Political Economy category archive

For all practical purposes, this is no change from last week:

Jobless claims fell by 14,000 to 418,000 in the week ended July 2, Labor Department figures showed today in Washington. The median forecast of economists in a Bloomberg News survey called for a drop to 420,000. The number of people on unemployment benefit rolls and those getting extended payments also declined.

Supply-chain disruptions from Japan’s March earthquake, European default concerns and gasoline prices that neared $4 a gallon prompted some companies in recent weeks to fire workers, further weighing on the consumer spending that makes up two thirds of the economy. Economists surveyed by Bloomberg forecast the Labor Department will report tomorrow that the unemployment rate in June held unchanged at 9.1 percent.

The decrease in persons receiving extended benefits is meaningless, as many persons are still unemployed but are aging out of benefits into destitution.

Daniel Ruth at the St. Petersburg Times writes about what he calls the “Washington kabuki.” I can’t say I agree fully with this, bit I agree mostly. I’m glad he included war defense spending. A nugget:

Aside from schlepping from meeting to meeting, if the political intelligentsia was remotely serious about tackling the national debt it would begin to admit to a few uncomfortable realities.

If you are a Democrat you will not fill a $14.5 trillion hole by simply raising taxes, unless you also are willing to fiddle around with entitlement spending on stuff like Social Security and Medicare, as well as defense.

If you are a Republican you will not address the debt problem by opposing an increase in taxes, or at least making sure wealthy people and corporations pay their fair share of the tax burden they should be paying anyway. When General Electric, which made a profit of $14.2 billion last year, paid zero in corporate taxes, something is horribly nuts.

And Wesley Snipes went to jail for not paying his taxes?

For both sides, the debt crisis won’t be solved if every time someone offers a proposal Washington’s special interest lobbies start sobbing uncontrollably while accusing the offending politico of being an anti-American sot with Marxist and/or fascist tendencies.

Follow the link. The first part of the column, in which he describes the empty ritual of Washington meetings, is a hoot.

(Link fixed.)

Had Paul Ryan offered something constructive about Medicare, he might not have turned himself into a third rail for Republican candidates.

But the public quickly realized that, ultimately, his plan was classic Republicanism: Decreasing the quantity and quality of services while turning buckets of money over to Wall Street bonus babies.

In other words, more rich richer, poor poorer.

Via Jack and Jill Politics.

The patient’s condition is unchanged.

Jobless claims fell by 1,000 to 428,000 in the week ended June 25, Labor Department figures showed today in Washington. The median forecast of economists in a Bloomberg News survey called for a drop to 420,000. The number of people on unemployment benefit rolls and those getting extended payments declined.

No doubt laying off more teachers will fix this.

The Republican campaign strategy continues:

Applications for unemployment benefits increased 9,000 in the week ended June 18 to 429,000, Labor Department figures showed today. The level of claims exceeded the highest estimate in a Bloomberg News survey in which the median projection called for 415,000 filings. The Bloomberg Consumer Comfort Index dropped to minus 44.9 last week from minus 44.

Stocks slumped and Treasury securities rose as the figures, combined with a drop in new-home sales, showed the recovery was struggling to gain momentum. Bernanke said yesterday that joblessness above 9 percent and weakness in housing show the economy’s “headwinds” may be stronger than Fed policy makers initially estimated.

(snip)

Purchases of new homes dropped 2.1 percent in May to a 319,000 annual rate, figures from the Commerce Department showed today in Washington. The median price of new properties sold declined from a year earlier.

Congressional Democrats seem to have become vertebrates; they’ve called out the Republican strategy:

They’ve made it explicit. Democrats are accusing Republicans of trying to sabotage the recovery — or at least stall it — by blocking all short-term measures to boost the economy, even ones they previously supported.

We’ll see how long that lasts.

Also, what Atrios said.

At the Asia Times, Ellen Brown considers how military spending is actually a drag on the economy. A nugget (emphasis added):

Why is the military’s half of the pie sacrosanct? Wasteful and unnecessary military programs get a pass from legislators because the military is also our largest and most secure jobs program, one that has penetrated into the nooks and crannies of Every Town, USA. If it were disbanded, the economy would be crippled by soaring unemployment, plant closures, and bankruptcies. Bruce Gagnon, coordinator of the Global Network Against Weapons and Nuclear Power, writes:

Most politicians understand … that weapons production is currently the number one industrial export product of the US. They know that major industrial job creation is largely coming from the Pentagon. Thus most politicians, from both parties, want to continue to support the military industrial complex gravy train for their communities.

That explains why the country seems to be permanently at war. If we had peace, the war machine would be out of a job. Every year since World War II, the US has been at war somewhere. It has been said that if we didn’t have a war to fight, we would have to create one just to keep the war business going. We have a military empire of over 800 bases around the world. What is to become of them when the lion lies down with the lamb and peace reigns everywhere?

She goes on the explore ways to move to an economy that’s not based on killing somebody somewhere day after day.

Via Leesburg Tomorrow.

Blah, blah, blah.

The truth is, there just isn’t that much of it in real terms. The real waste, fraud, and abuse are in what items are funded, not in how the funds are spent.

Click for a larger image.

Meanwhile, piles of money are set on fire in the Middle East and South Asia.

Via Some Guy with a Website.

Da mob got nuttin’ on dis racket:

When his girlfriend needed help paying rent, Travis Wood figured he could borrow $500 quickly by using his 1989 Mercury as collateral.

Fifteen minutes after turning over the car’s title to a title lender in Suffolk, he emerged with the cash his girlfriend needed.

That was in late August.

Today, Wood regrets being in such a hurry. After paying more than $700 so far for the $500, he still owes $1,265, much of it interest, and is behind on his monthly payments, he said.

If he fails to pay what he owes, the 20-year-old Suffolk resident likely will lose his car, which is essential for getting to work and running errands for his girlfriend, Wood said.

Follow the link for much more.

Via Balloon Juice.

Celebrate thirty years of Reagonomics’s making the rich richer and the poor poorer.

From MarketWatch:

We all think it’s a panacea. If you don’t have enough money saved for retirement, you’ve got a few ways to close the gap between what you have and what you need in your nest egg: Save more, invest more aggressively, and/or work longer. (See Note–ed.)

Well, it turns out that working longer is indeed an option, according to the Employee Benefit Research Institute latest study. The only problem is that the latest research shows that you’ll have to work much longer than you anticipated. In fact, many Americans will have to keep on working well into their 70s and 80s to afford retirement, according to the study, titled “The Impact of Deferring Retirement Age on Retirement Income Adequacy.”

What’s more, it’s even worse for low-income workers, according Jack VanDerhei, one of the co-authors of the study. Those who earned (on average over the course of their careers) less than $11,700 per year, the lowest income quartile, would need to defer retirement till age 84 before 90% of those households would have just a 50% chance of affording retirement.

Much more at the link, if you can bear it.

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Note: Yeah, except for that pesky no-jobs-to-be-had thing.

Still over 400k:

Jobless claims declined by 16,000 to 414,000 in the week ended June 11, Labor Department figures showed today in Washington. Economists surveyed by Bloomberg News projected 420,000 filings, according to the median forecast. The number of people on unemployment benefit rolls and those receiving extended payments decreased.

Further declines in dismissals followed by gains in hiring would help sustain consumer spending, which accounts for about 70 percent of the economy. While payrolls have been climbing, a jobless rate above 9 percent underscores the need for a pickup in employment that will spur an expansion entering its third year.

As Dick Destiny has repeatedly pointed out, as in this post, trying to prosper on consumption without creation is a fool’s game.

Writing as “Spengler” at Asia Times, David P. Goldman is gloomy. A nugget:

The so-called American economic recovery won’t die, because it’s undead. It was a zombie to begin with. Equity investors during the past six weeks came to the collective conclusion that the US is not in the early phase of an economic recovery, but in the endless middle of a structural slump, in the term of Nobel Prize winner Edmund Phelps.

Read the whole thing, then go have a drink. Or four.

Foreclosures are just fine, thank you, Country Wide and Ameriquest:

In May, 1,145 homes sold in South Hampton Roads, Real Estate Information Network Inc. reported Thursday. That’s up 25.4 percent from April but down nearly 4 percent from a year ago.

Meanwhile, the median price of homes sold last month dipped to $189,000, down 11.1 percent from May 2010, the Virginia Beach-based multiple listing service reported.

Nearly one of every three homes sold in May – 31 percent – were in foreclosure or sold for less than what the homeowner owed, according to the report. That’s up from 21 percent a year ago.

Via Bob Cesca.

No doubt throwing more persons out of work austerity will fix this:

Jobless claims increased by 1,000 to 427,000 in the week ended June 4, Labor Department figures showed today in Washington. Economists surveyed by Bloomberg News projected a drop in claims to 419,000, according to the median forecast. The number of people on unemployment benefit rolls and those receiving extended payments decreased.

Strong indicators for continued foreclosures:

The number of local (southeastern Virginia–ed.) home-owners who were “underwater” on their loans rose slightly to 80,150 at the end of March, according to CoreLogic, a Santa Ana, Calif.-based company that tracks mortgages nationwide. The number is up less than 1 percent from the roughly 79,500 who were underwater at the end of December.

The firm’s quarterly report said 22,967 more mortgages in the region will be underwater if home prices decline 5 percent from current levels.

Economists and real estate experts say that owing more on a home than it is worth is one of the most common precursors to foreclosure.

As Duncan frequently points out, our Galtian overlords have broken the economy and are not bothering to put it back together.

Rather, they’re off looking for the next bubblelicious con.

Still above 400k:

Jobless claims fell by 6,000 to 422,000 in the week ended May 28, Labor Department figures showed today in Washington. Economists surveyed by Bloomberg News projected a drop in claims to 417,000, according to the median forecast. The number of people on unemployment benefit rolls and those receiving extended payments decreased.

Bloomberg put “less that forecast in its headline.”*

Less than whose forecast? one might ask.

Why, Bloomberg’s, of course.

This says nothing about unemployment, but something about forecasters.

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*As it that actually meant anything to anyone other than bookies.