Who hasn't heard these words from someone you know, a friend of a friend, maybe someone just out of school...? Words of anguish, no doubt.
The visible fallout from unemployment is disheartening enough. The invisible loss, the scarring, has even deeper implications. For some, the loss of a job equates to the loss of their life's work.
Jobs -- where are they, and why are they not coming back?
It's not that hard to figure out.
Job-eliminating, multi-decade-long trends are in motion: globalization, conglomeration and technological automation. Note, too, the speed at which we're moving, leaving some workers unskilled for the 21st-century jobs that may be out there. Let's consider, too, the implications of demographics: the aging baby-boomer generation drove a multi-decade-long growth and spending cycle, one that's shifting.
The housing bubble masked the underlying jobs problem within the economy brought on by the trends noted above. In the last decade, the U.S. shed jobs on a net basis from 132 million in nonfarm payrolls (August 2001) to 131.1 million in August 2011. The 8 million jobs created following the 2003 Bush tax cuts vanished as the financial meltdown unfolded. Jobs resultant from an artificial housing bubble proved unsustainable.
The financial system -- the backbone of the economy -- appears broken. Just recently, the Federal Reserve asked the largest bank, Bank of America, about its plans should conditions worsen.
Is this 2008 redux?
Without healthy financial institutions, how can credit flow efficiently through the economy to job-creating entities, small businesses, for example (which account for some 65 percent of net new jobs). Instead of deploying resources toward productive uses, resources now go to stave off the ongoing financial fallout (by keeping the banking system afloat, for example).
The public sector continues to expand while the private sector limps along. Little wonder that GDP growth in the first half of the year remains anemic. Little wonder that U.S. national debt continues to escalate. Get this: since the U.S. national debt ceiling debate (a mere month ago), U.S. national debt grew by $400 billion, from $14.3 trillion to $14.7 trillion. Wow!
Corporations continue to achieve productivity gains through cost cuts, which further erode jobs and benefits and lead to wage compression and/or wage stagnation. The words of Citi's Chief Investment Officer are chilling: "The corporate sector continues to simply slash costs rather than focus on top-line growth. ... If you carry on just cutting costs and cutting people, at some stage the growth will stop."
What about jobs? What about a stock market dependent upon growth and corporate profitability? Investors (pensions included) rely on stock market returns to meet obligations.
Take note: as Larry Kudlow writes on Real Clear Markets, "[W]hile jobs, the economy, and stocks slumped over the past ten years, the dollar dropped 37 percent and gold increased by nearly 500 percent, from $250 to nearly $1,900 an ounce."
We're familiar with buzzwords like "interconnected financial system" and "systemic risk." What of societal systemic risk from sustained unemployment? Unemployment feels like a "lives on hold" waiting room, forestalling human and economic progress.
Note: As Forrest Jones explains on MoneyNews.com, "In the United States, many companies need consumers to spend again, but bad economic news -- especially high unemployment rates -- and uncertainty are keeping household purse strings tight and economic growth sluggish at best." Simply put, we need each other.
Here's another viewpoint, from Peter Morici, an economist at the University of Maryland:
Jobs creation remains weak, because temporary tax cuts, stimulus spending, large federal deficits, expensive and ineffective business regulations, and increased health care mandates and costs do not address structural problems holding back dynamic growth and jobs creation -- the huge trade deficit and dysfunctional energy policies.
To spur growth and jobs, the U.S. government stimulated the economy, yet the economy is not responding the way we had hoped. Why? James Galbraith of the University of Texas writes:
In fact, stimulus alone was never going to bring recovery. This crisis was caused by financial collapse, rooted in massive banking fraud. The financial system is our economic motor and when it fails it cannot be revived simply by pouring money on it, any more than a wrecked reactor can be restarted just by adding fuel.
Financial institutions are now mired in a hornet's nest of legal problems, which further exacerbates the jobs crisis. This takes away the focus from where it's badly needed. Reuters reports:
Major banks already face potential payouts of tens of billions of dollars to settle regulatory charges of abusive mortgage lending and foreclosure practices, and other investor lawsuits over mortgage debt losses.
Such payouts would reduce earnings and weaken capital levels, perhaps harming the ability of banks to lend money and provide much-needed life to a stalled housing market and weakened economy.
The latest twist in the litigation litany? Oddly, the Federal Housing Finance Agency (FHFA) is suing 17 large banks and financial institutions for "misrepresenting the checks they had done on mortgages before bundling them into securities." In my first Huffington Post blog, I note that "bad loans are bad loans no matter how one packages them up." The FHFA lawsuit may now potentially complicate the sought-after $20-billion bank settlement by states' Attorney Generals -- sans New York Attorney General Schneiderman, who will not back the settlement until alleged bank fraud and wrongdoing is investigated.
As the twisting, turning, inconsistency-filled financial thriller rolls...
This just in: "Lucrative Package for Outgoing Bank of New York Mellon Chief" -- north of $30 million. Here we go again.
I can't help but think of Antoine de Saint-Exupéry's The Little Prince. Do you recall the businessman occupying the Fourth Planet? He spent his life counting and owning stars being disturbed only three times in 54 years. Need I say more?
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