Political Economy category archive

Still under half a mil:

Figures from the Labor Department showed jobless claims increased to 480,000 last week from 473,000 a week earlier, indicating the labor market will take time to strengthen.

Some other indicators looking up a bit.

No Lucas Electric here. From MarketWatch:

The U.K. government will not compromise on its planned 50% bonus tax, and may extend the rules to catch firms with unusual tax years, even as more firms reportedly consider moving high-paid staff overseas.

U.K. Chancellor Alistair Darling has refused requests to relax the terms of the tax — which would be paid by banks on all bonuses over 25,000 pounds ($40,600) — as firms claim it would raise far more than the 550 million pounds the Treasury estimated, the Financial Times reported.

The Treasury claims that the solution is for the banks to pay out less in bonuses, rather than to relax the tax rules, it added.

It’s an interesting report; it defines value as something other than country club memberships:

The New Economics Foundation said today that a study of the social impacts of several jobs revealed that City workers, advertising executives and tax advisers destroyed value, while hospital cleaners, childcare workers and staff in the waste-recycling industry gave much more to the country than they took out.

(snip)

The report said tax accountants were the most destructive, laying waste to £47 of value for every £1 they created. Elite City bankers (earning £1m plus bonuses) destroy £7 of value for every £1 they create and advertising executives wreck £11 of value for every £1 they are paid.

On the other hand, the report judged that waste-recycling workers generated £12 for every £1 spent on their wages. Childcare workers create between £7 and £9.50 of value for every £1 of pay and hospital cleaners create more than £10 in value for every £1 they receive in pay.

To see a description of how the “value” estimates were reached, follow the link.

Krugman:

Talk to conservatives about the financial crisis and you enter an alternative, bizarro universe in which government bureaucrats, not greedy bankers, caused the meltdown. It’s a universe in which government-sponsored lending agencies triggered the crisis, even though private lenders actually made the vast majority of subprime loans. It’s a universe in which regulators coerced bankers into making loans to unqualified borrowers, even though only one of the top 25 subprime lenders was subject to the regulations in question.

Oh, and conservatives simply ignore the catastrophe in commercial real estate: in their universe the only bad loans were those made to poor people and members of minority groups, because bad loans to developers of shopping malls and office towers don’t fit the narrative.

Speaking of catastrophes in commercial real estate, as I traversed the Jersey Turnpike this weekend, I saw the number of vacant warehouses has increased since my last trip up that way, and office buildings which had been occupied by the same folks ever since I first traveled that road [mumble] years ago are now for rent, cheap.

One sign by a warehouse park touted “1,000,000+ Square Feet Available!” Three of those is a square mile.

And I only went from Exit 7A to Exit 11.

Still under half a mil. The stimulus may be having an effect. Bloomberg:

The average number of Americans filing first-time claims for unemployment benefits over the past four weeks dropped to 473,750 last week, a one-year low, indicating companies are gaining confidence the economy will recover, figures from the Labor Department also showed today. Initial jobless claims, which are more volatile, unexpectedly rose by 17,000 to 474,000 in the week ended Dec. 5.

I heard on the radio that continuing claims dropped also, but the story left out how many of those folks had simply run out of unemployment compensation. That is a statistic that seems routinely not to make the news, and I’m too tired, after a 250 mile drive today, to go digging.

Passing the bucks:

Senate budget hawks on Wednesday unveiled a proposal that aims to get the national debt under control by forming a bipartisan commission to make tough decisions that they do not trust Congress to make on its own.

No mention is made in the story that most economists think that, right now, the national debt is not the issue; the recession is. Radio Times considered this issue last week. From the website:

All estimates point to a growing economy, but the recovery is not quite fast enough for average Americans to feel the improvement. We talk about economic policies – what’s worked and not worked and what it will take to get Americans working and spending again. Our guests are economists JAMES GALBRAITH and LARRY MISHEL.

Go to the website and search the archives for December 1, 2009, Hour One, or listen here (mp3).

Afterthought: This is the RepubliBlueDog way:

Be scared. Think small.

The whole darn system of tying health insurance to employment was absurd from the git-go; that may be why every other industrialized company does it differently.

A house built on sand and all that, dedicated to the proposition of paying insurance company execs’ country club memberships and Wall Street Banksters trading fees.

Now it is falling apart, and we can see who is more important to our elected representatives incongruously assembled: rich folks or rickety folks.

Look what happens when COBRAs are unleashed:

The government’s COBRA subsidy will expire this month for many people who lost their jobs between September 2008 and February of this year and are still out of work. The federal subsidy, adopted in March in the midst of the deep recession, paid 65 percent of the cost of monthly insurance premiums for up to nine months.

An effort has emerged in Congress to extend the aid, but deficit concerns may make that a tough sell. The end of the subsidy would be a major blow for people battling extended joblessness.

The cost of maintaining the average policy was $398 per month for a family and $144 for an individual, according to the Kaiser Family Foundation. Once the subsidy expires, that cost jumps to $1,137 per month for family coverage and $410 per month for individual coverage.

Commercial real estate–the other shoe is still dropping:

It’s just a hint of the harrowing state of affairs in commercial real estate, where vacancies are on the rise across virtually all sectors, rents and property values are dropping, building owners are low on funds, and financing options are drying up.

And bad as things are, they’re expected to get worse – the next slide in the snowballing economic crisis that began with the collapse of the housing market and continues to claim casualties.

(snip)

For instance, a property bought in 2005 for $10 million with a $7 million mortgage now might be valued at $6 million, said Steve Blank, a senior fellow in finance at the Washington-based Urban Land Institute.

Since these folks are losing their Armani shirts for whole shopping centers and office buildings, rather than for one bungalow or condo, there will be no shortage of state and local government help for them and no pundits calling them deadbeats for taking out the loans in the first place.

No, they are merely victims of the economy. It is only the poor who are responsible for their own fates.

Unemployment figures less bad this week. Bloomberg:

Recent readings on claims for jobless benefits signal firings are slowing as the economy grows. The number of Americans filing first-time claims for unemployment insurance unexpectedly declined by 5,000 to 457,000 in the week ended Nov. 28, the fewest since September 2008, figures from the Labor Department today showed.

“The labor market is turning,” said Dean Maki, chief U.S. economist at Barclays Capital Inc. in New York. “We are set to break into positive job growth over the next few months. The recovery is proceeding on schedule.”

I do find the quotation in the second paragraph to show the hubris one would expect from a Master of the Universe.

Where, praytell, is this schedule of which he speaks?

Addendum:

Bonddad.

Still under half a mil. Must have been a difficult Thanksgiving for these folks:

Initial jobless claims declined to 466,000 in the week ended Nov. 21 from 501,000 a week earlier, Labor Department figures showed today in Washington. The number of people collecting unemployment insurance dropped in the prior week, while those getting extended payments also declined.

(snip)

The report showed the four-week moving average of initial claims, a less volatile measure, dropped to 496,500 last week from 513,000 the prior week.

Continuing claims declined by 190,000 in the week ended Nov. 14 to 5.423 million.

A caller to the Diane Rehm show (about 38 mnutes in):

My question is . . . why it is that our legislators can find a way to turn over $900 billion dollars a year to our Department of Defense to discover new and better ways to destroy people, yet there is a hue and cry from many of them over spending $900 billion over a 10-year period to help the people of this country.

Read more »

Perhaps a bit of sunshine: Under half a mil for the first in a month of Sundays.

Initial claims for state unemployment benefits slid to a seasonally adjusted 466,000 in the week ended November 21, from a revised 501,000 in the prior week, the Labor Department said.

(snip)

It was the fourth consecutive week of declines in seasonally adjusted claims, and marked a steady march lower from a recent peak of 674,000 in late March. Analysts say claims must fall below 400,000 to signal payrolls growth, which would be a critical indicator of recovery from the worst recession since the 1930s.

Analysts polled by Reuters were expecting a more modest slip to 500,000 claims from the previously reported 505,000.

Aside: Reuters analysts continue their sterling record. Next time I go to the track, I won’t be asking them to help me pick the exacta.

And, as a long time SEC fan, I generally loathe everything Big Ten on principle.

Ohio’s attorney general sued Standard & Poor’s, Moody’s and Fitch Ratings on Friday, asserting that they provided misleading credit ratings that led to hundreds of millions of losses for state funds.

The persons who certified the bad paper are just as culpable as the ones who printed it.

Via Balloon Juice.

Still over half a mil:

Initial jobless claims were unchanged at 505,000 in the week ended Nov. 14, in line with the median forecast of economists surveyed by Bloomberg News, Labor Department figures showed today in Washington. The number of people collecting unemployment insurance dropped in the prior week, while those getting extended payments jumped.

The loss of 7.3 million jobs since the recession began in December 2007, the biggest drop of any postwar economic slump, makes an acceleration in firings less likely as consumers begin to spend. A rebound in hiring may take longer to develop as companies have ample room to boost hours for current employees before taking on additional staff.</blockquote>

November 19, 2009 | Posted by: Frank | Posted in: Political Economy | Bookmark this post

Thoreau at Unqualified Offerings applies Wall Street strategy to lexicography:

Perhaps I should start selling assets based on buzzword usage. I’ll go out to Riverside County (real estate there is so cheap right now! better buy it fast because it won’t stay cheap!) and open a for-profit school that doesn’t actually teach any students but generates huge volumes of paperwork full of buzzwords, sell assets based on these buzzwords, then get out of the market before the bubble bursts. And once it does, I’ll explain that your children will never learn to read if you don’t give me a trillion dollars.

Glimmers. Almost under half a mil.

From Reuters:

Initial claims for state unemployment benefits dropped last week to a seasonally adjusted 502,000, the lowest since January, from a revised 514,000 the prior week. Analysts polled by Reuters had expected initial claims to fall to 510,000 from an initially reported 512,000.

The long-term and two-week figures are also down. Statistics at the link.

Aside: The damage left behind by years of the Republican Economic Theory that the Rich Can Do No Wrong is truly staggering. As is the economy.

Marc Lamont Hill on the November 2, 2009, episode of Radio Times, Hour One:

Fox News is to news as professional wrestling is to sports.

Follow the link and search the archives for November 2 or listen here (mp3).

Before the insurance companies bleed us dry.

In a nutshell:

“My pay has been increasing at the same rate as inflation,” said Hill, who is divorced and lives in Portsmouth. “But with health care costs increasing much more, I’m falling behind. And I suppose that many others are in the same boat.”

To pay the fines. Bloomberg:

Since May 2004, Pfizer, Eli Lilly & Co., Bristol-Myers Squibb Co. and four other drug companies have paid a total of $7 billion in fines and penalties. Six of the companies admitted in court that they marketed medicines for unapproved uses.

In September 2007, New York-based Bristol-Myers paid $515 million — without admitting or denying wrongdoing — to federal and state governments in a civil lawsuit brought by the Justice Department. The six other companies pleaded guilty in criminal cases.

In January 2009, Indianapolis-based Lilly, the largest U.S. psychiatric drug maker, pleaded guilty and paid $1.42 billion in fines and penalties to settle charges that it had for at least four years illegally marketed Zyprexa, a drug approved for the treatment of schizophrenia, as a remedy for dementia in elderly patients.

In five company-sponsored clinical trials, 31 people out of 1,184 participants died after taking the drug for dementia — twice the death rate for those taking a placebo. Those findings were reported in an October 2005 article in the Journal of the American Medical Association.

Still over half a mil:

The Labor Department also reported that initial claims for state unemployment benefits dropped to 512,000 in the week ended October 31, the lowest level since early January. Markets had expected a decline to only 523,000, from the 530,000 reported in the prior week.

The story also reports that productivity is up, but that the pace probably cannot be sustained by the existing workforce, so that hiring may increase. In other news, it doesn’t look like a lot of the hiring will be for Christmas help.

More than half of U.S. retail chains posted October sales that fell short of Wall Street’s heightened expectations, raising doubts about a widespread recovery for the holiday season.

Maybe the two writers should talk to each other.