Showing posts with label US Workers. Show all posts
Showing posts with label US Workers. Show all posts
Tuesday, May 22, 2012
Monday, February 14, 2011
The Danger in Forgetting About American Workers
Posted at February 14, 2011
“We need better intelligence, the kind that is derived not from intercepting a president’s phone calls to his mistress but from hanging out with the powerless.”
That was one of columnist Nicholas Kristof’s lessons for U.S. foreign policy drawn from Egypt’s revolution. In the New York Times this weekend he pointed out that American journalists and foreign policy experts alike missed the warning signs of what was coming in Egypt in part because they talk to the wrong people. Aha. That’s not exactly a revelation to consumers of independent media.
It’s not just revolutions in far off places that we miss when reporters ignore the everyday working people, though. Another piece in the very same paper on the very same day examined the consequences of this country’s outsourcing-only manufacturing policy. The question raised there was pretty fundamental. It went to the entire justification for globalization.
We’ve been told that going global serves American interests because increased profits produce innovation, creativity, and investment in new improved products. Right?
The question raised in Louis Uchitelle’s deep-inside-the-paper story is, is it even true? Can a country continue to be innovative if it’s not making the stuff it innovates?
When great products of American innovation are made not here but there — Americans are a world away. Aren’t the innovations that will bring us the next iPads and iPhones, for example, in Asia, mostly likely going to come from people who spend their time actually making things, instead?
Robert Kuttner noted this week in the American Prospect that Democrats have become distanced from labor—that most party officials come from the business class and have little appreciation of what workers can do. No wonder they don’t think of workers as potential innovators—they barely think of them at all.
The US must export to “win the future,” President Obama said in his State of the Union. Pundit heads nodded. But how much time are they spending listening to the President and his ilk. And how much are they listening to the rest of America?
American workers are not the “powerless” exactly in Kristof’s sense of the word. But policy makers keep not listening, down the road, they certainly could be. Things are going that way.
Monday, January 24, 2011
Demographic Nonsense
Nationalist Fear Mongering
By DEAN BAKER
The debate over the demographic trends in the United States and other wealthy countries can be described a debate between those who care about our children and those who want more of them. This is apparent once a little bit of logic is applied to the tales of demographic disaster being hawked by those concerned about declining birth rates and greater longevity.
The basic story is that we are seeing a declining ratio of workers to retirees. This is supposed to mean that our children and our grandchildren will have an unbearable burden supporting us in our old age. In the United States the story is that we now have about three workers for each retiree. In 20 years this ratio is supposed to drop to two.
In countries like Germany and Japan the decline is somewhat greater, since they have lower birth rates, and in the case of Japan, less immigration. They also have somewhat more rapid gains in longevity.
This basic story has managed to make otherwise sane people seriously fearful about the country and the world's future. A quick statistic that should alleviate the fears is that the ratio of workers in retirees in the United States was 5 to 1 back in the 60s, far higher than the current 3 to 1 ratio.
That's right, boys ands girls, aging is not new. As a result of modern medical technology and high living standards, life expectancies have been increasing for a long time. And, just as no one now blames our current economic problems on the larger percentage of retirees in the population, there is no reason to believe that in 30 or 40 years that it will be an important factor depressing living standards.
The reason that we are on average much wealthier today even though we have a much larger population of retirees is productivity growth. Productivity growth has averaged over 2.0 percent annually over the last 50 years. (It has averaged 2.5 percent over the last 15 years.) If productivity growth averages 2.0 percent a year, then in 20 years workers will be on average be producing almost 50 percent more in an hour of work. In 40 years they will be producing 120 percent more in an hour of work. Such gains in output will allow our children and grandchildren to enjoy much higher living standards than workers today, even while supporting a larger population of retirees.
While no serious economist would dispute this basic arithmetic, the demographic scare pushers invariably come back with stories about labor shortages. This is a cheap trick. In a dynamic market economy there are always labor shortages in the sense that some businesses cannot profitably hire workers at the prevailing wage.
This is the reason that half of the U.S. workforce is not still employed in agriculture. Farm workers had better paying opportunities in the cities creating labor shortages on farms. As aging slows the growth in the labor force we may expect to see some tightening in the labor market (i.e. unemployment falls).
This means that workers can be more selective in the jobs they choose. Perhaps no one will want to work the midnight shift at convenience stores. This could mean that Wal-Mart will have to pay their clerks more and hotels and restaurants will have to offer higher wages for housekeepers, bellhops, and dishwashers.
Higher wages will be in part passed on in higher prices, which means that we might have somewhat fewer convenience stores, Wal-Marts, hotels and restaurants. The least productive jobs will go unfilled. This is what always happens in a dynamic economy. What is the problem?
In fact, measured productivity numbers are unlikely to pick up the fill gains that may be associated with lower populations. Large populations and crowding put enormous stress on the environment. Imagine having commute times cut in half if smaller populations eliminated rush hour congestion. This would not be picked up in productivity measures.
Similarly, increased access to desirable locations, such as lower prices for waterfront property, would not be picked up conventional measures of productivity. And of course the reduced pollution, including lower levels of greenhouse gas emissions, would also not be picked up in standard measures of productivity.
So, what's the problem with low birth rates and declining populations? Well, for some people I just described it. The folks at the top don't like to think of a world where workers can tell the manager at Wal-Mart to shove it. The idea of a world in which ordinary workers really do have serious job options (the one we used to know) is a nightmare.
Some of the demographic fear mongers are openly nationalist in the sense that they want the United States or their home country to be a great power in the world. The ability of a country to flex its economic and military power will depend on its level of economic development and also to some extent on its population.
For these belligerent nationalists, the problem is that there may not be enough children for future national leaders to be sufficiently powerful. In other words, the problem is not that our children and grandchildren will be suffering, but rather that their leaders will not be the big tough boys and girls that the demographic fear mongers idealize.
In short, there is no demographic problem facing wealthy countries. The only problem is that people with poor math skills and imperialistic designs hold positions of influence and power.
By DEAN BAKER
The debate over the demographic trends in the United States and other wealthy countries can be described a debate between those who care about our children and those who want more of them. This is apparent once a little bit of logic is applied to the tales of demographic disaster being hawked by those concerned about declining birth rates and greater longevity.
The basic story is that we are seeing a declining ratio of workers to retirees. This is supposed to mean that our children and our grandchildren will have an unbearable burden supporting us in our old age. In the United States the story is that we now have about three workers for each retiree. In 20 years this ratio is supposed to drop to two.
In countries like Germany and Japan the decline is somewhat greater, since they have lower birth rates, and in the case of Japan, less immigration. They also have somewhat more rapid gains in longevity.
This basic story has managed to make otherwise sane people seriously fearful about the country and the world's future. A quick statistic that should alleviate the fears is that the ratio of workers in retirees in the United States was 5 to 1 back in the 60s, far higher than the current 3 to 1 ratio.
That's right, boys ands girls, aging is not new. As a result of modern medical technology and high living standards, life expectancies have been increasing for a long time. And, just as no one now blames our current economic problems on the larger percentage of retirees in the population, there is no reason to believe that in 30 or 40 years that it will be an important factor depressing living standards.
The reason that we are on average much wealthier today even though we have a much larger population of retirees is productivity growth. Productivity growth has averaged over 2.0 percent annually over the last 50 years. (It has averaged 2.5 percent over the last 15 years.) If productivity growth averages 2.0 percent a year, then in 20 years workers will be on average be producing almost 50 percent more in an hour of work. In 40 years they will be producing 120 percent more in an hour of work. Such gains in output will allow our children and grandchildren to enjoy much higher living standards than workers today, even while supporting a larger population of retirees.
While no serious economist would dispute this basic arithmetic, the demographic scare pushers invariably come back with stories about labor shortages. This is a cheap trick. In a dynamic market economy there are always labor shortages in the sense that some businesses cannot profitably hire workers at the prevailing wage.
This is the reason that half of the U.S. workforce is not still employed in agriculture. Farm workers had better paying opportunities in the cities creating labor shortages on farms. As aging slows the growth in the labor force we may expect to see some tightening in the labor market (i.e. unemployment falls).
This means that workers can be more selective in the jobs they choose. Perhaps no one will want to work the midnight shift at convenience stores. This could mean that Wal-Mart will have to pay their clerks more and hotels and restaurants will have to offer higher wages for housekeepers, bellhops, and dishwashers.
Higher wages will be in part passed on in higher prices, which means that we might have somewhat fewer convenience stores, Wal-Marts, hotels and restaurants. The least productive jobs will go unfilled. This is what always happens in a dynamic economy. What is the problem?
In fact, measured productivity numbers are unlikely to pick up the fill gains that may be associated with lower populations. Large populations and crowding put enormous stress on the environment. Imagine having commute times cut in half if smaller populations eliminated rush hour congestion. This would not be picked up in productivity measures.
Similarly, increased access to desirable locations, such as lower prices for waterfront property, would not be picked up conventional measures of productivity. And of course the reduced pollution, including lower levels of greenhouse gas emissions, would also not be picked up in standard measures of productivity.
So, what's the problem with low birth rates and declining populations? Well, for some people I just described it. The folks at the top don't like to think of a world where workers can tell the manager at Wal-Mart to shove it. The idea of a world in which ordinary workers really do have serious job options (the one we used to know) is a nightmare.
Some of the demographic fear mongers are openly nationalist in the sense that they want the United States or their home country to be a great power in the world. The ability of a country to flex its economic and military power will depend on its level of economic development and also to some extent on its population.
For these belligerent nationalists, the problem is that there may not be enough children for future national leaders to be sufficiently powerful. In other words, the problem is not that our children and grandchildren will be suffering, but rather that their leaders will not be the big tough boys and girls that the demographic fear mongers idealize.
In short, there is no demographic problem facing wealthy countries. The only problem is that people with poor math skills and imperialistic designs hold positions of influence and power.
Friday, December 31, 2010
Cutting From the Bottom
Austerity for the Poor; Bail Outs for the Banks; Tax Cuts for the Rich
By BRIAN TIERNEY
Across the U.S. working-class people are struggling, scrapping together meager sums in order to get by. In state and local governments throughout the country, workers are watching public services slashed in the name of balanced budgets.
Trillions of dollars have been doled out to Wall Street titans and big banks. And while the epidemic of home foreclosures and cuts to public services rages on, untaxed corporate profits are soaring at record highs and banks are sitting on hordes of accumulated capital.
Still, we are told, there simply isn't enough money to help the millions struggling in these economic hard times.
Earlier this month, in the same city where Congress is enacting cuts from the bottom, more budget cuts affecting childcare and affordable housing were voted on by the city council of Washington , D.C.
Community activists and affected city residents insisted on a different path: increasing the tax rate by up to one percent on the city's top income-earners.
One young unemployed single mother on disability approached council chair Vincent Gray. Her glassy black eyes peered into the darting glances of a city bureaucrat who nervously recoiled before the faces of low-income residents affected by his decisions. In her soft, trembling voice, she told the chairman that she might lose her daughter if the council carries through with the budget cuts.
With a straight face, Chairman Gray – who will soon replace Adrian Fenty as mayor of the district – looked at the young woman and said, "If you can print money, please do." On the same day and in the same chamber Gray led the council in voting down a resolution that would have modestly raised taxes on the top income-earners in D.C. and staved off cuts that hurt the poorest residents in the city.
This is the human face of Merriam-Webster's word of the year: austerity.
The reality of a system based on such backward priorities that reward the rich and punish workers and the poor was again laid bare in the waning days of the lame-duck Congress of 2010. Many were left wondering why it was that the only "pragmatic" way to extend unemployment benefits for the long-term unemployed was to extend tax-cuts for the rich.
We live in a society where Congress becomes deadlocked in dispute over aiding the jobless while it simultaneously passes a massive war spending bill without so much as a symbolic show of debate.
Meanwhile, across the Atlantic, scenes of barricades, burning park benches, outraged students "kettled" by police and striking workers stand against the backdrop of plumes of teargas. From Greece to Ireland , harsh austerity measures that threaten to eradicate the already besieged traditional welfare states of Europe are inspiring rolling strikes and student mobilizations against fee hikes.
Yet by contrast, the streets in the U.S. remain comparatively calm. Where is the organized uproar of workers in the U.S. ? Where is the labor movement?
The weakness of a small, institutionalized labor movement in the U.S. , as compared to the clout of trade unionism in Europe , helps to explain some of the discrepancy.
But in addition to its shrinking numbers, a major qualitative failing prevents the U.S. labor movement from becoming a fighting force against austerity. Indeed, organized labor in the U.S. is impaired by its entanglement in one of the political machines championing austerity in the first place: the Democratic Party.
Much has been said about the fury that erupted among Obama's liberal base since the White House pushed its "tax-cut compromise." The deal struck between Obama and Republicans adds on to the administration's ever-growing rap sheet of offenses that has infuriated progressives.
And somewhere between Obama's band of centrist apologists and his spurned liberal base lies the U.S. labor movement, a disjointed community of institutional organs for collective bargaining and the 15 million rank-and-file workers they represent. The labor movement may be fragmented in many ways, but the loyalty of labor leaders to the Democratic Party has for the last three decades remained a point of unity.
In 2008 labor spent an unprecedented amount of money – more than $400 million – to support the election of Obama and Democratic candidates to Congress. And even after a Congress controlled by labor's supposed allies dropped the Employee Free Choice Act – labor's top legislative priority that would have made it easier for workers to join unions – unions stuck by Obama and the Democrats.
The American Federation of State, County and Municipal Employees (AFSCME) alone spent $87.5 million to support Democrats in 2010. A few weeks after the 2010 midterm elections, the Obama administration showed its appreciation for labor's undying fidelity by announcing a two-year pay freeze for federal employees, one of the most unionized sectors of the workforce.
AFL-CIO President Richard Trumka condemned the wage freeze. But leaders like Trumka have been increasingly caught in the awkward position of defending Obama while condemning anti-worker policies pushed by his administration.
"No one is served by our government participating in a 'race to the bottom' in wages," Trumka said of the federal pay freeze. "The president talked about the need for shared sacrifice, but there's nothing shared about Wall Street and CEOs making record profits and bonuses while working people bear the brunt."
Politicians on the right would have us believe that it's not Wall Street that caused the economic mess vexing the nation. Rather it's public sector workers. Those workers and their unions are the new scapegoats for the country's economic woes. Incoming GOP Wisconsin Governor Scott Walker recently declared, "We can no longer live in a society where the public employees are the haves and the taxpayers who foot the bill are the have-nots."
In early December, AFSCME announced it was launching a media campaign called "Stop the Lies" to "expose right wing lies" against public sector workers.
But Democrats have also joined the efforts to demonize public workers.
The campaign of Democratic Governor-elect Andrew Cuomo of New York included calls for public sector unions to grant massive concessions in order to ease the state's budget gap. The incoming governor is rallying business lobbying groups to his side to launch a $10 million anti-union effort against worker in the public sector.
Meanwhile, Obama's deficit commission, with its crosshairs trained on Social Security and other "entitlements," has set the terms for congressional debate on reducing the nation's deficit through punishing austerity measures.
So, it's fair to ask how far to the right Obama and the Democratic Party will shift before the labor movement can no longer support them. How much longer can labor leaders continue to justify to their membership the massive sums of money spent to prop up Democrats, whose allegiance to corporate welfare surpasses whatever expressed interests they share with working-class people?
Looking forward to 2012, Chris Townsend, political action director of the rank-and-file-driven United Electrical Workers Union (UE), doesn't see the abusive relationship between Democrats and labor ending anytime soon.
"Labor leaders and the apparatus they control will go all-out and spend even more money than they did this year," he said. "They see no other way to proceed. They don't call it the two party 'trap' for nothing. Labor will not support third-party efforts, and they will not sit out the election, either. So, they will crank up the negative campaign and scare machinery to mobilize for the Democrats and against the even-worse Republicans."
What's more, unions are increasingly spending huge portions of their budgets on these political losing strategies and devoting fewer resources toward organizing and workplace activism, a trend that Townsend describes as a kind of "reverse syndicalism."
"It is obvious to me that growing numbers of unions are opting to demobilize and dismantle workplace structures, replaced by election-time activities to prop up Democrats," he explained.
As the White House cleared the final hurdles in Congress to secure the tax-cut deal, Trumka described the compromise thusly: "This is a huge relief for the more than 1.4 million long-term job seekers who already have lost their emergency unemployment benefits. But this deal comes at a terrible price: It rewards obstructionists with huge tax breaks for millionaires and billionaires."
If ever there was a time for the labor movement to assert bold political independence rather than a slavish deference to Democratic talking points, that time is now. But Trumka is careful not to be too critical of Obama, reserving the main thrust of his criticism for Republican obstructionists.
Any hope of the labor movement helping to forge a genuine progressive alternative independent of Republicans and Democrats is of course diminished by the continued division of the labor unions in two separate camps – the AFL-CIO and Change to Win federations. But that hope is even more hampered by the culture of union leadership that is so thoroughly intertwined with Democratic Party politics.
The latest tax-cut deal with Republicans is certainly another compromise by Obama and the Democrats which tack decidedly to the right, leaving progressives feeling profoundly betrayed and further harnessing the livelihoods of workers to the welfare of Wall Street.
But so long as the lesser-evil calculus of the two-party system remains the prevailing wisdom among liberals, Obama and the Democrats can always count on browbeating much of their progressive base, including labor, to come around again when it's time to hit the campaign trail.
Short of a mass grassroots movement on the left buttressed by a unified, independent labor movement, there is little reason for politicians like Obama to fear being held accountable by workers.
A serious challenge is needed to stop the agenda of austerity that both political parties are using to bludgeon workers and the poor. But fighting back against the bipartisan cutback consensus requires higher levels of bottom-up organization, as opposed to top-down institutionalization. And it requires an independent labor movement through which workers can chart their own political course.
If the conventional political wisdom among unions is that the Democrats are the only game in town, then we must ask when the labor movement will step out from the sidelines.
By BRIAN TIERNEY
Across the U.S. working-class people are struggling, scrapping together meager sums in order to get by. In state and local governments throughout the country, workers are watching public services slashed in the name of balanced budgets.
Trillions of dollars have been doled out to Wall Street titans and big banks. And while the epidemic of home foreclosures and cuts to public services rages on, untaxed corporate profits are soaring at record highs and banks are sitting on hordes of accumulated capital.
Still, we are told, there simply isn't enough money to help the millions struggling in these economic hard times.
Earlier this month, in the same city where Congress is enacting cuts from the bottom, more budget cuts affecting childcare and affordable housing were voted on by the city council of Washington , D.C.
Community activists and affected city residents insisted on a different path: increasing the tax rate by up to one percent on the city's top income-earners.
One young unemployed single mother on disability approached council chair Vincent Gray. Her glassy black eyes peered into the darting glances of a city bureaucrat who nervously recoiled before the faces of low-income residents affected by his decisions. In her soft, trembling voice, she told the chairman that she might lose her daughter if the council carries through with the budget cuts.
With a straight face, Chairman Gray – who will soon replace Adrian Fenty as mayor of the district – looked at the young woman and said, "If you can print money, please do." On the same day and in the same chamber Gray led the council in voting down a resolution that would have modestly raised taxes on the top income-earners in D.C. and staved off cuts that hurt the poorest residents in the city.
This is the human face of Merriam-Webster's word of the year: austerity.
The reality of a system based on such backward priorities that reward the rich and punish workers and the poor was again laid bare in the waning days of the lame-duck Congress of 2010. Many were left wondering why it was that the only "pragmatic" way to extend unemployment benefits for the long-term unemployed was to extend tax-cuts for the rich.
We live in a society where Congress becomes deadlocked in dispute over aiding the jobless while it simultaneously passes a massive war spending bill without so much as a symbolic show of debate.
Meanwhile, across the Atlantic, scenes of barricades, burning park benches, outraged students "kettled" by police and striking workers stand against the backdrop of plumes of teargas. From Greece to Ireland , harsh austerity measures that threaten to eradicate the already besieged traditional welfare states of Europe are inspiring rolling strikes and student mobilizations against fee hikes.
Yet by contrast, the streets in the U.S. remain comparatively calm. Where is the organized uproar of workers in the U.S. ? Where is the labor movement?
The weakness of a small, institutionalized labor movement in the U.S. , as compared to the clout of trade unionism in Europe , helps to explain some of the discrepancy.
But in addition to its shrinking numbers, a major qualitative failing prevents the U.S. labor movement from becoming a fighting force against austerity. Indeed, organized labor in the U.S. is impaired by its entanglement in one of the political machines championing austerity in the first place: the Democratic Party.
Much has been said about the fury that erupted among Obama's liberal base since the White House pushed its "tax-cut compromise." The deal struck between Obama and Republicans adds on to the administration's ever-growing rap sheet of offenses that has infuriated progressives.
And somewhere between Obama's band of centrist apologists and his spurned liberal base lies the U.S. labor movement, a disjointed community of institutional organs for collective bargaining and the 15 million rank-and-file workers they represent. The labor movement may be fragmented in many ways, but the loyalty of labor leaders to the Democratic Party has for the last three decades remained a point of unity.
In 2008 labor spent an unprecedented amount of money – more than $400 million – to support the election of Obama and Democratic candidates to Congress. And even after a Congress controlled by labor's supposed allies dropped the Employee Free Choice Act – labor's top legislative priority that would have made it easier for workers to join unions – unions stuck by Obama and the Democrats.
The American Federation of State, County and Municipal Employees (AFSCME) alone spent $87.5 million to support Democrats in 2010. A few weeks after the 2010 midterm elections, the Obama administration showed its appreciation for labor's undying fidelity by announcing a two-year pay freeze for federal employees, one of the most unionized sectors of the workforce.
AFL-CIO President Richard Trumka condemned the wage freeze. But leaders like Trumka have been increasingly caught in the awkward position of defending Obama while condemning anti-worker policies pushed by his administration.
"No one is served by our government participating in a 'race to the bottom' in wages," Trumka said of the federal pay freeze. "The president talked about the need for shared sacrifice, but there's nothing shared about Wall Street and CEOs making record profits and bonuses while working people bear the brunt."
Politicians on the right would have us believe that it's not Wall Street that caused the economic mess vexing the nation. Rather it's public sector workers. Those workers and their unions are the new scapegoats for the country's economic woes. Incoming GOP Wisconsin Governor Scott Walker recently declared, "We can no longer live in a society where the public employees are the haves and the taxpayers who foot the bill are the have-nots."
In early December, AFSCME announced it was launching a media campaign called "Stop the Lies" to "expose right wing lies" against public sector workers.
But Democrats have also joined the efforts to demonize public workers.
The campaign of Democratic Governor-elect Andrew Cuomo of New York included calls for public sector unions to grant massive concessions in order to ease the state's budget gap. The incoming governor is rallying business lobbying groups to his side to launch a $10 million anti-union effort against worker in the public sector.
Meanwhile, Obama's deficit commission, with its crosshairs trained on Social Security and other "entitlements," has set the terms for congressional debate on reducing the nation's deficit through punishing austerity measures.
So, it's fair to ask how far to the right Obama and the Democratic Party will shift before the labor movement can no longer support them. How much longer can labor leaders continue to justify to their membership the massive sums of money spent to prop up Democrats, whose allegiance to corporate welfare surpasses whatever expressed interests they share with working-class people?
Looking forward to 2012, Chris Townsend, political action director of the rank-and-file-driven United Electrical Workers Union (UE), doesn't see the abusive relationship between Democrats and labor ending anytime soon.
"Labor leaders and the apparatus they control will go all-out and spend even more money than they did this year," he said. "They see no other way to proceed. They don't call it the two party 'trap' for nothing. Labor will not support third-party efforts, and they will not sit out the election, either. So, they will crank up the negative campaign and scare machinery to mobilize for the Democrats and against the even-worse Republicans."
What's more, unions are increasingly spending huge portions of their budgets on these political losing strategies and devoting fewer resources toward organizing and workplace activism, a trend that Townsend describes as a kind of "reverse syndicalism."
"It is obvious to me that growing numbers of unions are opting to demobilize and dismantle workplace structures, replaced by election-time activities to prop up Democrats," he explained.
As the White House cleared the final hurdles in Congress to secure the tax-cut deal, Trumka described the compromise thusly: "This is a huge relief for the more than 1.4 million long-term job seekers who already have lost their emergency unemployment benefits. But this deal comes at a terrible price: It rewards obstructionists with huge tax breaks for millionaires and billionaires."
If ever there was a time for the labor movement to assert bold political independence rather than a slavish deference to Democratic talking points, that time is now. But Trumka is careful not to be too critical of Obama, reserving the main thrust of his criticism for Republican obstructionists.
Any hope of the labor movement helping to forge a genuine progressive alternative independent of Republicans and Democrats is of course diminished by the continued division of the labor unions in two separate camps – the AFL-CIO and Change to Win federations. But that hope is even more hampered by the culture of union leadership that is so thoroughly intertwined with Democratic Party politics.
The latest tax-cut deal with Republicans is certainly another compromise by Obama and the Democrats which tack decidedly to the right, leaving progressives feeling profoundly betrayed and further harnessing the livelihoods of workers to the welfare of Wall Street.
But so long as the lesser-evil calculus of the two-party system remains the prevailing wisdom among liberals, Obama and the Democrats can always count on browbeating much of their progressive base, including labor, to come around again when it's time to hit the campaign trail.
Short of a mass grassroots movement on the left buttressed by a unified, independent labor movement, there is little reason for politicians like Obama to fear being held accountable by workers.
A serious challenge is needed to stop the agenda of austerity that both political parties are using to bludgeon workers and the poor. But fighting back against the bipartisan cutback consensus requires higher levels of bottom-up organization, as opposed to top-down institutionalization. And it requires an independent labor movement through which workers can chart their own political course.
If the conventional political wisdom among unions is that the Democrats are the only game in town, then we must ask when the labor movement will step out from the sidelines.
Thursday, December 30, 2010
'Serfing' USA
How Corporate America is Robbing Workers
By DAVE LINDORFF
Along with the staggering theft in broad daylight of Americans' assets that has occurred in the course of the ongoing financial crisis, as taxpayers funded multi-trillion bank bailouts and banks stole homes through foreclosures with the help of fraudulent paperwork, American companies have also been picking the pockets of workers more directly.
This second round of paycheck theft has come in the form of stolen productivity gains.
Historically, the relatively high and rising standard of living of American workers--both blue and white-collar--, which once gave the US one of the highest standards of living in the world, has come courtesy of rising productivity, which has allowed US companies to produce more goods with less labor, and to then pass some of the enhanced profits on to workers in the form of higher wages, without having to raise prices. That has been important because, when higher wages are financed by higher prices, it tends to be a kind of zero-sum game: higher wages cancelled out by inflation.
But beginning in 2000, the old system, already creaky, broke down.
The corporate onslaught against trade unions and against the minimum wage, which began with the Nixon administration in 1968, combined with so-called "free-trade" deals that allowed US companies to shift production overseas and then to freely import the products of their overseas production facilities back for sale to Americans at home, by weakening the power of workers to demand higher wages, has led to a situation where companies can just pocket all the profits from productivity gains, leaving wages stagnant, or even driving them down.
The recession that began in late 2007 has only made matters worse, giving owners and managers to opportunity to really hammer employees. With real unemployment and underemployment now running at close to 20%, employees are in no position to press for higher wages, even as those who are still working are putting in extra effort to keep their jobs, thus pushing productivity gains even higher.
The figures speak for themselves.
According to the Bureau of Labor Statistics, productivity gains during the 1990-1999 decade averaged just 2.1% per year. The prior decade, from 1980-1989, the average productivity gain was 1.5% per year. But between 2000 and 2009, when the economy suffered two recessions, the average annual productivity gain has been 2.9%, almost 50% higher than the prior decade, and almost double the rate in the 1980s.
During this same period, however, wages have actually declined. According to the BLS, wages in 2010 rose 0.1%, but inflation, running at an official (and grossly under-measured) 1%, more than ate that up. According to the Economic Policy Institute, a Washington think tank, for the whole decade from 2000 through 2009, wages actually sank for most people. In 2000, the median weekly wage for a high school graduate was $629. By the end of 2009, high school graduates were earning a median weekly wage, in inflation-adjusted dollars, of just $626--three dollars a week less than a decade earlier. A college degree didn't change things, either. In 2000, the median weekly wage for a college grad was $1030, but that had fallen to $1025 by the end of 2009.
Remember, all during that decade, companies were seeing productivity gains averaging almost 3% per year. If 50% of that gain in productivity annually had gone to workers, as might have been typical back 30 years ago when unions were stronger and before Congress gave away the store by signing onto the World Trade Organization and the North American Free Trade Act and similar trade agreements, that high school grad would have been earning $729 a week in inflation-adjusted dollars by 2009, while the college grad would have been earning $1,195.
Of course as a whole, Americans have been doing even worse, because these are just the mean wages of people who are working full weeks. In fact, many companies have been laying off workers, and making the remaining workers, desperate to hang on to their jobs, work harder to produce the same amount of product, meaning that besides not getting any pay increase, they are producing much more profit for the boss. Many workers who are still hanging onto their jobs are actually working fewer hours, and thus are taking home smaller paychecks, all of which goes into that higher productivity figure for output per worker the government is reporting.
Indeed, the Wall Street Journal today reported glowingly that US production of goods and services had returned to its 2007 pre-recession level, but this is with unemployment running at an official rate of 9.8 percent, and an actual rate of about 19 percent.
What we're witnessing is a massive national "speed-up" which is enriching the owners of capital, while the workers are getting stiffed. It is the payoff to the ruling class of decades of hammering of trade unions, and also of trade unions cutting deals with the Democratic Party, which in turn has refused to defend workers' interests. Look at the sell-out of Labor during the first two years of the Obama administration. The union movement's one big issue--restoring some measure of fairness to the Labor Relations Act, so that it would be at least possible to organize unions and to win contracts and improved wages and working conditions--was dropped without even a fight by the Obama administration and the leadership of the House and Senate. The government, fully in the hands of Democrats, has also continued to sign trade agreements, most recently with Korea, that further shift jobs overseas, thus further weakening the position of workers here at home.
A cynic might speculate that this is also why the Democrats have refused for over three years now to come up with any real public jobs program despite the desperate straits of tens of millions of jobless people who have been without work for more than a year. The Democrats, in thrall to corporate interests, would on the evidence much rather spend $50 billion on a program of extended unemployment benefits that leaves those millions of people hungry for any real job, than spend that same sum on providing them with government jobs, as that would actually reduce unemployment and increase the bargaining power of all workers vis-a-vis employers.
Meanwhile, the national corporate media, itself viciously anti-union, continue to skew news coverage to portray unions as corrupt and greedy, so that the 90 percent of American workers who are not in a union don't even realize that any pay gains or benefits they get are because employers are trying to avoid unionization of their workforce.
Unless Americans wake up soon to how this process is impoverishing us all, we will see this shifting income and wealth to the top strata of the population continue until most of us are little more than modern-day serfs.
A start would be for people to at least recognize that this stagnation and decline in incomes we're witnessing is not some natural phenomenon. It is, no less than the fat salaries, perks and bonuses paid by corporate managers to themselves, simply another manifestation of corporate greed gone wild.
By DAVE LINDORFF
Along with the staggering theft in broad daylight of Americans' assets that has occurred in the course of the ongoing financial crisis, as taxpayers funded multi-trillion bank bailouts and banks stole homes through foreclosures with the help of fraudulent paperwork, American companies have also been picking the pockets of workers more directly.
This second round of paycheck theft has come in the form of stolen productivity gains.
Historically, the relatively high and rising standard of living of American workers--both blue and white-collar--, which once gave the US one of the highest standards of living in the world, has come courtesy of rising productivity, which has allowed US companies to produce more goods with less labor, and to then pass some of the enhanced profits on to workers in the form of higher wages, without having to raise prices. That has been important because, when higher wages are financed by higher prices, it tends to be a kind of zero-sum game: higher wages cancelled out by inflation.
But beginning in 2000, the old system, already creaky, broke down.
The corporate onslaught against trade unions and against the minimum wage, which began with the Nixon administration in 1968, combined with so-called "free-trade" deals that allowed US companies to shift production overseas and then to freely import the products of their overseas production facilities back for sale to Americans at home, by weakening the power of workers to demand higher wages, has led to a situation where companies can just pocket all the profits from productivity gains, leaving wages stagnant, or even driving them down.
The recession that began in late 2007 has only made matters worse, giving owners and managers to opportunity to really hammer employees. With real unemployment and underemployment now running at close to 20%, employees are in no position to press for higher wages, even as those who are still working are putting in extra effort to keep their jobs, thus pushing productivity gains even higher.
The figures speak for themselves.
According to the Bureau of Labor Statistics, productivity gains during the 1990-1999 decade averaged just 2.1% per year. The prior decade, from 1980-1989, the average productivity gain was 1.5% per year. But between 2000 and 2009, when the economy suffered two recessions, the average annual productivity gain has been 2.9%, almost 50% higher than the prior decade, and almost double the rate in the 1980s.
During this same period, however, wages have actually declined. According to the BLS, wages in 2010 rose 0.1%, but inflation, running at an official (and grossly under-measured) 1%, more than ate that up. According to the Economic Policy Institute, a Washington think tank, for the whole decade from 2000 through 2009, wages actually sank for most people. In 2000, the median weekly wage for a high school graduate was $629. By the end of 2009, high school graduates were earning a median weekly wage, in inflation-adjusted dollars, of just $626--three dollars a week less than a decade earlier. A college degree didn't change things, either. In 2000, the median weekly wage for a college grad was $1030, but that had fallen to $1025 by the end of 2009.
Remember, all during that decade, companies were seeing productivity gains averaging almost 3% per year. If 50% of that gain in productivity annually had gone to workers, as might have been typical back 30 years ago when unions were stronger and before Congress gave away the store by signing onto the World Trade Organization and the North American Free Trade Act and similar trade agreements, that high school grad would have been earning $729 a week in inflation-adjusted dollars by 2009, while the college grad would have been earning $1,195.
Of course as a whole, Americans have been doing even worse, because these are just the mean wages of people who are working full weeks. In fact, many companies have been laying off workers, and making the remaining workers, desperate to hang on to their jobs, work harder to produce the same amount of product, meaning that besides not getting any pay increase, they are producing much more profit for the boss. Many workers who are still hanging onto their jobs are actually working fewer hours, and thus are taking home smaller paychecks, all of which goes into that higher productivity figure for output per worker the government is reporting.
Indeed, the Wall Street Journal today reported glowingly that US production of goods and services had returned to its 2007 pre-recession level, but this is with unemployment running at an official rate of 9.8 percent, and an actual rate of about 19 percent.
What we're witnessing is a massive national "speed-up" which is enriching the owners of capital, while the workers are getting stiffed. It is the payoff to the ruling class of decades of hammering of trade unions, and also of trade unions cutting deals with the Democratic Party, which in turn has refused to defend workers' interests. Look at the sell-out of Labor during the first two years of the Obama administration. The union movement's one big issue--restoring some measure of fairness to the Labor Relations Act, so that it would be at least possible to organize unions and to win contracts and improved wages and working conditions--was dropped without even a fight by the Obama administration and the leadership of the House and Senate. The government, fully in the hands of Democrats, has also continued to sign trade agreements, most recently with Korea, that further shift jobs overseas, thus further weakening the position of workers here at home.
A cynic might speculate that this is also why the Democrats have refused for over three years now to come up with any real public jobs program despite the desperate straits of tens of millions of jobless people who have been without work for more than a year. The Democrats, in thrall to corporate interests, would on the evidence much rather spend $50 billion on a program of extended unemployment benefits that leaves those millions of people hungry for any real job, than spend that same sum on providing them with government jobs, as that would actually reduce unemployment and increase the bargaining power of all workers vis-a-vis employers.
Meanwhile, the national corporate media, itself viciously anti-union, continue to skew news coverage to portray unions as corrupt and greedy, so that the 90 percent of American workers who are not in a union don't even realize that any pay gains or benefits they get are because employers are trying to avoid unionization of their workforce.
Unless Americans wake up soon to how this process is impoverishing us all, we will see this shifting income and wealth to the top strata of the population continue until most of us are little more than modern-day serfs.
A start would be for people to at least recognize that this stagnation and decline in incomes we're witnessing is not some natural phenomenon. It is, no less than the fat salaries, perks and bonuses paid by corporate managers to themselves, simply another manifestation of corporate greed gone wild.
Wednesday, December 29, 2010
Where Are The Jobs? Overseas...
For Many Companies, Overseas
Tuesday, December 28, 2010 by Associated Press
Corporate profits are up. Stock prices are up. So why isn't anyone hiring?
Actually, many American companies are — just maybe not in your town. They're hiring overseas, where sales are surging and the pipeline of orders is fat.
More than half of the 15,000 people that Caterpillar Inc. has hired this year were outside the U.S. UPS is also hiring at a faster clip overseas. For both companies, sales in international markets are growing at least twice as fast as domestically.
The trend helps explain why unemployment remains high in the United States, edging up to 9.8 percent last month, even though companies are performing well: All but 4 percent of the top 500 U.S. corporations reported profits this year, and the stock market is close to its highest point since the 2008 financial meltdown.
But the jobs are going elsewhere. The Economic Policy Institute, a Washington think tank, says American companies have created 1.4 million jobs overseas this year, compared with less than 1 million in the U.S. The additional 1.4 million jobs would have lowered the U.S. unemployment rate to 8.9 percent, says Robert Scott, the institute's senior international economist.
"There's a huge difference between what is good for American companies versus what is good for the American economy," says Scott.
American jobs have been moving overseas for more than two decades. In recent years, though, those jobs have become more sophisticated — think semiconductors and software, not toys and clothes.
And now many of the products being made overseas aren't coming back to the United States. Demand has grown dramatically this year in emerging markets like India, China and Brazil.
Meanwhile, consumer demand in the U.S. has been subdued. Despite a strong holiday shopping season, Americans are still spending 3 percent less than before the recession on essential items like clothing and more than 10 percent less on jewelry, furniture, electronics, and big appliances, according to MasterCard's SpendingPulse.
"Companies will go where there are fast-growing markets and big profits," says Jeffrey Sachs, globalization expert and economist at Columbia University. "What's changed is that companies today are getting top talent in emerging economies, and the U.S. has to really watch out."
With the future looking brighter overseas, companies are building there, too. Caterpillar, maker of the signature yellow bulldozers and tractors, has invested in three new plants in China in just the last two months to design and manufacture equipment. The decision is based on demand: Asia-Pacific sales soared 38 percent in the first nine months of the year, compared with 16 percent in the U.S. Caterpillar stock is up 65 percent this year.
"There is a shift in economic power that's going on and will continue. China just became the world's second-largest economy," says David Wyss, chief economist at Standard & Poor's, who notes that half of the revenue for companies in the S&P 500 in the last couple of years has come from outside the U.S.
Take the example of DuPont, which wowed the world in 1938 with nylon stockings. Known as one of the most innovative American companies of the 20th century, DuPont now sells less than a third of its products in the U.S. In the first nine months of this year, sales to the Asia-Pacific region grew 50 percent, triple the U.S. rate. Its stock is up 47 percent this year.
DuPont's work force reflects the shift in its growth: In a presentation on emerging markets, the company said its number of employees in the U.S. shrank by 9 percent between January 2005 and October 2009. In the same period, its work force grew 54 percent in the Asia-Pacific countries.
"We are a global player out to succeed in any geography where we participate in," says Thomas M. Connelly, chief innovation officer at DuPont. "We want our resources close to where our customers are, to tailor products to their needs."
While most of DuPont's research labs are still stateside, Connelly says he's impressed with the company's overseas talent. The company opened a large research facility in Hyderabad, India, in 2008.
A key factor behind this runaway international growth is the rise of the middle class in these emerging countries. By 2015, for the first time, the number of consumers in Asia's middle class will equal those in Europe and North America combined.
"All of the growth over the next 10 years is happening in Asia," says Homi Kharas, a senior fellow at the Brookings Institute and formerly the World Bank's chief economist for East Asia and the Pacific.
Coca-Cola CEO Muhtar Kent often points out that a billion consumers will enter the middle class during the coming decade, mostly in Africa, China and India. He is aggressively targeting those markets. Of Coke's 93,000 global employees, less than 13 percent were in the U.S. in 2009, down from 19 percent five years ago.
The company would not say how many new U.S. hires it has made in 2010. But its latest new investments are overseas, including $240 million for three bottling plants in Inner Mongolia as part of a three-year, $2 billion investment in China. The three plants will create 2,000 new jobs in the area. In September, Coca-Cola pledged $1 billion to the Philippines over five years.
The strategy isn't restricted to just the largest American companies. Entrepreneurs, whether in technology, retail or in manufacturing, today hire globally from the start.
Consider Vast.com, which powers the search engines of sites like Yahoo Travel and Aol Autos. The company was founded in 2005 with employees based in San Francisco and Serbia.
Harvard Business School Dean Nitin Nohria worries that the trend could be dangerous. In an article in the November issue of the Harvard Business Review, he says that if U.S. businesses keep prospering while Americans are struggling, business leaders will lose legitimacy in society. He exhorted business leaders to find a way to link growth with job creation at home.
Other economists, like Columbia University's Sachs, say multinational corporations have no choice, especially now that the quality of the global work force has improved. Sachs points out that the U.S. is falling in most global rankings for higher education while others are rising.
"We are not fulfilling the educational needs of our young people," says Sachs. "In a globalized world, there are serious consequences to that."
Tuesday, December 28, 2010 by Associated Press
Corporate profits are up. Stock prices are up. So why isn't anyone hiring?
Actually, many American companies are — just maybe not in your town. They're hiring overseas, where sales are surging and the pipeline of orders is fat.
More than half of the 15,000 people that Caterpillar Inc. has hired this year were outside the U.S. UPS is also hiring at a faster clip overseas. For both companies, sales in international markets are growing at least twice as fast as domestically.
The trend helps explain why unemployment remains high in the United States, edging up to 9.8 percent last month, even though companies are performing well: All but 4 percent of the top 500 U.S. corporations reported profits this year, and the stock market is close to its highest point since the 2008 financial meltdown.
But the jobs are going elsewhere. The Economic Policy Institute, a Washington think tank, says American companies have created 1.4 million jobs overseas this year, compared with less than 1 million in the U.S. The additional 1.4 million jobs would have lowered the U.S. unemployment rate to 8.9 percent, says Robert Scott, the institute's senior international economist.
"There's a huge difference between what is good for American companies versus what is good for the American economy," says Scott.
American jobs have been moving overseas for more than two decades. In recent years, though, those jobs have become more sophisticated — think semiconductors and software, not toys and clothes.
And now many of the products being made overseas aren't coming back to the United States. Demand has grown dramatically this year in emerging markets like India, China and Brazil.
Meanwhile, consumer demand in the U.S. has been subdued. Despite a strong holiday shopping season, Americans are still spending 3 percent less than before the recession on essential items like clothing and more than 10 percent less on jewelry, furniture, electronics, and big appliances, according to MasterCard's SpendingPulse.
"Companies will go where there are fast-growing markets and big profits," says Jeffrey Sachs, globalization expert and economist at Columbia University. "What's changed is that companies today are getting top talent in emerging economies, and the U.S. has to really watch out."
With the future looking brighter overseas, companies are building there, too. Caterpillar, maker of the signature yellow bulldozers and tractors, has invested in three new plants in China in just the last two months to design and manufacture equipment. The decision is based on demand: Asia-Pacific sales soared 38 percent in the first nine months of the year, compared with 16 percent in the U.S. Caterpillar stock is up 65 percent this year.
"There is a shift in economic power that's going on and will continue. China just became the world's second-largest economy," says David Wyss, chief economist at Standard & Poor's, who notes that half of the revenue for companies in the S&P 500 in the last couple of years has come from outside the U.S.
Take the example of DuPont, which wowed the world in 1938 with nylon stockings. Known as one of the most innovative American companies of the 20th century, DuPont now sells less than a third of its products in the U.S. In the first nine months of this year, sales to the Asia-Pacific region grew 50 percent, triple the U.S. rate. Its stock is up 47 percent this year.
DuPont's work force reflects the shift in its growth: In a presentation on emerging markets, the company said its number of employees in the U.S. shrank by 9 percent between January 2005 and October 2009. In the same period, its work force grew 54 percent in the Asia-Pacific countries.
"We are a global player out to succeed in any geography where we participate in," says Thomas M. Connelly, chief innovation officer at DuPont. "We want our resources close to where our customers are, to tailor products to their needs."
While most of DuPont's research labs are still stateside, Connelly says he's impressed with the company's overseas talent. The company opened a large research facility in Hyderabad, India, in 2008.
A key factor behind this runaway international growth is the rise of the middle class in these emerging countries. By 2015, for the first time, the number of consumers in Asia's middle class will equal those in Europe and North America combined.
"All of the growth over the next 10 years is happening in Asia," says Homi Kharas, a senior fellow at the Brookings Institute and formerly the World Bank's chief economist for East Asia and the Pacific.
Coca-Cola CEO Muhtar Kent often points out that a billion consumers will enter the middle class during the coming decade, mostly in Africa, China and India. He is aggressively targeting those markets. Of Coke's 93,000 global employees, less than 13 percent were in the U.S. in 2009, down from 19 percent five years ago.
The company would not say how many new U.S. hires it has made in 2010. But its latest new investments are overseas, including $240 million for three bottling plants in Inner Mongolia as part of a three-year, $2 billion investment in China. The three plants will create 2,000 new jobs in the area. In September, Coca-Cola pledged $1 billion to the Philippines over five years.
The strategy isn't restricted to just the largest American companies. Entrepreneurs, whether in technology, retail or in manufacturing, today hire globally from the start.
Consider Vast.com, which powers the search engines of sites like Yahoo Travel and Aol Autos. The company was founded in 2005 with employees based in San Francisco and Serbia.
Harvard Business School Dean Nitin Nohria worries that the trend could be dangerous. In an article in the November issue of the Harvard Business Review, he says that if U.S. businesses keep prospering while Americans are struggling, business leaders will lose legitimacy in society. He exhorted business leaders to find a way to link growth with job creation at home.
Other economists, like Columbia University's Sachs, say multinational corporations have no choice, especially now that the quality of the global work force has improved. Sachs points out that the U.S. is falling in most global rankings for higher education while others are rising.
"We are not fulfilling the educational needs of our young people," says Sachs. "In a globalized world, there are serious consequences to that."
Friday, July 16, 2010
Corporations Want Fewer Workers, But Still Need Everyone to Be Consumers
The Economic Crunch We're in
The recession has been a way for employers to cull payrolls -- and to discover that many jobs don't have to be filled again.
By Robert Parry, Consortium News
July 16, 2010
A hard truth about the U.S. economy is that corporations don’t need as many of us as workers but still need us as consumers. That dilemma helps explain why unemployment is stuck near 10 percent and why the economic recovery is stumbling toward a double dip.
The Washington Post reported Thursday that nonfinancial companies are sitting on $1.8 trillion - about one-fourth more than at the start of the recession - but won't add personnel in part because they're waiting for consumer demand to pick up, which isn't happening because many Americans don't have jobs or are afraid of losing theirs.
Yet, even if that vicious cycle could be broken, there's another reason for the lack of hiring: companies have found they can make do with a lot fewer American workers. The recession has been a way to cull payrolls - and to discover that many jobs don't have to be filled again, either because of new technologies or because the jobs have been shifted overseas.
Both these trends predated the recession but the rapid shedding of jobs since the Wall Street financial crash in 2008 - some eight million jobs lost - has spotlighted this structural change. Further, corporate determination to remain "lean" has turned the worker-surplus issue from a personal crisis for many American families into a systemic one for the country's economy.
Predictably, the free-marketers at CNBC and the Wall Street Journal have echoed the political message of the Chamber of Commerce and other right-wingers who blame the sluggish rehiring on the Obama administration's health-care reform and the likelihood that President George W. Bush's tax cuts for the rich will lapse.
That view fits with Ronald Reagan's economic orthodoxy which has dominated the United States for the past three decades. It holds that the answer to the nation's economic woes is always to cut taxes especially for the rich, to trust in corporate self-regulation, and to crack down on unions.
Yet, the realistic answer to America's sorry economic state would seem to be the opposite: to raise taxes on the rich so investments can be made in the national infrastructure of education, transportation and technology; to impose reasonable regulations on corporations to prevent dangerous excesses and risks; and to ensure that workers (and consumers) get a fair shake.
Through the federal taxing power, Washington could put Americans to work preparing the nation for the future, building high-speed rail, developing clean energy, improving education for all, advancing medical technologies, repairing the environment, and addressing a host of other national priorities.
The Media Imbalance
But a second hard truth about today's America is that the political/media structure is such that these steps are almost unimaginable. In the power centers of New York and Washington, in particular, Corporate America and its right-wing allies have built a propaganda apparatus that makes any serious discussion of these options political suicide.
This propaganda machinery, which reaches across the United States through right-wing talk radio, Fox News and a variety of other outlets, guarantees that any politician (or media personality) who pushes too hard or too effectively for questioning the Reagan orthodoxy will be demonized.
President Barack Obama is only the latest politician to learn this lesson. Though many on the American Left denounce Obama as a weak-kneed centrist too eager to compromise, he is portrayed to the rest of America as a radical socialist, sometimes even likened to Hitler and Stalin.
It doesn't matter that these comparisons are as absurd as they are offensive. The point about propaganda is that if ugly attacks are repeated enough about some individual, many in the public will be influenced, consciously or subconsciously, to think of the person in a negative light.
And as that trend gains momentum - as the politician's polls sink - the mainstream media will go with the flow, endlessly reprising stories about the person's slipping popularity and thus hastening the political decline.
This pattern is almost inevitable unless there is a counterforce within the media that challenges the lies and distortions. But today's America has almost no Left media to speak of, at least nothing that compares with what the Right has built, and what Left media does exist tends to resent the political compromises that Obama and other Democrats have made.
Thus, the media asymmetry causes Democratic politicians to make more compromises, hoping to limit the Right's ability to demonize them but further alienating and demoralizing the Democratic base.
So, the outcome of Election 2010 seems likely to follow the same course as Election 1994, the last time a new Democratic president was in office and tried to enact some watered-down reforms. Again, Republicans are expected to win - and win big - which would then put them in position to block whatever is left of Obama's agenda and thus turn him into an actual (or virtual) lame duck.
Though Bill Clinton did win reelection in 1996 against a weak Republican opponent (Bob Dole) with the help of a third-party candidate (Ross Perot), Clinton had to confine his second-term ambitions to "micro-programs" and to changes favored by the Republicans, such as the removal of Great Depression-era regulations of the banking system (a "modernization" that set the stage for the 2008 financial collapse).
Investigating Obama
If Republicans gain control of at least one house of Congress, they would surely launch a wave of investigations against Obama, much as the GOP did against Clinton.
Unlike the Democrats who shy away from investigative controversies - turning their backs even on historic scandals such as Iran-Contra, Iraq-gate and contra-cocaine trafficking in the 1980s as well as George W. Bush's torture abuses and illegal wars last decade - the Republicans have no such qualms.
They pounced all over trivial Clinton "scandals" like Whitewater and Travel-gate and impeached Clinton for lying about sex (though they could not muster a super-majority in the Senate for conviction). And Rep. Darrell Issa, R-California, has vowed to be similarly aggressive now if he gains control of the House oversight committee next year. [Washington Post, July 4, 2010]
So, with Obama embattled and the Democratic congressional majorities likely to shrink or disappear, the chances for the United States to confront its structural problems will only worsen.
With unemployment staying high, many middle-class Americans will sink into a growing under-class. The rich will fight to keep as much of their oversized salaries and bonuses as possible, with the Republicans ensuring that the one political sure-thing will be that legislated tax increases won't happen.
Indeed, the simplest way to address the nation's myriad of problems - by restoring the marginal tax rates for the rich back to the historical levels of, say, the Kennedy era (around 60 percent on their top income) - is the one thing that is almost impossible to contemplate.
Since Reagan's presidency, the Republicans have been determined to "starve" the government of resources so it can't address problems like climate change, renewable energy, education, transportation, health care, housing, etc. The only big expenditure that the GOP won't cut is military spending, especially for overseas wars.
Though the Republican vision of the future appears to guarantee a continued decline in the quality of American life, the Right's propaganda machinery makes any suggestion about the need to tax the rich more heavily akin to socialism. The Revolutionary War slogan, "no taxation without representation," has been transformed to something close to "no taxation, period."
Remember the famous encounter between candidate Obama and "Joe the Plumber," who decried Obama's idea about the need to redistribute wealth from the upper-income levels to middle- and working-class Americans so the economy would work better.
That debate remains at the center of America's economic struggles, as it has been since the Great Depression when income inequality and financial speculation were two key factors in the mass unemployment that followed the Crash of 1929. Two lessons learned were that a strong middle class and reasonable government regulations were necessary for a healthy economy.
New Consensus
That New Deal consensus held until 1980 when a new Reagan-era consensus took hold, claiming that tax cuts tilted toward the wealthy and reduced regulation of corporations were the route to prosperity. A corollary was that the wealthy deserved the lion's share because of their intelligence and hard work.
Reagan and the Right sold many Americans, including large numbers of people from the lower economic strata, on the idea that it was unfair for the government to use the tax system to reverse the consolidation of wealth and the political power that went with it.
However, the counter-argument is that virtually every rich person in the United States has benefited from the investment of taxpayers' money in creating the conditions for business success, from public education of workers, to the transportation infrastructure for shipping goods, to the research and development that opened opportunities in computer technology, medicines and the Internet.
Indeed, to ensure that the benefits from these government investments are shared with some equity would require that the excess income at the top be recycled into other improvements of the nation's infrastructure and the quality of life for all Americans.
In other words, by raising taxes on the rich, Washington could help create the jobs needed for addressing national problems and simultaneously break the vicious cycle that has left nearly 10 percent of Americans unemployed, the key fact that has depressed consumer demand.
However, to change the dominant Reagan-era ideology - and thus to change America - would require smart investments from progressives in the information battles for the hearts and minds of the American voters.
Only with the Right's orthodoxy challenged and the American people understanding their real choices might politicians gain the confidence and courage to do what's needed to get the United States back on the path of a healthy economy - and toward a revived democracy.
The recession has been a way for employers to cull payrolls -- and to discover that many jobs don't have to be filled again.
By Robert Parry, Consortium News
July 16, 2010
A hard truth about the U.S. economy is that corporations don’t need as many of us as workers but still need us as consumers. That dilemma helps explain why unemployment is stuck near 10 percent and why the economic recovery is stumbling toward a double dip.
The Washington Post reported Thursday that nonfinancial companies are sitting on $1.8 trillion - about one-fourth more than at the start of the recession - but won't add personnel in part because they're waiting for consumer demand to pick up, which isn't happening because many Americans don't have jobs or are afraid of losing theirs.
Yet, even if that vicious cycle could be broken, there's another reason for the lack of hiring: companies have found they can make do with a lot fewer American workers. The recession has been a way to cull payrolls - and to discover that many jobs don't have to be filled again, either because of new technologies or because the jobs have been shifted overseas.
Both these trends predated the recession but the rapid shedding of jobs since the Wall Street financial crash in 2008 - some eight million jobs lost - has spotlighted this structural change. Further, corporate determination to remain "lean" has turned the worker-surplus issue from a personal crisis for many American families into a systemic one for the country's economy.
Predictably, the free-marketers at CNBC and the Wall Street Journal have echoed the political message of the Chamber of Commerce and other right-wingers who blame the sluggish rehiring on the Obama administration's health-care reform and the likelihood that President George W. Bush's tax cuts for the rich will lapse.
That view fits with Ronald Reagan's economic orthodoxy which has dominated the United States for the past three decades. It holds that the answer to the nation's economic woes is always to cut taxes especially for the rich, to trust in corporate self-regulation, and to crack down on unions.
Yet, the realistic answer to America's sorry economic state would seem to be the opposite: to raise taxes on the rich so investments can be made in the national infrastructure of education, transportation and technology; to impose reasonable regulations on corporations to prevent dangerous excesses and risks; and to ensure that workers (and consumers) get a fair shake.
Through the federal taxing power, Washington could put Americans to work preparing the nation for the future, building high-speed rail, developing clean energy, improving education for all, advancing medical technologies, repairing the environment, and addressing a host of other national priorities.
The Media Imbalance
But a second hard truth about today's America is that the political/media structure is such that these steps are almost unimaginable. In the power centers of New York and Washington, in particular, Corporate America and its right-wing allies have built a propaganda apparatus that makes any serious discussion of these options political suicide.
This propaganda machinery, which reaches across the United States through right-wing talk radio, Fox News and a variety of other outlets, guarantees that any politician (or media personality) who pushes too hard or too effectively for questioning the Reagan orthodoxy will be demonized.
President Barack Obama is only the latest politician to learn this lesson. Though many on the American Left denounce Obama as a weak-kneed centrist too eager to compromise, he is portrayed to the rest of America as a radical socialist, sometimes even likened to Hitler and Stalin.
It doesn't matter that these comparisons are as absurd as they are offensive. The point about propaganda is that if ugly attacks are repeated enough about some individual, many in the public will be influenced, consciously or subconsciously, to think of the person in a negative light.
And as that trend gains momentum - as the politician's polls sink - the mainstream media will go with the flow, endlessly reprising stories about the person's slipping popularity and thus hastening the political decline.
This pattern is almost inevitable unless there is a counterforce within the media that challenges the lies and distortions. But today's America has almost no Left media to speak of, at least nothing that compares with what the Right has built, and what Left media does exist tends to resent the political compromises that Obama and other Democrats have made.
Thus, the media asymmetry causes Democratic politicians to make more compromises, hoping to limit the Right's ability to demonize them but further alienating and demoralizing the Democratic base.
So, the outcome of Election 2010 seems likely to follow the same course as Election 1994, the last time a new Democratic president was in office and tried to enact some watered-down reforms. Again, Republicans are expected to win - and win big - which would then put them in position to block whatever is left of Obama's agenda and thus turn him into an actual (or virtual) lame duck.
Though Bill Clinton did win reelection in 1996 against a weak Republican opponent (Bob Dole) with the help of a third-party candidate (Ross Perot), Clinton had to confine his second-term ambitions to "micro-programs" and to changes favored by the Republicans, such as the removal of Great Depression-era regulations of the banking system (a "modernization" that set the stage for the 2008 financial collapse).
Investigating Obama
If Republicans gain control of at least one house of Congress, they would surely launch a wave of investigations against Obama, much as the GOP did against Clinton.
Unlike the Democrats who shy away from investigative controversies - turning their backs even on historic scandals such as Iran-Contra, Iraq-gate and contra-cocaine trafficking in the 1980s as well as George W. Bush's torture abuses and illegal wars last decade - the Republicans have no such qualms.
They pounced all over trivial Clinton "scandals" like Whitewater and Travel-gate and impeached Clinton for lying about sex (though they could not muster a super-majority in the Senate for conviction). And Rep. Darrell Issa, R-California, has vowed to be similarly aggressive now if he gains control of the House oversight committee next year. [Washington Post, July 4, 2010]
So, with Obama embattled and the Democratic congressional majorities likely to shrink or disappear, the chances for the United States to confront its structural problems will only worsen.
With unemployment staying high, many middle-class Americans will sink into a growing under-class. The rich will fight to keep as much of their oversized salaries and bonuses as possible, with the Republicans ensuring that the one political sure-thing will be that legislated tax increases won't happen.
Indeed, the simplest way to address the nation's myriad of problems - by restoring the marginal tax rates for the rich back to the historical levels of, say, the Kennedy era (around 60 percent on their top income) - is the one thing that is almost impossible to contemplate.
Since Reagan's presidency, the Republicans have been determined to "starve" the government of resources so it can't address problems like climate change, renewable energy, education, transportation, health care, housing, etc. The only big expenditure that the GOP won't cut is military spending, especially for overseas wars.
Though the Republican vision of the future appears to guarantee a continued decline in the quality of American life, the Right's propaganda machinery makes any suggestion about the need to tax the rich more heavily akin to socialism. The Revolutionary War slogan, "no taxation without representation," has been transformed to something close to "no taxation, period."
Remember the famous encounter between candidate Obama and "Joe the Plumber," who decried Obama's idea about the need to redistribute wealth from the upper-income levels to middle- and working-class Americans so the economy would work better.
That debate remains at the center of America's economic struggles, as it has been since the Great Depression when income inequality and financial speculation were two key factors in the mass unemployment that followed the Crash of 1929. Two lessons learned were that a strong middle class and reasonable government regulations were necessary for a healthy economy.
New Consensus
That New Deal consensus held until 1980 when a new Reagan-era consensus took hold, claiming that tax cuts tilted toward the wealthy and reduced regulation of corporations were the route to prosperity. A corollary was that the wealthy deserved the lion's share because of their intelligence and hard work.
Reagan and the Right sold many Americans, including large numbers of people from the lower economic strata, on the idea that it was unfair for the government to use the tax system to reverse the consolidation of wealth and the political power that went with it.
However, the counter-argument is that virtually every rich person in the United States has benefited from the investment of taxpayers' money in creating the conditions for business success, from public education of workers, to the transportation infrastructure for shipping goods, to the research and development that opened opportunities in computer technology, medicines and the Internet.
Indeed, to ensure that the benefits from these government investments are shared with some equity would require that the excess income at the top be recycled into other improvements of the nation's infrastructure and the quality of life for all Americans.
In other words, by raising taxes on the rich, Washington could help create the jobs needed for addressing national problems and simultaneously break the vicious cycle that has left nearly 10 percent of Americans unemployed, the key fact that has depressed consumer demand.
However, to change the dominant Reagan-era ideology - and thus to change America - would require smart investments from progressives in the information battles for the hearts and minds of the American voters.
Only with the Right's orthodoxy challenged and the American people understanding their real choices might politicians gain the confidence and courage to do what's needed to get the United States back on the path of a healthy economy - and toward a revived democracy.
Saturday, July 10, 2010
Wealthy Are Cashing in Huge, While Workers' Salaries Keep Shrinking
Times are tough for workers in the U.S. where a recession has a stranglehold on much of the economy, but life is perfectly rosy for those at the top.
By Adrianne Appel, IPS News
July 10, 2010
Times are tough for workers in the U.S. where a recession has a stranglehold on much of the economy, but life is perfectly rosy for those at the top.
The riches of the wealthiest North Americans grew by double digits in 2009, primarily from interest their money earned when it was invested in the stock market and elsewhere, according to a report by the Boston Consulting Group.
Millionaires in the U.S. and Canada saw their wealth increase 15 percent in 2009, to a total of 4.6 trillion dollars, the report found.
Worldwide, 11 million - or less than 1 percent of all households - were millionaires in 2009. They owned about 38 percent of the world's wealth or 111 trillion dollars, up from about 36 percent in 2008, according to Boston Consulting Group.
About 4.7 million millionaires live in the U.S., four percent of the population and more than anywhere else in the world. Japan, China, Britain and Germany followed the U.S. in the number of millionaires.
Their fortune is a stark contrast to the lives of more than 15 million people in the U.S. who are unemployed and searching for work, and the eight million more who are just getting by with a part-time job, according to the U.S. Bureau of Labor Statistics. More than two million more people were working prior to the recession but have now dropped out of the labour force.
Apart from the newly unemployed, about 39 million people in the U.S. are chronically poor and do not have enough food to eat, according to the U.S. Census and U.S. Department of Agriculture.
"The nation's jobs crisis is so catastrophic that, unless Congress acts on the scale of the New Deal, millions of Americans will experience extremely long periods of unemployment for many years ahead," Lawrence Mishel, president of the Economic Policy Institute, told a panel of the Committee on Ways and Means recently.
Not so for millionaires and the uber-rich.
The uber-rich, those with more than 30 million dollars, are on the rebound. They spent more money in 2009 on fancy cars, yachts and jets compared to 2008, according to a study by Merrill Lynch-Capgemini. They bought fine art, expensive jewelry, gems and antiques, items that are likely to increase in value over time, so they can sell them later and make more money.
The recession isn't hitting those at the top as it has workers. In fact, many wealthy people benefited from the stock market's ups and downs, said Mike Lapham, director of the Responsible Wealth Project at United for a Fair Economy, an NGO in Boston.
"Folks at the top have a cushion, a disposable income to fall back on. Maybe their portfolios took a hit but they didn't lose their jobs and their homes. If they had losses, they can deduct them from their taxes," Lapham told IPS.
"Some people bet successfully on the financial system going under," he said. "The stock market went from 10,000 to 6,000 and back to 11,000. That's a big jump for people with significant portfolios."
"The people at bottom who've lost work, it'll be years before they get back to where they were before the crash," Lapham said.
The U.S. average national unemployment rate is 9.7 percent. Only those who are actively looking for work are included in this statistic. Among Black Americans, the rate is 15.5 percent and Latinos, 12.4 percent, according to the Bureau of Labor Statistics.
The Congressional Budget Office predicts that unemployment will remain almost unchanged in 2011, about 9.5 percent.
Many families have been surviving on small, weekly unemployment checks provided for 26 weeks by their state government, and an additional 73 weeks by the federal government. The first group of unemployed to run through both benefits hit that point Jul. 1, and today about a million people are receiving no assistance at all. About nine million more are still receiving unemployment payments.
Congress is considering extending federal assistance for another 20 weeks. The House approved the legislation, but the Senate did not. Congress left town for its holiday break until mid-July without passing the legislation.
In the Senate the issue fell almost precisely along party lines, with all but one Democrat for extending the benefit, and all but two Republicans against it, saying the 34- billion-dollar cost was not worth adding to the federal deficit.
Without the vote of Democratic Senator Ben Nelson, of Nebraska, the bill was one vote short of the 60 needed for passage.
"I think we're going to see a new wave of heartache here in Rhode Island," with the end of the federal assistance, Kate Brewster, executive director of the Poverty Institute, a Rhode Island NGO, told IPS.
The small, northeastern U.S. state, a former manufacturing centre whose jobs moved offshore, has struggled with higher unemployment and low-wage jobs for years. Most recently, it was hard hit by the foreclosure crisis and the downturn in the construction industry.
The ongoing unemployment and low jobs creation nationwide is helping to fuel the millions of foreclosures sweeping across the nation, according to a report by the Harvard University Joint Center for Housing Studies.
The nation's anemic jobs creation, high foreclosures and weak consumer spending has convinced Mishel and many economists that the U.S. is in for an extended downturn. Just 83,000 jobs were created in June, instead of the 150,000 needed for robust employment, according to the U.S. Labor Department.
"The United States is undergoing the worst economic downturn in 70 years, and the damage and suffering it is causing will last many years beyond the official end of the recession," Mishel said.
Rhode Island's future is uncertain.
"We've consistently had one of the highest rates of unemployment in the country," Brewster said. Today, in the midst of the recession, more people are showing up at soup kitchens for free meals and dialing in to a toll-free, crisis phone service for families in dire circumstances, she said.
"They've had an enormous influx of calls in the past 18 to 21 months," she said. Fewer services are available to help them.
"Within last five years the state cut back work support programmes like child care assistance and funded health insurance," Brewster said. "The cruel irony is that when families really need help, less is available."
By Adrianne Appel, IPS News
July 10, 2010
The riches of the wealthiest North Americans grew by double digits in 2009, primarily from interest their money earned when it was invested in the stock market and elsewhere, according to a report by the Boston Consulting Group.
Millionaires in the U.S. and Canada saw their wealth increase 15 percent in 2009, to a total of 4.6 trillion dollars, the report found.
Worldwide, 11 million - or less than 1 percent of all households - were millionaires in 2009. They owned about 38 percent of the world's wealth or 111 trillion dollars, up from about 36 percent in 2008, according to Boston Consulting Group.
About 4.7 million millionaires live in the U.S., four percent of the population and more than anywhere else in the world. Japan, China, Britain and Germany followed the U.S. in the number of millionaires.
Their fortune is a stark contrast to the lives of more than 15 million people in the U.S. who are unemployed and searching for work, and the eight million more who are just getting by with a part-time job, according to the U.S. Bureau of Labor Statistics. More than two million more people were working prior to the recession but have now dropped out of the labour force.
Apart from the newly unemployed, about 39 million people in the U.S. are chronically poor and do not have enough food to eat, according to the U.S. Census and U.S. Department of Agriculture.
"The nation's jobs crisis is so catastrophic that, unless Congress acts on the scale of the New Deal, millions of Americans will experience extremely long periods of unemployment for many years ahead," Lawrence Mishel, president of the Economic Policy Institute, told a panel of the Committee on Ways and Means recently.
Not so for millionaires and the uber-rich.
The uber-rich, those with more than 30 million dollars, are on the rebound. They spent more money in 2009 on fancy cars, yachts and jets compared to 2008, according to a study by Merrill Lynch-Capgemini. They bought fine art, expensive jewelry, gems and antiques, items that are likely to increase in value over time, so they can sell them later and make more money.
The recession isn't hitting those at the top as it has workers. In fact, many wealthy people benefited from the stock market's ups and downs, said Mike Lapham, director of the Responsible Wealth Project at United for a Fair Economy, an NGO in Boston.
"Folks at the top have a cushion, a disposable income to fall back on. Maybe their portfolios took a hit but they didn't lose their jobs and their homes. If they had losses, they can deduct them from their taxes," Lapham told IPS.
"Some people bet successfully on the financial system going under," he said. "The stock market went from 10,000 to 6,000 and back to 11,000. That's a big jump for people with significant portfolios."
"The people at bottom who've lost work, it'll be years before they get back to where they were before the crash," Lapham said.
The U.S. average national unemployment rate is 9.7 percent. Only those who are actively looking for work are included in this statistic. Among Black Americans, the rate is 15.5 percent and Latinos, 12.4 percent, according to the Bureau of Labor Statistics.
The Congressional Budget Office predicts that unemployment will remain almost unchanged in 2011, about 9.5 percent.
Many families have been surviving on small, weekly unemployment checks provided for 26 weeks by their state government, and an additional 73 weeks by the federal government. The first group of unemployed to run through both benefits hit that point Jul. 1, and today about a million people are receiving no assistance at all. About nine million more are still receiving unemployment payments.
Congress is considering extending federal assistance for another 20 weeks. The House approved the legislation, but the Senate did not. Congress left town for its holiday break until mid-July without passing the legislation.
In the Senate the issue fell almost precisely along party lines, with all but one Democrat for extending the benefit, and all but two Republicans against it, saying the 34- billion-dollar cost was not worth adding to the federal deficit.
Without the vote of Democratic Senator Ben Nelson, of Nebraska, the bill was one vote short of the 60 needed for passage.
"I think we're going to see a new wave of heartache here in Rhode Island," with the end of the federal assistance, Kate Brewster, executive director of the Poverty Institute, a Rhode Island NGO, told IPS.
The small, northeastern U.S. state, a former manufacturing centre whose jobs moved offshore, has struggled with higher unemployment and low-wage jobs for years. Most recently, it was hard hit by the foreclosure crisis and the downturn in the construction industry.
The ongoing unemployment and low jobs creation nationwide is helping to fuel the millions of foreclosures sweeping across the nation, according to a report by the Harvard University Joint Center for Housing Studies.
The nation's anemic jobs creation, high foreclosures and weak consumer spending has convinced Mishel and many economists that the U.S. is in for an extended downturn. Just 83,000 jobs were created in June, instead of the 150,000 needed for robust employment, according to the U.S. Labor Department.
"The United States is undergoing the worst economic downturn in 70 years, and the damage and suffering it is causing will last many years beyond the official end of the recession," Mishel said.
Rhode Island's future is uncertain.
"We've consistently had one of the highest rates of unemployment in the country," Brewster said. Today, in the midst of the recession, more people are showing up at soup kitchens for free meals and dialing in to a toll-free, crisis phone service for families in dire circumstances, she said.
"They've had an enormous influx of calls in the past 18 to 21 months," she said. Fewer services are available to help them.
"Within last five years the state cut back work support programmes like child care assistance and funded health insurance," Brewster said. "The cruel irony is that when families really need help, less is available."
Wednesday, June 30, 2010
Recession cut into employment for half of working adults, study says
By Michael A. Fletcher | Washington Post Staff Writer
Wednesday, June 30, 2010
The recession has directly hit more than half of the nation's working adults, pushing them into unemployment, pay cuts, reduced hours at work or part-time jobs, according to a new Pew Research Center survey.
The economic shock has jolted many Americans into a new, more austere reality, which is likely to have lasting consequences for an economy fueled mostly by consumer spending. More than six in 10 Americans say they have cut down on borrowing and spending, the survey found.
The reason: Nearly half of the survey's respondents say they are in worse financial shape as a result of the downturn, which destroyed 20 percent of Americans' wealth.
"We're going to see much lower consumption going forward," said Dean Baker, co-director of the Center for Economic and Policy Research. He blames diminished spending on the drop in housing prices. "People who thought they had equity in their homes have seen it disappear," he said.
The longest and deepest recession since the Great Depression has exacted a punishing toll that continues nearly a year after the economy started growing again. Hardest hit are the 9.7 percent of workers who have been out of a job for an average of nearly six months. Many Americans are delaying retirement and others have lower expectations for their children's futures, the Pew poll found.
Among adults 62 and older who are still working, 35 percent say they have postponed retirement. Six in 10 working adults between ages 50 and 61 say they may be forced to do the same. Meanwhile, half of the survey respondents say they have whittled down their mortgages, credit card balances, car loans and other borrowing.
Four in 10 adults say they have tapped savings and retirement accounts to make ends meet. Others have sought help from friends and family. Almost a quarter say they have borrowed money from someone. And one in 10 -- including 24 percent of workers from 18 to 29 years old -- say they moved back in with their parents to weather the economic storm.
The new, more frugal lifestyles may outlast the recession and its immediate aftermath, the survey indicated. Nearly half of respondents say they plan to save more; nearly a third say they plan to spend less and 30 percent say they plan to borrow less.
While a broad swath of Americans have been hurt by the recession, blacks, who have a 15.5 percent unemployment rate, and Hispanics, whose jobless rate is 12.4 percent, have suffered disproportionately. Not only have they endured massive job losses, but they also have been hardest hit by housing foreclosures. Still, black and Hispanic workers are among the most upbeat groups about their personal financial situations and the national economy, the survey found.
"One likely explanation for these seemingly counter-intuitive patterns is that the election of Barack Obama (which came at the height of the recession in November 2008) appears to have put his most enthusiastic supporters -- especially blacks, Democrats and young adults -- in a more positive state of mind about many aspects of national life, including their perceptions of the economy," the report said.
Overall, Democrats are now much more optimistic than Republicans about the economy, even though they have lower incomes and less wealth and have suffered more job losses during the recession. For most of the time that President George W. Bush was in office, Republicans were more upbeat than Democrats about the economy.
Even as they continue to reel from the downturn, most Americans are beginning to believe that the worst is over. More than six in 10 respondents say they expect their personal financial situation to improve in the next year, which the report called the rosiest outlook since before the recession began in December 2007. Similarly, 61 percent predict that the damage caused by the recession will be temporary.
Results for the Pew survey are based on telephone interviews conducted May 11 to 31 on landline phones and cellphones with a nationally representative sample of 2,967 adults 18 and older. The margin of sampling error is plus or minus 2.2 percentage points for the overall results. Interviews were done in English and Spanish by Princeton Survey Research Associates International.
Wednesday, June 30, 2010
The recession has directly hit more than half of the nation's working adults, pushing them into unemployment, pay cuts, reduced hours at work or part-time jobs, according to a new Pew Research Center survey.
The economic shock has jolted many Americans into a new, more austere reality, which is likely to have lasting consequences for an economy fueled mostly by consumer spending. More than six in 10 Americans say they have cut down on borrowing and spending, the survey found.
The reason: Nearly half of the survey's respondents say they are in worse financial shape as a result of the downturn, which destroyed 20 percent of Americans' wealth.
"We're going to see much lower consumption going forward," said Dean Baker, co-director of the Center for Economic and Policy Research. He blames diminished spending on the drop in housing prices. "People who thought they had equity in their homes have seen it disappear," he said.
The longest and deepest recession since the Great Depression has exacted a punishing toll that continues nearly a year after the economy started growing again. Hardest hit are the 9.7 percent of workers who have been out of a job for an average of nearly six months. Many Americans are delaying retirement and others have lower expectations for their children's futures, the Pew poll found.
Among adults 62 and older who are still working, 35 percent say they have postponed retirement. Six in 10 working adults between ages 50 and 61 say they may be forced to do the same. Meanwhile, half of the survey respondents say they have whittled down their mortgages, credit card balances, car loans and other borrowing.
Four in 10 adults say they have tapped savings and retirement accounts to make ends meet. Others have sought help from friends and family. Almost a quarter say they have borrowed money from someone. And one in 10 -- including 24 percent of workers from 18 to 29 years old -- say they moved back in with their parents to weather the economic storm.
The new, more frugal lifestyles may outlast the recession and its immediate aftermath, the survey indicated. Nearly half of respondents say they plan to save more; nearly a third say they plan to spend less and 30 percent say they plan to borrow less.
While a broad swath of Americans have been hurt by the recession, blacks, who have a 15.5 percent unemployment rate, and Hispanics, whose jobless rate is 12.4 percent, have suffered disproportionately. Not only have they endured massive job losses, but they also have been hardest hit by housing foreclosures. Still, black and Hispanic workers are among the most upbeat groups about their personal financial situations and the national economy, the survey found.
"One likely explanation for these seemingly counter-intuitive patterns is that the election of Barack Obama (which came at the height of the recession in November 2008) appears to have put his most enthusiastic supporters -- especially blacks, Democrats and young adults -- in a more positive state of mind about many aspects of national life, including their perceptions of the economy," the report said.
Overall, Democrats are now much more optimistic than Republicans about the economy, even though they have lower incomes and less wealth and have suffered more job losses during the recession. For most of the time that President George W. Bush was in office, Republicans were more upbeat than Democrats about the economy.
Even as they continue to reel from the downturn, most Americans are beginning to believe that the worst is over. More than six in 10 respondents say they expect their personal financial situation to improve in the next year, which the report called the rosiest outlook since before the recession began in December 2007. Similarly, 61 percent predict that the damage caused by the recession will be temporary.
Results for the Pew survey are based on telephone interviews conducted May 11 to 31 on landline phones and cellphones with a nationally representative sample of 2,967 adults 18 and older. The margin of sampling error is plus or minus 2.2 percentage points for the overall results. Interviews were done in English and Spanish by Princeton Survey Research Associates International.
Saturday, May 29, 2010
Ordinary Workers Are Fired in Seconds If They Screw Up as Badly as the Bankers
(Sscrew-ups or thieves?--jef)
#*#
By Dean Baker, AlterNet
May 29, 2010
The world is suffering from the worst downturn since the Great Depression. The crisis has left tens of millions unemployed in the U.S., Europe, and elsewhere. The huge baby boomer generation in the United States, now on the edge of retirement, has seen much of its wealth destroyed with the collapse of the housing bubble.
It would be difficult to imagine a worse economic disaster. Prior periods of bad performance, like the inflation ridden seventies, look like mild flurries compared to the blizzard of bad economic news in which we are now enmeshed.
None of this is new. People don't need economists to tell them that times are bad. However, what the public may not recognize is that the same people who caused this disaster are still calling the shots. Specifically, there has been little change in personnel and no acknowledgment of error at the central banks whose incompetence was responsible for the crisis.
Remarkably, this crew of incompetents is still claiming papal infallibility, warning governments and the general public that bad things will happen if they are subjected to more oversight. Instead, the central bankers and their accomplices at the IMF are dictating policies to democratically elected governments. Their agenda seems to be the same everywhere, cut back retirement benefits, reduce public support for health care, weaken unions and make ordinary workers take pay cuts.
Given how much they have messed up, it is amazing that these central bankers have the gall to even show their face in public. They are lucky that they still have jobs -- and very good paying ones at that. (Many of the boys and girls at the IMF can retire with six figure pensions at the age of 50.) Ordinary workers, like teachers, autoworkers, or custodians, would be fired in a second if they performed as badly as the world's central bankers.
What was going through their heads when they saw house prices in the United States, the UK, Spain and elsewhere spiral upward with no basis in any of the fundamentals of the housing market? How did they think this bubble would end; did they think that trillions of dollars of housing bubble wealth could just disappear without any impact on the economy. Or, did they think the bubble would never end and that house prices would just continue to go skyward forever?
How about the central bankers who allowed the euro to be imposed on a mix of economies with very little in common and no controlling governmental organization? Did they think that wages and prices would follow the same pattern in Greece and Germany? If not, what adjustment mechanism did they envision once these widely different economies were tied to together in a single currency?
Yes, many of the central bankers are now saying that they knew the euro was a bad idea back when it was established. Some of them even muttered quietly to this effect. But the central bankers and the IMF in 1998 were not making the same bold pronouncements and issuing the same directives to elected governments about structuring the euro zone that they are now doing in telling them to dismantle their welfare states. In other words, these central bankers failed disastrously -- why do they still have jobs and why on earth is anyone listening to them?
At the top of the list of villains in this story is the IMF. Its ineptitude managed to reverse the fundamental flows of capital in the world economy. In normal times capital is supposed to flow from wealthy countries with large amounts of capital, like the United States and the European countries, to the developing countries who need capital to fuel their development. Due to the failure of the IMF to establish a workable system of international finance, the flows went in the opposite direction in a huge way. The world's poor were sending their capital to the United States because the IMF gave them little choice.
It is important to be clear about the responsibility of the central bankers and the IMF for this totally preventable disaster. The first reason is accountability, something that is very important to economists who believe in economics. Economic theory teaches us that if workers are not held accountable for poor work, then they have no incentive to do their jobs well. If the central banker and IMF crew can mess up disastrously and continue to draw their paychecks as though everything is fine, what is their incentive to do better next time?
The other reason why it is important to recognize the responsibility of the central bankers and the IMF for this disaster is so that we don't continue to take advice from people who apparently don't have a clue. Before anyone listens to Ben Bernanke, European Central Bank President Jean-Claude Trichet, or IMF Managing Director Dominique Strauss-Kahn, they should first be forced to tell us when they stopped being wrong about the economy. We cannot afford to let these subprime central bankers control economic policy any longer.
Subscribe to:
Posts (Atom)