Archive for August 13, 2009

Portrait of a Dragon King…

August 13, 2009 Leave a comment

“Power law distributions incarnate the notion that extreme events are not exceptional events. Instead, extreme events should be considered to be rather frequent and to result from the same organization principle(s) as those generating other events: because they belong to the same statistical distribution, this suggests common generating mechanism(s). In this view, a great earthquake is just an earthquake that started small … and did not stop …”

Didier Sornette, Dragon-Kings, Black Swans and the Prediction of Crises

EmploymentRecessionsJuly.jpg by Caculated Risk

EmploymentRecessionsJuly.jpg by Calculated Risk

So, curiosity got the better of us, and we decided to see if we could finish this portrait you have been busily sketching out – your masterpiece of 21st Century political-economic folk art.

We did some research on how the economic community projected this unfolding epic, and found a 2007 study produced up by John Schmitt and Dean Baker as they tried to get a handle on the worst case scenario for this recession:

If the next recession follows the pattern set by the three most recent downturns, a recession in 2008 would raise the national unemployment rate by … 3.8 percentage points (a severe recession along the lines of the early 1980s), increasing the number of unemployed Americans by … 5.8 million. Based on the historical pattern, the unemployment rate and the number of unemployed would continue to increase through … 2011 (to 8.4 percent in the case of a more severe economic downturn).

We admit, it did spark our imagination.

We began to build a projection from scratch based on the 1981 and 2001 recessions, which recessions have the reputation for being, respectively, the most severe recession and the longest recession of the post-war period.

And, here is the result: Comparing the actual 1981 and 2001 recessions, the actual data from the current recession, and our rendition of the projected course of this recession:


The Dragon King Recession

You’re gonna need a bigger boat.

What color was your unemployment line, Sojourner Truth?

August 13, 2009 Leave a comment

Jobless claims – up another 13,129, from 466,695 last week to 479,824 this week – provided another arkwardly horrendous moment in this entire sad affair for the boosters of the Messiah.

The body count continues to look as grim with 9,156,028 unemployed workers claiming unemployment benefits, down slightly from 9,326,787 last week.

An additional 14 million unemployed are not eligible for unemployment benefits, and do not appear in these statistics.

The difference in this months total body count from the previous total number claiming benefits is not explained, but perhaps as many as 60 percent of the nation’s unemployed are currently not eligible to collect unemployment benefits – either because they have exhausted their benefits, or were not legally qualified to collect.

These include those who left their job voluntarily, were fired for cause, or who were self-employed.

Estimates indicate that as many as 1.5 million more people may exhaust their benefits before the end of the year.

In Texas, the Republican governor has rejected extending unemployment benefits because, according to USA Today, “expanding the unemployment system would require raising taxes on businesses, thus ‘hurting our job-creation climate.’ Perry’s ‘ultimate goal is to make sure there are jobs out there, so that when this economic climate turns, folks can get back to work…'”


Surprisingly, we find ourselves in agreement with Governor Perry in rejecting the idea of further extending unemployment benefits. Like him, we believe people should not be paid to not work.

We can say this from personal experience: Not working is its own benefit – one which should be enjoyed by every member of society in equal proportion as the need for work declines.

Moreover, the problem confronting us in this crisis is not the absence of jobs, it is the absence of work and the refusal of both Washington and Wall Street to recognize this absence.

The problem of the 21st Century is the unemployment line – the relation of men and women to the means of life.

Sojourner-TruthMuch as the late and unlamented problem of the 20th Century came to be known as that of the Color Line, when it was really the problem of a planter class who refused to recognize that African-Americans were no longer their property, and who erected a myriad of legal, social, and cultural devices to seize back what they had lost in the Civil War, so the slave masters of this century refuse to acknowledge that they have already lost the right to impose the burden of life long toil on the 21st Century inheritors of the Legacy of Ham.

The Color Line was never about race – there is, in fact, no such things as race; it was a convenient fiction – it was about the relation of each man and woman in our society to work.

For centuries involuntary work was imposed on Africans under slavery, and, as the progress of capital advanced in this country, this imposition was converted, under conditions of competition, and, the political powerlessness of this newly freed class of citizens, to an exclusion FROM access to the industrial era means of life.

Through laws, custom, and naked violence, the former African slaves were maintained in an involuntary servitude to the planter class until as late as the mid-century, and denied equal access to modern industry.

What has happened since then (the defining influence on events even at that time) is that access to the means of life by not just the descendants of African slaves, but all the slaves of modern society – those who work for a living – are being progressively undermined by the abolition of work.

The competition for work (which, in the Twentieth Century, assumed the form of a racial divide but was never this latter divide upon any serious consideration) intensified as the natural improvement in the productivity of social labor progressively eliminated the need for work, and as this material need was succeeded by the entirely arbitrary extension of the social work day for the purpose of maximizing the extraction of surplus labor time in industry.

The entirely artificial creation of work – the deliberate manipulation of all the factors of economic life to extend your dependence on wage slavery – has become the over-riding political imperative of the moment.

Your life is being stolen from you by the very leaders in whom you have put your trust to protect you from the avaricious and rapacious vandalisms of the plunder bosses of Wall Street.

What is the expansion of the Federal Reserve balance sheets, but the expansion of the means to extend working time?

What is the stimulus plan, but the plan to stimulate you to engage in further unnecessary work?

What is the TARP, but the means to “unclog” the pipeline of debt peonage – to restart the manufacture of means by which you impose on yourself years of unnecessary labor?

nat_turnerYou are the modern slave, the despised collective property of handsomely dressed gentlemen, who pass you between themselves like Sally Hemmings was passed as a wedding gift to the new son-in-law.

This crisis is not about jobs – a job is merely the wrapper within which comes the possibility of access to the means of life.

The cost of that job to you are the hours you have to sacrifice in exchange for access to those means, and those hours are no longer set by economic necessity, but by political calculation.

Which is to say, Washington has made the political calculation that you will slave away your life for 40 hours a week in return for a job – in return, that is, for access to the means of life.

It is a well-formed calculation since, unlike your forebears, the stolen African men and women who built this nation, your acquiescence to this rape of your humanity depends not on dogs and guns, agents and fugitive slave laws, but on starvation – a contractual term so effective in its enforcement, it needn’t be mentioned or even acknowledged by one party to the other: it is assumed by both parties to be a natural law.

The problem then is not the wrapper – a job for everyone – but its content: the amount of work required in exchange for a job.

Washington, despite the Messiah’s promise of change, continues to side with Wall Street in demanding from you the longest possible duration of work in exchange for access to the means of life.

It is a duration of work which was already indefensible in the 1930s, and has only become intolerable in the intervening years, and particularly in this wretched eruption of unemployment.

Under such conditions, the demand by “progressives” for additional stimulus, such as the extension of unemployment benefits, is as bizarre and other-worldly as would have been a demand by Sojourner Truth or Nat Turner to open the western territories to slavery.

Hours of work must be reduced – there is no alternative to this!

No extension of unemployment benefits, no reform of health insurance laws, no rollout of an alleged green industry can substitute for this – all the promises of the Messiah and his economic team are as worthless as those pictures of dead presidents you carry around in your wallet.