If the Bureau of Labor Statistics reports that unemployment has decreased, but there is no corresponding report of an increase in the total jobs available in the economy, which of the following conditions is necessarily true?
a. current equilibrium is at full-employment output
b. the Federal Reserve is selling bonds in open-market operations
c. the money supply is expanding
d. net capital inflows are increasing
e. the number of discouraged workers is increasing
The correct answer is e. Sadly, this AP Macroeconomics question comes directly from recent data that show precisely what the question indicates. Where are the jobs?
Free-market boosters like to point out that companies can make jobs where labor is cheap. The jobs help the local economy and then, when the economy has been helped out and the wages rise, those same corporations go somewhere else to find cheaper labor. They’ll say this is a win-win situation.
Except when those corporations pack up and leave, the people left without the jobs face massive structural unemployment. Nobody is demanding their skills, so they have to make their way as best they can. Kind of like Detroit.
And that’s the new model for America: a city that’s seen better days, but now it has trouble scraping enough money together to fix the potholes. In their search for profits, the corporations built up with the idea of serving up a portion of the American Dream to one and all kept the profits and moved their jobs elsewhere.
Ahmedinijad hasn’t lost the will to rule, that’s why. Mubarak was old and tired and facing a regime change, anyway. Iran’s dear leader still has some spunk in him. Moreover, with the way the State Department is backing Twitter, Iran can now legitimately portray the website – and possibly also Facebook – as tools of the US Government… the same US Government that ordered the overthrow of Mossadeq in 1953 and that set up the Shah in his place.
Iran is ready to fight and break bones. I don’t see peaceful protest succeeding there because the police will make things violent as quickly as they can. Root for the plucky, wired-in activists if you want, but they’re not going to find much success in their efforts.
Not that the recent revolts had that much to do with the Internet, anyway. The people that speak English may use the Internet, but for the folks on the street that don’t have an ISP, things look a whole lot more like they did back in the day… I recommend “The Battle of Algiers” to understand their unwired world. What happened in Tunisia and Egypt and everywhere else looked just like the closing scenes of that film. The opening of the wave of unrest didn’t look like “The Social Network”, either. It looked more like the Buddhist monk immolating himself to protest the anti-Buddhist measures of the US-backed government of South Vietnam.
I’m now wondering if the 60s metaphor will extend to a general wave of economic decolonization. The nations attained political freedom in the 50s and 60s, but soon fell under the economic sway of the USA and its allies, becoming economic colonies. This wave of activism could very well be what unseats the American Empire… unless our forces join in the breaking of bones “to protect American interests”, as I suspect they will, one day soon.
The Texas Tribune reports how Texas is now last or next to bottom in a lot of good measures and #1 or near the top in a lot of bad ways. It also reports how Rick Perry is turning down money for education because he’s too busy being a martyr for limited government.
Get over yourself, Perry. You’re as useful as Hosni Mubarak right now. Maybe it’s time to just show up in Austin and start a protest to see who turns up. This is no idle threat, Mr. Perry: I know how to draw a crowd.
This is going to be a rant. I thought about what I’d like to say as my last words before I died and I realized I wanted more than just a pithy sentence. I plan to dish out the last wit and testament when I kick the bucket, should I be within earshot of anyone, but I have a lot more to say than that.
Hence, this rant.
A recent article on the BBC discusses the global concentration of wealth and how it is increasingly separating the wealthy of the world from the poor. And make no mistake: if a flirtation with a dread disease would wipe out your income and savings at a stroke, you are poor. You are not rich unless you could still make millions while dead.
Which probably explains the exuberance with which today’s crop of super-rich individuals work at looting the world. They do not yet have that stable, old money revenue stream. They are dependent on work. One heart attack, and their cash flow goes to zero. They take jobs at major banks, run spreadsheets constantly, and innovate ways of fleecing the world in order to line their pockets.
So what happens when the rich are too rich and the poor are too poor? The article concludes that the rich either have to spread the wealth or crack down harder. If they choose the latter course, they invite the day when, as the Lakota described it, the world will roll to and fro like a tired, angry old dog, trying to shake off the fleas sucking its blood.
So what do you want to do when you grow up? My recommendation: be virtuous. Live with dignity and bear up under hardships. You’ll keep your soul and you’ll need that for when capitalism is no more.
Interesting article about Iceland, which let its banks fail instead of bailing them out. Creditors for the banks had to take their losses and the taxpayers didn’t have to foot the bill. Iceland’s government took a hit and their economy went way down, but they’re apparently on their way back up.
Ireland, on the other hand, has a government that, like the US, wants its taxpayers to pay for the banks’ criminal, stupid, and/or reckless behavior. Iceland’s public debt, while high, is still manageable. Ireland has taken on debt that is 12 times – 1200% for those who like big percentages – of its GDP. This is known in economic circles as “unmanageable.”
While the USA has a big enough GDP to absorb the calamities of 2007-2008, will it be able to manage things if there is another banking crisis? It might happen… Click that last link for a paper on how the underlying fundamentals of the banking system remain reckless, stupid, and, yes, criminal.