Yesterday's Clusterstock's "Chart of the Day" immediately struck me as highly misleading, with the implication of a strong economic recovery completely contrary to everything else you've heard. This came in even as I was writing my diary "Austerity narratives from real economists debunked ", and struck me as something in a similar vein. Take a look:
CHART OF THE DAY: Wait, Is That A "V"?
Joe Weisenthal | Dec. 14, 2010, 12:07 PM
But weren't consumers supposed to be dead? Yeah, you thought so, and that's the sound of your pre-conceived notions being blown up.
(Note that we're almost past the peak, all-time month for sales).
Now, I'm not an economist, I'm a journalist, and so when covering economic news, I always feel most comfortable when I can check things with an economist. If it's going over ground I've covered before, I may not want to bother anyone to tell me what I've already learned from them in the past, but this sort of falls between the cracks. First off, intuitively I know that retail sales is not the main problem, as the economy as a whole is no longer in recession--but that hardly means that it's anything close to a normal recovery, with sky-high unemployment, record foreclosures, etc. The great example here is the Great Depression, where FDR got the GDP turned around within a year in office, but didn't get unemployment licked until mobilization for WWII a good 7 years later or so.
In short, I know that the core problem we face is employment, that "jobs are a lagging indicator", so much so that even with the GDP-based "official" end of the recession well behind us, economists are talking about it taking years, perhaps as much as a decade for employment to recover. So even without questioning anything about these numbers, I'd want to look at what's happening to jobs in that sector. Only problem is, I have know for certain what to match to what. Off the top of my head, looking at the Bureau of Labor Statistics website, it looks like the sector identified as "Retail Trade" would match up with the above chart, and here's what their 10-year picture of jobs in this sector looks like:
Not very encouraging, and not remotely similar.
So what's going on?
Well, I assume that it's just like I said. I have every reason to think so. But I want to be sure. So, I turned to the Center for Economic Policy Research, who are not only very very good, but pretty damn fast as well (h/t Alan Barber, their media person). If we had more think tanks like them on the left, we'd be in much, much better shape. And not only did they confirm it was the right data comparison, I got a quote from Dean Baker about the figures behind the Clusterstock chart:
Retail sales almost always grow, except in recessions. This means that typically, every single month is the highest sales on record. Stock analysts and members of Congress can make a big deal out of this, but it doesn't tell a real story. After 2 years and 3 months we are just getting back to the pre-crisis levels in nominal terms. We are still down after adjusting for inflation. Look at the two years prior to the crash -- we had the same sort of growth then and it was not from a hugely depressed base.
This chart should be ingrained in the mind of anybody who cares about fiscal policy. The main things to note:
Federal taxes are the lowest in 60 years, which gives you a pretty good idea of why America's long-term debt ratios are a big problem. If the taxes reverted to somewhere near their historical mean, the problem would be solved at a stroke.
Income taxes, in particular, both personal and corporate, are low and falling. That trend is not sustainable.
Employment taxes, by contrast-the regressive bit of the fiscal structure-are bearing a large and increasing share of the brunt. Any time that somebody starts complaining about how the poor don't pay income tax, point them to this chart. Income taxes are just one part of the pie, and everybody with a job pays employment taxes.
There aren't any wealth taxes, but the closest thing we've got-estate and gift taxes-have shrunk to zero, after contributing a non-negligible amount to the public fisc in earlier decades.
If you were structuring a tax code from scratch, it would look nothing like this. But the problem is that tax hikes seem to be politically impossible no matter which party is in power. And since any revamp of the tax code would involve tax hikes somewhere, I fear we're fiscally doomed.
We need not have been doomed had Barack Obama (a) understood this simple situation coming in, and (b) had the least bit of inclination to take on the ogilopolies in particular (especially high finance, the medical-industrial complex, the military-industrial complex and the fossil fuel industry), and selfish super-rich in general. The fact that such a candidate with such a message of unity to face and solve our problems could be elected should not be forgotten or ignored simply because he turned out to be such a spectacular disappointment. The American people still have the will for national greatness in them. It's the leadership that's wanting.
But tax structure isn't the only problem. There's also the problem of employment, of jobs, which brings us to this chart:
There are multiple factors behind the "bipartisan" push on "education reform". But one of them is the long-standing liberal/conservative agreement that education is a pathway to prosperity. Of course, the meaning of this belief is historically quite different to liberals than it is to conservatives. For liberals, education is a way out of poverty for the disadvantaged, in combination with broader systemic and institutional reforms. For conservatives, it's a way of reinforcing the Horatio Alger myth--that individual success through virtue, hard work and diligence is the answer to poverty, rather than any sort of social reform, no matter how modest. For neo-liberals, who have come to accept--more or less--the conservative reframing of the politically possible, the logic of the conservative arguments prevail, along with minor tinkering that's an almost private homage to ideals abandoned in fact, but still given lip-service to.
Of course education remains a pathway to better living for most individuals. But what's better for the individual isn't simply additive for society as a whole. And this reality for society as a whole can trickle down to the individual level as well. Just ask any "overeducated" job seeker in any number of fields or situations over the past 20-30 years. What's more, things mount up. The end result is that incomes for the college educated have been relatively stagnant overall for some time now (individual fortunes may still vary considerably, of course.) I made this point in my diary "Higher Education, Lower Wages" in October 2009, which included the following graph, showing the relatively stagnant incomes of the college-educated, compared to those in the top 5% and 10% of income-"earners":
This is evidence of a relatively over-supply of educated workers. There's still a premium for a higher education, but that premium is not keeping up with the more general increase in income for higher-income individuals as a whole.
But another way to see the problem is to realize that most of the future job projected with our economy does not involve a demand for people with higher education. He's a chart I just created, presenting data from the ten fastest-growing job categories listed in the Economic News Release "Table 6. The 30 occupations with the largest employment growth, 2008-18", last updated December 11, 2009:
Aggregating these jobs by the level of training required, we see that over half of them require nothing more than short-term on-the-job training, 70% require no college, and 86% require nothing beyond a 2-year associate degree:
Two new government reports illustrate the complex and troubling state of opportunity in America, but also the right way forward.
The first set of data, by the Bureau of Labor Statistics, found that the gender pay gap is at a historic low, with women earning almost 83¢ for every dollar earned by men—compared with 76¢ a decade ago and until fairly recently. The change is due in part to young women’s progress in the workplace—they increasingly are better educated and out earn their male counterparts—but also to depressed wages and, especially, more rapid job loss by men.
"We are all in it together" was the sentiment portrayed in last week's opinion polls on the extension of the unemployment benefits. The passing of the bill last week Tuesday was a decision supported by the majority of Americans across the board, regardless of income, race or political orientation.
• According to the CBS News poll, 52% of respondents said Congress should extend unemployment benefits for people currently out of work, even if it meant increasing the budget deficit.
• According to an ABC News/Washington Post poll 62 percent of respondents said Congress should approve another extension.
The end of a year – and especially the end of a decade – warrants both retrospective reflection and predictions of what is to come. Currently there seems to be much consensus, especially around the 2000s as a decade of struggle and decline for the US. There is a silver lining, however, in the cautious optimism around the issue of race relations. As the decade comes to a close, it is still clear that the US is entering the 2010s with much work to do, particularly with the economy and unemployment. Below is recent public opinion on the past decade, the current climate, and what may be in the next ten years.
Last week, the Labor Department reported that youth unemployment stands at 18.2%, nearly twice the national average of 9.8%. The percentage of young people without a job is a staggering 53.4 percent, the highest figure since World War II. Looking deeper, the statistics for youth of color are terrible and telling.
According to the most recent data released by the Bureau of Labor Statistics, 40.7% of black youth between 16-19 are unemployed, almost double the amount of whites teenagers (23%). For Latinos the same age, the rate is nearly 30%. Get a little older and the gap grows wider. Unemployment for black Americans aged 20-24 is 27.1%, over twice that faced by white youth (13.1%) in the same age range.
The glaring differences indicate that unemployment is not only decidedly raced, but also that the current economic condition is wholly unforgiving for young people of color. Only a massive, well-funded set of green jobs programs explicitly designed to close those racial gaps can create a truly vital, full-employment economy.
The April employment report is still giving me nightmares. Employment in retail trade declined by 47,000; jobs in manufacturing plummeted by 149,000; Construction employment fell by 110,000; the professional and business services industry lost 122,000 jobs.
And 66,000 Americans found work helping to prepare for the 2010 Census.
Of course, these weren't the only citizens to obtain employment last month. What's more, the new Census positions aren't even permanent. But amidst the carnage of unrelenting layoffs, there's something about those newly hired Census employees... I can't help wishing there were more of them.
I thought about the Census workers during the utterly absurd controversy over whether the Republican party would officially urge the Democrats to change their name to the "Democrat Socialist Party." If the Democrats were truly willing to think big - to be informed by the best traditions of European social democracy, or even the New Deal - the federal government would be hiring a lot more than 66,000 employees during a time of tremendous economic need.
We may not need thousands more people take the Census (although more employees might help prevent the troubling undercounts that plagued past Census efforts). But we have no shortage of other urgent public needs. The time has come to think about hiring people to address them directly, going beyond inadequate stimulus funding to launch a genuine public jobs program.
"Guaranteed public jobs paying more than the minimum wage would permanently and automatically stabilize the economy, swelling the ranks of public workers in recessions and shrinking them when private jobs become more abundant. Instead of punishing the working poor most severely in downturns, as the system does now, the government would redistribute the costs of recession so that all taxpayers would share the burden as a public obligation."
A permanent public jobs program, as Greider proposes would indeed be thinking big. But a even temporary program of sufficient scale would make an enormous difference in a broken economy. After all, the Democratic party is apparently bound to be called "socialist" regardless.
On Tuesday, Democracy Now! featured a segment, "Report: Communities of Color Bear Heaviest Burden in Recession". The title was actually a bit misleading, because the report, though taking note of the recession and the need to respond pro-actively to it, wasn't specifically limited to the effects of the recession, it was about geographical patterns of opportunity and lack of opportunity that have long persisted throughout good times and bad. And-Surprise! Surprise!-those patterns turn out to be strongly related to race. As I'll explain below, this report was remarkable to me in part because of how many different familiar threads itg brought together, in addition to the threads of the opportunity sub-indexes it brought together.
It's not bad enough that blacks suffer twice the unemployment rate of whites (with Asians and Latinos falling in between), they also suffer inferior housing, health care, and education, along with greater exposure to pollution. Indeed, the report identified six broad areas, constructing an index of indictors for each, and found similar patterns of racialized opportunity in all six of them.
It's important to realize that none of this necessarily depends on old-fashioned racism. But that doesn't make a bit of difference when it comes to the effect, which is to place disproportionate, and often debilitating burdens on minorities. (Sub-prime mortages, for example, not only were targeted disproportionately at minorities, in many cases minorities who qualified for standard financing were simply not offered the option that would have been routine, had they been white.) Furthermore, as minority populations grow, and minorities collectively come to constitute a majority, these patterns of suppressed opportunity are increasingly a problem for our society as a whole--as, indeed, was the case with the sub-prime mortgage meltdown.
It's not just a noble sentiment, it's increasingly simply a fact of life-allowing large segments of our population to be held back by substandard opportunities to advance creates mounting problems for our society as a whole. The converse is also true: effective strategies for advancement as a whole require a special focus on those who are being held back the most. That's the message behind the report, "One Region: Promoting Prosperity Across Race" [pdf]
[TOM] DELAY: Excuse me, but the economy from 2001 to 2007 was going quite well, thank you, but people were pushing especially Freddie Mac and Fannie Mae into loaning-making loans to people that couldn't afford them. That caused the housing strike (ph). And we can all go through that. But the economy most of the years of Bush was going just fine and we were fighting a war on terror in two different countries and we were keeping the homeland safe and we were not on a spending spree, like Obama is putting us on with his budget.
Economy going quite well, thank you? Er, not so much (all in constant dollars):
As can be seen above, the economic growth experienced by all income groups during the Clinton years came to a screeching halt when Bush took office. Incomes stagnated completely, all across the board. Numbers on the flip.
547,267,000 months to be more or less exact, according to the Bureau of Labor Statistics.
That's how many months of work, of productivity, of income the American economy lost under George W. Bush, compared to the pace set by Bill Clinton. And we'll have another 20 million or so to add before he leaves office.
Under Bill Clinton, the US economy added 18,703,000 jobs in 96 months, for an average rate of 194,823 jobs added per month. Population growth alone required adding around 180,000 per month, so jobs increased faster than population by a modest amount.
Under George Bush, the US economy has added 6,507,000 jobs in 94 months, for an average of 69,223 jobs added per month--far below the growth rate required to keep up with population growth.
Here's a thousand words of what the difference looks like:
That's what leading progressive economist Dean Baker calls it, noting:
Senator McCain is filling the airwaves with commercials telling the public that Obama's tax increases will slow growth and cost the economy jobs. It's pretty scary stuff to anyone who takes it seriously.
This chart alone is enough to show what a load of hooey it is:
That steep ascent from 1993 to 2001 is the Clinton Adminstration, adding over 22.7 non-farm jobs to the American economy--an increase of over 20%. And after that? That uneven landscape atop the sharp Clinton rise? That's GW "Taxcut" Bush territory, with a measely 5.53 million jobs added throuhg January of this year--an increase of just over 4%.
"But wait!" you might say, "That's only seven years. Clinton had eight." And you'd be right. But since the beginning of the year, the Bush "taxcut" economy has lost over 1/2 million jobs. And this is what we're supposed to be scared to death of losing???
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