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So, I guess it has been a rather eventful week in the world economy and the lives of the Beltway Village Idiots Politicians, Pundits, and Courtiers. I’ll let Paul Krugman and Jane Hamsher do the honors of eviscerating the Standard & Poor downgrade of the US credit rating but do want to add my 2¢ in agreement that supposed neutral arbiters who sold their souls and “independent analysis” for the banksters crappy mortgage based securities should be well advised to STFU rather than interject themselves politically.

To the non-surprise of most folks living in the reality based world, the passage of the debt ceiling increase did absolutely nothing towards improving the overall economy and the budget slashing accompanying the increase is likely to push the economy back into recession (at least that’s my prediction here, here, and here). Reuters had this on the “small blessings” of the debt deal:

The plan for $2.4 trillion in spending cuts over a decade, if backed by lawmakers, would help lift some of the uncertainty that has weighed on investors, businesses and consumers unsettled by talk about a possible new and deep U.S. financial meltdown.

Of course, this was published prior to the stock market drop on Thursday. So much for the “certainty,” right? The LA Times seems to have a little better handle on things than Reuters with this:

Instead of increasing confidence in the future, the agreement seems to have underscored the near paralysis in Washington — and the fact that no substantial new efforts are likely for dealing with unemployment, lagging consumer spending or a host of other problems that have been dragging the economy down.

…snip…

The stock market provided an early indicator Monday that investors and business leaders saw little to cheer about. Stocks initially rallied on the debt-ceiling pact, then tumbled after a report showed that U.S. manufacturing activity slowed sharply in July, reinforcing other weak economic data.

As we know today (Saturday, August 6), the stock markets worldwide greeted the Debt Ceiling deal by having their worst week since the middle of the Great Recession.

As always though, my foremost interest is in the Jobs Reports. Or maybe better phrased as lack of jobs reports. The ADP report on private sector jobs came out Wednesday and had it as 114K jobs (via Reuters), although this was offset by Challenger-Gray reporting that planned layoffs had jumped once again to the highest number in 16 months. CNN had a nice little article on the top ten latest “job killing” companies.

Thursday brought the weekly report of Initial Unemployment Claims for last week. Reuters reports it:

Initial claims for state jobless benefits edged down 1,000 to 400,000, the Labor Department said on Thursday. Economists had expected claims to rise to 405,000 and the dip last week indicated an easing in layoffs, which have weighed on employment in the past two months.

Of course, they failed to mention that the previous week’s report had been revised upwards once again from the original reports of 398K.

The official BLS numbers on jobs created for July came in at 117K. The most interesting part of the reporting on the BLS number is how many media sites put on the rose colored glasses to report. CNN’s headline (linked above) was “Hiring Picks Up” while the Washington Post presented it as”Cautious relief amid modest job growth.” The NY Times headline read “US Posts Stronger Job Growth in July” and Bloomberg said “Payrolls Rise, Jobless Rate Falls, Concerns Ease.” I think the LA Times may have provided one of the more realistic looks at the Friday report with this headline “Jobs report doesn’t offset U.S. recession fears.” The fact is, 117K new jobs, in an economy that needs to create 1 million jobs a year (roughly 90k per month) just to stay even with folks entering the work force, is no where near enough to attack the long term un and underemployment problems we face.

For a bit of comic relief, I’ll leave you with this article from Bloomberg this past Monday headlined “‘Embarrassed’ CEOs Silent on U.S. Debt Debate Driven by Republican Demands” combined with this one from Reuters from last week on hedge fund managers refusing to comment on the economy. So much for the best and brightest on Wall St I guess.

And because I can (H/T Old Folks Boogie on Facebook):

Cross posted from Just A Small Town Country Boy

Author’s Note: Please take a few minutes and Join the Firedoglake Membership Program today. FDL provides the tools that help me and others extend our reach with our rants so we need to support FDL when we can.

Clue Game 1960 by Thrift Store Addict, on Flickr

No. It probably isn’t. Probably just some more wishful thinking on my part. Nevertheless, I was quite surprised this morning to see a few pieces around the web pointing out that a “new Republican Jobs bill” was just another tired rehash of the same failed policies of the last thirty years. Ezra Klein at the Washington Post, Paul Krugman at the NY Times, Steve Benen at Washington Monthly all pounded on the Republican “Plan” and for good reason. From the Klein link:

The best evidence that Washington has forgotten about the jobs crisis is to look at the plans emerging to address it. Yesterday’s House GOP plan was a perfect example. It was, as MIT economist David Autor told me, a classic case of “now-more-than-everism”: Everything on the agenda was also on the GOP’s agenda in 2006, in 2002, in 1987, etc. It’s lower taxes, less spending, fewer regulations, more trade agreements, more domestic oil production. You can argue about whether these proposals are good for the economy. But as Autor says, there’s “no original thinking here directed at addressing the employment problem.” 

Actually, you can argue whether those “proposals” are good for the economy as we have thirty years of evidence that they are not good for the economy.

Krugman points to how foolish it is to try to negotiate with the Republicans on these issues (as does Blue Texan at FDL this afternoon). Krugman said:

Anyway, the new “jobs plan” illustrates, once again, the foolishness of believing that we can reach any real bipartisan agreement on economic policy. The GOP stopped thinking a long time ago; all it knows how to do is parrot Reaganite rhetoric over and over. And there’s so little there there that the document — look at it! — has to rely on extra-large type and lots of pointless pictures to bulk it out even to 10 pages. 

Benen is even less forgiving than both Klein and Krugman:

As we discussed yesterday, the jobs agenda, such as it is, is practically a conservative cliche: the GOP wants massive tax cuts for the wealthy, deregulation, more coastal oil drilling, and huge cuts to public investment. Republicans are confident this will work wonders, just as they were equally confident about the identical agenda in the last decade, and the decade before that, and the decade before that. 

Indeed, the most glaring problem with the GOP jobs agenda is that it won’t work, but nearly as painful is the realization that it’s already been tried, over and over again, to no avail. They either don’t care or can’t understand the famous axiom: “Insanity is doing the same thing over and over again and expecting different results.”

The agenda is the agenda: tax cuts for the wealthy, deregulation, cut public investments. Good times and bad, deficit or surplus, war or peace, it just doesn’t matter.

It’s as if someone bought an iPod, uploaded one song, and hit “shuffle.”

Read the rest of this entry →

tell truth by arimoore, on Flickr

Today (Monday, April 25) CNN has an opinion piece from former George W. Bush staffer David Frum that shocked me, and not in a Capt Renault kind of way.

Technically speaking, the U.S. economy is recovering right now. GDP growth has been positive since the summer of 2009. Employment is growing. If you like, you can say the recession is over.

But don’t say it too loud. With 13.5 million people out of work — 6.1 million out of work for 27 weeks or more — the odds are high that one of them may hear and take offense.

The recovery is weak, and job creation is slow. Everybody knows that. But here’s something that we don’t know, or anyway don’t think about enough: Isn’t it weird that in this dismal economic situation, neither of the two great U.S. political parties is offering a plan to do anything about the job situation?

Frum goes on to note that the Republicans at least have a “plan” (Rep Paul Ryan’s “budget”), even though the “plan” does nothing to help the unemployed, nor does it actually do anything on the budget. He also notes that the Democratic “plan” consists primarily of blasting the Ryan plan.

The administration does however have a political plan: Blast the Ryan plan. Since the Ryan plan is highly politically vulnerable, the blasting will likely hurt the GOP and help President Obama. The blasting will not, however, do much for the unemployed. But then we’ve all sort of given up on them, haven’t we?

I have to give credit when it is due and right now, Frum seems to be one of the few members in presumably good standing of the Village who is actually seeing something close to the reality faced by millions of us within the US today. Annie Lowrey of the Washington Post almost got it correct yesterday before reverting to Beltway cheerleading. The rest of the Very Serious People though are ever so serious as they toil away in the alternative world where the budget deficit is the ultimate problem in the world today. From Robert Samuelson at the Washington Post we get this. Of course in Samuelson’s world, everything is the fault of social spending. How else to explain these two little ‘nuggets’?

Who deserves government subsidies and how much? About 55 percent of spending goes to individuals, including the elderly, veterans, farmers, students, the disabled and the poor.

How much, if at all, should social spending be allowed to squeeze national defense?

Social spending is squeezing national defense? Seriously? I guess if you believe that we need a few more aircraft carrier groups, more nuclear submarines, more advanced fighter jets costing billions each, all relics of the Cold War, then I guess taking care of “the elderly, veterans, farmers, students, the disabled, and the poor,” that’s a squeeze. Enjoy life in that bubble Mr Samuelson.
Read the rest of this entry →

So there I was this morning, after my usual morning search for something approaching a full time job in my chosen career (generally unsuccessful of course) and going on to the standard search of the various news sites just to see what is happening in the world around us, I came across this article over at CNN:

Economists’ biggest worry: Federal budget deficit

Once again, when I think I have seen just how totally clueless economists are, it is articles such as this that let me know we still have such a long way to go. From the article:

NEW YORK (CNNMoney) — Government deficits are the biggest long-term worry of top U.S. economists, according to a survey released Monday.

The survey of 47 top economists by the National Association of Business Economics predicted that the Federal deficit will jump to $1.4 trillion in the fiscal year ending in September. In the November survey, the economists had forecast a $1.1 trillion deficit.

…snip…

The previous survey was taken before Congress agreed to extend Bush-era tax cuts for all income brackets and have a one-year holiday on a portion of the payroll tax. The payroll tax holiday, which hadn’t been widely expected, by itself added about $112 billion to the federal deficit.

Asked to rank the seriousness of various economic problems, with one meaning no concern and five equaling extreme concern, the federal deficit was the biggest worry, with an average score of 4.1.

Why do I think most of these 47 economists that were polled probably supported the Tax Cut extensions?  . . . Read the rest of this entry →

It gets somewhat frustrating to read the cheerleader stories on the economy, or from the supposed economic experts on the same day and in the same paper where there are other stories plumbing the economic problems of average, everyday, yes, real Americans.

First off, we have the somewhat ludicrous cheerleader opinion piece from Treasury Secretary Tim Geithner in today’s (Tuesday August 3) NY Times titled Welcome to the Recovery. It’s impossible for me to pull out a couple of points of idiocy from this piece as almost every line of it is a misdirection, strawman, or flat out untruth.

From there, we go to this piece discussing a speech Monday by Fed Chair Ben Bernanke:

While the United States has “a considerable way to go” for a full recovery, “rising demand from households and businesses should help sustain growth,” Mr. Bernanke said on Monday in a speech in Charleston, S.C. “We are maintaining strong monetary policy support for the recovery,” he said in response to an audience question, without discussing any further action the Fed could take to aid growth.

The remarks signal that Mr. Bernanke and his colleagues, when they meet in Washington next week, will stop short of making major changes in their policy statement or taking new steps to lower interest rates and reduce unemployment, said John Ryding, a former Fed researcher. Consumer spending, which accounts for about 70 percent of the economy, “seems likely to pick up in coming quarters from its recent modest pace,” Mr. Bernanke said.

Yeah, who cares about nearly 10% official Unemployment and the Un/Underemployment nearly double that? David Dayen had a post at FireDogLake yesterday on a Krugman column on how this is the "New Normal" for employment. Looks like Krugman is correct (not that that is a shock mind you.)

These speeches and such are contrasted by this story in today’s Times on "99ers."

In June, with long-term unemployment at record levels, about 1.4 million people were out of work for 99 weeks or more, according to the Bureau of Labor Statistics. Not all of them received unemployment benefits, but for many of those who did, the modest payments were a lifeline that enabled them to maintain at least a veneer of normalcy, keeping a roof over their heads, putting gas in their cars, paying electric and phone bills.

I’m one of those "99ers." I was laid off in April ’04, a few months before my 52nd birthday. I exhausted my unemployment benefits and used up my retirement plans. As I’ve said before, the only consolation in that is knowing that even with paying early cash out penalties, I still got to use more of it on myself than those who watched their plans swirl down the toilet in the Crash of Too Big To Fail.

An Economix blog post in today’s Times offers some discussion on why "laypeople" think the Great Recession is still ongoing. Using Alan Greenspan’s analysis from Sunday’s Meet the Press(!) to explain:

MR. ALAN GREENSPAN: …I think we’re in a pause in a recovery, a modest recovery. But a pause in the modest recovery feels like quasi recession. Our problem, basically, is that we have a very distorted economy in the sense that there has been a significant recovery in a limited area of the economy amongst high-income individuals who have just had $800 billion added to their 401(k)s and are spending it and are carrying what consumption there is. Large banks, who are doing much better, and large corporations, whom you point out and the — and everyone’s pointing out, are in excellent shape. The rest of the economy, small business, small banks, and a very significant amount of the labor force, which is in tragic unemployment, long-term unemployment, that is pulling the economy apart. The average of those two is what we are looking at, but they are fundamentally two separate types of economy.

We truly are in Bizarro World when Greenspan seems to have the best handle on the problems being felt by those of us who refuse to give up our job searches no matter how much the cheerleaders want us to just accept the status quo.

And because I can:

Cross posted from Just A Small Town Country Boy