Thursday, October 31, 2013

New Normal: Lousy Labor Market (if You're a Worker)

Excerpts from What Will the "New Normal" for America Be? by Brad DeLong of the Oregon Economic Forum (October 2013). Brad DeLong is a professor of economics at U.C. Berkeley, chair of the Political Economy of Industrial Societies and a research associate of the National Bureau of Economic Research (NBER).

The dominant and most likely scenario for America's "new normal" that Brad DeLong predicts:

Report: Median Wage was $27,519 a Year

Nominally, wages were up 2% last year -- but down 2% in real dollars due to inflation.

According the Social Security Administration, based on compensation (wages, tips, and the like) that is subject to Federal income taxes (as reported by employers on Forms W-2) --- 50 percent of all wage earners in the U.S. had a net compensation less than or equal to the median wage, which is estimated to be $27,519.10 for 2012.

Budget Stalemate: No More Cuts & No New Taxes

As usual, most Democrats want to preserve the government programs of FDR's New Deal that the vast majority of Americans, who at some time, come to rely on (e.g. Social Security, Medicare, etc.); while all the Republicans are far more concerned about preserving the extremely low tax rates that a few ultra-wealthy Americans currently enjoy.

Yet the the Grand Old Party of Rich White Guys always denies being the party of the super-rich and mega-corporations, and usually has to dig really far back in history to find good examples of what the GOP has done for the poor and middle-class (like emancipating the slaves, for example).

Wednesday, October 30, 2013

What the Farm Bill (Crop Insurance & SNAP) Cost

Mother Jones reports that taxpayers are on the hook for climate-related disruption of US food production—mainly in annual outlays for crop insurance. In February 2013, the same month that the USDA released its bleak assessment on global warming, the Government Accountability Office released a statement warning about the federal government's "fiscal exposure to climate change," including the crop insurance program.

From Middle-Class to Jobless and Poor


Over the last 5 years, counting "discouraged workers" and high school grads in the US (who never entered the labor force), we now have 1 out of every 5 adults who don't have jobs (that would otherwise be included in the labor force)--- and for THOSE people who are without jobs, there is only one job opening for every 6 jobless people --- and of THOSE job openings, they might only be for a temporary and/or part-time low-paying job.

No One is Worth $1 Million a Year

In 1930, an obscure lawsuit against Bethlehem Steel unearthed a piece of corporate data that would quickly outrage Great Depression-era America. Bethlehem CEO W. R. Grace, Americans learned, had grabbed $1.6 million in personal compensation the year before. That revelation would soon help fix a variety of new regulations on America's corporate executive suites, including a mandate that required companies to annually reveal — for the first time ever — the pay of their top executives.

Over the next four decades, executive pay in America would essentially stagnate. In effect, points out historian Harwell Wells, corporations observed an unofficial $1 million limit on annual CEO compensation.

The Old Corporate Tax Debate

Since the economy collapsed in 2008 -- since the housing bubble burst and the stock market crashed -- since the mass layoffs when 8.7 million Americans lost their jobs -- 5 years later, people are finally starting to get it.

All the data is in -- it's a matter of the official record -- inequality in the US is now at a record high, higher that it's ever been in over 100 years --- and inequality in the US today is higher than anywhere else in the world.

For the past 40 years we've been working our asses off, trying to get ahead, but only falling further behind. At first, as we were spinning our wheels like hamsters in their cages, we thought we might have been imagining our slowly declining economic demise.

We used to think that, what's good for the boss (our company) just HAD to be good for us, right? WRONG! So we found ourselves working overtime whenever we could, we sent the wife to work, we took a second job, we cut expenses, and we took less vacation days. We used our credit cards and borrowed on our homes...but wages stagnated as prices continued to rise.

We learned that, it wasn't us, but a deliberate squeeze that was being put upon us by a corporate America and their political enablers --- with everything from "free trade agreements" to a skewed tax code.

But there are still those who want us to forget all these horrible statistics --- and they still relentlessly argue that the rich pay too much and need more tax breaks, even though corporations are making record profits and the executives are paying themselves record salaries --- even as the poverty rate is 15% and the un-official unemployment rate is near 23%.

Tuesday, October 29, 2013

Bill O'Reilly: "The numbers are frightening!"


Fox News continues to get their "news" from right-wing propaganda blogs. Bill O'Reilly (whose estimated net worth is $75 million) is paid about $17 million a year to tell the American people misinformation.

Media Research Center is a not-for-profit 501 (c)(3) organization that runs ads on their website and states that their "sole mission is to expose and neutralize the propaganda arm of the Left: the national news media" and is the "leader in documenting, exposing and neutralizing liberal media bias" -- as though, there was no right-wing bias. Media Research Center is the parent of CNSNews.com who states that it "endeavors to fairly present all legitimate sides of a story and debunk popular, albeit incorrect, myths about cultural and policy issues."

On October 24, 2013 the right-wing blog CNSNews.com ran a story by Terence P. Jeffrey saying:

"Americans who were recipients of means-tested government benefits in 2011 outnumbered year-round full-time workers, according to data released this month by the Census Bureau."

They go on to say that there were 108,592,000 people who were recipients of one or more means-tested government benefit programs. But they don't tell you that millions of those workers and those receiving government benefits are also ONE AND THE SAME!

According to Census data, the bulk of this number were 82.5 million who were on Medicaid and 49 million who rely on food stamps. But these numbers also include children, but CNSNews.com doesn't differentiate the children who are included in the numbers or the working-aged adults in the labor force who are also drawing these benefits. (But yet CNSNews.com says they "fairly present all legitimate sides of a story.")

A study shows that just for fast-food employees alone, 52% rely on food stamps and only 13% of those employees receive health benefits through their employers. Now add to that retailers like Walmart who also pay their employees sub-standard wages and it's no wonder so many Americans must rely on some form of government assistance just for basic necessities. Government "entitlements" (such as food stamps and Medicaid) are really wage subsidies, and cost taxpayers $7 billion a year.

Last night (on Monday, October 28, 2013) I heard Bill O'Reilly say on Fox News, "More people are collecting welfare than are actually working." Then he says, "We'll have on Karl Rove to discuss the situation...the numbers are frightening."

Bill O'Reilly in Tux

Does this multi-millionaire, who lives in a mansion on the beach of the Atlantic Ocean, really look frightened? Or is he paid $17 million a year to fear-monger, and to frighten his audience into voting against their own best interests...like lowering Bill O'Reilly's tax rates? Yes, I can understand if you were one of those numbers, it WOULD be frightening!

After the commercial break, we return to Fox News and see Karl Rove with his white board where he's saying:

"28% of Americans are dependent on government. We had a 70% increase in food stamps since 2009, half the increase was because of poverty, but the other half was because of loosening rules for eligibility."

That's because, in 2009, because of the Great Recession and the mass layoffs, Congress loosened the eligibility rules for food stamps for able-bodied adults without children to receive food stamps beyond the 3 month maximum that was previously allowed; and Congress had also extended unemployment benefits (in some states) to 99 weeks because of mass unemployment in a horrific job market (those extended benefits end at the end of the year and cuts in food stamps are already taking effect within a few days.)

50% of all other wage earners in the U.S. takes home a measly $27,000 a year or LESS. Why should Bill O'Reilly care if they all need Medicaid and food stamps, unless he felt bad for them and just wanted to contribute more. Should people like Bill O'Reilly pay less in taxes just so that these other people will eat less?

On the Fox News website, an article titled: CENSUS: Welfare Recipients Outnumber Full-Time Workers, and sub-titled: "Census Bureau: Means-Tested Gov't Benefit Recipients Outnumber Full-Time Year-Round Workers", where their article says:

"There were 108,592,000 people in the United States in the fourth quarter of 2011 who were recipients of one or more means-tested government benefit programs [and] there were 101,716,000 people who worked full-time year round in 2011."

But Fox News doesn't tell you that millions of those workers and those receiving government benefits are also ONE AND THE SAME!

Democratic Senators urged committee members to reject House Republicans' stricter eligibility standards for the Supplemental Nutrition Assistance Program in a Monday letter:

"While we support efforts to improve the integrity of the SNAP program, we encourage conferees to reject all SNAP eligibility changes designed to erect new barriers to participation, preventing millions of seniors, children and families from accessing food assistance," the senators wrote. "The eligibility changes also will mean an additional 280,000 children would lose free school meals because children in SNAP households are automatically eligible for school meals."

Regardless of what happens with the farm bill, all 47 million Americans receiving food stamps will already see their benefits shrink roughly 7 percent in November, thanks to the expiration of an increase from the 2009 stimulus bill. According to the Center on Budget and Policy Priorities, the forthcoming food stamp cut will already reduce benefits for nearly a million veterans (the ones that Fox News, Bill O'Reilly and the Republicans always professes they care so much about.)

Why doesn't Bill O'Reilly (and those right-wing hacks) report on that, or why don't they report this?

"Over half the country now thinks that it's a bad thing that the Republican Party controls the House; three quarters of Americans believe that Republican members of Congress don't deserve re-election. By a nearly four-to-one margin, Americans believe GOP lawmakers in Congress aren’t concerned with the nation’s best interests."

Yes, it's frightening when we can't all the facts from the media -- from the Left or from the Right. From the Democratic leaning Daily Kos:

"Good reporting does not mean just laying out the facts. The purpose of the press is to ensure transparent government. It is a check on government. Reporting carries responsibilities as well. Where two factions within a government are at war, it is the responsibility of journalists to be truthful but to minimize the possibility that truth will be used to do harm. Journalist must do their jobs. It is [also] time for liberals in the media to stop hyperventilating. Report truthfully but with the proper context that does not scare, but inform. Otherwise you are nothing more than Fox News Lite."

To get the truth from media, we have to rely more and more on people like Jon Stewart, Stephen Colbert and Bill Maher (but at least they're a lot more entertaining than Fox News, CNN and MSNBC). Here's Bill Maher’s New Rules Snippet On The Minimum Wage:

Bill Maher"When it comes to raising the minimum wage Conservatives always say it is a non-starter because it cuts into profits. You might think that paying people enough to live is so self-evident that even crazy people could understand it. But you would be wrong.

Michele Bachmann is not only against raising the minimum wage, she is against having one at all. She wants said “If we took away the minimum wage we could virtually wipe out unemployment because we would be able to offer jobs at whatever level.”

And naturally Ted Cruz agrees. Ted Cruz thinks it’s a good thing that when his Cuban father came to America he was paid fifty cents an hour to work as a dishwasher.

When did the American dream become this pathway to indentured servitude, this economic death spiral where workers get paid next to nothing, so they can only afford to buy next to nothing, so businesses are forced to sell cheaper and cheaper shit?

Consider the fact that most fast food workers, whose average age by the way is 29, are on some form of public assistance which is not surprising. When even working people can’t make enough to live they take money from the government.

This is the question the Right has to answer. Do you want smaller government with less handouts or do you want do you want a low minimum wage because you cannot have both. If Colonel Sanders isn’t going to pay the lady behind the counter enough to live on, then Uncle Sam has to. And I for one am getting a little tired of helping highly profitable companies pay their workers."

Also, watch Bill Maher blast McDonalds.

Monday, October 28, 2013

LA Times on Obamacare: Middle-Class is not Middle-Income


Today MSNBC aired a segment saying that according the the LA Times, because of Obamacare, middle-class Americans will see their healthcare premiums go up. The LA Times reported:

"Middle-class consumers [in California] are staring at hefty increases on their insurance bills as the overhaul remakes the healthcare market. Their rates are rising in large part to help offset the higher costs of covering sicker [and] poorer people who have been shut out of the system for years."

The LA Times cites an aerospace engineer, a real estate agent and a couple earning $80,000 a year who will see their healthcare insurance rates rise under Obamacare --- but 50% of all wage earners take home $27,000 or LESS a year --- that is a huge difference when comparing a "middle income" to a "middle-class" income.

From Marriner Eccles to Janet Yellen

Marriner Eccles was born in 1890 in Logan, Utah. He attended Brigham Young College and served as a Latter-day Saint missionary to Scotland. His grandfather had been lured to the U.S. from Paisley, Scotland in 1863 by the Mormon’s Perpetual Emigration Fund.

Whatever doubts the Eccleses may have had about the Prophet Joseph and the golden plates were beside the point, Eccles later wrote. His father had made a fortune in the lumber and sugar-refining industries, and according to custom, took two wives. As the firstborn child of the second (or cadet wife), Marriner Eccles, at 22 years old, assumed control of two-sevenths of his father’s business empire when “the richest man in Utah” had died in 1912.

Sunday, October 27, 2013

The U.S. Needs a Brand New Economy

It was government spending that unintentionally pulled us out of the Great Depression by helping us to transform our economy from a nation of farmers into a manufacturing super power as we were gearing up for World War II. But because of technology (automation and robotization) and the offshoring of jobs over the last 40 years, our economy has morphed into a low-paying domestic service industry economy. We need government spending again, not to preserve an old economy, but to focus instead on creating a brand new economy.

But by putting people to work doing what? That is the #1 economic question of the new millennium. The Second Industrial, Digital and Technological revolutions may have increased productivity, but most American workers benefited very little in the way of wages or benefits—it was mostly those at the very top of the income ladder who fared much better. Median wages and household incomes have actually declined in real dollars as the prices of goods and services have risen over the past 40 years.

40 Years of Economic Submission

"...for better, for worse, for richer, for poorer, in sickness and in health."

For the past 40 years the middle-class, working-class, low-wage earners and the poor have been subjected to the most obscene domestic abuse of all, being forced into economic submission and treated as second-class citizens in what can only be called one of the worst marriages of all time.

Our political leaders (via the top one percent) has made a vow to further enrich the wealthiest at the expense of the poorest. There persists the constant threats (by both Democrats and Republicans) to cut food stamps, Social Security and Medicaid (and all other social programs) as the rest of us struggle with stagnant or declining wages (or unemployment) while the rich get richer --- too rich, and too fast.

Saturday, October 26, 2013

Obama Adviser Hints at Entitlement Cuts

Gene Sperling, director of the White House’s National Economic Council, hinted at a budget deal that would trade near-term “investment” (the preferred euphemism for “stimulus") for long-term entitlement reform (the preferred euphemism for “cuts").

He also warned that "we’re not pushing off unbearable burdens to the next generation." (unlike the Republican's talking points, Gene Sperling didn't say "children and grandchildren."

Right now, the official Democratic position is that they’ll accept entitlement cuts only in exchange for new revenue. But that's like trading a $1 increase in taxes on billionaires for a $1 in cuts to seniors on Social Security.

Friday, October 25, 2013

5 Million Missing Americans

The media generally reports the U-3 unemployment rate, but it's the U-6 rate that is capturing a smaller and smaller share of the total number of missing workers as the weak recovery drags on. Since mid-2010, another measure called the “Alt U-6” shows much less improvement than the official U-6. In other words, much of the improvement in the official U-6 in this recovery, and essentially all of the improvement in the official U-6 so far this year, is due to people dropping out of, or not entering, the labor force because job opportunities are so weak. (estimated 5 million not counted). The official U-6 rate is 13.6% but the Alt U-6 rate is 15.2% --> Read more at the Economic Policy Institute.

Which bring us to this article by Paul Craig Roberts...

As Ye Sow, So Shall Ye Reap (Excerpts)

Washington served as cheerleader, as did most economists and libertarians, while US corporations, greedy for short-term profits and executive bonuses, offshored US industry and manufacturing, calling it free trade. The only market that America dominates is the market for financial fraud.

When industrial, manufacturing, and tradeable professional service jobs are offshored, they take US GDP and tax base with them. The foreign country gets the benefit of the relocated economic activity. Due to the revenues lost from jobs offshoring, there is a large gap between federal revenues and federal expenditures.

Policymakers, economists, and corporation executives are in denial about the adverse effects of offshoring, which they still, despite all the evidence, maintain is good for the economy. So nothing will be done about offshoring. Republicans will blame the budget deficit on welfare and entitlements, and if those are cut consumer spending will decline further, widening the budget deficit. Inflation will rise as incomes fall, and social cohesion will break down.

Now you know why Homeland Security purchased 1.6 billion rounds of ammunition, enough ammunition to fight the Iraq war for 12 years, has its own para-military force and 2,700 tanks. If you think the “terrorist threat” in America warrants a domestic armed force of this size, you are out of your mind. This force has been assembled to deal with starving and homeless people in the streets of America.

Billion-dollar Slumlords

Most rental houses in the U.S. are owned by individuals, or small, local businesses. But there's a new breed of homeowners: Wall Street-backed investment companies with billions of dollars at its disposal.

Over the past two years, Colony American and its two biggest competitors, Invitation Homes and American Homes 4 Rent, have spent more than $12 billion buying and renovating at least 75,000 homes in order to rent them out.

Invitation Homes is an arm of Blackstone, the largest private equity firm in the world. The firm booked more than $4 billion in revenue in 2012. Colony American has invested $2 billion in more than 15,000 houses.

This new incursion by hedge funds and private equity groups into the American single-family home rental market is unprecedented, and is proving disastrous for many of the tens of thousands of families who are moving into these newly converted rental homes. Read more at the Huffington Post >>>

When the going gets tough, the poor get shafted

People like President Bill Clinton and then-Speaker of the House Newt Gingrich claimed they'd be doing welfare recipients a favor in the 1990s when they reformed the welfare program to impose work requirements and make it more difficult for people to get benefits. The idea was that welfare recipients were just lazy and that their government checks were keeping them from working, making them dependent on the government.

Thursday, October 24, 2013

Why Tax on the Top 1% Should be Double


* Based on studies by Emmanuel Saez, Thomas Piketty and Stefanie Stantcheva; and excerpted from an updated version of an article originally published by VoxEU.)

In the United States, the share of total pre-tax income accruing to the top 1% has more than doubled, from less than 10% in the 1970s to over 20% today. At the same time, top income tax rates on upper income earners have declined significantly since the 1970s.

Doubling the average US individual income tax rate on the top 1% income earners from the current 22.5%-23.8% level to 45% would increase tax revenue by 2.7% of GDP per year.

Labor Market Still Sucks...So What's New?

Robert Oak at the Economic Populist reports that 20,000 of September's jobs were temporary ones and that overall job growth was barely enough to keep up with the growing population --- and that the United States is now down -1.72 million jobs from December 2007.

And Binyamin Applebaum, who likes to take pot shots at the disabled, recently reported in the New York Times that "job growth continued to keep pace with population growth in September, leaving the share of Americans with jobs stuck at 58.6 percent, basically the same low level this 'employment rate' has maintained since September 2009."

What others are saying:

Extended Benefits End as Millions left Jobless

(Las Vegas, Nevada) Despite arguments to the contrary, giving unemployed Americans extended jobless benefits of up to 99 weeks didn't prevent them from taking jobs, according a Fed report. But by the end of they year, it won't matter anyway, because extended benefits will end. So all those Fox News viewers can relax a bit, since many of those "freeloaders" will soon be out of their pockets and off the government dole.

Fry the Friendly Skies of McDonalds

Bloomberg News reported that McDonald's Corp has just purchased (for the use of its executives) a Bombardier Challenger 605, a 12-seat plane that goes for between $27 million and $35 million. (Fries and soft drink not included.)

Meanwhile, McDonald's employees have been offered a "McResources" telephone help-line that offers them helpful advice if they are having problems meeting their living expenses on their minimum-wages. The advice: Sign up for Supplemental Nutrition Assistance Program ("food stamp") benefits and Medicaid.

Taxpayers are spending an estimated $1.2 billion a year supporting McDonald's workers, according to a recent National Employment Law Project study, because McDonald's would prefer to tell its employees to get public assistance.

That figure is less than the $1.5 billion in profits that McDonald's earned in one quarter (the three months ending September 30). McDonald's CEO Donald Thompson earns $13.7 million a year (Sign this petition)

(* No, we're not subsidizing McDonald's wages with food stamps...the taxpayers are buying McDonald's their private jets!)

Full story at TruthOut...

McDonald's private jet

Now What Should the Democrats Do? (Survey)

The Progressive Democrats (as opposed to the corporate Democrats, such as the Clintons) has a two question survey that they sent out in a newsletter:

1) What do you think progressives should focus on? (Text box)

2) What is your top priority right now? (Choose One)

  • Pressuring Democrats who would cut Social Security in a budget deal.
  • Organizing in Republican districts to influence budget negotiations.
  • Recruiting and supporting progressives who can beat Tea Party Republicans in 2014.
  • Resting -- I'm worn out from the shutdown and need a week off from activism.
  • I have another priority in mind.

I chose saving Social Security as my answer for question #2 and for question #1 I left this:

Wednesday, October 23, 2013

Fox News is Still Pompously Pontificating

Dodo Bird

The Dodo bird is an extinct flightless bird. The closest living relative of the Dodo is a Pigeon. The Dodo had variously been declared a small ostrich, a rail, an albatross, or a vulture by 19th century scientists. The Dodo achieved widespread recognition from its role in the story of Alice in Wonderland, and it has since become a fixture in popular culture, often as a symbol of extinction and obsolescence.

Am I the only one, or do you also get frustrated when you have to listen to those people on Fox News (and their rabid followers) dishing out all their wise and sage advice?

"If I were them, I'd get a job...I'd get two jobs if I needed to, or even three jobs, if that's what it takes."

Evidently, those people must have just awoken in their dark, dank and dreary caves after a very long time in hibernation --- and they must all think that jobs are growing wild on the trees these days. They must have been very deeply asleep, all throughout the Great Recession, and during its long 4-year aftermath. What else could it be?

Those people on Fox News (and their rabid followers) just don't get it --- they don't seem realize that there is only one job opening for every 6 people who are out of work --- but who very much want a job.

But yet, incredibly, these moronic, simple-minded, stupid, arrogant and idiotic people just keep chanting their same old tired mantra --- like empty-headed bird brains --- as though they truly believe that what they've been endlessly dispensing is some kind of God-like wisdom to us lesser beings --- as though their infinite knowledge is so awe-inspiring, that only their wisdom alone will save the planet.

"SQUAWK!! Get a job...SQUAWK!! Get a job...Get a job...SQUAWK!!...I got bootstraps!...SQUAWK!!...Get a job..."

Zerohedge:

"In 223 years, the average real GDP growth for the USA has been 3.8%. At 1.9%, the 2000-2010 decade was the 2nd worst decade for real GDP growth in the storied history of the United States. The worst was the 1930s."

Economic Populist:

"If one takes the official broader definition of unemployment, or U-6, the ratio becomes 6 unemployed people per each job opening."

The Rich Feeds the Poor, just not Enough

$80.35 billion was spent on food stamps last year to feed 47 million people. $80.35 billion = $142.46 per person, per month for food. According to the Center for Economic and Policy Research, $80.35 billion = 2.3% of all annual federal spending.

Tuesday, October 22, 2013

More Americans Unemployed Today than in 2009

  • From December 2007 to June 2009 the Great Recession initially accounted for 8.7 million lost jobs.

  • 4 years ago the New York Times reported that 15.7 million were unemployed and that the unemployment rate was 10.2%.

  • Yesterday the Secretary of Labor just said that 7.6 million new private-sector jobs were created over the last 43 months, and that the unemployment rate dropped again to 7.2%.

  • But during that same period of time, 12 million people also graduated from high school (averaging 3 million a year).
8.7 million Lost jobs from December 2007 to June 2009 (+ jobs lost since June 2009)
+ 18.0 million High school grads (3 million a year for 6 years --- for the years '08,'09,'10,'11,'12 and 2013
= 26.7 million Total jobs needed to be where we were in December 2007
7.6 million Jobs created from June 2009 to September 2013
= 19.1 million Possibly unemployed, but the government says only 11.3 million
* *
11.3 million Currently reported unemployed
+ 6.3 million Discouraged workers that Labor Department says "persons who currently want a job"
= 17.6 million Total unemployed, but some people say 19.93 million want full-time work
Conclusion: So 4 years ago 15.7 million Americans were counted as unemployed and today over 17.6 million are out of work --- for a difference of 1.9 million more people unemployed today than there were 4 years ago, but yet, the unemployment rate went down 3 percentage points since then (because the labor participation rate is much lower?)
As an aside: The Republican Governor of Maine said that 47 percent of able-bodied Maine residents do not work. (So the State of Maine has a 47% unemployment rate.)

Senator Durbin on Fox News, Agrees to Cut Social Security

This past weekend, Senator Dick Durbin, the second most powerful Democrat in the Senate, appeared on Fox News Sunday and told host Chris Wallace that he would support cuts to Social Security and Medicare benefits as part of a grand bargain with Republicans.

Why We Need More Government, Not Less

P.J. O' Rourke said it best: "Republicans are the party that says government doesn't work, and then they get elected and prove it."

Since January 2009, we've been hearing a lot about the debt and deficits—ever since the Democrats were in control of the government; but we didn't hear much about government spending when the Republicans had gone on a spending spree under George W. Bush. Since then, the GOP has had an attention deficit disorder.

Monday, October 21, 2013

Why Beef may be Healthier than Chicken

Many people eat only chicken to avoid the health and environmental questions surrounding beef. Yet the track record of US chicken may be much worse.

Foster Farms has three California processing plants that were linked to a Salmonella outbreak that sickened hundreds of people. Federal officials believe plants in Fresno and Livingston may not have properly processed the poultry. Last reported, there were 300 people in 18 states who were affected.

Sunday, October 20, 2013

The Tea Party is a Minority of the Minority

We have two dominant political parties. Each of those parties is built upon two of the four primary waves of migration from Britain that defined America in its earliest years. Historian David Hackett Fischer, in his book Albion's Seed: Four British Folkways in America, identifies these waves as:

  • Puritans, who settled in New England;
  • Cavaliers, who settled in Virginia;
  • Quakers, who settled in the Delaware River Valley; and
  • Borderers, who settled in the "backcountry" (as Appalachia and the Highland South were termed back then.)

Saturday, October 19, 2013

What I Learned about Senator Ted Cruz

Rafael Edward Cruz, Ted's father, fled from Cuba to the US in 1957 --- a year after Senator Marco Rubio's parents had also fled Fidel Castro's revolution.

Rafael Cruz was living in Houston, Texas when he and his wife had moved to Canada in the 1960s. Ted Cruz was born in 1970 in Alberta, Canada. The family returned to Houston in 1974 when Cruz was four.

Robert Reich Proposes Thinning the Heard

Arguing against Obama's proposed means-testing for Medicare as an appeasement (aka compromise) to the GOP, Robert Reich says: "The real problem is the rising costs of healthcare, coupled with the aging of the post-war boomers. The best way to deal with the former [is] a single-payer system. The best way to deal with the aging of the American population is to allow more young immigrants into America." Some people might call this thinning the herd --- or demographic dilution (If he's going to speak like that, why not recommend Soylent Green?).

Friday, October 18, 2013

Can Senator Harry Reid be Trusted?


Senate Majority Leader Harry Reid (D-Nevada) says he has no interest in a budget deal that trades sequestration relief for entitlement cuts. Instead, the Senator told The Huffington Post that any large-scale debt-reduction deal must include increased revenue in exchange for changes to mandatory spending programs.

52% of Fast-food Employees Rely on Food Stamps


Because fast-food employers refuse to pay a living wage, the cost of basic healthcare and basic needs are transferred to taxpayers in the form of public assistance. Tell the nation's nine largest fast-food chains: Pay your workers $15 an hour so they can make ends meet and Americans can stop paying the hidden costs of poverty wages.

Here is a petition to McDonald's, Wendy's, Burger King, Taco Bell, KFC, Pizza Hut, Domino's, Subway, and Papa John's:

Jim DeMint: Frontman for the Rich?

Is Jim DeMint really a frontman for the mega-rich, those who really pull the strings of our "leaders" in government, and who really controls the policies of the United States of America?

The far-right-wing think tank Heritage Foundation was co-founded by the President of Coors beer in 1973 --- not long after the Powell Memo was released.

* The Heritage Foundation received foundation grants from the Lynde and Harry Bradley Foundation, the Scaife Foundations, the John M. Olin Foundation, Castle Rock Foundation, JM Foundation, Claude R. Lambe Charitable Foundation, the Richard and Helen DeVos Foundation and the Charles G. Koch Charitable Foundation.

The former South Carolina Senator Jim DeMint is now president of Heritage Foundation. In a recent op-ed piece at the Wall Street Journal DeMint writes why the Tea Party had shutdown the government in a failed attempt de-fund Obamacare:

"It's worth explaining why my organization, the Heritage Foundation, and other conservatives chose this moment to fight --- and why we will continue to fight. The reason is simple: to protect the American people from the harmful effects of this law."

But the real reason why DeMint and the other rebels want to get rid of Obamacare (which was the Heritage Foundation's idea in the first place), is because multi-billionaires will be taxed 3.8% on their capital gains to fund the expansion of Medicaid under the Affordable Care Act (aka Obamacare).

DeMint, via the the top one percent's foundations (and others) who support the Heritage Foundation, use and support the 501c tax-exempt Tea Party to push for an agenda representing ultra-rich people, but yet, they call themselves a grassroots organization that represents regular hard-working, honest and patriotic Americans. (The word "freedom" is a code word for the Tea Party.)

After witnessing recent events, I've come to the conclusion that Mister DeMint must now be representing the majority of American voters...

DeMint gets most of his policy information from multi-millionaire talk radio jocks like Glenn Beck and Rush Limbaugh. Then Demint orders Texas Senator Ted Cruz to do what he wants, and then Cruz tells Speaker of the Houser John Boehner what he should do, then Boehner decides what goes to the floor for a House vote (by using an unconstitutional policy called the Hastert Rule).

So basically, we have the crazies advising a fanatic, who instructs a radical, who in turn directs a corrupt politician what to illegally vote for in the best interests of Southern Dixiecrats (not the entire nation).

I was once concerned that our democracy had become a plutocracy (note all the previously listed foundation grants). But now I fear that we're living in an insane asylum, and all our government leaders have flown over the cuckoo's nest.

Take this country back...from the inbred wackos.

Thursday, October 17, 2013

GAO Report on Older Unemployed, Early Retirees & Disabled

If you were 50-something and laid off from your job during the Great Recession, you were most likely left standing without a chair after the music stopped --- and remained unemployed, even after employers eventually began rehiring again. As the New York Times recently reported, "For those over 50 and unemployed, the statistics are grim." CNN reports these older jobless Americans as "the new unemployables" --- and Fox News describes them as "hidden and hurt".

According to one Government Accountability Office (GAO) report, if you lost your job early on during the Great Recession, after a duration of time, and after using up all your available unemployment benefits (if you had qualified), you were also most likely to use all (or part) of your savings account and/or retirement plan --- and/or maybe you used these funds to augment your unemployment benefits while attempting to maintain your status quo --- all while you were vainly seeking re-employment, but only to be constantly rejected by employers.

And as you were exhausting all your economic means (maybe you sold your possessions on eBay, or at a garage sale, or at swap meet), you might have been forced to move in with a family member or friend, or you might have ended up homeless, and/or you might have even contemplated suicide*.

* Editor's Note: While although the GAO report doesn't touch on this subject, earlier this year the Centers for Disease Control and Prevention reported: "Evidence suggests that there have been substantial increases in suicide rates among middle-aged adults in the United States." As of 2010 there was a 28.4% rise in suicide rates for people aged 35 to 64 --- but the greatest increases were women aged 60–64 years (up 59.7%) and men aged 50–59 years (up 49.4%) --- Also read: Suicides Spike 30% for Baby Boomers

Or maybe you struggled through a long and protracted Social Security disability claim, and were lucky enough to finally be awarded after being on pins and needles for 1 to 3 years while awaiting your fate.

Or maybe you managed to make it to the age of 62, thereby qualifying for an early (but much reduced) Social Security retirement benefit.

Last year the Government Accountability Office released a report on unemployed older workers. The basic findings are this: Many faced long-term joblessness and reduced retirement security --- primarily because, after remaining unemployed and using up their savings and/or retirement funds to pay for basic necessities, by being between the ages of 55 and 62 years old, they were "too old to hire but too young to retire" --- and were left stuck between a rock and a hard place. What follows are a few excerpts from the 19-page GAO report with a few notations...

"Although long-term unemployment hurts job seekers of all ages, it poses particular challenges for older workers. Older workers tend to be out of work longer than younger workers, threatening their retirement savings during a period of their lives when they have may have less opportunity to rebuild them.

Even when they are able to obtain reemployment, they often do so at lower wages, making it even more difficult to replenish the lost earnings and reduced retirement savings that they suffered. For those long-term unemployed workers who cannot find work, they may leave the labor market altogether and claim Social Security retirement benefits earlier than they would have otherwise, leaving them with less retirement income each month for the rest of their lives. As such, the effects of the recent recession highlight the limitations of our current retirement security system.

While it is crucial that the nation help people of all ages return to work, long-term unemployment has particularly serious implications for older workers (age 55 and over). Job loss for older workers threatens not only their immediate financial security, but also their ability to support themselves during retirement.

Unemployment rates for workers of all ages have risen dramatically since the start of the recent recession in December 2007 --- and workers age 55 and over have faced particularly long periods of unemployment. The seasonally unadjusted unemployment rate for older workers increased from 3.1 percent in December 2007 to 7.6 percent in February 2010 --- before it decreased* to 6.0 percent in April 2012.

* Editor's Note: This 1.6% decline might also be because these older workers became classified by the Bureau of Labor Statistics as "discouraged workers", and just like unemployed workers in all age groups, after a while, they are no longer counted in any measure of in the unemployment rate.

As in prior recessions, smaller percentages of older workers (age 55 and over) became unemployed in comparison with younger workers. Some researchers attribute older workers’ lower unemployment rates to the fact that older workers tend to have longer job tenure*, and are consequently less likely to be laid off than younger workers.

* Editor's Note: Unless of course, they had less in-house seniority --- as in, the "last hired, the first fired" --- or if they are ever fired for "willful misconduct".

But generally speaking, it usually takes older job seekers longer to find new work. Since the Great Recession began in 2007, many job seekers of all ages have experienced long-term unemployment --- but individuals age 55 and over have consistently experienced longer durations of unemployment than younger workers. Moreover, the median length of unemployment has more than tripled for older workers since the recession started, increasing at a greater rate than that of younger workers.

In 2007, less than a quarter of unemployed older workers were unemployed for longer than [6 months]. By 2011, this number had increased to 55 percent. Moreover, by 2011 over one third of all unemployed older workers had been unemployed for over a year.*

* Editor's Note: As of this post, in 2013, "over one year" means "over 3 years". And if one were laid off in the Fall of 2008, this would mean "over 5 years". If someone were 55 in 2008 and still remained unemployed today, they would still be 2 years away from qualifying for an early (and much reduced) Social Security benefit.

Unemployment rates for older men were comparable to those of women in 2007, but were significantly higher for men by 2011.

Regarding education, older workers without a high school diploma were more likely to be unemployed before and after the recession than those with a high school diploma. One possible explanation of the increase in unemployment among less educated older workers is that unemployment rates in manufacturing and construction increased dramatically in the recent recession, and these industries tend to employ a higher percentage of less educated workers than do many other industries.

Further, an estimated 70 percent of reemployed displaced older workers sustained earnings losses (if they were ever to be re-employed). Displaced workers* are those who indicated that they lost a job for economic reasons --- such as plant closures or their position being eliminated --- during the previous 3 calendar years. (Displaced workers are surveyed by the Census Bureau every 2 years, with the most recent survey interviewing people who lost their jobs during the Great Recession.)

* Editor's Note: See this post about the offshoring of jobs. A study shows that almost 1/3 of all US jobs are still prone to offshoring, meaning more displace workers.

During a GAO focus group, participants said that they believed employer reluctance to hire older workers was their primary reemployment challenge, and several cited job interview experiences that convinced them that age discrimination was limiting their ability to find a new job. Moreover, many experts and other workforce professionals who were interviewed actually admitted that some employers are reluctant to hire older workers --- but because of legal prohibitions against age discrimination, employers were very unlikely to explicitly express their lack of interest in hiring "older workers".

However, one workforce professional told the GAO that local employers had asked them to screen out all applicants over the age of 40. According to experts that the GAO interviewed, a key reason employers are reluctant to hire older workers is that employers expect providing health benefits to older workers would be costly. Several surveys of employers have corroborated their concerns, and said that many older workers substantially increased insurance costs, which provided a disincentive to hire older workers.

In addition to increased health insurance costs: according to experts, workforce professionals, and GAO focus group participants, some employers may be hesitant to hire older workers because of the higher wages that many older workers earned in their previous jobs.

Also, according to the experts that the GAO interviewed, employers may also believe that an older worker who previously held a high-level position will be overqualified, and therefore, unhappy in a lower-level position. (Editor's Note: Maybe the younger boss feels threatened by an older worker's experience and skill --- and fears losing their own job.)

Some experts the GAO interviewed said that employers might hesitate to hire and retrain older workers because they assume that older workers will not want to work much longer (as in, they might soon retire), so the employer would not get a good return on any training investment.

Also: According to workforce professionals, an ongoing trend among employers is to require job seekers to submit all applications and resumes online --- and many online job applications* require applicants to disclose information that readily reveals the applicant’s age (such as the year the job seeker graduated from high school) --- and applications cannot be submitted until such fields are completed.

* Editor's Note: Some online applications also require an applicant to submit to a very lengthy 3rd party psychological exam (up to 100 questions), and from personal experience, not only do I find this more invasive than a criminal background or credit check, but I believe this is pseudo-science when screening real human beings.

Job loss can result in fewer years of work over a worker’s lifetime, which can lower the worker’s retirement income in several ways. Moreover, Social Security retirement benefits may be reduced as a result of fewer years of work because the benefits are based, in part, on a calculation of the worker’s average monthly earnings over 35 years*.

* Editor's Note: The 35 years used for the calculation are those with the worker’s highest earnings, adjusted for changes in wage levels. If a worker has less than 35 years of earnings, then zeros would be used for earnings in the missing years, and this will result in a lower calculated benefit.

Long-term unemployment can motivate older workers to file for early Social Security retirement benefits. Many unemployed older workers in the GAO focus groups said that they were planning to claim Social Security retirement benefits as soon as they were eligible --- or had already done so because they needed a source of income to help pay for living expenses.

Moreover, a 2012 study found that high unemployment increases Social Security retirement claims among men with limited education. The spike in claims for Social Security retirement benefits that occurred in 2009 after large increases in unemployment rates offers support for the study’s findings. According to estimates from the Social Security Administration's Office of the Chief Actuary, in fiscal year 2009 about 6 percent more older workers applied for Social Security retirement benefits than would have been expected in the absence of a recession. (But men with a limited education, by about a whopping 40 percent.)

Because Social Security retirement benefits claimed before full retirement age are reduced to account for the longer period of time that the benefits will be received, early claiming will cause individuals and their survivors to have lower monthly retirement benefits for the rest of their lives. (Editor's Note: And there's talk in Washington about reducing these benefits even more by using chained-CPI for calculating their cost of living adjustments.)

The recession also led to an increase in applications for disability benefits from the Social Security Disability Insurance program (SSDI). In turn, the percentage of individuals in the population age of 50 and over who have been awarded disability benefits has increased* since the recession started.

* Editor's Note: Because the GAO report is slightly dated (relying on data pre-2012), it was not mentioned that since that time, while although disability "claims" were up for a while, actual "awards" are now down. See my posts at the Economic Populist --- Report: Disability Claims and Awards Declined and The Last Word on Social Security Disability. Also see my post about the false reports of disability fraud.

Older workers who lost their jobs in the recession and had significant injuries or health problems, and were not old enough to claim Social Security retirement benefits, have a stronger incentive to apply for Social Security disability benefits [even though many would still prefer to work]. If they are awarded benefits, they will receive monthly payments and, after a 24-month waiting period, they will also be eligible for health insurance from the Medicare program. Also, receiving Social Security disability benefits gives unemployed older workers an alternative to claiming Social Security retirement benefits early.

Unemployed older workers who have a retirement account may also end up using some or all of those savings to cover living expenses while unemployed. Indeed, just over half of the older workers in the GAO's focus groups who reported having retirement savings in an IRA (or a DC plan like a 401k or union pension) also reported that they had used some or all of these savings to pay for expenses while they were unemployed. More specifically, the focus group participants described using retirement savings to cover expenses such as mortgage and car payments, medical bills, a child’s college tuition and moving to more affordable housing.

A survey of unemployed workers conducted in March 2010 also found that a high percentage of individuals 55 and over reported using savings set aside for retirement for other purposes to help make ends meet. In addition, an October 2010 survey of workers age 50 and over found that nearly a quarter reported that they had used all their savings in the previous 3 years. The GAO reports says, "These recent developments are particularly troubling considering the fact that the earlier a worker stops working and cashes out a DC retirement plan, the lower the savings will be, and the shorter the period that the savings are likely to last."

As the GAO report had also noted, depending on the level of savings, the length of time the worker spends unemployed, and the worker’s other financial resources, a worker may be at risk of using a large percentage of their DC retirement plan during unemployment. If, however, the worker is fortunate enough to find another job that includes an employer-sponsored retirement plan (or is paid enough to enable the worker to save some earnings in an IRA), the worker may be able to resume saving for retirement.

Two of the policies that experts selected* would provide work incentives, such as temporary wage or training subsidies for employers to hire long-term unemployed older workers and/or would require long-term unemployed workers to enroll in training to remain eligible for unemployment insurance benefits.

* Editor's Note: I suspect that these "experts" that the GAO alludes to are GOP politicians, who would also limit food stamps to unemployed adults without children to only 3 months.

But the GAO report concludes that "in the current context of high unemployment and slow job creation, the impact of such policies is likely to be muted by limited job openings." (Editors Note: Using the U-6 measure for unemployment, there is only one job opening for every 6 unemployed.)

The video below contains excerpts from focus groups that the GAO conducted with long-term unemployed older workers discussing the challenges they face in unemployment and how it has affected their plans for retirement. Many unemployed older workers who experience challenges regaining employment, not only face reduced retirement security, but they also struggle with depression, anxiety and discouragement --- and many have difficulty paying for critical living expenses (food, heat and and rent). They also had to deal with the realization that employers are reluctant to hire them --- "Too old to hire, too young to retire" --- and the older and longer they have been out of work, the least likely they will ever be rehired again. Many employers think of them as "tainted goods".

Excerpted Text
GAO Link

My Other Posts on Long-term Unemployed Workers

June 28, 2013 - Congressional Hearing: Long-term Unemployment for Older Workers
http://www.dailykos.com/story/2013/06/28/1219620/-Congressional-Hearing-Long-term-Unemployment-for-Older-Workers#

October 9, 2013 - The Long-Long-Term Unemployed (A Year or Longer)
http://bud-meyers.blogspot.com/2013/10/the-long-long-term-unemployed-year-or.html

September 28, 2013 - Older and Unemployed? You are SOL
http://bud-meyers.blogspot.com/2013/09/older-and-unemployed-you-are-sol.html

August 26, 2013 - Long-Term Unemployed Baby Boomers in 2013
http://www.economicpopulist.org/content/long-term-unemployed-baby-boomers-2013-5345

July 7, 2013 - Count the long-term unemployed 99ers in 2013
http://bud-meyers.blogspot.com/2013/07/count-long-term-unemployed-99ers-in-2013.html

June 25, 2013 - Long-term Unemployment: Hysteresis, Older Workers & Disability
http://www.dailykos.com/story/2013/06/25/1218826/-Long-term-Unemployment-Hysteresis-Older-Workers-Disability

Wednesday, October 16, 2013

McDonalds Worker Arrested for Speaking to CEO

Jeff Stratton couldn’t stop grinning last December when he became the top exec for the U.S. side of the McDonald’s fast food empire. But Stratton wasn’t smiling recently, not when McDonald’s worker Nancy Salgado stood up from a hotel ballroom audience during one of his talks to protest Mickey D’s notorious poverty wages.

Dozens of McDonald's workers, supported by fellow members of the Workers Organizing Committee of Chicago, convened at the Union League Club to speak out against McDonald's and their claims of providing "competitive wages and opportunities for career advancement".

McDonald's President Jeff Stratton was giving a keynote talk ("Fries with That?") for the First Friday Club of Chicago. As Mr. Stratton was beginning his talk, Nancy Salgado, a single mother of two young children and a McDonald's employee of ten years, stood up to confront the big bad CEO:

Nancy Salgado begins with, "I'm a Catholic woman and a single mother of two. It's really hard for me to feed my two kids and struggle day to day. Do you really think it's fair that I have to go through this? Do you think it's fair that I am making $8.25 while I've worked for McDonald's for 10 years?

McDonald's President Jeff Stratton had remained mostly silent but then replied, "I've been there for 40 years."

Nancy Salgado finishes with, "The thing is, I need a raise, but you're not helping your employees. How is this possible? You're out here, putting your face out here, and saying "I did this", but you haven't done anything because we're still living on poverty wages. And you know what? It's not fair."

Taxpayers are shelling out $1.2 billion a year to help pay workers at McDonald's, according to a study from the National Employment Law Project published yesterday. The organization used estimated figures from a study by University of California-Berkeley and University of Illinois at Urbana-Champaign on how many fast food workers rely on public assistance programs like food stamps and Medicaid for its analysis. Overall, NELP found that low wages at the top 10 largest fast food chains cost taxpayers about $3.8 billion per year.

Soon after Nancy Salgado had spoke, security staff had her and six others arrested. They were all charged with criminal trespass and are faced with a November 1 court date. (They said that, if they had the chance, they would do it again.)

The video of the encounter (below) hopes to bolster the ongoing nationwide campaign for a $15 fast food minimum wage.


Older Workers & Retirees Blamed for Slow Recovery?


New York Times: Sorry, Kids. We Ate It All by THOMAS L. FRIEDMAN (former chief economic correspondent for the New York Times)

"Druckenmiller urges young people to design their own solutions, but, when asked, he recommends: raising taxes on capital gains, dividends and carried interest — now hugely weighted to the wealthy and elderly — to make them equal to earned income taxes..."

Ok, so far, so good, but he failed to mention that capital gains are also exempt from Social Security taxes, nor does he say anything at all about the cap on Social Security taxes on regular wages. But what did he mean by "the elderly"? People like Warren Buffett? THEN HE GOES ON TO SAY...

"...making all consumers more price sensitive when obtaining health care; means-testing Social Security and Medicare so they go to those most in need; phasing in higher age qualifications for entitlements and cutting corporate taxes to zero, so the people who actually create jobs will have more resources to do so."

Is he suggesting that older workers, especially those earning hourly wages in labor intensive jobs, should be forced to work until they're 70 years old? As it is, most unemployed people over 50 can't find a job now. (See the links below).

And I won't even bother arguing his ridiculous notion of ZERO % for corporate taxes. The "effective" corporate tax rate, especially as far as a percentage of GDP, has been dropping like a rock since we first put a man on the moon. And the myth about "job creators" has been thoroughly debunked many times over these past several years.

New York Times: Aging, Taxes and the State of the Labor Market By CASEY B. MULLIGAN (an economics professor at the University of Chicago)

"Economists disagree about many things, but they seem to agree with the basic idea that the lack of recovery is partly attributable to population aging..."

This may be true to a certain degree, as older people are working longer to recover their losses from the recession, thereby, not making room for more new entrants into the labor market. BUT THEN HE GOES ON TO SAY...

"Aging is not the only change affecting labor supply. Marginal tax rates have increased five percentage points since 2007 and will increase another five percentage points over the next 15 months, a trend attributed especially to expansions in health and other safety net programs. By 2015, a typical worker will keep only half of the value created by employment, compared with 60 percent kept before the recession."

Can somebody please check these numbers please? What does he mean "a typical worker will keep only half of the value created by employment"? That 50% of someone's paycheck goes to taxes? And yes, the tax on capital gains --- which should be taxed as regular wages --- went up from a measly 15% to 23.8% to include a 3.8% surtax for the expansion of Medicaid in Obamacare. And the temporary payroll tax cuts for FICA taxes on working Americans (who earn regular wages) weren't extended again. But then again, nothing was ever mentioned about eliminating the cap for Social Security taxes...for which capital gains are completely exempt!

  • Read "Taxes: How Congress Lets the Rich Pay Less" -- Congress benefits from the lower capital gains tax rate, because half are millionaires and most own stock. And Congress also benefits from the cap on Social Security taxes (taxed up to $113,700 of their $174,000 congressional salary). So why would they want a more fair and progressive tax code? Self-interest.

New York Times: After the Jobs Disappear by JULIET B. SCHOR (a professor of sociology at Boston College) --- Take a horrific peek at the dismal future awaiting those who expect to earn a livelihood in the near future. This is what's forecast in this New York Times. It reminded me of a time in earlier human existence where hunter-gatherers traded and bartered goods and services with their counter-parts, such as nomadic herders.

Job Market Might Improve, According to Fed


Basically, from what I can gather, according to the Fed (and based on a 6-month moving average), the job market should be modestly improving going forward --- but not so much for those who are older and/or long-term unemployed, but for those first entering the job market, or for those who were unemployed for only a short period. Maybe you can glean some better news than I did in their report. I quoted a few phrases below:

  • "The Great Recession took an enormous toll on the labor market, which has been reflected in the deterioration of many labor market indicators. The pace of labor market improvement has been modest since the end of the recession, and many indicators have not yet returned to their pre-recession levels. Still, the improvements are visible in a broad set of [six] indicators." (Chart below)
  • "This [report] includes information on employment, unemployment, the rate at which people quit existing jobs, the number of people who get hired, employers’ perceptions of the ease of filling their job vacancies, and workers’ sentiment about the state of the overall labor market."
  • "The strength of [economic] recoveries is based on the rate at which people find jobs, which can remain low for some time after layoffs have subsided."
  • "Recent declines in the unemployment rate have coincided with declines in labor force participation."
  • "Labor market recoveries tend to begin with the hiring of workers who are eligible for unemployment insurance and who tend to have longer previous work histories."

The Fed reports an improving job market

Getting the Fed to Explain Itself Better by Jared Bernstein

"People, especially market participants, have come to believe that markets are the Fed’s primary target, if not its sole one, when in fact, it’s the real economy — jobs, inflation, unemployment — that is the ultimate target. Financial markets are by no mean incidental, but especially in downturns, those markets are intermediaries through which Fed actions are intended to help average, working families. The tail does not wag the dog."

Brookings: Okun's Law says we're growing well below our economic potential by George L. Perry:

"The 4.6 percent unemployment rate in the two years preceding the Great Recession are a reasonable estimate of full employment. Unemployment in the second quarter of this year was 3 points higher than that, so the output gap was about 6 percent of GDP, or roughly $800 billion. This measure of today's output gap is quite consistent with estimates of today's employment shortfall that my colleague Gary Burtless recently made using a different methodology. He estimated that employment today is about 5 percent, or 7.4 million jobs, below what it would be at full employment."

Excerpted and edited from a recent post by Paul Krugman (no quotes):

Macroeconomic Advisers has a new report showing that since the GOP takeover of the House, the combined effects of uncertainty in the bond market and cuts in discretionary spending have subtracted 1% from the GDP's annualized rate of growth --- meaning almost 3% of actual GDP --- with losses around $700 billion of wasted economic potential. And the report also estimates that the current unemployment rate is 1.4 points higher than it would have been without those Tea Party/Republican policies (We’d have a U-3 unemployment rate below 6% if not for these wackos).

A side note on those wackos: A little-known far-right movement called Christian Reconstructionism can claim partial responsibility for the government shutdown. Their goal: to eradicate the U.S. government so that a theocratic Christian nation emerges to enforce biblical laws. The key leader of this movement is Gary North from Tyler, Texas. He's a long-time associate of Ron Paul, intellectual godfather of the Tea Party movement.--- Quote of the Day from America the Half Beautiful: "The Mad Hater's Tea Party throws everything overboard, not just the tea. The captain, the crew, the ships dog...pirates could hardly do worse."

Also read Paul Krugman's explanation about The Paradox of Thrift (with quotes):

"For those who don’t know or don’t get the paradox of thrift, it’s actually very simple: if people (or the government) cut their spending, and the Fed can’t offset this move by cutting interest rates, the economy will contract — and the economy’s contraction will reduce the incentive to invest, so that investment actually falls. I know that many economists just refuse to accept this proposition, which seems absurd to them. But what, exactly, is their alternative? If you believe that a cut in spending under current conditions — it doesn’t matter whether it’s public or private spending — leads to more rather than less investment, what is the mechanism? How does my spending cut give businesses a reason to spend more rather than less (other than via the confidence fairy)? Remember, interest rates can’t fall — the zero lower bound isn’t a theory, it’s a fact, and it’s a fact that we’ve been facing for five years now."

My posts on older and long-term unemployed workers:

* If you're not older and long-term unemployed --- enjoy the moment --- because tomorrow you might end up being older and long-term unemployed. A study shows that 1/3 of all US jobs are still prone to offshoring. Will you dodge the bullet? Will you have a chair when the music stops?

US Judge Allows Big Oil to Corrupt Foreign Leaders


In July 2010, the U.S. Congress passed Section 1504 of the Dodd-Frank Act, a measure requiring companies registered with the Securities and Exchange Commission (SEC) to publicly report how much they pay governments for access to oil, gas and minerals.

Revenue Watch and a wide range of development, anti-corruption and anti-poverty organizations worked hard to support the passage of this landmark requirement. It is a powerful tool that allows investors to properly assess risk and citizens to see the value placed on their natural resources.

But U.S. District Judge John D. Bates vacated a Securities and Exchange Commission rule requiring energy and mining companies to disclose payments to governments, a major setback for anti-corruption advocates and a victory for the oil industry.

Section 1504, also known as the Cardin-Lugar provision in the 2010 Dodd-Frank Act, attempted to address the so-called “resource curse,” by which valuable resources such as oil and gas reserves “can be a bane, not a blessing, for poor countries, leading to corruption, wasteful spending, military adventurism, and instability,” as then-Sen. Richard Lugar (R-Ind.) put it at the time. (We can always count on the GOP to dismantle anything that's good for humanity.)

The House passed a bill, H.R. 1613, with a provision weakening disclosure requirements under Section 1504 of Dodd-Frank. But for the oil industry to say that this is a huge victory is an understatement.

Judge Bates remanded it to it to the SEC to be redrafted, calling the agency’s interpretation of two key provisions “arbitrary and capricious.” The SEC issued its final rule last August after a lengthy consultation process marked by delays.

Building on the reporting standard established by the U.S. law, several countries have declared interest in establishing similar requirements, including the United Kingdom, Norway and South Korea. In October 2011, the European Commission adopted legislative proposals that build on the U.S. precedent by requiring publicly traded and private EU companies to disclose payments to governments made in exchange for oil, gas, mineral and forest resources. In the U.S., the SEC released final regulations implementing Section 1504's requirements on August 22, 2012.

Many poor countries like Equatorial Guinea is brimming with oil, but very little of the money from that oil is being spent on schools or hospitals or new jobs. It's being spent instead on mansions and luxury cars and private jets by their government officials.

Right now, Big Oil is trying to stop the rule by the Securities and Exchange Commission that would require oil and gas companies to publish what they pay to governments like Equatorial Guinea. But if Big Oil wins, that means billions of dollars will likely keep lining the pockets of their country's (and others) corrupt rulers.

Demand to know (Online petition) what oil companies are paying and where that money is going. Oil-rich countries shouldn't be home to some of the poorest in the world. Instead, it should be a model for how oil revenues eradicate poverty and lessen social inequality.

That's the VERY LEAST the oil companies should do, especially if they are allowed to continue extracting America's natural resources from federal lands and then exporting them other countries to enrich a few corporate executives.

Tuesday, October 15, 2013

American Workers becoming Hunter-Gatherers

Take a horrific peek at the dismal future awaiting those who expect to earn a livelihood in the near future. This is what's forecast in this New York Times article titled "After the Jobs Disappear". It reminded me of a time in earlier human existence where hunter-gatherers traded and bartered goods and services with their counter-parts, such as nomadic herders.

This shift from employment to livelihood, while far from prevalent, has become a necessity for many in the wake of the 2008 global financial collapse, which led to the loss of more than 8 million jobs in the United States. At the time, I and other observers predicted that these jobs — a victim of labor-saving technical change, globalization and financialization — were unlikely to return. Five years later, the employment-to-population ratio in the United States, 58.6 percent, is at its lowest since 1983. As jobs disappear, people have begun to carve out new ways to gain access to income, goods and services.

In the sharing economy, people are returning, in a sense, to modes of independent production and self-provisioning that preceded (and persevered through) the industrial revolution...Like most economic innovations, these trends promise their share of pain. [Web] sites where people bid to perform tasks have the potential to create a race to the bottom, particularly in times like now, when the supply of labor in wealthy countries is abundant, and the demand is limited.

These trends won’t solve the most urgent economic afflictions facing the West — a shortage of jobs, soaring inequality and a fraying of the welfare state — but they represent one significant response to it...They can participate in urban food growing, an increasingly popular phenomenon...So while they are no panacea, the emergent trends of community fabrication, self-provisioning and the sharing economy collectively suggest a future for work in wealthy countries that involves more making, sharing and self-organizing.

Now keep in mind: Globally, those sitting on over $1 million in personal net worth make up just 0.7 percent of the world’s adult population, but they hold 41 percent of the world’s wealth. This striking info-graphic from Bloomberg neatly depicts how rising income inequality tends to slow upward social mobility. Meanwhile, read why a vineyard in Italy is now a "must-have" for the super-rich.

But last week Supreme Court Justice Antonin Scalia was opining about how unjust our society would be if people of means could stuff no more than a mere $3.5 million into the pockets of their favorite political candidates. Said Scalia: "I don’t think $3.5 million is a heck of a lot of money."

Maybe it's true, and it's only a matter of time before the starving peons begin storming the ramparts.

New NBC News/Esquire Poll Shows Americans More "Center"


Note to Fox News --- A new NBC News/Esquire poll (conducted nationwide with 2,410 registered voters) shows that a majority of Americans are now in the political center. NBC News political director Chuck Todd discussed the findings with Matt Lauer.

  • (90 percent) still believes in the death penalty.
  • (84 percent) think their lives are either stuck in place or getting worse.
  • (81 percent) shouldn't spend money on foreign aid when we need to build up our own country.
  • (81 percent) supports offshore drilling.
  • (70 percent) realize that the rich keep getting richer at the expense of everyone else.
  • (70 percent) fear another 9/11 or Boston-style bombing is likely.
  • (67 percent) supports a federal minimum wage hike to no less than $10 per hour.
  • (66 percent) still thinks that America is still the greatest country in the world.
  • (64 percent) support gay marriage.
  • (63 percent) support the right to an abortion for any reason within the first trimester.
  • (63 percent) believe respect for minority rights has gone overboard.*
  • (62 percent) believe their children’s lives will be more difficult than their own.
  • (62 percent) supports paid sick leave and 70 percent supports paid maternity leave.
  • (57 percent) thinks we should subsidized childcare to help women return to work.
  • (57 percent) supports the end of affirmative action in hiring and education.
  • (54 percent) calls America a model that other countries should emulate.
  • (52 percent) wants legalized marijuana.
  • (50 percent) says the economy is bad while 41 percent thinks it will likely to stay that way a while.
  • (49 percent) believe that the political system is broken.
  • (25 percent) support a path to citizenship for those who came here illegally.

* The poll consisted of mostly white participants (78 percent) as is most of the American voting public (72 percent)

** Republicans (25 percent), Democrats (36 percent), Independents (36 percent).

*** Self-described as liberals (20 percent), conservatives (25 percent), moderates (55 percent) and Tea Party (15 percent),

Notable Economist Blasts Media Bias

Economists of all political and ideological persuasions have fiercely been debating their macroeconomic theories in their blogs for years --- and sometimes call each other out by name (Paul Krugman, Robert Reich, Brad DeLong, etc.) You can sometimes follow their discussions at websites such as the Economist's Views.

Usually in those debates (that can range from intellectual bantering to serious criticism) their arguments can be too "wonkish" for average readers to fully understand; nevertheless, they can sometimes make for some interesting reading.

But recently something really stood out...when one renown economist bashed the mainstream media for falsely reporting the facts and misleading the American public --- and calling out the major media for not correcting the Republican's lies.

Yesterday, in an op-ed piece for the Guardian, Dean Baker (co-founder of the Center for Economic and Policy Research) blasted the media for misreporting the facts on deficits and government spending --- as though the mainstream media were attempting to appear to be neutral, unbiased and nonpartisan in their reporting. But just by not reporting the plain facts, the media has been giving the Republicans a pass on their blatant lies.

Dean Baker: "Polls show that [Americans] overwhelmingly oppose [the Republicans] tactic of shutting down the government and risking default over Obamacare. As a result, the Republicans are now claiming that the dispute is actually over spending. Given the national media's concept of impartiality, they now feel an obligation to accept that the Republicans' claim that this is a dispute over spending levels.

But that is only the beginning of the reason that people should detest budget reporters. The more important reason is that they have spread incredible nonsense about the deficit and spending problems facing the country, causing most of the public to be completely confused on these issues. If budget reporters were held to the same standards as school teachers, with the expectation that they would be able to convey information, they would all be fired in a minute.

Contrary to the widely repeated stories of out-of-control deficits and spending, deficits have plunged in the last four years falling from 10.1% of GDP in 2009 to just 4% of GDP in 2013. The Congressional Budget Office projects the deficit to be just 3.4% of GDP in 2014. The latest projections show the debt-to-GDP ratio falling for the rest of the decade.

In other words, the story of out-of-control debts and deficits is just plain wrong. Less polite people would call it a lie, but it stands at the center of the public debate because the media consider it rude to point out a truth that would embarrass so many important politicians.

There is no explanation except the bias of the media. Obviously they identify much more with rich doctors and the people who profit from the bloated prices charged in the United States by drug companies and medical equipment providers than with the seniors who are dependent on Social Security and Medicare."

Over the years we have learned that one could expect Fox News to be very biased, as their reputation for misreporting the facts to favor the GOP and Tea Party has been well documented:

Since 1985 the Center for Media and Public Affairs (CMPA) has been a nonpartisan research and educational organization which conducts scientific studies of news and entertainment media. Last May in a press release they reported on a new study at George Mason University. "The study finds that PolitiFact has rated Republican claims as false three times as often as Democratic claims during President Obama's second term. Republicans continue to get worse marks in recent weeks, despite controversies over Obama administration statements on Benghazi, the IRS and the AP."

Two years ago it was similarly reported: "A Smart Politics analysis of more than 500 PolitiFact stories over the last year finds that statements made by Republican politicians have been rated as false at more than three times the rate of those made by their Democratic counterparts." According to the study, 32 percent of GOP claims were rated as "false" or "pants on fire" by PolitiFact, compared with 11 percent of claims by Democrats.

Earlier this year The Atlantic posted an article titled Why Fact Checkers find more GOP Lies: "This month, 60 percent of Republican claims have been rated as lies, while 29 percent of Democratic claims have been." (More on this here and here and here)

Over two years ago the left-leaning Media Matters had reported that a Fox News insider claimed in an interview: "Its [Fox News] MO to undermine the administration and to undermine Democrats. They're a propaganda outfit, but they call themselves news."

And just recently Fox News was AGAIN spreading misinformation about the Social Security disability program. Fox News also spins their ratings the same way they spin their news. While Fox News likes to brag that they are the #1 watched "cable TV news show" (which they are), but what they don't tell you is, when compared to "all TV news shows" (CNN, MSNBC, NBC, CBS, ABC, PBS, etc.), collectively speaking, most people get their news from other news sources --- meaning, OTHER than Fox News --- who has about a 34% market share of all TV news sources. Which, coincidentally, is about the same number of people who identify themselves as Republicans (33%) according to a 2012 (right-leaning) Gallop poll. According to another more recent poll (an NBC News/Esquire poll) that number is much lower now at 25%, while most Americans are now in the political "center". Also read:

Meanwhile, on the other side of the media spectrum, most people also realize that MSNBC (as a counter-balance to Fox News) has been too cozy with the Obama administration and the corporate Democrats. No one will forget Chris Matthews when he said, "I felt this thrill going up my leg when Obama spoke." And everyone knows that Ed Schultz also praises Obama too much; but yet, Ed can criticize the President too (such as Obama signing on to the TPP trade agreement).

Also, not long ago, after the White House correspondent Chuck Todd was on MSNBC's Morning Joe, he was blasted for not correcting GOP lies about Obamacare. (Here's a petition against Chuck Todd. Also, see this post: MSNBC Lies Like a Fox News Rug)

Every year at the White House Correspondents Dinner members of Congress, fashion models, musicians and Hollywood celebrities gather with the mainstream media pundits to party like it's 1999 --- and this might have something to do with the problem of media bias. The "mainstream" journalists have become too chummy with those that they're supposed to be watching, and who now fears correcting or criticizing the politicians who lie. But if one party or another is to be blamed for something, it's supposed to be the media's job to tell us --- not to take sides or trying to remain neutral to avoid the appearance of taking sides. Instead, they should just be reporting the facts. If the Democrats lie, let us know. If the GOP lies, let us know. A "lie" is "news" and should be "reported" by the "mainstream" media.

This was recently posted by Paul Krugman. He doesn't call out the mainstream media for misreporting facts, but he does get his point across in a very amusing and truthful way:

"So you have this neighbor who has been making your life hell. First he tied you up with a spurious lawsuit; you’re both suffering from huge legal bills. Then he threatened bodily harm to your family. Now, however, he says he’s willing to compromise: He’ll call off the lawsuit, which is to his advantage as well as yours. But in return you must give him your car. Oh, and he’ll stop threatening your family — but only for a week, after which the threats will resume. Not much of an offer, is it? But here’s the kicker: Your neighbor’s relatives, who have been egging him on, are furious that he didn’t also demand that you kill your dog. And now you understand the current state of budget negotiations."

And as far as the government shutdown: There was no way in hell John Boehner and Eric Cantor were ever going to allow a clean continuing resolution (CR) to reach the House floor the night before the government shutdown. They knew that there were plenty of Republicans who would vote for a clean CR and that it would pass. So they (Boehner and Cantor) used an unprecedented parliamentary procedure to block any chance that the clean CR sent to them by the Senate would every reach the House floor for a full vote --- and they did so by changing standing House rules.

Why didn't Fox News or MSNBC or CNN report this? This makes the GOP 100% to blame for the shutdown, but the media thinks they have to play nice with lying politicians, rather than just report the facts and let those who deserve the blame, receive the blame.

Another thing that really ranks many of us is when the media keeps parroting the GOP's argument for "entitlement reforms", which the mainstream media (do you hear us CNN?) knows very well that the GOP's meaning of "reform" really means "cuts" to Social Security and Medicare, and not some kind of imaginary "fix" to these programs that the vast majority of Americans will eventually come to rely on when they get older. So why doesn't the media just come right out and say this, instead of always sugar-coating the GOP's position, rather than questioning the Republican's usual talking points?

Here is EXACTLY what the media pundits at Fox News, MSNBC, CNN, ABC, CBS, NBC, NPR, PBS, The Daily Show and The Colbert Report should all say to a GOP politician being interviewed whenever they claim we need entitlement reform:

"We have been hearing for many years from the Republicans that we need entitlement reform. Tell us just exactly what it is you mean by entitlement reform, because, you must have a very detailed plan by now --- as the Republicans have been saying this for a very long time. Please, give us some precise details, and not the usual talking points or generalities. Please tell us what YOU would do, and exactly what legislation you've put forward on this specific issue. We already have one proposal by Senator Harkin called The Strengthening Social Security Act of 2013. What is the name of the Republican's bill for reforming Social Security? Oh, and while you're at it...what is the name of the GOP's healthcare bill that would 'fix and replace' Obamacare? I'm sure that the American people would like to know that as well."

ALSO READ: