The following is excerpted from "End This Depression Now!" available now from W.W. Norton & Company.
I think as those green shoots begin to appear in different markets and as some confidence begins to come back that will begin the positive dynamic that brings our economy back.
Do you see green shoots?
I do. I do see green shoots.
--Ben Bernanke, chairman of the Federal Reserve, interviewed by 60 Minutes, March 15, 2009
In March 2009 Ben Bernanke, normally neither the most cheerful nor the most poetic of men, waxed optimistic about the economic prospect. After the fall of Lehman Brothers six months earlier, America had entered a terrifying economic nosedive. But appearing on the TV show 60 Minutes, the Fed chairman declared that spring was at hand.
His remarks immediately became famous, not least because they bore an eerie resemblance to the words of Chance, aka Chauncey Gardiner, the simpleminded gardener mistaken for a wise man in the movie Being There. In one scene Chance, asked to comment on economic policy, assures the president, "As long as the roots are not severed, all is well and all will be well in the garden. . . . There will be growth in the spring." Despite the jokes, however, Bernanke's optimism was widely shared. And at the end of 2009 Time declared Bernanke its Person of the Year.
Unfortunately, all was not well in the garden, and the promised growth never came.
To be fair, Bernanke was right that the crisis was easing. The panic that had gripped financial markets was ebbing, and the economy's plunge was slowing. According to the official scorekeepers at the National Bureau of Economic Research, the so-called Great Recession that started in December 2007 ended in June 2009, and recovery began. But if it was a recovery, it was one that did little to help most Americans. Jobs remained scarce; more and more families depleted their savings, lost their homes, and, worst of all, lost hope. True, the unemployment rate is down from the peak it reached in October 2009. But progress has come at a snail's pace; we're still waiting, after all these years, for that "positive dynamic" Bernanke talked about to make an appearance.
And that was in America, which at least had a technical recovery. Other countries didn't even manage that. In Ireland, in Greece, in Spain, in Italy, debt problems and the "austerity" programs that were supposed to restore confidence not only aborted any kind of recovery but produced renewed slumps and soaring unemployment.
And the pain went on and on. I'm writing these words almost three years after Bernanke thought he saw those green shoots, three and a half years after Lehman fell, more than four years after the start of the Great Recession. The citizens of the world's most advanced nations, nations rich in resources, talent, and knowledge--all the ingredients for prosperity and a decent standard of living for all--remain in a state of intense pain.
In the rest of this chapter I'll try to document some of the main dimensions of that pain. I'll focus mainly on the United States, which is both my home and the country I know best, reserving an extended discussion of the pain abroad for later in the book. And I'll start with the thing that matters most--and the thing on which we've performed the worst: unemployment.
The Jobs Drought
Economists, the old line goes, know the price of everything and the value of nothing. And you know what? There's a lot of truth to that accusation: since economists mainly study the circulation of money and the production and consumption of stuff, they have an inherent bias toward assuming that money and stuff are what matter. Still, there is a field of economic research that focuses on how self-reported measures of well-being, such as happiness or "life satisfaction," are related to other aspects of life. Yes, it's known as "happiness research"--Ben Bernanke even gave a speech about it in 2010, titled "The Economics of Happiness." And this research tells us something very important about the mess we're in.
Sure enough, happiness research tells us that money isn't all that important once you get to the point of being able to afford the necessities of life. The payoff to being richer isn't literally zero--citizens of rich countries are, on average, somewhat more satisfied with their lives than citizens of less well-off nations. Also, being richer or poorer than the people you compare yourself with is a fairly big deal, which is why extreme inequality can have such a corrosive effect on society. But when all is said and done, money is less important than crude materialists--and many economists--would like to believe.
That's not to say, however, that economic affairs are unimportant in the true scale of things. For there's one economics-driven thing that matters enormously to human well-being: having a job. People who want to work but can't find work suffer greatly, not just from the loss of income but from a diminished sense of self-worth. And that's a major reason why mass unemployment--which has now been going on in America for four years--is such a tragedy.
How severe is the problem of unemployment? That question calls for a bit of discussion.
Clearly, what we're interested in is involuntary unemployment. People who aren't working because they have chosen not to work, or at least not to work in the market economy--retirees who are glad to be retired, or those who have decided to be full-time housewives or househusbands--don't count. Neither do the disabled, whose inability to work is unfortunate, but not driven by economic issues.
Now, there have always been people claiming that there's no such thing as involuntary unemployment, that anyone can find a job if he or she is really willing to work and isn't too finicky about wages or working conditions. There's Sharron Angle, the Republican candidate for the Senate, who declared in 2010 that the unemployed were "spoiled," choosing to live off unemployment benefits instead of taking jobs. There are the people at the Chicago Board of Trade who, in October 2011, mocked anti-inequality demonstrators by showering them with copies of McDonald's job application forms. And there are economists like the University of Chicago's Casey Mulligan, who has written multiple articles for the New York Times website insisting that the sharp drop in employment after the 2008 financial crisis reflected not a lack of employment opportunities but diminished willingness to work.
The classic answer to such people comes from a passage near the beginning of the novel The Treasure of the Sierra Madre (best known for the 1948 film adaptation starring Humphrey Bogart and Walter Huston): "Anyone who is willing to work and is serious about it will certainly find a job. Only you must not go to the man who tells you this, for he has no job to offer and doesn't know anyone who knows of a vacancy. This is exactly the reason why he gives you such generous advice, out of brotherly love, and to demonstrate how little he knows the world."
Quite. Also, about those McDonald's applications: in April 2011, as it happens, McDonald's did announce 50,000 new job openings. Roughly a million people applied.
If you have any familiarity with the world, in short, you know that involuntary unemployment is very real. And it's currently a very big deal.
How bad is the problem of involuntary unemployment, and how much worse has it become?
The U.S. unemployment measure you usually hear quoted in the news is based on a survey in which adults are asked whether they are either working or actively seeking work. Those who are seeking work but don't have jobs are considered unemployed. In December 2011 that amounted to more than 13 million Americans, up from 6.8 million in 2007.
If you think about it, however, this standard definition of unemployment misses a lot of distress. What about people who want to work, but aren't actively searching either because there are no jobs to be had, or because they've grown discouraged by fruitless searching? What about those who want full-time work, but have only been able to find part-time jobs? Well, the U.S. Bureau of Labor Statistics tries to capture these unfortunates in a broader measure of unemployment, known as U6; it says that by this broader measure there are about 24 million unemployed Americans--about 15 percent of the workforce--roughly double the number before the crisis.
Yet even this measure fails to capture the extent of the pain. In modern America most families contain two working spouses; such families suffer, both financially and psychologically, if either spouse is unemployed. There are workers who used to make ends meet with a second job, now down to an inadequate one, or who counted on overtime pay that no longer arrives. There are independent businesspeople who have seen their income shrivel. There are skilled workers, accustomed to holding down good jobs, who have been forced to accept work that uses none of their skills. And on and on.
There is no official estimate of the number of Americans caught up in this sort of penumbra of formal unemployment. But in a June 2011 poll of likely voters--a group probably in better shape than the population as a whole--the polling group Democracy Corps found that a third of Americans had either themselves suffered from job loss or had a family member lose a job, and that another third knew someone who had lost a job. Moreover, almost 40 percent of families had suffered from reduced hours, wages, or benefits.
The pain, then, is very widespread. But that's not the whole story: for millions, the damage from the bad economy runs very deep.
Reprinted from End This Depression Now! by Paul Krugman. Copyright © 2012 by Paul Krugman. With the permission of the publisher, W.W. Norton & Company.
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Max Fraad Wolff: April Employment Showers
Krugman points out the Republican Party as an example, but Obama and the Dems are guilty as well. We need to stop letting elected officials think they are the most informed knowledgeable people about every issue under the sun. Let the economists tell you whats best for the economy, and then do it.
Obama, and by extension Summers, should've listened more closely to what Romer was trying to tell them.
face?
now back to your mindless staged reality tv programming - just like your staged American justice
the supreme court has been bought and paid for,
they set the the standard of justice for being "above the law,"
http://www.huffingtonpost.com/2012/01/05/chief-justice-john-roberts-supreme-court-ethics_n_1184780.html
much like the banksters and the 1% neocons causing our second depression,
"engineering" their private government bailouts,
being flush with Trillions in cash they invest in China and hide in offshore havens,
"engineering" taxfree offshore stash "repatriation" holidays,
begged by the white house to buy the assets they destroyed, our homes and assets, for pennies on the dollar,
with complete government guarantees against any losses,
the true definition of socialism of losses,
privatized gains,
while destroying any accumulated wealth, social programs and educational opportunities for hundreds of millions of Americans,
the 1% neocons own the game, the supreme court, the administration, the media,
we are their disposable pawns,
questioning and critical thinking are not allowed for us mere worker drones,
of course they are "above the law,"
checkmate,
back to dancing with the pseudo-stars
I know as a fact that is the case. So what else do you want the president on? Equal rights?
Equql pay? Saving Americans billions on health care?
Women paying the same for health insurance in all states?Those are starters.
http://www.commondreams.org/view/2012/05/11-10
Shock Doctrine Opponents Revolt: The Austerity Backlash Across Europe | Common Dreams
"...Democracy in Europe has not been suspended, and the collision course is more apparent than ever. "Stop the world, we want to get off!" was The Wall Street Journal's verdict on the mounting European anti-austerity backlash. The truth is that the real world has paid the high priests of austerity an unwelcome visit. Their policies have sucked growth out of the economy, failed to tackle debt, dramatically increased unemployment, and devastated living standards. It would be utterly baffling if people did not fight back.
No wonder Greece is at the forefront of the backlash. A modern European society is being dismembered by austerity. The economy has shrunk by nearly a fifth, and the country's debt continues to mount. Over half of young people are without work; the minimum wage has been slashed to desperately low levels; and wages have fallen by a third since 2009. Then there's the ultimate indicator of despair: the number of people taking their own lives. Greece had one of the lowest suicide rates in the world, but experts suggest it may have doubled since the crisis began. Austerity is literally killing people..."
We have no such problem here, The republicans intend to harm us in fact they have, that meets the definition of Evil.
U.S. workers' share of national income is at an ALL-TIME low:
http://research.stlouisfed.org/fred2/series/PRS85006173
FRED« Nonfarm Business Sector: Labor Share
While corporate profits are increasing:
http://research.stlouisfed.org/fred2/series/CP
FRED« Corporate Profits After Tax
Mainly because of reduced wages and benefits:
"JPMorgan’s July 11 “Eye on the Market” newsletter put it, “Reductions in wages and benefits explain the majority of the net improvement in [profit] margins… US labor compensation is now at a 50-year low relative to both company sales and US GDP.”
Ok... that's the death metal version...
Censorship is evil.
In 2011, the Obama administration selected Jeff "I'm a nut on China" Immelt, GE's CEO, a high priest of the offshoring cult, to be the jobs czar.
Workers have few friends in the corporate-controlled two-party duopoly.
2004 President's Economic Report.
BUSH: SENDING JOBS OVERSEAS HELPS U.S
February 10, 2004
WASHINGTON — The movement of American factory jobs and white-collar work to other countries is part of a positive transformation that will enrich the U.S. economy over time, even if it causes short-term pain and dislocation, the Bush administration said yesterday.
I'm a controlled substance and abused by most. --American worker
1. Get rid of congress and the supreme court and give Obama temporary dictatorial powers. Replace the legislative body with one giving coastal states more power than landlocked ones and set 3 year term limits for supreme court justices.
2. Institute a massive government funded infrastructure investment program paid for by dissolving multinational banks, seizing all their assets and nationalizing the banking sector.
3. Abolish all free trade agreements and institute a 90% tariff on all countries who manipulate their currencies who desire access to the U.S. marketplace.
4. Forgive all student debt and eliminate tuition charges at all state universities.
5. Extend medicare for all and abolish private health insurance and all medical debt.
6. Enact an emergency 90% income tax on income above $250,000. If capital flight ensues use the military to find the tax evader, incarcerate him or her and seize every single one of their assets.
Do these simple 6 steps and you'll have a vibrant economy that pays for itself within 5 years. All that's required is you eliminate the notion that the market works.
Excelsior
Where exactly has this "solution" (in any form) worked?
What makes you confident this would "fix" anything?
http://www.amazon.com/Welcome-Free-America-David-Barker/dp/1105027791
Amazon.com: Welcome To Free America (9781105027796): David Barker: Books
"Welcome to Free America describes America in the year 2057, 26 years after government has collapsed. The book is written as a guide for new immigrants. Free America is not a paradise, but it is prosperous and free, and manages to function in the complete absence of government. Readers may differ over whether the society described is a utopia or a dystopia."
Given corporations' history, that would be hell on earth.