Skip to main content

There were two bits of bad news on the jobs front Wednesday. Seasonal hiring will only be slightly better than last year, when it was dismal. ADP's National Employment Report was even more discouraging. Instead of a gain of 20,000 private jobs in September, ADP reported a loss of 39,000. ADP does not survey government jobs, and its numbers have been significantly lower than those contained in the jobs report from the Bureau of Labor Statistics each month. Nevertheless, ADP and BLS track more or less along the same trend. Which means that the BLS report coming out Friday could be even more disappointing than it has been this past summer. Of course, there is always the possibility of a surprise.

The consensus is for a wash in the BLS report: a loss of 78,000 Census jobs and a gain of 85,000 private-sector jobs. That would be a slight improvement over the figures for August, but indicative of continued painfully slow growth in the job market 15 months after the recession has officially ended. Given that this will be the final jobs report before the November election, for which early voting has begun, the media message that emerges is not likely to be helpful to Democrats. According to ADP:

The decline in private employment in September confirms a pause in the economic recovery
already evident in other data.  A deceleration of employment occurred in all the major sectors shown in The ADP Report and for all sizes of payroll.  The September decline in employment followed seven monthly increases from February through August.  However, over those seven months, the average monthly gain in employment was 34,000.  There simply is no momentum in employment.

No momentum, indeed. In the eight months of 2010 reported so far, fewer new private-sector jobs have been created than were lost in January 2009. Hope of an acceleration keeps being transferred to next month's report. But while glimmers appear a couple of times a week - this time it was the ISM's higher-than-expected increase in the non-manufacturing index - the general tenor of opinion is that we're in for more of the same - at best, not enough job growth to keep up with the recent historical growth in the labor force of 125,000-150,000 a month. At worst, a drop into negative territory again.

Among other things, what this means is that what Andy Kroll calls the black hole of long-term unemployment has the potential to get deeper and darker in the months ahead as the so-called "99ers" lose their unemployment benefits.

At the Conference on the Future of Financial Reform in Washington, D.C., Tuesday, there was plenty of talk about where we should go next, which I'll discuss later in the week, but what caught a lot of attention were the words of Jan Hatzius, chief U.S. economist at Goldman Sachs Group Inc,, who suggested two near-term scenarios for the U.S. economy:

"Pretty bad, and very bad.” Under the “pretty bad” scenario, the economy would limp along and it would take “many years before full employment” returns. Under the “very bad” scenario, recession returns and the jobless rate would soar again, he said.

From a research note of Hatzius:

We see two main scenarios for the economy over the next 6-9 months—a fairly bad one in which the economy grows at a 1½%-2% rate through the middle of next year and the unemployment rate rises moderately to 10%, and a very bad one in which the economy returns to an outright recession. There is not much probability of a significantly better outcome.

Columnist Paul Krugman added a third option: "absolutely catastrophic."

Krugman said that “nothing very good is going to happen” in the economy in 2011, and suggested that high unemployment — which he defined as 7% or higher — could persist indefinitely unless Washington can find away around “political paralysis.”

Speaking as the (relative) optimist of the bunch, Martin Feldstein, a Harvard economics professor and a long-time adviser to Republicans, agreed that the jobless rate will remain high for a very long time, and suggested that a severe devaluation of the dollar might be the only way out of the trap.

Finding a way around the political paralysis in a year when Republicans will undoubtedly have more Representatives and Senators than they do now is a conundrum. The stimulus kept us from plunging over the cliff but didn't drag us back very far away from the edge. Tepid economic growth has not made what's going on  literally a "jobless recovery," but it's not far above that level, and the possibility of slipping into that realm remains significant.

But if direct-funding of jobs by means of a modern WPA and CCC was an impossible dream in 2009 and 2010 because "the votes weren't there," then 2011 will surely be no better with a reduced (or worse) Congressional majority. Even passing something as modest and sensible as Rep. George Miller's Local Jobs for America Act can't seem to be done. And if fixing the immediate crisis remains bogged down in unproductive palaver about deficits and tax cuts for the wealthy, what then can be expected when it comes to taking on the chronic underlying factors that have exacerbated the acute crisis?

There has been some welcome but carefully couched push-back recently against China's export-oriented currency manipulation.  But what's really needed is a complete rewriting of trade policy away from the neoliberal model.

The country also needs tough laws - with corporate incentives and disincentives - to deal with the off-shoring of jobs, laws far more effective than the modest legislation so far enacted into law or approved by the House but rejected by the Senate.

To reiterate for the zillionth time , the United States needs an industrial policy, just like every developed nation as well as China, India and Brazil operate under to strengthen their economies. An element of that industrial plan must focus on the effects of automation on the labor force.

America must stop deferring maintenance on our existing infrastructure and invest - heavily - in the new stuff. Among other things, that means spending at least as much as the $738 billion the Chinese plan to put into renewables over the next decade.  

Income taxes need to be restored to progressivity.

Policies should be developed to spur worker-owned businesses and other arrangements outside the current corporate model.

The power of corporations to keep workers from unionizing must be curtailed with the Employee Free Choice Act and other laws.

A sustainable economy, that is, an environmentally sound economy, with all which that means, should be the ultimate goal. Further delay on heading down that path will pay negative dividends in both the short and long runs.

None of these are new ideas, and none can be transformed into reality easily. Standing in the way are the oligarchs, the politicians who pal around with them and the ever-more untrustworthy megamedia, a plutocratic cabal that has more concentrated power in this second Gilded Age than the robber barons could imagine. Prying them off their perches will be no mean feat. But if we are to change our current state of affairs, it cannot be avoided.  


Originally posted to Daily Kos on Thu Oct 07, 2010 at 06:00 AM PDT.

Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags


More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

  •  But Remember To Vote Republican. (6+ / 0-)

    It's not it's their fault we're in this mess. Right?

    •  Republicans work for Plutocrats (6+ / 0-)

      They are actively working to make the rich even richer, and will ensure that the major spending areas are:

      1. Continued trillions to the mega-banksters.
      1. One trillion per year to the Military Industrial Complex.
      1. Crumbs for everyone else.
      1. Extend the retirement age, reduce health care coverage- that's a two-fer for Republicans- kill off the worker bees before they ever get any Social Security payments!

      "Drill Baby Drill": Stupid in 2008, criminally stupid now.

      by MD patriot on Thu Oct 07, 2010 at 06:10:26 AM PDT

      [ Parent ]

    •  Looking forward, not backward (4+ / 0-)

      Sure the Republicans are largely to blame, but that helps us very little. We knew that.

      From this week forward, let's demand change, shall we?

      From President Obama to the Precinct Captain, lets try what  Meteor Blades describes (direct hire massive jobs, industrial policy, automation offset, infrastructure rebuild) and let that become job number 1.

      No more hiding behind the rules/supposed lack of votes, no more of this 'we cannot afford it ' deficit voodoo doggy poodoo.

      We are the Democrat Party, are we not?

      Given current reality, our Dem leaders  have no excuse not to lead from our values, even if the outcome of the mid terms  turns out to be less than we work for.

      •  Yes lets make sure that the Democratic party can (2+ / 0-)
        Recommended by:
        divineorder, The Lone Apple

        be efficiently labeled as fiscally irresponsible.


        •  Dem economist James Galbraith (6+ / 0-)

          told the Catfood Commission:

          There Is No Economic Justification for Deficit Reduction
          by James K. Galbraith

          Statement to the Commission on Deficit Reduction
          by James K. Galbraith, Lloyd M. Bentsen, jr. Chair in Government/Business Relations, Lyndon B. Johnson School of Public Affairs, The University of Texas at Austin, and Vice President, Americans for Democratic Action, June 30, 2010

          While  he was at it, he spanked them over operating in secret and over the composition of the leadership and members.

          Love to see President replace Larry Summers, instead of a (gag)  CEO that apparently is being considered.

        •  The party that pissed away trillions on 2 wars (1+ / 0-)
          Recommended by:

          1 of which never should've been started, and the other of which was totally mismanaged, is the party of fiscal responsibility?  How about the party of tax cuts for the top 1%?

          If our foes want to debate "fiscal responsibility," let's have at it.

          Some men see things as they are and ask why. I dream of things that never were and ask why not?

          by RFK Lives on Thu Oct 07, 2010 at 07:40:13 AM PDT

          [ Parent ]

        •  I am always puzzled how that label sticks, (1+ / 0-)
          Recommended by:

          when republicans have presided over every major crash since 1920, have ballooned the budget deficit in every one of their administrations, have reduced employment and increased inflation each time they've held office since 1920, and have engineered the collapse of the middle class since 1980.

          In the past century there have been three times the federal budget went into surplus: Under Truman, Johnson and Clinton. And each time, rather than pay down the debt, a republican president (Ike, Nixon and Shrub) has chosen to blow the money in tax breaks to corporations and the wealthy.

          So, other than letting the facts get in the way of ideology, how is it the GOP is able to keep selling this "liberals are spendthrifts" meme? Maybe because we don't refute it with these factual truths?

          •  How do Repugs sell it, you ask? (1+ / 0-)
            Recommended by:

            MB answers in the story:

            None of these are new ideas, and none can be transformed into reality easily. Standing in the way are the oligarchs, the politicians who pal around with them and the ever-more untrustworthy megamedia, a plutocratic cabal that has more concentrated power in this second Gilded Age than the robber barons could imagine. Prying them off their perches will be no mean feat. But if we are to change our current state of affairs, it cannot be avoided.  

      •  Get ready for Gridlock, the economy will suffer (6+ / 0-)

        After Nov. there will be complete and total gridlock!  But this doesn't mean we stop pushing a progressive economic agenda, in fact since nothing is going to get accomplished anyway, we should push HARDER for a true progressive agenda, and let the public see how far the Republicans will go to block legislation that will produce jobs, jobs, jobs.

        The absolute worst scenario would be for the President to start compromising and accepting the Republican economic agenda, which will lead to a disaster this country can't comprehend, and then have the public blame the Democrats for it!

        •  I doubt the President will stop (0+ / 0-)

          accepting the Republican economic agenda. Wait for him to invite Angle and Miller to the WH. That is the problem he gives them stuff and takes away liberal stuff. It isn't I will give you A for B. The even split of the Senate will veer Obama more right.

          There will be gridlock, they will blame Obama. If they take back the WH in 2012 they will sit on thier asses and just blame Obama.

          I have an inch of hope left. That is it right now.

          Vote 11.2.10 the penalty for refusing to participate in politics you end up being governed by your inferiors. Plato

          by coffejoe on Thu Oct 07, 2010 at 08:04:02 AM PDT

          [ Parent ]

          •  Don't give up hope, yet (0+ / 0-)

            There are really some great Dems in the house and Senate.  My guess is 80% of them are really good people.  So there's always some hope.  We need to get out and make sure the Dems keep control of the congress, then get that 80% of the Dems to say, we tried it Obama's way and it got us nowhere, now it's time to do it our way.

            If the President picks a "moderate" CEO to replace Summers, It'll certainly put a big dent in my hope meter.

      •  They have no choice (2+ / 0-)
        Recommended by:
        Foxwizard, coffejoe

        There's no triangulation magic that will convince voters they're better off without good paying jobs.

    •  Well pointing to all the gloomy scenarios by (2+ / 0-)
      Recommended by:
      Foxwizard, The Lone Apple

      Goldman Sachs people and some nearly Professional Leftists certainly will help electing Republicans! Has it occurred to the diarist that Goldman Sachs might have their own and less than pure motifs to spread doom and gloom???

    •  We need a national industrial policy. (2+ / 0-)
      Recommended by:
      mmacdDE, The Lone Apple


      The hungry judges soon the sentence sign, And wretches hang, that jurymen may dine.

      by magnetics on Thu Oct 07, 2010 at 08:19:04 AM PDT

      [ Parent ]

  •  The sustainable economy you reference will also (5+ / 0-)

    go a long way towards ameliorating the wealth gap that you have been addressing lately.

    Let's go back to E Pluribus Unum

    by hazzcon on Thu Oct 07, 2010 at 06:03:36 AM PDT

  •  waiting for leaders with vision and will (6+ / 0-)

    thanks for another great post.

    An ambulance can only go so fast - Neil Young

    by mightymouse on Thu Oct 07, 2010 at 06:05:42 AM PDT

  •  GOP takeover of Congress... (6+ / 0-)

    menas gridlock...the GP even says so. Sounds like even more political paralysis to me. But whoever wins, Americans will get the government they deserve...why should supplying the wrong answer get rewarded?

  •  I don't care what the 'charts' say, we're not in (10+ / 0-)

    a 'recovery'.  Just because things are okie dokie for the top 1% and all is 'normal' for them does not mean that the remainder of the country is fairing as well.  Record lengths of unemployment, record numbers needing assistance (food stamps, welfare, etc) is hurting the nation as a whole.

    I've been unemployed since the beginning of the year.  I've gotten a few interviews out of the untold dozens of applications, but no offers.  I'm starting to consider other countries...... But, I really don't want to leave my family and friends, just for money.

  •  We need an industrial policy. a progressive (16+ / 0-)

    income tax, penalties for off-shoring jobs, investment in infrastructure, etc. You are absolutely right about all of this. We could not get this through the current congress because of the blue dogs. It will not happen in the next and certainly more Republican congress. We may need another depression to change some minds about economic policy. I hate to be a pessimist, but I think that we will be living in a banana republic in 10 years. The Citizens United decision made it easier for corporate interests to triumph over those of the people.

  •  I don't know that the US can take... (7+ / 0-)

    ...two more years of gridlock and survive as a nation. The closer the election gets, the higher the stakes apprear...

    "Ridicule may lawfully be employed where reason has no hope of success." -7.75/-6.05

    by QuestionAuthority on Thu Oct 07, 2010 at 06:10:59 AM PDT

    •  survival is not a question at this point... (0+ / 0-)

      though this could change in time. America survived the real tumult 1930's and 1960's, and we're nowhere close to that point - for now.

      It'll take another economic shock to drive us into that territory, which is entirely possible. Gridlock isn't much of a factor at all.

      We need to be STRONG because Obama is not.

      by papicek on Thu Oct 07, 2010 at 07:17:08 AM PDT

      [ Parent ]

      •  In point of fact, we are well on our way to (1+ / 0-)
        Recommended by:

        becoming the "sick man" nation of the 21st century, mirroring the state of the Ottoman Empire at the turn of the 20th century. It was a massively large and rich empire that found itself incapable of forming and sustaining a functioning government, and in its last 20 years was sustained only by the tacit cooperation of every other European power.

        It gave birth to the modern middle east, and we see how that turned out. Without drastic changes, expect the same thing here by mid-century with dissolution by 2100.

        •  that's not a "survival"... (0+ / 0-)

          issue, but one of geopolitics. Not an economic point, first of all, and not in any way, I say again, a survival threat. Turkey is still around these days, and so is the UK, who went into a similar period of decline in the early 20th century.

          At what cost do we feel we need to be able to project force worldwide?

          We need to be STRONG because Obama is not.

          by papicek on Thu Oct 07, 2010 at 08:33:29 AM PDT

          [ Parent ]

          •  The UK survived because their government (1+ / 0-)
            Recommended by:

            functioned and charted a way through. Turkey is not the Ottoman empire, for the Ottomans clearly did NOT survive.

            Anyone who thinks survival of nations has nothing to do with economics should look at the USSR. The Soviet Union was strong militarily, but had a calcified government and atrophying economy. It finally collapsed under its own weight. The US didn't "defeat" the Soviets; it stood by and watched while they collapsed from economic exhaustion and inept government.

            The geopolitical questions arise from the conditions, actions and inaction of the various players. IOW, the Ottomans became sick long before it became apparent geopolitically.

            I am not making an argument for projecting power; I am making an argument for there to be sane economic policy and a government capable of making decisions and acting in the best interests of the people. Our economic policy, including the Pentagon budget, is currently insane. Both tax and fiscal policies are in need of revision. Taxes need to be progressive and just; and fiscally we need to quit showering so much are defense and corporations who ship jobs out of the country, and pay attention to the needs of our citizens.

            Indeed, as the pool of long term unemployed continues to grow, and is cast as a lazy underclass, the more resentment and unrest that will breed.

            In the end, this IS about survival, the survival of not only our country, but of the ideal of democracy and freedom. All over the world, a new kind of fascism is on the march, one which seeks to restrict the freedom of individuals in service to corporate power. If we cannot get our government functioning again for the people, I do not believe it will long outlive this generation.

            •  still a long way away from this... (0+ / 0-)

              Indeed, as the pool of long term unemployed continues to grow, and is cast as a lazy underclass, the more resentment and unrest that will breed.

              and it becomes clearer to all as this goes on that it's affecting all sorts of hardworking Americans.

              As the middle class sinks into a growing poor class, it'll become much harder to classify these people as "lazy". If I had to guess, it'll be when great numbers of white people join the ranks of the poor. Horrible thing to say, but there it is, I believe it to be true, but it shouldn't be that way.

              We need to be STRONG because Obama is not.

              by papicek on Thu Oct 07, 2010 at 04:38:26 PM PDT

              [ Parent ]

              •  In case you hadn't noticed, large numbers of (1+ / 0-)
                Recommended by:

                white people are already poor; the majority of poor people are white, mostly rural.

                And I didn't posit that this would happen next week. I am suggesting merely that there are serious consequences to our political gridlock and voodoo economics, and providing a prediction for the distant future based on my experience of living through the last forty years.

                Of course, many will belittle this, in the belief that the US is so strong it can never fall apart. A study of history suggests otherwise.

                •  all I'm suggesting... (0+ / 0-)

                  is that times have already been a good deal more tumultuous than they are now. The great depression. The sixties.

                  Why is it you think that the very first bailout was passed? On its second introduction, mind you. Because the Dow Industrials fell 770-plus points in one session. Then congress acted. Then they got the message that there was something serious going on. Even the most brain-dead congressman gets it that they can't let the market go into the gutter. On either side. Republicans, because it fails their paymasters and democrats, because too many people's retirement savings, maybe their entire life savings, are tied up in retirement plans which are invested in Wall Street trading houses.

                  Is another economic shock possible? Certainly. Probable? Depending on your time frame, yes.

                  *     *     *

                  Ethnicity matters:

                  The Bureau of Labor Statistics calculates seasonally adjusted unemployment rates by race and ethnicity. We found that in June 2010, the white unemployment rate was 8.6 percent. The black unemployment rate was 15.4 percent, and the Hispanic/Latino rate was 12.4.


                  Ethnicity matters in employment, and it matters in what political themes are accepted and broadcast. When poverty is seen as a whites-as-well problem, then the country is beginning to face real danger, but not until then.

                  We need to be STRONG because Obama is not.

                  by papicek on Thu Oct 07, 2010 at 08:36:47 PM PDT

                  [ Parent ]

  •  When will we see the light (9+ / 0-)

    Much more money is needed to stimulate the economy. We need to spend 5-6 trillion dollars, not on tax cuts, but on all the things that need doing, as in education, infrastructure, energy, housing, food, health care, . . .

    Practice tolerance, kindness and charity.

    by LWelsch on Thu Oct 07, 2010 at 06:10:59 AM PDT

  •  FWIW (10+ / 0-)

    on MSNBC they were just talking about how various estimates are being made about levels of consumer spending and how they are not expected to get back to 2007 levels until 2014.  The conventional wisdom seems to be forming -- that it will be a seven year slump (2007-14.)  No information was offered about how they came to this conclusion, but it seems to me that whoever made the estimates had to have been considering unemployment estimates.

    So much for "the recession is over."  This whole crap sandwich that the establishment economists have offered about this BS recovery just seems like some kind of cruel joke.

    Disclosure: I'm working as an unpaid citizen journalist covering the Sestak campaign/ PA Sen. race for Huffington Post's "Eyes and Ears 2010" project

    by joanneleon on Thu Oct 07, 2010 at 06:12:24 AM PDT

  •  There Isn't a Way Out Because Ownership (7+ / 0-)

    benefits from taking over more than it benefits from a healthy United States and population.

    We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

    by Gooserock on Thu Oct 07, 2010 at 06:13:26 AM PDT

  •  Until we actually start discussing globalization (3+ / 0-)
    Recommended by:
    papicek, RadicalRoadRat, coffejoe

    honestly, most of these discussions are pointless.  The truth is that offshoring is killing the job market.

    Talk to anyone and they will talk about how all of the jobs are going overseas.

    Yet even on a progressive blog globalization doesn't even get mentioned when talking about jobs.  There is no mention of the House vote on the Yuan two weeks ago, where a substantial number of Republicans defected.

    It is actually pathetic.  The people are way ahead of the discussions here on this subject.

    Hell, you can argue given the Yuan vote on the House and the offshoring vote in the Senate the politicians are ahead of the blogs.

    The bitter truth of deep inequality has been disguised by an era of cheap imported goods and the anyone-can-make-it celebrity myth - Polly Toynbee

    by fladem on Thu Oct 07, 2010 at 06:14:33 AM PDT

    •  Well, the Chinese have problems of their own (2+ / 0-)
      Recommended by:
      papicek, coffejoe

      and this may help us in future.

      Jerome a Paris: Daily Kos: An optimistic diary (for once)

      So, why the optimism?

         * as noted, the consequences of the Chinese demographic transition are hard to overstate. Labor constraints are going to become a global reality once again, as no other third world country will be able to replace the Chinese on anything near the scale required. With increasing wages in China many things change: the lure of offshorisation fades, Chinese domestic demand (suppressed so far) will increase, and the Chinese themselves are going to ask for better environmental and work standards. This will translate into more demand for Western workers, and thus an end to labor cost erosion - and to living standards stagnation;

         * the resource constraint is going to become a permanent feature, forcing us (and the Chinese) to change the structure of our economies. Pain, but also a lot of economic activity, will come from our necessary adaptation to lower energy availability. A lot of work will be required on infrastructure and green technologies, both of which are (i) jobs intensive and (ii) structurally hard to offshore.  And they require investment in the real economy, which is exactly what the oligarchs have been skimming off on. And it's not like they will have a choice: you cannot cheat the laws of nature like you can cheat the "laws" of economics; and the so-far compliant/distracted/fearmongered populace will balk at doing without electricity or blaming brownouts on brown people...; it's already happening: more wind farms have been built than traditional power plants in recent years in the West, while oil and electricity consumption are dropping quite spectacularly;

         * and the good news is that we actually have the technologies available to do the transition. We know how to do building weatherisation; we know how to scale up renewable energy; we know how to do public transport and smart grids: what's been missing is the political framework to make it happen.

      He goes on to say that when situation gets bad enough, politicians will step right up and make important changes....

    •  working on that... (1+ / 0-)
      Recommended by:
      Meteor Blades

      and so are others. Income Inequality Kos does a weekly series which touches on this. If you care to contribute to a series on globalization, drop me an email. Stuart Heady and I are looking get something started.

      We need to be STRONG because Obama is not.

      by papicek on Thu Oct 07, 2010 at 07:27:50 AM PDT

      [ Parent ]

    •  Two of my key points above... (1+ / 0-)
      Recommended by:

      ...directly address offshoring, so you're mistaken to say globalization "doesn't even get mentioned." The House and Senate vote on off-shoring was specifically mentioned and linked. Industrial policy - which includes a reworking of trade policy - has been a point I've been making for more than a year.

      Don't tell me what you believe. Tell me what you do and I'll tell you what you believe.

      by Meteor Blades on Thu Oct 07, 2010 at 07:44:56 AM PDT

      [ Parent ]

  •  sobering news (4+ / 0-)

    But if you (care to) listen to the Republicans, everything is great! We don't need unemployment benefits... Right.

    Part of the issue is that in order to invest in infrastructure, we need $$$. Just rectifying the income tax issue (not renewing the Bush tax cuts for the wealthy) will not resolve this issue. We've got highways that haven't had much attention since Eisenhower's time. Here's hoping that some progress can be made. That might be difficult with a Republican House (possible scenario).

  •  Until private sector becomes solvent we're SOL. (1+ / 0-)
    Recommended by:

    One of the bad side effects of financial reform is the inability for people to leverage the way they did before the collapse. Without the access to massive leverage, prices of all assets will NEVER return to their 2006 values.This means that even if unemployment drops the private sector will still be underwater. While job growth is a great start, the salaries won't be the same as 2006 because the leverage won't be there to sustain the insane salaries that people demanded when credit flowed freely. This is a 25 year problem. Additionally, why should someone who saved and plated by the rules be punished if the Feds decide to forgive private debt? They shouldn't, and if that is the case the economy will be in the dumps for decades.

    "It's getting late early" - Yogi Berra

    by buckshot face on Thu Oct 07, 2010 at 06:21:33 AM PDT

  •  We must prepare for 2012 (1+ / 0-)
    Recommended by:

    I don't know how we're going to get the votes in the Senate, but we must punish the Republicans so severely in the 2012 elections that they won't be able to stop us from creating a new WPA, because they're hell bent on stopping anything Democrats want. It's only going to get worse come January. I don't know how we're going to do it, save for creating a massive movement in the streets.

  •  Sure, liberal ideas 'work'.. if that matters.. (2+ / 0-)
    Recommended by:
    FuddGate, divineorder

    ..but the point is, they aren't POPULAR.  It's so naive to evaluate solutions solely on the basis of whether they would fix the problem.  We don't have the votes.  We'll never have the votes.

    We do have the votes for a few of the solutions that won't make things much worse, and that's what we're going to work on.  

    We hope we'll have your support in the next election, because we really need your vote.  Not you.. you're replaceable via outsourcing.. but we do need your vote.

    If you don't give us your vote, and stay home instead?  Those other guys are worse.  Unlike our solutions, which don't solve anything, their solutions actually create more problems than we have now.

    It seems a bit depressing when you look at the big picture, doesn't it?

    So, stop doing that.

    "To pass these defendants a poisoned chalice is to put it to our own lips as well." Justice Robert Jackson, Chief Prosecutor, Nuremberg.

    by Wayward Son on Thu Oct 07, 2010 at 06:27:03 AM PDT

  •  Not gonna happen (1+ / 0-)
    Recommended by:

    Anemic job gains will not dominate for years because of the political implications.  For this to be politically sustainable, "anemic" must be no worse than the 1970s or mid-2000s.

    50 states, 210 media market, 435 Congressional Districts, 3080 counties, 192,480 precincts

    by TarheelDem on Thu Oct 07, 2010 at 06:30:23 AM PDT

  •  Runaway Trade Deficits w/ China need to be rained (3+ / 0-)
    Recommended by:
    papicek, divineorder, Hockeyray
    in for the US economy to ever rebound robustly.

    (click on the image for a higher resolution version.)

    Data from here:

    India and America share a mutually beneficial trade and economic relationship.

    by iceweasel on Thu Oct 07, 2010 at 06:34:07 AM PDT

    •  2010 Goods Trade deficits (2+ / 0-)
      Recommended by:
      papicek, squarewheel
      Latest 2010 Goods Trade deficits (the table and chart in the preceding comment are for both goods and services, through 2009; the one below is for goods trade only, as service trade numbers come out with a time lag) for January-July:

      Data: text, pdf, xls.

      India and America share a mutually beneficial trade and economic relationship.

      by iceweasel on Thu Oct 07, 2010 at 06:54:24 AM PDT

      [ Parent ]

      •  What can consumers do about that? (2+ / 0-)
        Recommended by:
        papicek, iceweasel

        Oh, I know, I know teacher, quit buying cheap shit from Walmart?! Focus spending on sustainable purchases, or don't buy, period.

        •  An Idea: 'Made in America Coalition' of (2+ / 0-)
          Recommended by:
          papicek, divineorder
          manufactures who produce things in the US (with, say, 90% or more of US content) and markets them under that label. Things may cost somewhat more, but if those that can afford to pay a bit more make it a point to buy those products even if they cost more, eventually the brand would expand.

          At the system level, if I were helping make policies, I'd work along these lines.

          The US government needs to tell China that the US economy cannot sustain runaway trade deficits with them any longer, and hence that China should work with us to bring the trade into balance. Asking China to stop its currency manipulation being only a part of that discussion. They should be told to relax or even incentivize American products in sectors where Chinese customers want to buy them. Protection of trademarks and IP is another important area. A whole bunch of things are involved, and it's high time that they're all brought to the table to hammer out a way to bring China trade into balance as soon as possible.

          Overall, a trade policy of doing as balanced trade as possible with every country (considering both goods and services trade) out there (except for the really underdeveloped and very poor countries that we want to give some initial push to, to get them going on development and eventually be able to stand on their own feet) is a sustainable policy, which, combined with the structural advantages that the US enjoys (world's best universities that attract and train top talent from everywhere, US Dollar being the global exchange currency, strength in services and financial sectors, etc), would return the US economy into health and strength, and keep it there for a long time to come.

          India and America share a mutually beneficial trade and economic relationship.

          by iceweasel on Thu Oct 07, 2010 at 07:33:19 AM PDT

          [ Parent ]

    •  'reined in,' I mean. (1+ / 0-)
      Recommended by:

      India and America share a mutually beneficial trade and economic relationship.

      by iceweasel on Thu Oct 07, 2010 at 06:59:50 AM PDT

      [ Parent ]

  •  Corp'. spending cash on stock buybacks not Jobs (3+ / 0-)
    Recommended by:
    papicek, squarewheel, divineorder

    This is just unfuckingbelievable. It's time to raise the coporate tax rate through the roof. If you are going to horde cash instead invest it in creating jobs in the economy -- we will confiscate it.

  •  Seasonal hiring around me is AWESOME! (4+ / 0-)

    Why, just last week two (TWO!) temporary Halloween costume stores opened up in my town.  Man, isn't the service economy wonderful?  We're so much better off without all those pesky factories we used to have.

    ((seething... resting... after pointless rant))

    Gentlemen, you can't fight in here! This is the War Room!

    by bigtimecynic on Thu Oct 07, 2010 at 06:38:16 AM PDT

  •  Devalue the dollar relative to what? (3+ / 0-)
    Recommended by:
    Sophie Amrain, papicek, divineorder

    Relative to the Euro? The Europeans are in the same mess we're in. The yen? Ditto.

    The renminbi? Ah, yes. But the Chinese will fight that with all the dollars at their disposal - which is many.

    Devaluation only occurs in context, and the context doesn't permit it except for vis-a-vis China, and that will be a slow process.

    In theory, there is no difference between theory and practice; but in practice, there always is a difference. - Yogi Berra

    by blue aardvark on Thu Oct 07, 2010 at 06:39:14 AM PDT

  •  "free trade" (2+ / 0-)
    Recommended by:
    papicek, coffejoe

    Sadly, there's no such thing as free trade--one country benefits, the other loses jobs.  Yesteryear, when capital flowed less easily, we could increase production where others couldn't--no longer true today.  Our labor force is no longer unique, our immigration policies denies admittance to many scientists--it's time to rethink trade from top to bottom.

    Apres Bush, le deluge.

    by melvynny on Thu Oct 07, 2010 at 06:39:47 AM PDT

    •  Not quite true; trade can be fairly free between (0+ / 0-)

      countries with similar labor costs and levels of affluence, and similar levels of government regulation to prevent companies from externalizing costs.

      It can't be free when there are huge disparities in the above.

      Non enim propter gloriam, diuicias aut honores pugnamus set propter libertatem solummodo quam Nemo bonus nisi simul cum vita amittit. -Declaration of Arbroath

      by Robobagpiper on Thu Oct 07, 2010 at 07:01:05 AM PDT

      [ Parent ]

  •  I'm looking for work and I can see the number of (6+ / 0-)

    postings dropping, again, over the last three weeks or so.  Immediately after the crash, postings dropped to literally nothing.  Gradually the numbers climbed to something.  About a year ago, there was a two or three month flurry that turned out to be just a momentary uptick.  A friend and I were talking about it and we agreed that it was employers forced to hire replacements and then shutting off the job reqs when the necessary slot were filled.  Very recently, the postings numbers have dropped, again.  

    This does not bode well.  I see people working jobs that I can tell, from their age and demeanor, the way they dress, they have taken because the office jobs they had aren't available.  Which also means, of course, that the people who would notmally fill those slots are being pushed out--to what I don't know, there isn't much to drop down into.  The overwhelming pressure is down, economically and socially.  But Americans continue to vote for people who implement policies which continue and reinforce.  Interesting.  I believe we've become a casino culture, everyone believing they're only a big strike away from the Carrington estate.  European America was founded and populated on that belief and we still believe it.  I think it's why any attempts to implement a more communal sense of services is so difficult:  our sense of individual breakout effort trumps our sense of communally guaranteed welfare.  Rather odd belief for a social species.  Terribly self limiting, really self destructive in the current circumstances.

  •  WITH an industrial policy... (0+ / 0-)
    China (and India and soon after Brazil) catch up with the United States between 2060 and 2090 and a condition of rough parity between the four world powers ensues.

    WITHOUT an industrial policy

    The BICs (sorry, Russia) overtake us between 2030-2060...and the new triumvirate of superpowers keeps on racing ahead.

    It's not that hard to brand.

  •  A quandary: What exactly does it mean to (1+ / 0-)
    Recommended by:

    "off-shore" a job, and how do you fight it?

    I don't ask that just to be difficult.

    Consider the case where a manufacturer closes a factory making shoes, and starts importing shoes from China.

    American jobs clearly are lost and Chinese jobs gained, but...

    a) Do you make it illegal to import shoes from China?
    b) Do you make it illegal to close unprofitable factories?
    c) Do you make it illegal to set up factories in other countries?

    Even if you had perfect power to do those things, they would present problems.

    It seems like the better approach is not from the "off-shoring" mentality but from an "on-shoring" mentality -- ie, how do we make American workers competitive and what industries to do we pursue where.

    That doesn't mean you can't pursue aggressive trade policy -- like getting a spine and doing something about Chinese trade and currency manipulation.  I know the Chinese all but own our economy thanks to their huge holdings of American debt, but, man!, if we're going to be sunk by the Chinese, we should at least go down swinging and standing up for our people.

    LG: You know what? You got spunk. MR: Well, Yes... LG: I hate spunk!

    by dinotrac on Thu Oct 07, 2010 at 06:47:51 AM PDT

    •  You apply a tariff that is indexed to the d (4+ / 0-)

      differences in labor and externalities cost. You can still make shoes in China to sell to the US market, but you gain no advantage in doing so because of cheap labor and weak environmental laws there.

      It's not that complicated. It's how we built this country's industrial base in the first place.

      Our workers are the most competitive and productive in the world. What they're not is cheap, semi-free, and exploitable.

      Currency manipulation is part of the problem, but one party having an industrial policy while the other does not is the bigger problem.

      Non enim propter gloriam, diuicias aut honores pugnamus set propter libertatem solummodo quam Nemo bonus nisi simul cum vita amittit. -Declaration of Arbroath

      by Robobagpiper on Thu Oct 07, 2010 at 06:59:25 AM PDT

      [ Parent ]

      •  Sounds easy, but not always so clean... (0+ / 0-)

        For example, what if a domestic exporter of complex products get some components from overseas.  American manufacturers exist, but are not competitive.

        Do you protect the American component makers or the American exporter of goods made largely, but not completely, with American labor?

        LG: You know what? You got spunk. MR: Well, Yes... LG: I hate spunk!

        by dinotrac on Thu Oct 07, 2010 at 08:42:19 AM PDT

        [ Parent ]

        •  Yes. Every time a part crosses a border, this (0+ / 0-)

          must be considered.

          In the long run, it will stimulate a domestic parts industry.

          Isn't a problem if the parts are coming from countries with similar labor markets and externalities regulations.

          Non enim propter gloriam, diuicias aut honores pugnamus set propter libertatem solummodo quam Nemo bonus nisi simul cum vita amittit. -Declaration of Arbroath

          by Robobagpiper on Thu Oct 07, 2010 at 08:49:29 AM PDT

          [ Parent ]

    •  the problem is the unequal labor/environmental (0+ / 0-)

      laws which we operate under.

      The Republican idea is to accelerate the race to the bottom.  They've partially succeeded by killing unions.  The Democrats in the form of Clinton, and now Obama, are helping them.

      They want to kill off the env laws too.

      The more reasonable approach is tariffs which at least partly compensate for the fact that China, and other countries too, are destroying the environment at a prodigious rate to bring you "cheaper" goods.

      That pollution from China is going worldwide.

      Externalities, externalities, externalities.

      Having said all that, we are losing our manufacturing base, and as MANY people have pointed out that has severe implications for our economy long term.  Really, we are already seeing the result of that.

      big badda boom : GRB 080913

      by squarewheel on Thu Oct 07, 2010 at 07:57:51 AM PDT

      [ Parent ]

  •  And whose fault is it? (1+ / 0-)
    Recommended by:
    Mistral Wind

    Republicans? No.
    Democrats? No.


    Capitalism is a spent force on the world scene. The concept of driving economic activity for profit, rather than for human needs, is now, thanks to advances in technology, absolutely guaranteed to not be able to produce enough jobs for everyone.

    I elaborate in something I wrote last year entitled Capitalism ad absurdam.

    Eli Stephens
    Left I on the News
    "Just say NO to Arizona Immigration Law SB1070"

    by elishastephens on Thu Oct 07, 2010 at 06:52:13 AM PDT

  •  The political result of this will, I imagine, be (2+ / 0-)
    Recommended by:
    papicek, divineorder

    instability. No party will have much time do enact its agenda before the bums are thrown out in favor of a different batch of bums.

    Non enim propter gloriam, diuicias aut honores pugnamus set propter libertatem solummodo quam Nemo bonus nisi simul cum vita amittit. -Declaration of Arbroath

    by Robobagpiper on Thu Oct 07, 2010 at 06:56:20 AM PDT

  •  new unemployment claims... (0+ / 0-)


    The number of first-time filers for unemployment benefits fell to 445,000 in the week ended Oct. 2, down 11,000 from the week before, the Labor Department reported Thursday.

    Companies are holding onto what employees they have in preparation for seasonal hiring. It's a buyers market for employers.

    We need to be STRONG because Obama is not.

    by papicek on Thu Oct 07, 2010 at 07:01:13 AM PDT

  •  Call the Republican Bluff (2+ / 0-)
    Recommended by:
    papicek, divineorder

    The Republican response to unemployment (and to everything else) is to reduce taxes, both personal and corporate.  The rationale is that this will spur investment in job-creating businesses.

    However, this doesn't take into account capital flight.  What's the guarantee that the investments will be in US businesses?  What stock would you rather buy now, GM or Honda?

    So call the bluff.  Democratic candidates, please challenge your opponents with something like this:

    "I'll support huge tax reductions if you support keeping the money here. I'll make it a crime  send 14 karat welfare overseas.  Will your rich supporters agree to that?"

    "If we cannot be free, let's at least be cheap."
    -Frank Zappa

  •  Devaluation (2+ / 0-)
    Recommended by:
    papicek, divineorder

    What a joke.

    It's the option these economists always fall back on, but it's a beggar thy neighbor policy. The whole world is experiencing difficulty. How can we devalue? The whole world then devalues. It's the same side of the coin as austerity.

    Plus, after saving the banks with TARP, devaluation will simply pressure the financial system even more. The banks that bought American bonds as well as the Chinese who are propping up our government finances, will look at devaluation as a form of  restructuring or default on those loans? Why? Because it is. if I owe you $100, but then through devaluation that $100 is only worth $90, then how much do you get back when I give you $100? The Chinese aren't stupid, PIMCO isn't stupid.

    This will just suppress American productivity and wages even further.

    We should NOT be looking to take MORE out of our economy by making American production more competitive on the world market. Instead, we should be investing and ramping up production in high valued products.

    The race to the bottom is ugly. Feldstein thinks of the USA as a banana republic.

    There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

    by upstate NY on Thu Oct 07, 2010 at 07:09:09 AM PDT

  •  A Modest Proposal? (0+ / 0-)

    My idea.

    Might be the only way to go.

  •  Still campaigning for the Dems..but I'm angry! (3+ / 0-)
    Recommended by:
    papicek, melpomene1, coffejoe

    Yes, I'm volunteering my tailbone off to get the Dems elected and re-elected in my Northern Illinois locale. BUT all that said, I can't reiterate enough about how angry and disappointed I am that Obama CHOSE to align himself from the very start with the sordid lot of Geithner, Summers, Emanuel, Salazar and the rest of this disgusting group of Corporatists!  If Obama had given even lip-service to the words of someone like Paul Krugman, Howard Dean or Robert Reich, then perhaps MAYBE our economy would begin by now to show an inkling of improvement.  As far as I'm concerned, Obama's cabal is not much better than their predecessors under Bush.  And I won't even begin to vent about the near two years Obama has wasted trying to play patty cake in Congress with people who never had any other intention but to see his demise.  Indeed, this has been a tragic waste of time--even if Obama (for the "time-being") is trying to placate the very Liberals and Progressives that he and his staff have continuously ridiculed and alienated since November 2008.

    To be blunt, I still don't think that Team Obama  "gets it" about the economy.

    Anyway, thank you Meteor Blades for your excellent--as always--analysis.  

  •  Voters won't give up without a fight (0+ / 0-)

    The American Dream of living a middle class lifestyle is too deeply embedded in our nation's history and culture.  Voter's know when that dream is slipping out of their reach and they remember history well enough to know the US has always overcome economic disasters. US political leaders in both parties are fools if they can't accept the fact the battle to keep the middle class won't be lost without a huge fight.

    Fearmongering, budget deficit demagoguery and global competitiveness propaganda haven't and won't convince American voters that a third world economy in the US is inevitable.  Forget it, it isn't going to happen. Divide and conquer politics sometimes succeed in promoting bigotry, racism, religious intolerance and jingoism. But when middle class jobs and wages and economic opportunity are threatened, voters are much more resistant to manipulation.

    DC Dems have to accept some hard truths. The GOP will blame them for US job losses. Neither party will be allowed to restructure the US economy in a way that shrinks the middle class and forces more people into low wage jobs and poverty.  Voters won't allow it, period.

    The sooner our Dem leaders stop listening to corporate lobbyists and think tanks and address unemployment, the better their chances are of staying in power.  There's no easy way. Protect the middle class and put people back to work or go home.

    •  professional cynic here (0+ / 0-)

      the voters have already given up.

      how is it even remotely possible that at this point in time Republicans are still getting elected in numbers sufficient to halt progress ?

      I'll tell you how, because the bottom 2 quintiles are still voting R, even as they are unemployed due to R policies.

      So they are either voting R, or not voting at all because both parties continue to screw over the people who actually work for a living.

      The real question is this: after the economy continues to be in the toilet for the next two years, or more likely, gets worse due to R policies, do you think the stupid voters will finally figure it out and

      1 get rid of the Rs
      2 get rid of the f*cking conservadems ?

      bet it won't happen.  With a 50% election participation rate, we could easily elect enough people to make a difference with an additional 5% turn-out, and yet it doesn't happen.

      big badda boom : GRB 080913

      by squarewheel on Thu Oct 07, 2010 at 08:02:33 AM PDT

      [ Parent ]

  •  Job Growth (0+ / 0-)

    Job growth will be slow for another decade- till Green jobs begin to kick as a result of the increasingly bad events of climate change begin to kick in.

  •  NPR says US wants to be like Sweden.. (1+ / 0-)

    NPR had an amazing story this AM about how Americans grossly underestimate wealth inequality in the US (good explanation of the difference between wealth and income), and how, when polled, they preferred a wealth distribution that was even more equal than they mistakenly believed it is. The closest model was the socialist Scandinavian countries, the bugaboo of Teabagger hatred.

    This is a truth that needs to be framed simply and publicized. "Teabaggers want to be serfs in Feudal Russia, sane Americans want to be free in a social democracy" (I know it's lame, please come up with something better).

    Link to summary


    •  What people want (0+ / 0-)

      is healthcare that they don't have to pay for directly, a college education, if they want one, that they don't have to pay for directly, a job that pays a decent wage, available food, energy, shelter, decent schools for their children that they don't have to pay for directly, and a sense that their neighbor isn't making a whole lot more than them.

      They just don't want to pay for anything, and you don't get those things without taxes.

      So I suggest that we do away with personal income taxes entirely. Don't have a gross wage and a net wage. Tax employers a set amount per worker, based on what how much is needed to provide services to the people. Flat rate. Then people don't think they're paying ANY taxes, even though they are. Just not directly. No tax returns to file, either.

      Then tax the employer on his profits, with strict rules as to what can be deducted from gross sales.

      The only people who would file tax returns are those who get returns from investments - and those taxes would be progressive. You can certainly make a good bit before the taxes kick in, but once they kick in they start to bite hard.

      There would be plenty of money for the govt then, people would think they were paying NO taxes, and everybody would be happy.

      Except the rich. They'd be pissed.

      But we'd basically have Sweden.  

  •  Before reading this article I coudln't quite (1+ / 0-)
    Recommended by:

    visualize how something anemic could be capable of domination ... but now I can.

  •  In other words - (0+ / 0-)

    We. Are. Fucked.

    The sad slow slide to global peonage for all has been in the works since the implementation of The New Deal.

    The betterment of society be damned! The really wealthy and powerful have theirs, they deserve it in their fevered little minds, and they need more.

    War is Peace, Freedom is Slavery, Ignorance is Power, The Senate is Functional

    by Anthony Page aka SecondComing on Thu Oct 07, 2010 at 11:02:39 AM PDT

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site