less despairing way. Representative quote: "Consciously or not, policy makers are catering almost exclusively to the interests of rentiers -- those who derive lots of income from assets, who lent large sums of money in the past, often unwisely, but are now being protected from loss at everyone's expense." But do click over and read the rest of what he has to say about how policy makers are protecting the creditor class by, i.e. choosing to curb (nonexistent) inflation over doing something to end unemployment, etc.
Following up a bit on yesterday's deconstruction of David Brooks and his disingenuous attempt to frame the Democratic and Republican approach to Medicare as a philosophical choice between "bottom-up" engineering and "top-down" central planning . . .
It occurred to me that the right wing in this county has a sort of schizophrenic take on how to address economic problems. On the one hand, they are filled with rhetoric about how "small businesses" and "entrepreneurs" are the heart and soul of our economy, and that if we only unleash the forces of the Free Market then those forces will solve any problem we might have cleanly and efficiently, without involving the government or any kind of central planning.
On the other hand, despite this rhetoric it seems pretty clear that they don't really believe in bottom-up solutions to anything when it comes to the economy. No matter the economic situation, whether boom or bust, whether the government runs a surplus or a deficit, their prescription is always the same: more and more tax cuts for the wealthy, large corporations and financiers, less and less corporate and financial regulation. And the justification is always the same too: these are the people and entities who create jobs and drive the economy. Not the people at the bottom, not the working class or the hard-working middle class -- nope, true wealth is generated by the wealthy at the top. Especially the banksters.
Sadly, the Democratic party leadership has bought into this idea nearly as much as the Repubicans have. Matt Taibbi warned us long ago to keep in mind that Wall Street financiers provided the largest part of Obama's presidential campaign donations, and despite Wall Street's public wailing whenever Obama says something that hurts their delicate feelings, Wall Street has made out pretty well under Obama. After nearly crashing the global financial system the banksters received what amounted to a strings-free bailout, and profits are now higher than ever on Wall Street, as are salaries and bonuses -- all at the same time the rest of America is still suffering through the worst economy since the Great Depression. And it doesn't strike me that this is entirely the result of political payback for campaign contributions. I get the sense that Obama really has bought into the idea -- as has pretty much everybody in the leadership of both parties -- that it is the Titans of Wall Street who are the fundamental drivers of our economy.
I think this is exactly wrong. America's FIRE (finance, insurance and real estate) economy is now the largest sector of our national GDP, but that doesn't mean it produces any actual wealth. Money is shifted around and interest is paid on debt, but no actual goods or services get produced by the FIRE economy. Nor does it employ a lot of people. Back when GM was the largest company in America that meant a lot of actual people were employed, both because automobile manufacturing was a (relatively) labor-intensive industry -- someone had to work the assembly lines -- and because all the suppliers to GM were also labor-intensive. But you don't need a 40,000 member workforce to shift money between electronic accounts. So while the vast amount of money that GM generated back in the 50's and 60's necessarily was spread out among many employees, all of whom then spent it themselves and thereby kept tons of other people employed, we don't have that with the FIRE economy. Now vast amounts of money are concentrated in the hands of relatively few people.
But the real wealth of any society resides in its natural resources and the goods and services that society can produce; while this wealth may end up concentrated in a few hands at the top level of society, actual wealth always -- always -- is created from the bottom up.
Whenever I think about this subject I am always reminded of feudal Japan. The Samurai class may have had all the wealth and the power in that society, but it didn't generate that wealth. The wealth was generated by the rice farmers at the bottom of society -- a circumstance recognized in Japan by the fact that up until the mid-19th century taxes were paid, not in money, but in actual bushels of rice. That -- the basic ability to feed its people -- was recognized as the nation's real wealth.
But I watch the fiscal and monetary decisions being made by our government today, and I don't get the feeling that anyone in charge really believes any longer that it is the great mass of people, toiling day in and day out, that actually created the wealth our society now has.
When the Fed is less concerned about doing something to bring down unemployment than it is about making sure inflation doesn't hurt the creditor class, when Republicans insist on shifting taxes away from the already wealthy because "they create the jobs" (a patent lie), when the salvation of the bond market is obviously more important to both parties than is our educational system, our infrastructure, our health care or -- as near as I can tell -- pretty much anything at all . . . .
Well, I get the sense that the people we put in charge really think that their job consists in making sure that the other elites in our society are basically free to do what they please because they are the only ones who "really matter." The rest of us -- the non-wealthy -- seem to be regarded more or less as livestock that can be herded, occasionally put to use (when the "real people" need consumers, debtors, or cannon fodder) but can also generally be safely ignored. The reasoning seems to be that if the richest of us are taken care of, then the rest of us will somehow naturally be taken care too.
How do they think that works? I dunno, but they seem to believe it. Maybe they think it's magic, or just a natural law of some sort. In any event, it is the epitome of a top-down approach to the economy and it seems to have infected everyone with a grip on any of the levers of power in this country.
UPDATE: In his column today Krugman hits on many of the same points I made here, albeit in a more erudite and slightly less despairing way. Representative quote: "Consciously or not, policy makers are catering almost exclusively to the interests of rentiers -- those who derive lots of income from assets, who lent large sums of money in the past, often unwisely, but are now being protected from loss at everyone's expense." But do click over and read the rest of what he has to say about how policy makers are protecting the creditor class by, i.e. choosing to curb (nonexistent) inflation over doing something to end unemployment, etc.
Subscribe to:
Posts (Atom)