GLOBALIZE THIS!

Friday, October 08, 2004

RUDE PUNDIT

Get this man a speech writing job.

¶ 10/08/2004 04:38:33 PM

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DESPONDENT JOB-SEEKERS FLEE LABOR FORCE

The hidden story behind today's Employment Situation Report released by the Bureau of Labor Statistics this morining:

While the economy added 96,000 jobs in September (via the payroll survey), another 221,000 gave up looking altogether.

(Note: by the household survey, employment fell by 201,000 jobs, so the shrinking labor force cannot be explained by self-employed entrepreneurs. Anyone who wants to know just what the difference is between the two surveys can read a PDF here).

Oh those 96k, 37,000 of the jobs were created by government, meaning the private sector created only 59,000 jobs. Even the retail sector--the back bone of our consumer debt driven economy--shed jobs in the last month.

Note 2: The hurricanes plagueing the American Southeast had no effect on this month's jobs data collection: "Establishment survey response rates in September were within the normal range for these areas as well as for the U.S. as a whole." This doesn't allow us to determine the jobs impact of the storms, only that the numbers reported today reflect ann accurate survey of te picture on the ground.

Prediction: In tonights debate, President pro tem Bush will tout a low 5.4% unemployment rate as a sign of a strong economic recovery.

In reality, if we assumed that labor force participation had kept pace with population growth, unemployment would be well over 7% by now.

Some friendly advice: if you are unemployed and want to get a job, Bush is not your man.

¶ 10/08/2004 11:37:50 AM

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Thursday, October 07, 2004

WHAT I'M READING: THE STATE OF WORKING AMERICA 2004-05

Yes, I'm finally getting around to reading SWA, roughly a month after it's preliminary release. Well, I shouldn't say I'm reading it so much as digesting its rich multitude of tables and charts of easily digested economic facts. It's not a book that most people will read cover to cover--just look through for what you need to know, and then maybe read some of the adjacent text for context. (Much of the data detailed in SWA is available for free download here).

Here are some of the gems I pulled out:

Class structure in the US is pretty rigid and growing more so by the day. So, of those in the richest quintile (top 20%) in 1969, 49% still were in 1979. But those starting off in the richest quintile in 1989 were more likely to stay there by 1998 (53%). This is good news if you are really rich, and bad news if you are poor. While 51% escaped the bottom rung of the income distribution in the 1970s, only 47% were able to in the go-go 1990s.

How did this happen? It turns out that a greater share of taxes people pay are now regressive--that is, they cost more to poor people than to rich people as a share of income. Bush's tax cuts really helped along this trend: the 80th percentile of households (that is the household where income is higher than 80% of the population and less than 19%), with an annual income of $96,600 received a whopping $967 tax cut from Bush. All those people under the 80th percentile got even less. But hey, if you were in the richest one percent (where 99% of people have lower incomes) you got a nice check from the IRS for $66,600. This only accounts for income taxes, not other changes in the tax code including the repeal of the estate tax.

Of those poorest 80%, 77% of their income is earned through wages and salaries from working. The richest 1% get 58% of their incomes from investments and 42% from salaries--hey, they are still the bosses and can pay themselves big salaries, too). Think stock ownership is more egalitarian these days with the rise of dot-com stock options? Wrong. Individuals with incomes over $100,000 own 79% of all stocks. The concentration of ownership is increasing. (Note that now we are discussing individuals as opposed to households--the household figure is standardized for two adult workers such that the 80th percentile household discussed above represents a combined income of $96,600 whereas this figure is for individual incomes > $100,000.

Meanwhile, many Americans are getting poorer. 87 million people, some 31% of Americans no live on incomes below twice the poverty line (roughly 2 x $14,000 for a family of four).

What can I say, it's George Bush's America.

¶ 10/07/2004 02:53:39 PM

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Tuesday, October 05, 2004

BOB MCINTYRE, COUNTER MOVEMENT

The Hill, a wonkish newspaper with a Washington insiders beat, today profiles Bob McIntyre of the Center for Tax Justice:

“If you’re looking for people who hate me, dial at random,” he jokes. “Bill Archer and I weren’t exactly bosom buddies,” he recalls. A tax staffer told McIntyre that Archer would ask the joint tax staff, “If we do this, can CTJ estimate” where the money goes by income group? “If the answer was yes, he would say, ‘Well, damn, we can’t do it.’”

This is how the right chooses which tax policy to push...the one that McIntyre has no model to dissect.

¶ 10/05/2004 07:56:13 PM

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BOB MCINTYRE, COUNTER MOVEMENT

¶ 10/05/2004 07:56:12 PM

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WHAT I'M READING: BLOOD BAKERS

The Blogger system has been a bit spotty in the last few days. I have a little back log of posts which I will be spreading out over the course of the next few days as I catch up. Starting with this one:

James Henry's book Blood Bankers depicts a series of richly detailed histories of political and economic corruption endemic in international finance. While Henry presents the stories as discrete episodes, from these histories a number of general observations can be drawn that contradict much conventional wisdom on global financial markets.

*Transnational networks of elite bankers, politicians and technocrats are indispensable to the operation of international finance under present conditions. Transactions in these markets are far from arm's-length, and thus allocation of resources tends to be driven by backroom deals between personal connections as opposed to an invisible hand. (This is perhaps to be expected: who would loan a billion dollars to someone known only at arm's-length?)

*Foreign lending often has a lot to do with the need of foreign lenders to continually find new opportunities for surplus capital (not to mention the personal greed and professional vanity of individual elites) rather than domestic demand for investment. As such, the lenders are at least as culpable for massive developing country sovereign debts.

*Money center banks are the indispensable backbone of international drug trafficking, terrorist financing, arms trafficking, human trafficking, and a slew of other seedy, illicit activities. It is more than that the banks turn a blind eye-they are willing co-conspirators.

*Citibank: Have you no shame?

*The power of foreign banks is underwritten by the use of state power (and sometimes state violence). No matter how debts are incurred, the broader population can be made to pay for it by state force. So long as states maintain this power, lending will continue. As a Citibank Vice Chairman said, “Who knows what political system works best? All we ask is, can they pay their bills?” (p.263). This relationship between the power of foreign banks and state power is mutually reinforcing: financial service and instruments provided by private banks also enable military power-both by financing acquisition of military goods and services and by financing political operations that favor right-wing leaders and movements.

*The centrality of US government intervention to financial markets (through the Fed, Treasury, and IMF) provides a powerful instrument of economic statecraft: the US government can induce private bank behavior to achieve its non-economic foreign policy goals.

¶ 10/05/2004 10:11:15 AM

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