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unemployment

Wrong about the “shrinking labor force”

by Dan Burns on January 12, 2014 · 1 comment

abandonedThe material at Barataria is always notable for clarity and accessibility; you don’t need to be an economics wonk to dig it.
 

Yes, the labor force is shrinking – but this has been due to retirement of Baby Boomers for the last two years. And yes, the trend will continue. More importantly, this is an opportunity that will help us when the dust finally settles on the working careers of the Baby Boom…
 
Restructuring an economy takes time after a depression, given that there has to be new faith where opportunity has been missing for a long time. The euphemism “Great Recession” has only served to mask the depth of this problem, putting the focus on 2008 as the down year – which is far from when everything started. The economy is getting better and hope is returning – but slowly.
 
The lie that people are hopeless and giving up looking for work is not supported by the data. The truth is a lot more complicated, and it shows that we’ve all been lied to for a lot longer than timeline given by Rush Limbaugh for this particular lie. But it is a lie – the decline in workforce participation lately has been entirely due to the retirement of aging Baby Boomers, and the losses before that are deeply troubling and point to an underlying weakness decades in the making.
 
Please help stop this terrible lie from circulating. Thank you.
(Barataria)

“Lie,” as in consciously presenting as fact something that one knows full well not to be true, may be a bit much in many cases, including Limbaugh‘s. (In the context of the above, it just means “a false statement.“) What’s likely going on is “motivated reasoning,” where people invent “proof” for what they feel emotionally compelled to believe. Reasoning from empirical fact is not part of the process. And that’s been a big, big problem, across the board, in all of human history so far.
 

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Put Everyone to Work

by Grace Kelly on January 8, 2014 · 1 comment

The wealth of the US is valued in our much we produce, in other words – work. When people are unemployed, that is the greatest loss to all of us. What if those unemployed people just built wind turbines and installed them. What if those unemployed people just fixed homes so heating and air conditioning was 30% more efficient. The 1% who have all the wealth could buy a few world-transforming miracles. The money sits unemployed. The people sit unemployed. What a loss!

 

This is not new knowledge. Way back in 1871, the Freemasons knew the value of work. Albert Pike said in the book, Morals and Dogma:

 

As Master of a Lodge, you are to inculcate these duties on your brethren. Teach the employed to be honest, punctual, and faithful as well as respectful and obedient to all proper orders: but also teach the employer that every man or woman who desires to work, has a right to have work to do; and that they, and those who from sickness or feebleness, loss of limb or of bodily vigor, old age or infancy, are not able to work, have a right to be fed, clothed, and sheltered from the inclement elements: that he commits an awful sin against Masonry and in the sight of God, if he closes his workshops or factories, or ceases to work his mines, when they do not yield him what he regards as sufficient profit, and so dismisses his workmen and workwomen to starve; or when he reduces the wages of man or woman to so low a standard that they and their families cannot be clothed and fed and comfortably housed; or by overwork must give him their blood and life in exchange for the pittance of their wages: and that his duty as a Mason and Brother peremptorily requires him to continue to employ those who else will be pinched with hunger and cold, or resort to theft and vice: and to pay them fair wages, though it may reduce or annul his profits or even eat into his capital; for God hath but loaned him his wealth, and made him His almoner and agent to invest it.

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Cutting unemployment insurance to just a few weeks

by Eric Ferguson on June 30, 2013 · 0 comments

Want another example of the bullets we dodged in Minnesota by getting Mark Dayton into the governor’s office by that barely-enough margin? North Carolina is making drastic cuts in unemployment insurance. The Republicans who control both governor and legislature are not only cutting off federal benefit extensions, which they’re doing by cutting the benefits too low to qualify, but they’re cutting the maximum weeks from 26 weeks to 20, and as few as 12 weeks when unemployment drops further.

 

Sound familiar? Didn’t that come up in the Minnesota legislature when the Republicans were in majority? Yes, it did. A bill cutting it to as few as four weeks was proposed by the current chair of the MNGOP, Keith Downey:

 

(c) The maximum amount of unemployment benefits available on any benefit account is the lower of:

(1) 33-1/3 percent of the applicant’s total wage credits; or

(2) 26 [The strike through is in the bill. That's the current 26 weeks being replaced.] (i) four times the applicant’s weekly unemployment benefit amount if the

statewide unemployment rate is at least three percent;

(ii) ten times the applicant’s weekly unemployment benefit amount if the statewide unemployment rate is at least four percent;

(iii) 18 times the applicant’s weekly unemployment benefit amount if the statewide

unemployment rate is at least five percent; or

(iv) 26 times the applicant’s weekly unemployment benefit amount if the statewide

unemployment rate is at least six percent.

 

His former district wisely rejected such cruelty by the comfortable, but apparently our GOP is just as OK with it as their counterparts in North Carolina. Unfortunately, thanks to the disaster of 2010, North Carolina is so gerrymandered that Democrats won’t be able to block anything until they somehow win governor.

 

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Sure, that headline is an overgeneralization. I’m sure new state chair Keith Downey cares about finding a way back into politics or he wouldn’t have run for chair. I mean he doesn’t care about the effects of the policies he wants to put in place. That’s how you can recognize an ideologue: they care that their policies are ideologically correct, and the actual effects are irrelevant.

 

I dug up the post I wrote about Downey last September, to see if there was any material in there still relevant. Obviously his bills died and he’s not in the legislature to propose them anymore, but in terms of how the new chair thinks, pretty much the whole post still applies.

 

State Rep. Keith Downey, the GOP Senate candidate in district 49, is probably best known for his 15×15 plan, mandating a 15% reduction in the state’s payroll by 2015. What’s so magical about 15%? It’s the same as the last two digits in 2015. 15 … and 15. See? Isn’t that clever? All the same thought that went into Herman Cain’s “9-9-9″ plan, which I believe was borrowed directly from a pizza pricing campaign. I’m not sure if Downey got his plan from a pizza sale, or a price war among sandwich shops.

 
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Go over the fiscal cliff

by Eric Ferguson on November 21, 2012 · 2 comments

I don’t take a decision to go over the fiscal cliff lightly. Economists think doing so will cause a recession. Since I’m advocating going over the cliff, I’d like to think the economists’ are, um, skewed — pardon the indulgence in a bit of post-election schadenfreude — but the case for the projections being wrong is that it would be convenient for me if they were wrong. Another recession would mean a drop in government revenues that makes the federal deficit and state shortfalls even worse, unemployment would presumably go up, and since real people will gt hurt, it’s just nothing to take lightly. Then why go over?

The Republicans, by agreeing to sequestrations and tax cut expirations if no “grand bargain” could be worked out following the debt ceiling crisis (sorry, their debt ceiling crisis, let no one forget that), unwittingly gave us a chance to achieve two long sought policy goals: ending the Bush tax cuts, and cutting defense.
The estimates of how much we outspend the rest of the world vary, but once we’re in the range of spending as much as the next 20 nations or next 25, does precision really matter? The defense contractor lobby is very tough to beat, and it has some Democrats seeking to shore-up their tough-on-whoever credentials to go along with a party of self-proclaimed fiscal hawks who give the Pentagon everything it wants, and then a bunch of stuff it doesn’t want but gets built in Rep. So-and-So’s district. Cutting defense has seemed impossible, until now. Now half the sequestered funds will come from defense. At last. If we go over the cliff.

Same with the Bush tax cuts. After a decade of blowing up the deficit and exacerbating income inequality, they were supposed to expire at the end of 2010, when the Republicans found a hostage. I know they hate that description, but I don’t know how else to characterize it when they said that if the Bush tax cuts weren’t extended in their entirety, including upper incomes, then unemployment insurance extensions would end too. Were they aware that unemployment was high, and millions of long-term unemployed people had no income besides the extended benefits? Of course they were. That was how they could use unemployed people for leverage to force the extension of Bush’s tax cuts. I supported taking the deal two years ago. Why not this time?

To be sure, it’s something of a cold equation. Unemployment is down in general and long-term. Unemployed people will be hurt by the end of the extensions, but there are fewer of them to be hurt. Maybe it’s time to stop paying ransom. Moreover, when the Republicans make proposals to avoid the fiscal cliff, they usually entail keeping all the tax cuts and replacing defense’s share of spending cuts with more domestic spending cuts. Makes me think that restricting the domestic cuts to what is already scheduled is the best we’ll do.

That’s the sacrifice. In terms of gains, though I accept that the fiscal cliff is likely to cause a recession, I’m skeptical about the stimulative effect of tax cuts generally, and upper income tax cuts seem bound to actually cause harm. The Obama tax cuts will come to an end too, but other than the payroll tax holiday, I’m unconvinced they’re helping. If we’re not going to get a stimulus effect, then even though it’s still premature to worry about deficit reduction, might as well have deficit reduction. Besides, at some point, the economy will have recovered enough to make deficit reduction the priority, so if we can’t have stimulus, then end the tax cuts and cut the deficit. Something that goes unspoken during attempts to end just the upper income tax cuts is that when the time comes to turn our attention to deficit reduction, the middle class cuts will have to end too. We simple can’t afford them. If we can’t end them at a better time, then abruptly it is.

Defense spending likewise is generally the least stimulative spending. Funny though, when it comes to something in their own districts, the austerians of domestic spending suddenly turn into complete Keynesians, pleading for continued spending because of the jobs it creates. I’m sure every contractor’s lobbyists make the same case. Should we stop the defense cuts for the sake of fiscal stimulus? If defense could be cut later when deficit reduction becomes a real priority and spending is based on need, sure. Anybody think that’s how it’s going to work? Frankly, if we’re ever going to cut our bloated defense spending, now’s our chance.

If we’re cutting things that don’t stimulate much or at all, then where is this recession going to come from? From the sudden cuts in domestic spending. From a purely economic point of view, they shouldn’t happen. In terms of hurting vulnerable people, they shouldn’t happen. In terms of political reality, I return to what I said above: when all proposals for saving defense spending and Bush’s tax cuts involve cutting domestic spending even more, I despair of avoiding the scheduled cuts.

So a recession it is — or rather a worse recession, since we might be thrown into another one anyway after the pounding Hurricane Sandy just gave the country’s biggest economic engine. Long term, in policy terms, given the chance to at long last cut defense and end the Bush tax cuts, the cost is worth it. Since going over the cliff is a decent deal from a Democratic point of view, we have the leverage. I don’t know that the Republicans understand that, but they’ll eventually figure out the leverage is on our side at last. They’ll figure out this isn’t like the debt ceiling crisis and the time a few months before that when they nearly shut down the federal government.

The president and the congressional Democrats need not give the Republicans a thing.

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Keith Downey doesn’t care what his policies will do

by Eric Ferguson on September 18, 2012 · 3 comments

State Rep. Keith Downey, the GOP Senate candidate in district 49, is probably best known for his 15×15 plan, mandating a 15% reduction in the state’s payroll by 2015. What’s so magical about 15%? It’s the same as the last two digits in 2015. 15 … and 15. See? Isn’t that clever? All the same thought that went into Herman Cain’s “9-9-9″ plan, which I believe was borrowed directly from a pizza pricing campaign. I’m not sure if Downey got his plan from a pizza sale, or a price war among sandwich shops.

Unfortunately, looking at Downey’s bills, this isn’t the only time Downey went off the deep right end with no concern for the consequences. It’s probably not even the most egregious example. This might be though: Downey authored a bill to reduce the maximum weeks of unemployment compensation to 18 when the state unemployment rate is below 6%, and as few as four weeks should unemployment ever dip below 3%. Current law says maximum unemployment benefits are the lower of one-third what the unemployed person made over a one-year period, or 26 times the weekly benefit. It’s not much to survive on, but Downey wants to reduce it further.

(c) The maximum amount of unemployment benefits available on any benefit account is the lower of:
(1) 33-1/3 percent of the applicant’s total wage credits; or
(2) 26 [The strike through is in the bill. That's the current 26 weeks being replaced.] (i) four times the applicant’s weekly unemployment benefit amount if the
statewide unemployment rate is at least three percent;
(ii) ten times the applicant’s weekly unemployment benefit amount if the statewide unemployment rate is at least four percent;
(iii) 18 times the applicant’s weekly unemployment benefit amount if the statewide
unemployment rate is at least five percent; or
(iv) 26 times the applicant’s weekly unemployment benefit amount if the statewide
unemployment rate is at least six percent.

We probably will never see unemployment below 3%, so why would he even bother lowering the maximum weeks to four? We’re already below 6%, so this measure would reduce benefits immediately when the job market still is difficult. Would he do anything about prohibiting employers from discriminating against unemployed applicants as is so rampant now? If so, he didn’t include it in the bill. Instead, he seems to want to punish unemployed people for not having a job by cutting holes in the safety net.

One mark of a fundamentalist is not caring about the effects of policies, as long as the ideology is pure. Downey didn’t care about the effects of dumping an arbitrary 15% of state employees or reducing unemployment benefits, nor did he care about the effects of the government shutdown the Republicans brought us in 2011:

“Nobody wants a shutdown, but it’s an interesting opportunity to see what impact not having these nonessential employees has,” he said. “It will allow us a chance to assess, one-by-one, what can actually be done without all of those people.”

He knew, or should have known, because it came up before the shutdown, how hard his shutdown would be on people with disabilities. Sure, lots of people thought the only effect of the shutdown would be the state parks would close, but a legislator should have known better. Somehow Downey could take an action that would have a profound effect on vulnerable people with the attitude, “it’s an interesting opportunity to see what impact not having these nonessential employees has”. Maybe he thought only state employees would be hurt, and it’s not like he values them at all anyway.

Downey made it apparent how little he respects state employees by a change he tried to make in the rules controlling when state agencies can hire outside contractors. He wants so badly to replace public employees even at the extra cost of hiring contractors, the he tried to take out the requirement that no employee be available before hiring a contractor. He struck this line in the list of requirements for hiring a contractor: “no current state employee is able and available to perform the services called for by the contract;” In case it’s assumed laid off employees would be called back because their old jobs need to be done again, this line was also struck: “the agency will not contract out its previously eliminated jobs for four years without first considering the same former employees who are on the seniority unit layoff list who meet the minimum qualifications determined by the agency.”

Efficiency be damned I guess. Let’s spend extra on contractors despite having people on the payroll who can do the same job, or being able to recall laid off employees who already know something about the work they would be doing.

That’s looking at bills he authored. In his voting record, he voted twice for Minnesota’s version of the “stand your ground” law, also called the “shoot first” law, or maybe we should call it the “let’s make Minnesota as nuts as Florida” law. I wonder if he’s been admitting to this since the Trayvon Martin murder? I wonder if he checked into the effect of this law in Florida before voting for it? Most of us heard about how many killings Florida had only after the Martin murder, but if you’re going to pass such a law here, wouldn’t you check? Only if you cared about the effects of your ideologically correct vote and as we keep seeing, Downey doesn’t care.

Finally, some brief bits of Downey’s brilliance:

 

 

 

 

 

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What does “war on women” mean, anyway?

by AprilStreich on September 9, 2012 · 3 comments

Katherine Kersten, the Star Tribune’s resident head-in-the-sand religious zealot, homophobe, and anti-feminist columnist, explained to us the other day that there is no such thing as a “war on women” which, she claims, President Obama invented purely to help his re-election campaign:

There’s a “war on women” being waged by those knuckle-dragging Republicans. How do you know? Because President Obama has told you so, and because his media enablers parrot the line at every opportunity.

Yes, we know because Obama told us so, not because the GOP platform is actually looking poised to include a constitutional ban on abortions of any kind for any reason; it’s also definitely not because we have men holding elected office who actually believe that uteruses contain magical powers that stop pregnancy from happening during a “legitimate” rape; it’s also absolutely not because so many men think it’s totally fine to suggest an entire audience gang rape a woman who had the nerve to mention that rape jokes aren’t funny, and that so many people defend the “joke.”  It can’t possibly be because a discussion about contraception included zero women, on behalf of whom the men were charged with making decisions — and that the only woman able to testify was subsequently called a slut, told to share videos of herself having sex, had her perceived sexuality judged openly and maliciously by commentators everywhere, and whose sex life essentially became the focus of the national discourse for weeks. And it definitely can’t be because all of these things, and more, clearly affect primarily women, over and over again throughout history, and rarely affect men on such a visceral and immediately practical level.

But, no. Those things do not constitute a “war on women.” In fact, the real problem is something entirely unrelated to the massive political and cultural fight against women’s reproductive rights, ability to speak in public, and comfort knowing half the population doesn’t think it’d be funny if you got gang raped: women are currently slightly more financially successful than men are, because of the recession!

What does the battlefield look like? A first reconnaissance might suggest that men, not women, are under assault and in full-scale retreat. For example, women now earn almost 60 percent of college degrees, and a majority of master’s and doctoral degrees. Education is the best predictor of future earnings in our information economy.

Women now hold 51 percent of white-collar management and professional jobs. Traditional male sectors like manufacturing are in decline, while women dominate 13 of the 15 job categories projected to grow most in the next decade. In 2010, the Atlantic magazine documented the shift in an article titled “The End of Men.”

That women outpace men in college degrees is nothing new; it’s a statistic we’ve been hearing for ages that has its share of varying analyses. Kersten, like so many others in her position, also makes no mention of the persistent and institutionalized misogyny and glass ceiling that women continue to face in academia in many fields, proving once again that women’s technical legal equality does not mean that women are fully equal in all of society.

On the workplace front, Obama supporters allege that women make 77 cents on the dollar compared with men. They blame sexist employers, and denounce Republicans for opposing the Paycheck Fairness Act, which they portray as key to “pay equity.”

In fact, the wage gap essentially disappears in “apples to apples” comparisons of the earnings of women with and without children. Women with children tend to choose hours, occupations and flexible work environments that result in lower earnings, while childless women earn virtually the same as their male counterparts on average. In fact, in cities like Minneapolis, Boston and New York, women in their 20s who work full-time now outearn their male peers.

It pains me to admit that one part of Kersten’s critique actually makes sense, but even a broken clock is right twice a day: the argument from the left about pay inequality between women and men is misleading, at best.  The argument is frequently framed in a way that leads readers/viewers/listeners to believe that the oft-cited “a woman makes $0.77 to a man’s $1.00″ is based on same pay for same work, when in fact, the statistic is a comparison between the employment and pay of all men and all women who work full-time hours, regardless of field, age, or any other factor other than hourly wage or yearly salary. As Kersten noted, apples-to-apples comparisons did, in fact, result in the much sought-after “equal pay for equal work.”

Ultimately, thought, it does not matter that Kersten and her conservative friends are right about this often-overlooked statistical complexity, because she, like nearly everyone else in this argument, continue to neglect the most important factor, and all of its implications: the industries dominated by women (childcare, teaching, housekeeping work) are the ones that pay the least, whether it’s a man or a woman doing the job. The industries dominated by men (construction, etc., etc.) pay the most, whether the job is held by a man or a woman.  We all agree on this pretty much irrefutable statistical reality, but why do we always stop there?  There are many more questions to ask:

The fact that there remains a vast disparity in the average amount of money women earn in general and the average amount of money men earn in general is still something that should feel immediately disturbing to all of us.   Why are these jobs compensated to unequally? Is it because women do the work typically performed in the most underpaid sectors, and we’re inherently sexist? Maybe; but that’s certainly not the whole story, nor, do I think , is it the right path to take when trying to determine the whole answer. What I’d really like to see discussed is why we, as a culture, value and subsequently reward performing physically strenuous or dangerous work more than we value instilling lifelong critical thinking skills, historical and technical knowledge, and socialization skills to our youth?  Alternately, why do we feel, as a culture, that waking up to an alarm, going to a cubicle in an office building with a deliberately aggressive and dictatorial environment, and bringing home a check signed by someone else, is more of an accomplishment worthy of practically meaningful compensation (i.e., money) than engaging full-time in the rearing of children, who need to form familial bonds and learn about the world in their youth, whether it’s from a mother, father, or other steadfast guardian figure in their lives?  Why do we insist on paying people for the type of job they do, rather than the time it takes to do it? A full-time cashier who makes $8.00 an hour still spends the same amount of their own limited on this planet time ringing up other people’s purchases as an accountant for a local bank who presses buttons on a calculator full-time for $14.44 an hour.

While there is much to be debated about what kind of time, whose time, and which activities happen within this time, and how to fairly compensate this time, it remains that we have constructed a society in which practically every single thing needed for a modestly comfortable life requires access to money. Some people have money, some people don’t, and its easier for some people to earn it than it is for others.  

Ultimately, the economic inequality between women and men won’t be meaningfully resolved until we have a serious conversation about how we spend our time, what we contribute to society, what we need, and what it means to be compensated fairly for our work. It’s time we move past the petty and unceasing arguments about whether or not there is still such a thing as “sexism,” as if it weren’t painfully obvious to most of us, and tackle the root of the issue.  Perhaps with such a large audience at her fingertips, Kersten could try to be part of the solution, rather than part of the problem.

This article was cross-posted to PaperRevolution.org.

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Republicans want to talk about the economy? Michele Bachmann doesn’t. She certainly doesn’t want to talk about the condition of the economy in her Sixth District (after three terms in office.)

“The Sixth District has a higher rate of unemployment compared to the rest of the state and Jim can do the job of improving the lives in his district,” (Sixth District chair Bill Usher) said. “Our current representative hasn’t done anything like that.”

Bachmann’s opponent is businessman Jim Graves. Graves has created jobs; thousands of jobs in the private sector. Bachmann hasn’t scheduled any debates with him. (I don’t think she likes being in the Sixth District. Her prez bid is so over, but she’s still touring the country, out of the district. She likes being almost anywhere other than the Sixth District. She’s always been more of a “national media hog” than a representative for the working families of the Sixth.)

“It’s hard to respond when she’s out in Washington D.C., New York and giving speeches outside her district,” (campaign chair) Adam Graves said. “We’d like to have a series of debates with her in all regions of the district, but so far not one debate is scheduled.”

Bachmann shies away from debates. She doesn’t like them because they call attention to the fact that she’s got a credible opponent in this year’s race. Michele Bachmann doesn’t ‘do’ credible.

And if Clint Eastwood wants to debate a chair–why didn’t he debate campaign chair Adam Graves?

LINK:
http://unioneagle.com/2012/09/…

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Joe Biden: the long walk

by Eric Ferguson on August 19, 2012 · 1 comment

I entitled this post “the long walk” after something Joe Biden said, but I could have called it the more clunky, “what Joe Biden really said in Danville, VA, when he made the ‘chains’ remark”.

C-SPAN doesn’t allow embedding, so click the still for the link:

Joe Biden speaking at Danville Virginia

Biden’s occasional gaffes (anyone else ever notice that when makes a gaffe, he doesn’t say anything rotten about somebody) are more than balanced out by his gift for poignancy. In the same rally speech where the concern trolls on the right picked on the remark they want to twist into Biden losing it mentally, he showed how they’re so full of s… um, such conservative propaganda. Starting about seven minutes into the video and running until about 12 minutes, he shows the sense of empathy the Romney/Ryan Rich Boys Club can’t comprehend. “The long walk” refers to the walk to the kids’ rooms parent make to tell them they’re going to be OK, despite the loss of a job and such things as go wrong in life.

It’s a lot to transcribe, but I’ll share the key part, 10:49 in to the video, what Biden described as his father’s “even longer walk”:

All kidding aside, my dad, I remember him sitting on the bed. He said, “Honey, Dad’s gonna move away for a year.” And I said, “oh my god.” And he said, “I’m going to go down to Wilmington with Uncle Frank. It’s only 157 miles.” He might was well have said he was going to the moon. And he said, “When I get settled honey, when we get a place, I’ll try to come home on the weekend. When I get a good job and a place,” he says, “I’ll bring you and Mom and Val and Jimmy down and it’s gonna be OK. It’s gonna be OK.” My Dad believed it was gonna be OK because things were still on the level then. He believed it. Then he convinced me to believe it. And it wasn’t tragic, it wasn’t like “my god”, but you know, it wasn’t until I got in my twenties I realized he made a longer walk. He walked into my grandfather Ambrose Finnegan’s pantry and said “Ambrose,” with my mother’s brothers there — my dad was a proud, graceful man. I can’t imagine what it was like say “Ambrose, I need a favor. Can you keep Jill –” — Jill’s my wife, Jean — “Can you keep Jean and the kids for the next year. I promise I’ll pay you back. I promise I’ll do it.” You know people who’ve made that walk. You know people right here in Danville who’ve made that walk. Some of you maybe made that walk.

Having somebody close to the president who feels this deeply what it’s like to struggle, what’s it like to fear, or as he put it elsewhere in the speech, to lay in bed and look around the room not knowing you’ll be able to still be in the same room two months from now, is worth some minor gaffes. I don’t know what he meant by the “chains” remark and I can’t say I care, nor do I much care he referred to North Carolina at the end of his speech in Virginia. So he’s giving a bunch of speeches at campaign events in swing states and mixed them up, big whoop. We should be glad that when the stooges of the 1% resume their attempts to punish the poor for being poor and reserve their sympathy for the rich who don’t like paying taxes, somebody like Biden is in the room.

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How much better the economy could be doing

by Eric Ferguson on February 12, 2012 · 0 comments

That inherent human tendency to assume whatever is going on will continue to go on applies to economics as much as anything else. Anyone remember, “real estate prices never go down”? I heard that when I bought my house — at the height of the bubble — thinking it was nonsense or a theory at best (whereas the noisy people in the apartment above mine were very real, so not a hard decision), but hear that I did. This came just a few years after “stock fundamentals don’t matter anymore”. Right, and the jobs are never coming back, high gas prices doom us to a destitute energy-less future, and the free market always works best. OK, that last one was probably never true.

Point is, with the economy, news that it might be getting better is a bit discordant. Maybe more-so if you’re counting on a bad economy to get the Kenyan socialist Muslim Nazi birth-certificate- faker out of the White House, but we’re surely all thinking this can’t really be the trend, can it? Not when unemployment is still high and so much can still go wrong? About that…

Supposedly the economy can’t recover until housing recovers. So if the economy is recovering, housing must be recovering, right? Wrong. It’s not. Housing might or might not have bottomed, but it sure hasn’t started back up. That’s why Obama proposed a new mortgage program and acknowledged the others hadn’t worked. Housing hasn’t gotten better. It’s dragging down the overall economy. That’s just it. The economy has improved despite housing dragging it down. The effect is already there. It’s not like the economy improved but housing could turn and pull it down. If housing was recovering, think of how much better we’d be doing — not that I know at all how much better, but better than it is, no doubt.

And then there’s the other impending doom, the crisis in Europe. You know, the one that causes conservatives to say we’re getting to be like Greece, even though both our policies and our results are about as Greek as a samurai mountie with an allergy to gyros and a strong opinion that Socrates was full of it.
Europe is in a recession. “OK”, you might be thinking, “that was inevitable, wasn’t it? Or at least easily explained?” No, what I mean by the  ”impending doom” is the crisis with Greek debt and bank bonds and high unemployment is supposed to be bad enough to cause a recession, and that will drag down the US too — but it’s already in recession.

This came as a tangential thought while reading Matt Taibbi expressing his disgust at whining on Wall Street. He was referring to an article whose writer let some very well-paid people lament about not being even more very well-paid because they can’t engage in the same risky activities that blew up the financial system. Besides the whining, Taibbi said the people on Wall Street he talks to don’t complain about the Dodd-Frank financial reform or Occupy Wall Street or the 99% being mean to them. They talk about Europe wrecking their profits, and Europe’s crisis being what keeps them awake and stressed.

Yes, the European crisis that could cause a recession — except it has. Greece is clearly in deep depression, not that “depression” is a technical term, but more one of those things we know when we see it, and after five years of recession and roughly 20% unemployment while the debt to GDP ratio gets worse despite the debt falling, I’m pretty sure I see it. Ireland has been in recession for years too. Britain has been thrown into recession by austerity, France and Italy are probably in recession, and even Germany’s growth was close to nil. Romanians are rioting over austerity and Hungary now has a proto-fascist government that might default on its debt. Sure, things might get worse. Maybe there’s another bank collapse coming from bad debt and credit default swaps and phony accounting just like we saw here. Here’s the thing though: our economy is doing decently, despite the European recession already happening. Could the European recession pull us down too? It already is. That nice jobs report, with unemployment dropping a bunch for one month, is including a pull from Europe.  Think of how well we might be doing without Europeans’ determined efforts to avoid doing the bloody obvious (if you’re European, don’t think about it: it will just depress you).

Do I sounds optimistic? I am. We’re recovering steadily — not fast, but steadily — despite the two factors most likely to pull us down already pulling us down. But go ahead Republicans, explain how the stimulus failed and no, you can’t pretend austerity in Europe isn’t causing a disaster.  

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