Political Economy category archive

Betting it gets revised upwards:

The number of U.S. workers filing new claims for unemployment benefits rose slightly more than expected last week, but the number of workers staying on jobless roles fell to the lowest in three months, government data showed on Thursday.

Initial claims for state unemployment insurance benefits rose 25,000 to a seasonally adjusted 584,000 in the week ended July 25, the Labor Department said, a touch above market expectations for a reading of 570,000.

However, the four-week moving average for new claims, considered to be a better gauge of underlying trends as it irons out week-to-week volatility, fell by 8,250 to 559,000. This was the lowest level since late January.

What happens when persons are not willing to pay the cost of living in a civilized society taxes.

The ingredients of the failure: too many special interests feeding off the public trough, at least in part through pushing spending proposals via the initiative process. A public willing to mandate a generous array of programmes into existence but unwilling to cough up tax revenues to fund it. A political culture that follows public opinion rather than seeking to lead. An initiative process that almost guarantees political incoherence. A tax-and-budget process that guarantees annual political stalemate. And a term-limits system, passed in the heyday of anti-government rhetoric in the 1990s, that discourages expertise and too often discourages high-calibre personnel from seeking public office.

No more la la la in LalaLand.

(Or maybe it’s “Egypts.” Noz wonders here.)

It’s a way of life. George Monbiot in the Guardian:

American conservatism could be described as a movement of denialogues, people whose ideology is based on disavowing physical realities. This applies to their views on evolution, climate change, foreign affairs and fiscal policy. The Vietnam war would have been won, were it not for the pinko chickens at home. Saddam Hussein was in league with al-Qaida. Everyone has an equal chance of becoming CEO. Universal healthcare is a communist plot. Segregation wasn’t that bad.

He goes on the discuss some of the consequences of blundering into the future with blinders on. It’s worth the five minutes it takes to read.

Bushonomics: The Hangover continues:

New claims for US unemployment benefits jumped last week, in line with market expectations, as employers cut payrolls to cope with the severe recession, government data showed Thursday.

The Labor Department said first-time claims for unemployment insurance benefits rose to a seasonally adjusted 554,000 in the week ended July 18, after a revised 524,000 in the preceding week.

Howard Jarvis finishes off California:

The agreement calls for cutting spending by $15 billion, including $6 billion from schools, $3 billion from colleges and $1.2 billion from prisons. Schools will be repaid $11 billion once the state’s economy turns around. It also raises $4 billion by in part accelerating personal and corporate income tax withholdings and increasing income tax withholding schedules by 10 percent.

It also calls for the state to divert more than $2 billion of tax receipts meant for local governments, redevelopment agencies and transportation districts. That money would be repaid with interest. Local governments could sell bonds backed by the promise of repayments. The agreement also shifts $1.5 billion between accounts to save money and moves the last payday for state workers in the current fiscal year into the next.

Running out of people to lay off (emphasis added):

In news on the closely watched jobs market, the U.S. Labor Department said initial claims for state unemployment insurance fell 47,000 to a seasonally adjusted 522,000 in the week ended July 11.

The figure was much lower than expected, but was not seen as a sign of a sudden, sharp improvement in the labor market.

Claims were “massively distorted by the shift in timing of summer shutdowns,” economists John Ryding and Conrad DeQuadros at RDQ Economics in New York said in a note to clients.

A Labor Department official said there had been far fewer seasonal layoffs than anticipated in early July in the automotive sector and elsewhere in manufacturing.

Many of the jobs typically shed for summer plant retooling were cut earlier, and in some cases permanently, as the industry slashed output in the spring to reflect extremely weak demand.

A caller to the Diane Rehm show:

Given a choice between a disinterested bureaucrat and an insurance company employee with a fiduciary interest in denying me coverage, I’ll take the bureaucrat.

Follow the link for his analysis. Here’s his conclusion:

The bottom line is there are a ton of indicators saying the worst is over. Now — this does not mean we have clear skies ahead because nothing could be farther from the truth. There are huge challenges. But, all signs are the worst is over.

Avedon at Eschaton:

. . . .when someone claims they oppose healthcare reform because it is too expensive, there really is only one sensible response: “If you are worried about costs, why don’t you support single-payer, which will save hundreds of billions of dollars?”

Imagine living in a society where reliable police and fire protection were available only to those who worked for the largest employers. In this fictional country, people with enough money might be able to buy personal protection – but perhaps not if they’d suffered a burglary five years ago, or once called 911 for a kitchen fire.

(snip)

Substitute health insurance for police and fire protection, and you have one of the best – and least-heralded – arguments for universal health care, according to a small but growing number of economists.

Read the whole thing.

Also, read this and this.

And from The Nation:

It’s time to part ways with obstructionist Republicans and pass a strong healthcare bill with a majority vote, which is possible if efforts cease to get a handful of Republicans to cross over. Redefining bipartisanship at a time when the GOP has become a male, pale and stale party committed to deficit demagoguery and fearmongering is the common sense and, I’d even argue, pragmatic course. Instead of wasting time on recalcitrant GOP holdouts, do what Drew Westen, author of the terrific book “The Political Brain,” advises to pass meaningful healthcare change: “Focus on principles, tell compelling stories, move people emotionally and send clear messages.”

“Male, pale, and stale.” I love it.

Military folks are changing their shopping habits:

Military families either went to the commissaries for the first time or shifted more of their grocery shopping to the government exchanges while “not spending as much at the Farm Fresh or not going over to Costco any more,” Maloney said.

This morning, Second Son called to make an eye doctor’s appointment. He can’t get one until late August.

Seems all the persons who have been laid off are making appointments before their health coverage runs out.

Reuters:

Fresh signs of weakness in U.S. job markets on Thursday underlined the strains faced by a recession-struck U.S. economy that contracted slightly less in the first quarter than previously thought.

The Labor Department said the number of U.S. workers filing new claims for unemployment benefits last week jumped unexpectedly by 15,000 to a higher-than-forecast, seasonally-adjusted total of 627,000.

Continued claims, which gauge how many Americans were still on jobless rolls after an initial week of claims, rose 29,000 to 6.738 million in the week ended June 13, the latest period for which the data was available.

I was in the local quicky lube this morning–I’d pushed the current oil change as far as I could–and only one of the two bays was in use until I arrived.

A fellow came in looking for a job (I guess you would call it a “lube job”). The manager took his application, but warned him that things were really bad, that he was having to cut his employees’ shifts and hours. “Just this morning,” he said, “I had to send two persons home because I didn’t need them today.”

“The industry and its backers are using fear tactics to tar a transparent and accountable health-care option as ‘government-run health care,’ ” Potter told the senators. “But what we have today is Wall Street-run health care that has proved itself an unworthy partner to doctors, hospitals,” and patients.

Brendan has more. Read this and this (warning: language).

Best done out of the light

U.S. banks are fighting the Obama administration plan to create a consumer agency for financial services as they seek to protect fees, such as credit-card penalties that have almost doubled to $19 billion in five years.

Fees imposed by banks accounted for 53 percent of industry income in 2008, up from 35 percent in 1995, according to R.K. Hammer Investment Bankers, a credit-card advisory firm. JPMorgan Chase & Co., the second-largest U.S. bank by assets, said such revenue doubled in the first quarter. A U.S. Consumer Financial Protection Agency also may add costs by expanding scrutiny.

Honestly, you can’t make this stuff up:

McDonald’s developed a complex scheme to keep country-club fees it paid for executive Tim Fenton out of the fast-food giant’s 2007 proxy statement, according to the civil complaint, filed in federal court in Illinois in late March by Lisa Bridges, who formerly worked for McDonald’s as a senior director of executive compensation.

The fees were $2,940.80. Fenton made more than $3.5 million in total compensation during 2006.

The suit, brought under the whistle-blower protection provision of the post-Enron Sarbanes-Oxley Act, claims McDonald’s discriminated against Bridges by firing her when she objected to the company’s alleged scheme.

It’s not just the pay and the bonuses. It’s the perks.

No wonder executives start to think of themselves as somehow anointed, rather than appointed.

The reality is all glitz and packaging and the old shell game:

(Elizabeth) Warren said that banking has changed over the years, from an old model that she called “simple and effective: consumers shopped around for products and terms, and lenders evaluated the creditworthiness of potential borrowers before making loans.

“Today, the business model has shifted. Giant lenders ‘compete’ for business by talking about nominal interest rates, free gifts and warm feelings, but the fine print hides the things that really rake in the cash. Today’s business model is about making money through tricks and traps,” she said.

Needless to say, the proprietors of the financial medicine shows banksters are protesting.

In labor relations, it is a truism that unions are the creation of management. Fair management does not cause unions.

In finance, regulation is the creation of the medicine show guys.

Not for dining. The Guardian of Sasha Abramsky’s book, Breadline USA:

It is Abramsky’s contention that the current sorry plight of low-income workers is a direct result of the “casino-capitalism experiment started by Ronald Reagan and ignominiously concluded under George W Bush”. And he makes a convincing argument to support his case. Whether the reader shares his view or not will largely depend on his or her own political persuasion. Liberals will cheer, and conservatives will cry foul – it must somehow be the fault of the poor. But whatever one deems to be the root cause, no one could argue that allowing the free market to do its thing for the past 30 years has had a positive effect on the lives of the working poor.

You can’t bank on them, not no more:

First National Bank of Anthony, Anthony, KS

Cooperative Bank, Wilmington, NC

Southern Community Bank, Fayetteville, GA