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Monday, April 30, 2012

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Sunday, April 29, 2012

Where have we heard this before?

Businesses aren’t investing in the United States because of a lack of consumer demand, International Paper CEO John Faraci said Friday.

"I think this was all about consumer spending and demand. You know, the problem we have is there's inadequate demand to create jobs. We know how to respond when there is demand," he said on CNBC’s "The Kudlow Report." (source)

It was a no-brainer back in August 2010 - it's a no-brainer now.

Saturday, April 28, 2012

No end in sight? Maybe not.

James Surowiecki, writing in The New Yorker:

Being unemployed is even more disastrous for individuals than you’d expect. Aside from the obvious harm—poverty, difficulty paying off debts—it seems to directly affect people’s health, particularly that of older workers. A study by the economists Till von Wachter and Daniel Sullivan found that among experienced male workers who lost their jobs during the 1981-82 recession mortality rates soared in the year after the layoffs. And the effects of unemployment linger. Many studies have shown that the lifetime earnings of workers who become unemployed during a recession are permanently reduced, and von Wachter and Sullivan found that mortality rates among laid-off workers were much higher than average even twenty years afterward.

Unemployment doesn’t hurt just the unemployed, though. It’s bad for all of us. Jobless workers, having no income, aren’t paying taxes, which adds to the budget deficit. More important, when a substantial portion of the workforce is sitting on its hands, the economy is going to grow more slowly than it could. After all, people doing something to create value, rather than nothing, is the fundamental driver of growth in any economy.

Surowiecki's article is titled "No End In Sight" - I've added the question mark, because I believe that there are efforts to address the problem, and people who are willing and eager to do more. From Secretary of Labor Hilda Solis and the (work in progress) blog:

The Obama Administration is committed to finding new and innovative ways to turn the unemployment system into a reemployment system. States, as laboratories of democracy, can play a crucial role in developing creative strategies that help us accomplish this goal in ways that may inform the policies of other states and the federal government in the future.

Today, I had the privilege to announce guidance to states interested in developing demonstration projects to help their unemployed obtain jobs faster and more efficiently. These demonstrations are a key component in the first major overhaul of the Unemployment Insurance system in decades.

Through this initiative, 10 states will have the opportunity to develop new and creative ways to help recipients of UI funds get back to work faster. These states will design programs that help the unemployed get back to work, while lowering costs and ensuring that all participants receive the same worker protections. This will create a level playing field for employers who follow the rules and have their employees’ welfare in mind.

When did this become acceptable?

(Milwaukee Police) Chief Flynn recounted pleading with a state senator to include a provision in Wisconsin’s concealed weapons law that would ban habitual criminal offenders from obtaining permits. The senator, he said, told him, “Here’s the phone number of the National Rifle Association lobbyist in Washington, D.C. If it’s O.K. with him, it will be O.K. with us.” The provision was not included, Chief Flynn said. (source)

Friday, April 27, 2012

One chance

As a New Yorker who watched from midtown as the towers fell; who had family in the vicinity of the attack; who was stunned into disbelief at the audaciousness of the attack, all I can say is... well done, President Obama. You earned my vote.

Sunday, April 22, 2012

Bernie Buzz: An American Oligarchy?

From Senator Bernie Sanders' latest Bernie Buzz newsletter:

At a time when the middle class is collapsing and poverty is increasing and the wealthiest people are doing phenomenally well, many Americans are wondering whether this country is moving toward an oligarchic form of government where a handful of very wealthy people control the economic and political life of the nation. At a time when the richest 400 Americans own more wealth than the bottom 150 million people, it was not surprising to learn from a recent study that between 2009 and 2010, 93 percent of all new income went to the top 1 percent of U.S. taxpayers. Additionally, it is extremely disturbing that because of the absurd Citizens United Supreme Court decision, many of these billionaires are now using their money to strengthen their political hold on the country. "This is not what democracy looks like. This is what oligarchy and plutocracy look like," Bernie said.

Saturday, April 14, 2012

A(nother) GOP Lie

"He had a Democratic House and a Democratic Senate for his first two years," Romney said of Obama.

Politicians running for national office should know better than that.

Grade schoolers know better than that.

Anyone who ever watched Schoolhouse Rock knows better than that.

Remember this little fellow?

Let's review - a bill has to go through the House, then the Senate, before the President can sign it.

In the House, a bill needs a simple majority to pass.

In the Senate, a bill has to meet two hurdles: the Senate has to agree to end debate, and then they can vote on the bill. That's where the filibuster and cloture motions come in.

This op-ed piece in the New York Times describes the current state of the Senate perfectly:

Before 1975, it took two-thirds of the Senate to end a filibuster, but it was the "Mr. Smith Goes to Washington" filibuster: if senators wanted to stop a vote, they had to bring in the cots and the coffee and read from Grandma’s recipe for chicken soup until, unshaven, they keeled over from their own rhetorical exhaust.

As revised in 1975, Senate Rule 22 seemed to be an improvement: it required 60 senators, not 67, to stop floor debate. But there also came a significant change in de facto Senate practice: to maintain a filibuster, senators no longer had to keep talking. Nowadays, they don’t even have to start; they just say they will, and that’s enough. Senators need not be on the floor at all. They can be at home watching Jimmy Stewart on cable. Senate Rule 22 now exists to cut off what are ghost filibusters, disembodied debates.

All it takes to stop a bill is 41 Senators.

Why is this important? Because of one man: Scott Brown, Senator from Governor Romney's Commonwealth of Massachusetts:

Senate Republican leader Mitch McConnell says he took notice when he heard that Brown was signing autographs "41".

"This is a man who understands how the Senate operates," McConnell said. (source)

Scott Brown became the "41st Senator" when was sworn into office on February 4, 2010.

So, how long did the Democratic Party have a filibuster-proof majority in the Senate? Kevin Drum has the answer:

Until Al Franken was sworn in on July 7, the Democratic caucus in the Senate stood at 59. After that it was technically up to 60, but Ted Kennedy hadn't cast a vote in months and was housebound due to illness. He died a few weeks later and was replaced by Paul Kirk on September 24, finally bringing the Democratic majority up to 60 in practice as well as theory. After that the Senate was in session for 11 weeks before taking its winter recess, followed by three weeks until Scott Brown won Kennedy's seat in the Massachusetts special election.

Fourteen weeks. Not the two years that Mitt Romney, Chris Christie and others in the GOP have claimed.

Add this one to the list of zombie lies.

Friday, April 13, 2012

Wednesday, April 11, 2012

An economic recovery that leaves workers further behind

Companies aren't creating jobs. They're not paying taxes, either. Why is the GOP on their side?

Harold Myerson, writing in The Washington Post:

Hiring has picked up in manufacturing, but manufacturing wages are falling nonetheless. The standard wage at Midwestern auto factories has declined from around $28 an hour to $15 an hour for workers hired during the past two years. New hires have their hourly wages contractually capped around $19, no matter how long they may work for the automakers. But the plunge in wages hasn't stopped at $15. At a new high-tech locomotive plant in Muncie, Ind., Caterpillar is hiring workers at $12 an hour. (Personal note: Caterpillar is the company that locked out workers over their refusal to take a 50% wage cut. Caterpillar later closed the plant and moved the work to Muncie.) That's $24,000 a year — let's say $30,000 with overtime, if there's overtime — to assemble some of the most sophisticated machinery that this country builds. That's not the kind of money you can send your kid to college on, or use to shop for much more than your daily bread.

So, if not to workers, where's the money going? Of the companies that comprise the Standard and Poor's 500, net income (chiefly, their profits) has risen 23 percent since 2007, the last year of the bubble, the Wall Street Journal reported this week. Their cash reserves have increased 49 percent during that time — in large part because they're neither hiring in the United States nor boosting their workers' incomes. Workers are producing more: "In 2007, the companies generated an average of $378,000 in revenue for every employee on their payrolls," the Journal reported. "Last year, that figure rose to $420,000." But workers are seeing none of that increase in their pay.

Profits and dividends are up and wages are down — which is why, as University of California economist Emmanuel Saez has documented, all income growth in the United States in 2010 went to the wealthiest 10 percent of households, and 93 percent to the wealthiest 1 percent. Profits and dividends are up largely because wages are down, as JPMorgan Chase chief investment officer Michael Cembalest has documented. "U.S. labor compensation," Cembalest wrote in a newsletter to the bank's major investors last year, "is now at a 50-year low relative to both company sales and U.S. GDP." (related chart here)

Sunday, April 8, 2012

Right To Work... For Minimum Wage


"Right To Work" states lead the nation in minimum wage jobs.

One argument for "right to work" laws is that they will create jobs. What kind of jobs are they?

To answer the question, let's look at the statistics: this is the percent of workers paid hourly rates, at or below minimum wage. When you sort the table by "At Minimum Wage," 17 of the top 21 states are right-to-work states. When you sort by "Below Minimum Wage," 12 of the top 22 states are right-to-work states.

State Total Percent % At Min. Wage % Below Min. Wage
 
Click a column heading to sort by that category
Source: Bureau of Labor Statistics, "Characteristics of Minimum Wage Workers: 2011," Table 3 - by State
Alabama6.503.702.70
Alaska1.900.501.40
Arizona5.601.304.30
Arkansas6.604.402.10
California1.600.601.00
Colorado4.000.703.30
Connecticut2.900.502.40
Delaware5.201.403.80
District of Columbia4.301.103.20
Florida6.301.904.40
Georgia9.605.104.50
Hawaii4.702.502.20
Idaho5.003.201.80
Illinois3.500.902.60
Indiana6.203.103.10
Iowa5.603.002.70
Kansas7.003.403.60
Kentucky5.802.803.10
Louisiana7.403.304.20
Maine3.700.802.90
Maryland5.102.103.00
Massachusetts3.900.703.20
Michigan4.601.103.50
Minnesota5.103.002.00
Mississippi8.505.403.10
Missouri7.103.503.60
Montana3.702.201.50
Nebraska5.502.802.60
Nevada3.301.301.90
New Hampshire3.801.102.70
New Jersey5.502.303.20
New Mexico4.401.303.10
New York5.102.302.70
North Carolina6.803.203.60
North Dakota5.302.902.40
Ohio4.700.803.80
Oklahoma6.804.302.40
Oregon1.200.400.80
Pennsylvania5.702.902.80
Rhode Island3.801.002.80
South Carolina7.303.903.40
South Dakota5.102.802.40
Tennessee6.903.303.60
Texas8.004.403.60
Utah4.602.002.60
Vermont2.200.501.60
Virginia7.103.403.80
Washington1.800.401.50
West Virginia7.404.303.00
Wisconsin4.601.902.70
Wyoming6.003.003.00

Related: As union membership decreases, so does middle-class income

Monday, April 2, 2012

Economix: The Enduring Consequences of Unemployment

From The New York Times Economix blog:

"People who lose jobs, even if they eventually find new ones, suffer lasting damage to their earnings potential, their health and the prospects of their children. And the longer it takes to find a new job, the deeper the damage appears to be."

This is a must-read, must-forward article.