This might well be called the slip-sliding economy because, for the vast majority of Americans, that’s exactly what it is. Last month, the creation of 103,000 jobs failed to even take care of half the growth in the labor force, continuing a deteriorating situation that has persisted throughout the economic downturn. Since the recession started over three years ago, the workforce should have increased by four million job positions just to keep up with the working-age population growth, according to the Economic Policy Institute, but, incredibly, it has actually shrunk.
Furthermore, the Labor Dept. reported that 445,000 workers filed first-time unemployment claims last week, marking the third increase in as many weeks. The one piece of good news recently was a small drop in the unemployment rate, but it turned out that one of the main causes was people giving up on the frustrating job of finding work.
President Obama says that jobs will have a high priority over the next two years. However, the political process is hardly known to crank itself up unless it is faced with a crisis. And, the mind-numbing, relentless erosion in the jobs market doesn’t appear to be a crisis to legislators who are, for the most part, living the high life that only lobbyists know how to provide.
Indeed, how can they be concerned when they are barraged with upbeat news reports? On Wednesday, for example, the Federal Reserve announced that the year 2010 ended strongly. A day earlier, the head of the U.S. Chamber of Commerce said that he was optimistic about the direction of the economy and about the White House’s recent approach to the business community.
Yet, reality tells us that, in addition to the disastrous jobs situation, the housing market continues to decline, that foreclosures continue to escalate (ominously, tens of thousands of sub-prime mortgages in California are about to be hit with another jump in their interest rates), and that the problems that have been gradually transferred from Washington to the state capitals are now rolling downhill to the municipalities. Furthermore, the number of bankruptcy filings were up 9% last year, according to the National Bankruptcy Research Center, and are expected to be even higher this year. Also, the Census Bureau reported that 15.7% of the population, or 47.8 million Americans, are now living in poverty. And the rate is even higher for children. Furthermore, right on cue, the misery index is being hit with rising oil prices.
California’s new governor, Democrat Jerry Brown, has already figured out how he’d like to solve the state’s financial crisis. He says he will transfer some of the operations “closer to the voters.” In other words, he wants to roll the costs on down to the cities and towns.
How will that work out? Well, consider this. They can’t afford it either. Several communities in the state are already in default on their obligations, or threatening to be in default, and the list of likely problem areas is growing daily. For example, the well known ski town of Mammoth is on the list. Furthermore, the economic carnage is expected to follow the “rust-belt” paths laid out by the state’s many vast developments of empty and unfinished homes.
Bloomberg News reports that the value of municipal bonds, nationally, is continuing to fall as concern spreads. Meredith Whitney, the analyst who accurately predicted three years ago that Citigroup, Inc. was headed for serious financial trouble, told 60 Minutes last Sunday that “hundreds of billions of dollars” in municipal bond debt would end up in default.
Does this all sound like a strong economy headed in the right direction?
Getting back to Jerry Brown, he has a few more solutions to California’s problems in mind. They involve cutting welfare by $1.5 billion, or 50%, Medi-Cal by $1.7 billion, services for the developmentally disabled by $750 million, and the State University systems by $1 billion. Nowhere, in this panoply of misery that apparently will be foisted on those who can least afford it, is there any mention of hitting up the wealthy for their share. In other words, those who have more wealth at their disposal than they and their families can possibly spend in their lifetimes - who belong to the precise sector of our society that actually caused this mess in the first place - these super-rich residents will continue to get a free ride in California, as they do in Washington.
Finally, if there is one golden rule in economics, it’s that you don’t embark on an austerity trip during bad times, and these are bad times. It will only make matters worse. Nations in Europe and elsewhere may learn this the hard way. Greece, Ireland, Spain, Portugal and Italy are all struggling with financial crises and the imposition of austerity measures is resulting in more and more civil unrest. In the last few days, violent riots have also broken out in Tunisia and Algeria over the same problems.
Don’t get me wrong, austerity is fine at the right time, and I consider myself to be a strong disciple. Right now, however, the problem is still the need to stimulate the economy, not smother it.
For those who would ignore the troubling signs that continue to exist, the specter of a “double dip” has not gone away.
Far from it…
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Comments: 37
Life is changing, and we've got to get about adapting.
Local, local, local. Everyone see to your local communities for the best ideas, shared amongst yourselves.
Haven't I been predicting just this kind of thing in comments to your posts? Big money is taking care of itself and cannot be controlled. Government is controlled by big money. The monkey has a handful of nuts and will not let go even if that prevents getting the hand out of the jug. These things are all "business as usual" in economies and in governments.
Money always does this. That's its nature.
I have read the book "Collapse" by Jared Diamond. In fact it's on the shelf next to my left shoulder. :-) If it's the same documentary, I found it quite frightening unless we change our money.
and money gives that illusion. I want to know how the figures on unemployment and poverty are found! I think the 'under the poverty line' has been forgotten as part of that 15% +. Also, many of the 'employed' are working at jobs so below their former pay grade that they are still losing their houses etc. I lost my business after 12 year plus; due to the greed of wealthy constituents of Bushes. The owner's of the land that my stable sat upon were deeply involved in making sure that Gore would not push for the recount in Florida during that infamous presidential election. I was seeing first hand, the absolute lack of empathy...the need to blame the underdog...that the wealthy use to excuse themselves.
I do believe that it is unfair to blame Obama for this mess. He walked onto a sinking ship where the companies and industries responsible for the leakages, are also responsible to fix the holes. But, they are not being held accountable. The wealthy run this country and it is sickening to watch. To experience it first hand, watching the cocktail parties of the rich and famous while the house I lived in fell down around me, the house offered to me to live in, to run my stable from, in exchange for training and caring for their horses became more and more a hideous discrepancy. I was brought there because, as the wife of an infamous lawyer said 'She's the best damned trainer and instructor there is!' with promises that fell like acid to the ground.
With people like that in charge of this country as well as world disasters, don't think that they will give over the reins of their comfort controls without a nasty and unglorius fight. They will go for the weakest and unfortunately the most gullible.
In Australia a person on Unemployment can work up to 16 hours a week and stay on unemployment at a reduced rate, this keeps them out of poverty.
I can remember several years ago when the economy was bad that alot of companies that had unions and paid real good, encouraged early retirement with bonus's to create jobs for the younger ones... Now, since more and more elderly are returning back into the work force, this is taking away jobs for the younger ones...
I dont think that we were meant to work all of our lives, it just doesnt fit into our economy..
The present political uncertainty, for not saying fight, the low productivity, are not helping at all.
Once upon a time scientists and researchers were incoming into USA because they could work and create being sure that they be funded by the banks.
Now China, India, Brasil are opening their borders to them because they know that wealth comes from education. But when we hear that GOP/TP want to fight the education and health care budgets we lose confidence in US investments.
Since last year (November) Sarkozy has raised the retirement age for 2 main reasons: people has to accumulate more assets in order to get a decent monthly retirment amount and, obviously, we presently live longer than 50 years ago which implies more healthcare and better retirement plan.
Another bezel is the problem of developing businesses (banking loans) - sooner retirement implies higher bank availabilities as retired people don't use to save as much as younger do - then this renders usual loans tough to get so high educated people are better off outsourcing themselves in countries where their researches will be supported.
Is France any worse or better off than the US because of their early retirement and short hours?
Response to change is what's required to move the job market. We can't go back to WWII when manufacturing was at a height and it took so many people to get things made. We live in a different age and must adapt accordingly. Technology, information, sustainability/greening...three sectors where jobs could be growing.
This is a sad commentary on contempoary America.
> President Obama says that jobs will have a high priority over the next two years.
Who cares, Obama's priorities have a way of not getting done, and in fact, often the opposite happens ... and that's why he does not deserve any more support from Democrats ... or anyone else. Obama is 100% lie.
Yeah, bleedin' obvious, so what, since when is that any kind of metric for any kind of judgement? Our Presidents of late have been really good at making disclaimers as to why they cannot do anything for the people, but while they are talking our of one side of their mouth all kinds of things are being done for businesses ... whether or not those businesses are doing anything positive or not.
I think it would be better to look at both parties as the objects of attacks by all sides, foreign governments and corporations, domestic corporations, powerful private interests as well. The Republicans historically have been easier for these interests to infiltrate and take over, but the Democrats are a close second, remember there is no other game in town.
The trends are obvious, rich get richer with no signs or any control, responsibility to anything but themselves, and pretty soon the average people are written out of the system altogether. The fact that Obama went to a church that was very vocal about criticisms of the country, and then when he got into office he gave the left the finger does not in any way give a pass to his doing nothing but what the Republicans are supposedly letting him do.
Obama supporters just cannot see how bad this guy is, and now NOT a Democrat, or anything else he is. He is a clean cut minority guy who kept his image clean and was useful to the CIA ... at least that's my best guess where he came from.
This will be one of the worst times in history for young people to be starting out to find and pursue careers. I feel sorry for them for the mess their elders created.
Nothing will be done for them or for the 25 million who are unemployed and underemployed because the politicians are too busy representing the special interests who pay them the big bucks and who treat them like royalty.