Archive for October, 2009

Political Pen: George Orwell, meet Vice President Joe Biden

October 31, 2009 Leave a comment

“These aren’t the unemployed you’re looking for…”

Obamy-wan’s mind tricks

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From Political Pen blog:

From 1984
by George Orwell

But actually, he thought as he re-adjusted the Ministry of Plenty’s figures, it was not even forgery. It was merely the substitution of one piece of nonsense for another. Most of the material that you were dealing with had no connexion with anything in the real world, not even the kind of connexion that is contained in a direct lie. Statistics were just as much a fantasy in their original version as in their rectified version. A great deal of the time you were expected to make them up out of your head. For example, the Ministry of Plenty’s forecast had estimated the output of boots for the quarter at one-hundred-and-forty-five million pairs. The actual output was given as sixty-two millions. Winston, however, in rewriting the forecast, marked the figure down to fifty-seven millions, so as to allow for the usual claim that the quota had been overfulfilled. In any case, sixty-two millions was no nearer the truth than fifty-seven millions, or than one-hundred-and-forty-five millions. Very likely no boots had been produced at all. Likelier still, nobody knew how many had been produced, much less cared. All one knew was that every quarter astronomical numbers of boots were produced on paper, while perhaps half the population of Oceania went barefoot. And so it was with every class of recorded fact, great or small. Everything faded away into a shadow-world in which, finally, even the date of the year had become uncertain.

The quote above is Winston Smith’s daily routine at the Ministry of Truth.  Smith would have to work overtime with Barack Obama in office.  Look at this graph from the Bureau of Labor Statistics from October 30th, 2009.

Unemployment graph from October 30th, 2009

Unemployment graph from October 30th, 2009

Now check out this video of Vice President Joe Biden from the Ministry of Truth MSNBC on the same day …

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How not to win a gunfight

October 31, 2009 Leave a comment

Show up with a starters pistol…

For your amusement, James K. Galbraith appears on Bill Moyers Journal one year ago looking for a fight with Wall Street, armed with, of all things, a renewed determination to finally – and we do mean REALLY, REALLY, REALLY, this time – impose such regulation as will prevent them from EVER, EVER, EVER, nearly bringing down the global financial system again.

Did we mention he really means it this time?

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Among his more salient points:

  • Mongo say ‘big government good’: “we have an enormous advantage over our predecessors in 1929. We have the fact that the New Deal happened. And we have the institutions of the New Deal, though they have been badly damaged in the last decade, they are still with us. We have deposit insurance. We have Social Security. We have a government which is capable of acting as the lender of last resort, which can borrow and spend as needed to deal with this crisis. So here in the United States the capacity to handle the crisis exists.
  • Liberal economic thought has not advanced one iota since Dad died: “But what needs to be stressed is that we’ve seen a breakdown of an entire system. The consequence of the failure of regulation, of supervision of the banking system over the past eight years, has been to cause a collapse of trust, a poisoning of the well.”
  • If everyone had the World Reserve Currency they could all print their way out of a depression: “Right now the thing that troubles me most is not the United States. The thing that troubles me most is that the same ideas of deregulation, of free markets, were applied in the construction of modern Europe. And the Europeans don’t have the institutions of the New Deal, a central bank that can lend as necessary.”

(On this point we state for the record that Germany saw its economy decline by nearly five percent yet unemployment barely budged, while the United States, with the reserve currency, and all those nice New Deal institutions, saw it unemployment rate jump by sixty – that’s six-oh! – percent in the past year.)

  • Thank God there is no oversight on the Federal Reserve as they raid the treasury to help banksters: “Mercifully, we have the institutions of government in this country that can act. The Europeans are winging it. They have to go against their charter of the Central Bank, against the Maastricht Treaty and its restrictions on government spending, government deficits. They- that problem is a systemic problem. Our problem is a policy problem. We can solve our problem.”
  • Conservatives and Liberals agree: We need bigger government: “What I mean is the people who took over the government were not interested in reducing the government and having a small government, the conservative principle. They were interested in using these great institutions for private benefit, to place them in the control of their friends and to put them to the use of their clients. They wanted to privatize Social Security. They created a Medicare drug benefit in such a way as to create the maximum profit for pharmaceutical companies. They used trade agreements to extend patent protections for various interests or to promote the expansion of the corporate agriculture’s markets in the third world. A whole range of things that were basically political and clientelistic. That’s the predator state.

–How’s that same old bullshit working for you these days, Jimmy?

Death Match Two: Post-game wrap-up…

October 31, 2009 Leave a comment

A recap in the language most accessible to our American audience:

GlobalDeathMatchSo far, Capital easily dominated the preliminaries, with the Proles and Owners of Capital on one side trouncing the Aristocracy and the Peasantry in a match up that rocked the European continent for several decades. The going was tough in the early rounds, since all the political and economic strength was on the side of the Aristocracy with its almost complete domination of the ground-rent game. But in the end, as economic power shifted to the Proles and Owners in the late round, the Aristocracy was forced to abandon its ground-rent game and strike a deal with the Owners. The Proles, abandoned in late innings by their erstwhile allies, turned briefly to the Peasants for a similar deal, but only scored gains in Russia, China, and handful of Asian heats.

Building on gains in the preliminaries, however, fissures began to open up among the Owners at the close, as each sought to consolidate early gains in their respective divisions –  also called “Nations” – and prepare for the semi-final playoffs. Having effected a surrender on the part of the Aristocracy – in American, in particular, on Team Slavery – and having successfully fended off weak challenges by a motley crew of Proles and Peasants from the Pitchfork Leagues, Owners turned their attention to a World Series face-off among the surviving teams.

These face-offs, known by their popular names, Global Death Match, and Global Death Match Two, saw the United States walk away with the Gold, with the Silver going to Great Britain, and Continental Europe and Japan sharing the Bronze. (Everyone else got dirt cookies.) China and Russia, after sitting out the early post-Global Death Match play, rejoined the games and were respectively awarded positions as Waterboy and the obligatory Angry Maladjusted Fan.


We will return in a moment to bring you a preview of the upcoming post-season play. But, first, a word from Alcoa:

In the below video, Klaus Kleinfeld, President & CEO of Alcoa joined Maria Bartiromo to discuss the prospect for his company. Among the points he makes are these:

  • “When you look at it from a regional perspective, China is back very, very strong, and pulling some of the Asian markets with them – Asian and Middle East, I would say, with them.”
  • “This quarter is also a quarter where we have been completing substantial growth projects in Brazil, in China, in Russia, that have an outstanding opportunity to continue.”
  • “We’ve also got to really look carefully at the headwinds, with the dollar weakening against other currencies that are important to us, like the Brazil Real and the Australian dollar. That’s an important headwind, when we actually need all the cash performance at this point in time.”

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If this is beginning to sound to you a lot like what Jim Cramer was talking about on Hardball last night, it should.

You’re gonna need a bigger boat.

A moment of stunned silence…

October 30, 2009 3 comments


MSNBC’s Hardball with Chris Matthews show was the scene of an uncomfortable pause when Jim Cramer of CNBC’s Mad Money show explained in plain unvarnished language why you are looking at years of unemployment unless working time is shortened.

Despite all the talk of an end to this depression, and recovery is right around the corner, Wall Street has a plan B.

You can access the clip by clicking on the picture; sit through an obnoxious commercial for mucous remedies or some such; and scroll five minutes into the interview to hear this:

“What’s happened in the last six months is that corporate America has decided, ‘you know what, we’re not going to fire any more people.’ But, where I feel Obama is going to be most challenged is when we do see hiring, Chris, it’s not in this country, American companies want to hire overseas. Why? Because those economies are growing much faster than ours. They will fire five people in this country and will hire two people in Brazil.

Just to be clear about this: With Jim Cramer, this is not a warning. It is investment advice from a Goldman Sachs alum.

Econospeak: Shorter Working Time at Work

October 29, 2009 Leave a comment

We wanted to show this to you, because we believe it will be important in the coming months as unemployment continues to rise despite all the talk of recovery.

As can be expected, given the global nature of the crisis, almost all countries have seen a rise in their rates of unemployment. This is to be expected, since a crisis is nothing more that an economic adjustment to changes in the way labor is being employed in the economy.

What is to be expected, however, is not always what is to be accepted. Thus each country is more or less implementing measures to combat unemployment, or not, as the case may be.

Some, like Germany have seen almost no change in employment, because it has implemented effective measures to combat unemployment by, among other things, shortening working time. While the US has seen a massive increase in unemployment over the past year, German unemployment has essentially gone unchanged.

A proposal along these lines has been made by Dean Baker.

Posted by Barkley Rosser to Econospeak blog:

So, as part of semi-peacefulness around here, I shall join Sandwichman (and Milkshakeman?) in munching on some of that stuff at the greasy spoon truck stop, particularly the German food, taking a bite of their policy of shortened work hours during the recession known as kazurbeit, of which I do not know all the details. However, I am prepared to say that whatever those details, the apparent evidence suggests that during the past year, Germany has had a relatively low impact of its recession, as measured in decline of GDP, on its unemployment rate. I shall simply present some numbers below, without further comment beyond noting that state governments in the US have also been following something like this with the furlough policy, and also to note that this is something both neoclassicals and Austrians would like, not to mention advocates of cooperatives, as it involves preserving jobs by cutting wages. So, I am going to show for several countries, their 2009 decline in GDP as reported in the 10/10 Economist, along with the Sept. 2008 unemployment rate, and the most recently available unemployment rate (oh, and keep in mind that France largely gave up its limited work hours approach in 2005).

Country 2009 GDP decline Sept. 08 Unemployment Rate Most Recent Unemployment Rate Month
Germany -4.9 8 8.2 (Sept. 09)
France -2.1 7.9 9.9 (Aug. 09)
UK -4.4 5.5 7.9 (July 09)
US -2.9 6.1 9.8 (Sept. 09)
Netherlands -4 2.5 5 (Aug. 09)
Switzerland -1.7 3.4 4.1 (Sept. 09)

Yes, you read that right:

German GDP fell by -4.9 percent, but its unemployment rate was virtually unchanged!

US GDP fell a little over half of what Germany’s fell, yet our unemployment rate jumped 60 percent!

Shorter working time works.

The Job-loss recovery

October 26, 2009 Leave a comment

You really have to wonder how anyone could call it a recovery when people are still losing their jobs. But, apparently, the term is in the process of being subtly redefined by the establishment propaganda organs to include rising unemployment.

At this rate the next depression will be called a jobless and output-less expansion.

From the San Francisco Chronicle:

Forget a jobless recovery. The economy may be entering a recovery with job losses.

Third-quarter estimates this week are expected to show that the economy grew for the first time since the quarter ending in June 2008. Despite the estimated 3 percent expansion and a stock market that has been on a tear since March, hundreds of thousands of people are still being laid off each month.

Eight million jobs have been lost nationwide since the recession began two years ago, and by some measures workers face the worst job market since the Depression. The average laid-off worker has been without a job for 61/2 months, a post-World War II record. Many of those workers will never recover financially.

Still more news along these lines from the Atlanta Federal Reserve: A much greater percentage of us were permanently laid off from our jobs than has been recorded since 1970:

The percentage of employee separations labeled permanent is at a recorded high.

Underneath the usual total unemployment numbers are the reasons an individual is unemployed: You are on temporary layoff; you quit your job; you have reentered the labor market and have yet to find a job; or you are entering the job market for the first time and have yet to find a job. Or, finally, you have been permanently separated from your previous employer, who has no expectation of hiring you back.

The last category is the dominant reason for unemployment at this time. That might not seem surprising, but it actually is. Never, in the six recessions preceding the latest one, did permanent separations account for more than 45 percent of the unemployed. The current percentage stands at 56 percent as of September and appears to be still climbing: (Our emphasis)

permanent layoffs

Of course, none of this is proof positive that we are in for a “jobless recovery,” but, to me, the odds appear to be increasing.

The Fed also reports:

  • The share of workers reporting that they have been involuntarily cut back to part-time is at a recorded high.
  • Job losses have been disproportionately concentrated in small businesses.
  • Job opening are at a record low.

You’re gonna need a bigger boat…

The systemic collapse of a system that has rotted from the inside out.

October 26, 2009 1 comment

Tom Walker takes on economics…

(Berlin) Wall to Wall (Street)

by Tom Walker

Twenty years ago next month, the Berlin Wall fell. One year ago last month, Lehman Brothers collapsed — the “second shoe” dropped. Just as the dismantling of the wall was the symbolic climax of a long process of disintegration that had begun in the 1970s and was not completed until several years after November 1989, the financial crisis that erupted in 2008 had deep historical roots and it will not be resolved with a recovery to business as usual. At this point it would be prudent to banish the word “recovery” from the analytical vocabulary. This is not a recession. Nor is it a depression. It is the systemic collapse of a system that has rotted from the inside out.

Full text here