Gen Z Hates The US In Record Numbers

The Idle Army: America’s Unworking Men

OPINION 

COMMENTARY

Millions of young males have left the workforce and civic life. Full employment? The U.S. isn’t even close.

PHOTO: GETTY IMAGES
By
NICHOLAS EBERSTADT

Sept. 1, 2016 6:40 p.m. ET

Labor Day is an appropriate moment to reflect on a quiet catastrophe: the collapse, over two generations, of work for American men. During the past half-century, work rates for U.S. males spiraled relentlessly downward. America is now home to a vast army of jobless men who are no longer even looking for work—roughly seven million of them age 25 to 54, the traditional prime of working life.

This is arguably a crisis, but it is hardly ever discussed in the public square. Received wisdom holds that the U.S. is at or near “full employment.” Most readers have probably heard this, perhaps from the vice chairman of the Federal Reserve, who said in a speech last week that “it is a remarkable, and perhaps underappreciated, achievement that the economy has returned to near-full employment in a relatively short time after the Great Recession.”

Near-full employment? In 2015 the work rate (the ratio of employment to population) for American males age 25 to 54 was 84.4%. That’s slightly lower than it had been in 1940, 86.4%, at the tail end of the Great Depression. Benchmarked against 1965, when American men were at genuine full employment, the “male jobs deficit” in 2015 would be nearly 10 million, even after taking into account an older population and more adults in college.

Or look at the fraction of American men age 20 and older without paid work. In the past 50 years it rose to 32% from 19%, and not mainly because of population aging. For prime working-age men, the jobless rate jumped to 15% from 6%. Most of the postwar surge involved voluntary departure from the labor force.

Until roughly the outbreak of World War II, working-age American men fell into basically two categories: either holding a paid job or unemployed. There was no “third way” for able-bodied males. Today there is one: neither working nor seeking work—that is, men who are outside the labor force altogether. Unlike in the past, the U.S. is now evidently rich enough to carry them, after a fashion. The no-work life hardly consigns these men to destitution.

This is at least somewhat true throughout the affluent West, but the U.S. has led the pack. Not even in dysfunctional Greece or “lost generation” Japan has the male flight from work proceeded with such alacrity. The paradox is that Americans—those who do have jobs—are still among the rich world’s hardest-working people. No other developed society puts in such long hours, and at the same time supports such a large share of younger men neither holding jobs nor seeking them.

Who are America’s new cadre of prime-age male unworkers? They tend to be: 1) less educated; 2) never married; 3) native born; and 4) African-American. But those categories intersect in interesting ways. Black married men are more likely to be in the workforce than unmarried whites. Immigrants are more likely to be working or job-hunting than native-born Americans, regardless of ethnicity. High-school dropouts from abroad are as likely to be working or looking for work as native-born college grads.

What do unworking men do with their free time? Sadly, not much that’s constructive. About a tenth are students trying to improve their circumstances. But the overwhelming majority are what the British call NEET: “neither employed nor in education or training.” Time-use surveys suggest they are almost entirely idle—helping out around the house less than unemployed men; caring for others less than employed women; volunteering and engaging in religious activities less than working men and women or unemployed men. For the NEETs, “socializing, relaxing and leisure” is a full-time occupation, accounting for 3,000 hours a year, much of this time in front of television or computer screens.

Clearly big changes in the U.S. economy, including the decline of manufacturing and the Big Slowdown since the start of the century, have played a role. But something else is at work, too: the male flight from work has been practically linear over the past two generations, irrespective of economic conditions or recessions.

What we might call “sociological” factors are evident, not least the tremendous rise in unworking men who draw from government disability and means-tested benefit programs. There are also the barriers to work for America’s huge pool of male ex-prisoners and felons not behind bars—a poorly tracked cohort that accounts for one adult male in eight in the civilian population, excluding those in jail now.

Regardless of its cause, this new normal is inimical to America’s national interests. Declining labor-force participation and falling work rates have contributed to slower economic growth and widening gaps in income and wealth. Slower growth in turn reduces tax revenue and increases budgetary pressures, producing higher deficits and national debt. Unworking men have increased poverty in the U.S., not least among the great many children whose fathers are without jobs.

There are the social effects, too. The male retreat from the labor force has exacerbated family breakdown, promoted welfare dependence and recast “disability” into a viable alternative lifestyle. Among these men the death of work seems to mean also the death of civic engagement, community participation and voluntary association.

In short, the American male’s postwar flight from work is a grave social ill. Strangely, nearly everyone—the news media, major political parties, intellectuals, business leaders, policy makers—has managed to overlook it. The urgency of the moment is to bring this invisible crisis out of the shadows.

Imagine how different America would be today if another roughly 10 million men held paying jobs. It is imperative for the future health of the country to make a determined and sustained effort to bring these detached men back—into the workplace, into their families, into civil society.

Mr. Eberstadt is a political economist at the American Enterprise Institute in Washington, D.C. This is adapted from his book “Men Without Work: America’s Invisible Crisis,” out this month from Templeton Press.

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Why America’s men aren’t working

The Washington Post

Ylan Q. Mui

5 hrs ago




The national unemployment rate has fallen by more than half since the nation emerged from the worst economic crisis since the Great Depression. It peaked at 10 percent in 2010 and stood at just 4.7 percent last month.


That’s mostly good news: Private employers have added more than 14 million jobs. About 2 million people have been out of a job for six months or longer, far too many but only about a quarter of the number of long-term unemployed people seven years ago. By almost every measure, the labor market has made incredible progress.


But there’s one statistic that has been vexing economists. The size of the nation’s workforce -- known as the labor force participation rate -- continues to fall. Since the start of the downturn, the percentage of that population that has a job or is looking for one has dropped more than 3 percentage points, to 62.6 percent, a level not seen since the 1970s.

The problem is particularly pronounced among men between the ages of 25 and 54, traditionally considered the prime working years. Their participation rate has been declining for decades, but the drop-off accelerated during the recession. The high mark was 98 percent in 1954, and it now stands at 88 percent. A new analysis from the White House’s Council of Economic Advisers, slated for release Monday, found that the United States now has the third-lowest participation rate for “prime-age men” among the world’s developed countries.

In other words, Greece, Slovenia and Turkey have a larger share of men in their workforces than the United States does. The United States beats only Italy and Israel.

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The CEA’s analysis looks at several common theories behind why so many American men have dropped out of the job market. Legions of women have joined the workforce since the 1950s, when about one-third of them had a job or were looking for one. Women’s participation rate topped 50 percent in the late 1970s and peaked at about 60 percent in the early 2000s. Perhaps fewer men are working because their wives are bringing home the bacon instead.

But the share of women in the workforce also has decreased significantly since the recession. And the CEA found that less than a quarter of prime-age men have a working spouse -- and that number has actually declined over the past 50 years.

Economists have posited that Social Security Disability Insurance could be incentivizing men to enroll in government assistance rather than look for work. The number of disability insurance recipients has risen by 2 percent since the late 1960s, not enough to account for the much greater drop in the male workforce. The CEA estimates that the increase in disability insurance explains only about half a percentage point of the decline in the male participation rate.

Instead, the CEA concludes that the problem is one of education and the erosion of demand for low-skilled workers. More than 90 percent of college-educated men are in the workforce, compared with 83 percent of those with a high school diploma or less. It’s a theme seen time and again in our increasingly globalized and high-tech economy: Blue-collar jobs that were once the cornerstone of the middle class get outsourced or replaced by automation.

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There’s a ripple effect, too. When a manufacturing plant shuts down, for example, the laid-off employees may wind up in lower-skilled jobs, displacing those workers and potentially forcing them out of the labor market.

The lower the wage, the more likely workers are to pass up the job altogether. The CEA looked at state-level data and found that among the bottom 10 percent of wage earners, a $1,000 increase in annual income boosted the participation rate by 0.16 percent for prime-age men.

“ When the returns to work for those at the bottom of the wage distribution are particularly low, more prime-age men choose not to participate in the labor force,” the report states.

The report also explores one more unorthodox explanation: the high number of men who have been incarcerated. The CEA notes that the U.S. prison population has grown significantly since 1990 and is far above that of any other developed country.

People in prison are not counted as part of the population for the purposes of labor market statistics. At first blush, that would actually boost the participation rate: A smaller population means the share in the workforce is larger. But in reality, there are immense and well-documented barriers to the job market for workers once they leave prison. And the gloomy prospects of the formerly incarcerated outweigh the statistical benefit of having a large prison population.

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Of course, the CEA argues that White House proposals -- from familiar positions such as raising the minimum wage and expanding the earned-income tax credit to wonkier ones such as reforming community colleges and flexibility in claiming unemployment benefits -- can help more men return to the workforce.

But the bigger question is whether there is really a way to reverse the tide, or if the best hope is to merely mitigate the pain. For 60 years, economists have debated the answer. And still, the share of men in the workforce continues to shrink.

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The City Slums

In the great cities are multitudes who receive less care and consideration than are given to dumb animals. Think of the families herded together in miserable tenements, many of them dark basements, reeking with dampness and filth. In these wretched places children are born and grow up and die. They see nothing of the beauty of natural things that God has created to delight the senses and uplift the soul. Ragged and half-starved, they live amid vice and depravity, molded in character by the wretchedness and sin that surround them. Children hear the name of God only in profanity. Foul speech, imprecations, and revilings fill their ears. The fumes of liquor and tobacco, sickening stenches, moral degradation, pervert their senses. Thus multitudes are trained to become criminals, foes to society that has abandoned them to misery and degradation.

Not all the poor in the city slums are of this class. God-fearing men and women have been brought to the depths of poverty by illness or misfortune, often through the dishonest scheming of those who live by preying upon their fellows. Many who are upright and well-meaning become poor through lack of industrial training. Through ignorance they are unfitted to wrestle with the difficulties of life. Drifting into the cities, they are often unable to find employment. Surrounded by the sights and sounds of vice, they are subjected to terrible temptation. Herded and often classed with the vicious and degraded, it is only by a superhuman struggle, a more than finite power, that they can be preserved from sinking to the same depths. Many hold fast their integrity, choosing to suffer rather than to sin. This class especially demand help, sympathy, and encouragement.

If the poor now crowded into the cities could find homes upon the land, they might not only earn a livelihood, but find health and happiness now unknown to them. Hard work, simple fare, close economy, often hardship and privation, would be their lot. But what a blessing would be theirs in leaving the city, with its enticements to evil, its turmoil and crime, misery and foulness, for the country's quiet and peace and purity.

To many of those living in the cities who have not a spot of green grass to set their feet upon, who year after year have looked out upon filthy courts and narrow alleys, brick walls and pavements, and skies clouded with dust and smoke--if these could be taken to some farming district, surrounded with the green fields, the woods and hills and brooks, the clear skies and the fresh, pure air of the country, it would seem almost like heaven.

Cut off to a great degree from contact with and dependence upon men, and separated from the world's corrupting maxims and customs and excitements, they would come nearer to the heart of nature. God's presence would be more real to them. Many would learn the lesson of dependence upon Him. Through nature they would hear His voice speaking to their hearts of His peace and love, and mind and soul and body would respond to the healing, life-giving power.

If they ever become industrious and self-supporting, very many must have assistance, encouragement, and instruction. There are multitudes of poor families for whom no better missionary work could be done than to assist them in settling on the land and in learning how to make it yield them a livelihood.

The need for such help and instruction is not confined to the cities. Even in the country, with all its possibilities for a better life, multitudes of the poor are in great need. Whole communities are devoid of education in industrial and sanitary lines. Families live in hovels, with scant furniture and clothing, without tools, without books, destitute both of comforts and conveniences and of means of culture. Imbruted souls, bodies weak and ill-formed, reveal the results of evil heredity and of wrong habits. These people must be educated from the very foundation. They have led shiftless, idle, corrupt lives, and they need to be trained to correct habits.

How can they be awakened to the necessity of improvement? How can they be directed to a higher ideal of life? How can they be helped to rise? What can be done where poverty prevails and is to be contended with at every step? Certainly the work is difficult. The necessary reformation will never be made unless men and women are assisted by a power outside of themselves. It is God's purpose that the rich and the poor shall be closely bound together by the ties of sympathy and helpfulness. Those who have means, talents, and capabilities are to use these gifts in blessing their fellow men.

Christian farmers can do real missionary work in helping the poor to find homes on the land and in teaching them how to till the soil and make it productive. Teach them how to use the implements of agriculture, how to cultivate various crops, how to plant and care for orchards.

Many who till the soil fail to secure adequate returns because of their neglect. Their orchards are not properly cared for, the crops are not put in at the right time, and a mere surface work is done in cultivating the soil. Their ill success they charge to the unproductiveness of the land. False witness is often borne in condemning land that, if properly worked, would yield rich returns. The narrow plans, the little strength put forth, the little study as to the best methods, call loudly for reform.

Let proper methods be taught to all who are willing to learn. If any do not wish you to speak to them of advanced ideas, let the lessons be given silently. Keep up the culture of your own land. Drop a word to your neighbors when you can, and let the harvest be eloquent in favor of right methods. Demonstrate what can be done with the land when properly worked.

Attention should be given to the establishment of various industries so that poor families can find employment. Carpenters, blacksmiths, and indeed everyone who understands some line of useful labor, should feel a responsibility to teach and help the ignorant and the unemployed.

In ministry to the poor there is a wide field of service for women as well as for men. The efficient cook, the housekeeper, the seamstress, the nurse--the help of all is needed. Let the members of poor households be taught how to cook, how to make and mend their own clothing, how to nurse the sick, how to care properly for the home. Let boys and girls be thoroughly taught some useful trade or occupation.
  

The Ministry of Healing, E.G. White, p.189-194.
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Pope Francis Equates Unemployment With Impending Suicide, Says Wealth Must Be Redistributed

VATICAN CITY (AP) — Pope Francis extolled the benefits of sharing wealth with the poor on Tuesday, warning that “unjust” social conditions like unemployment can lead to sin, financial ruin and even suicide.



Do YOU know of any other city that sits on 7 hills, wears purple and scarlet and is drunk on the blood of all the saints they killed?

The Jesuit pope has frequently railed about the excesses of capitalism and income disparity in a globalized world, and his message for Lent issued Tuesday echoed those same concerns.

Lent is the solemn period leading up to Holy Week and Easter, when the faithful recall Christ’s death and resurrection. It’s a time when Christians often fast, and Francis urged the faithful to deny themselves certain things this Lent “to help and enrich others by our own poverty.”

“When power, luxury and money become idols, they take priority over the need for a fair distribution of wealth,” he said in the short message. “Our consciences thus need to be converted to justice, equality, simplicity and sharing.”

He said it’s not enough to just make charitable offerings. “Let us not forget that real poverty hurts: no self-denial is real without this dimension of penance. I distrust a charity that costs nothing and does not hurt,” he wrote.

While calling for Christians to actually touch poverty and make it their own, Francis distinguished material poverty or destitution from moral destitution, which he said “consists of slavery to vice and sin.”

“How much pain is caused in families because one of their members – often a young person – is in thrall to alcohol, drugs, gambling and pornography!” he lamented. Sometimes “unjust social conditions” like unemployment lead to this type of destitution by depriving people of the dignity of work and access to education and health care, he said.

“In such cases, moral destitution can be considered impending suicide.”

Francis has riled some conservative Americans for his denunciation of capitalism and trickle-down economic theory, which is says is based on a survival of the fittest mentality “where the powerful feed upon the powerless” with no regard for ethics, the environment or even God.

His predecessor, Pope Benedict XVI, however, espoused the exact same concerns, writing an entire encyclical in 2009 in which he denounced the profit-at-all-cost mentality blamed for bringing about the global financial meltdown and called for a new world financial order guided by ethics and the search for the common good. source – AP


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Unemployment down to 6.7 percent, not 6.66?

The unemployment rate fell to 6.7 percent. Don’t celebrate.


By Neil Irwin


January 10 at 9:42 am



A tradition like no other: The jobs sign as an illustration of our jobs report story. (Karen Bleier/AFP/Getty Images)

...

The unemployment rate fell to 6.7 percent, which is the lowest since October 2008. But this apparent good news has a dark lining -- 347,000 people dropped out of the labor force (that is, are no longer looking for work) while only 143,000 additional people reported having a job. Interestingly, a broader measure of unemployment that also captures people who have given up looking for a job out of frustration didn'tdidn’t budge, remaining at 13.1 percent. 

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Flashback to the Fall of 2008, when President George W. Bush addressed the nation regarding the subprime mortgage crisis, toxic assets, and the need to pump $700 Billion into the federal government to avoid a financial collapse.

Just a few days after his inauguration in 2009, President Barack Obama called for the American Recovery and Reinvestment Act to jump start the economy; proposed cost $787 Billion.

Ever since taking office the Obama Administration has devised several techniques to improve the economic condition of the nation:

1. Shovel Ready Jobs;
2. Extension of Unemployment Benefits to 99 weeks;
3. Cash for Clunkers;
4.  And several other measures that didn't amount to much...

Remember the Recovery Summer of 2010?

Ever since I can remember (perhaps, the last 5 years) the Federal Reserve has been pumping $85 Billion per month into the economy:

The Federal Reserve (and other Central Banks) have been 'printing' money in recent years under various code-names, including Quantitive Easing (QE 1, 2, & 3), LTRO, SMP, TWIST, TARP and TALF, in order to bring unemployment down & speed up the economy. This article explains the failure behind the current money printing scheme and how banks, not people, get the money.

http://demonocracy.info/infographics/usa/federal_reserve-qe3/money_printing-2012-2013.html

Photo (Courtesy)  http://www.npr.org/2013/12/17/251796694/year-in-numbers-the-federal-reserves-85-billion-question


In December 2013, the Federal Reserve hinted that it might 'reduce' the Quantitative Easing to a smaller amount...


In January 2014 we hear President Barack Obama talking about wage disparity and Income Inequality; parroting the Roman Pontiff's latest critique of the Capitalist Financial System and its Trickle Down Economics.

Poverty?

Then, yesterday (01/21/2014), the White House revealed that the President will meet with the Bishop of Rome on March 27, 2014...


And you wonder whether the Unemployment Rate is down to 6.7%?

I think the unemployment rate is rather down to 6.66%, and the signs and wonder are all over the place (for those that have ears to hear and eyes to see)!

Photo (Courtesy) http://www.naplesnews.com/news/2014/jan/21/president-obama-pope-francis-shared-economic-view/

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Arsenio.
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Alarm at Spain's economic woes

Latest News
15 May 2013




The General Secretary of the Commission of European Bishops' Conferences (Comece) this week said he "broadly agreed" with the Archbishop of Toledo, who called for a change of direction in the Spanish economy to avoid a collapse of the political system. "The situation in Europe has become deeply worrying," Fr Patrick Daly told The Tablet. "There are some huge tensions in the European Union family now."

Archbishop Braulio Rodriguez had told The Telegraph: "Unemployment has reached tremendous levels and austerity cuts don't seem to be producing results. There is deep unease across the whole society, and it is not just in Spain. We have to give people some hope or this is going to foment conflict and mutual hatred."

However, Fr Daly emphasised that Comece remains deeply committed to Europe and does not take a position on whether any particular country would be better off outside the euro.

Above: Men in Valencia receive hand-outs of soup. According to Caritas Spain 22 per cent of Spanish households are living in poverty. Photo: CNS/Heino Kalis, Reuters

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The Adventures of Unemployed Man

A CLASSIC MASTERWORK

Beyond being a hilarious and brilliant dissection of our current economic meltdown, The Adventures of Unemployed Man is an all-time classic.

The art is done by such comics masters as Ramona Fradon, Rick Veitch, Michael Netzer, Terry Beatty, Josef Rubenstein, Benton Jew, Thomas Yeates, Shawn Martinbrough, Clem Robins, Tom Orzechowski, Thomas Mauer and Lee Loughridge. See their bios and be amazed—then see the book, and be even more amazed!

Every page is a stunning work of art in itself. In fact, many pages are now limited-edition fine art posters. With one page selling for as much as 100 dollars, the 80 page book is an extremely good value.

Look inside the book at Barnes & Noble.

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The Offshore Outsourcing of American Jobs: A Greater Threat Than Terrorism

By Dr. Paul Craig Roberts

Global Research, February 17, 2013

Creators Syndicate and Global Research 18 April 2010

Is offshore outsourcing good or harmful for America? To convince Americans of outsourcing’s benefits, corporate outsourcers sponsor misleading one-sided “studies.”

Only a small handful of people have looked objectively at the issue. These few and the large number of Americans whose careers have been destroyed by outsourcing have a different view of outsourcing’s impact. But so far there has been no debate, just a shouting down of skeptics as “protectionists.”

Now comes an important new book, Outsourcing America, published by the American Management Association. The authors, two brothers, Ron and Anil Hira, are experts on the subject. One is a professor at the Rochester Institute of Technology, and the other is professor at Simon Fraser University.

The authors note that despite the enormity of the stakes for all Americans, a state of denial exists among policymakers and outsourcing’s corporate champions about the adverse effects on the US. The Hira brothers succeed in their task of interjecting harsh reality where delusion has ruled.

In what might be an underestimate, a University of California study concludes that 14 million white-collar jobs are vulnerable to being outsourced offshore. These are not only call-center operators, customer service and back-office jobs, but also information technology, accounting, architecture, advanced engineering design, news reporting, stock analysis, and medical and legal services. The authors note that these are the jobs of the American Dream, the jobs of upward mobility that generate the bulk of the tax revenues that fund our education, health, infrastructure, and social security systems.

The loss of these jobs “is fool’s gold for companies.” Corporate America’s short-term mentality, stemming from bonuses tied to quarterly results, is causing US companies to lose not only their best employees-their human capital-but also the consumers who buy their products. Employees displaced by foreigners and left unemployed or in lower paid work have a reduced presence in the consumer market. They provide fewer retirement savings for new investment.

Nothink economists assume that new, better jobs are on the way for displaced Americans, but no economists can identify these jobs. The authors point out that “the track record for the re-employment of displaced US workers is abysmal: “The Department of Labor reports that more than one in three workers who are displaced remains unemployed, and many of those who are lucky enough to find jobs take major pay cuts. Many former manufacturing workers who were displaced a decade ago because of manufacturing that went offshore took training courses and found jobs in the information technology sector. They are now facing the unenviable situation of having their second career disappear overseas.”

American economists are so inattentive to outsourcing’s perils that they fail to realize that the same incentive that leads to the outsourcing of one tradable good or service holds for all tradable goods and services. In the 21st century the US economy has only been able to create jobs in nontradable domestic services-the hallmark of a third world labor force.

Prior to the advent of offshore outsourcing, US employees were shielded against low wage foreign labor. Americans worked with more capital and better technology, and their higher productivity protected their higher wages.

Outsourcing forces Americans to “compete head-to-head with foreign workers” by “undermining US workers’ primary competitive advantage over foreign workers: their physical presence in the US” and “by providing those overseas workers with the same technologies.”

The result is a lose-lose situation for American employees, American businesses, and the American government. Outsourcing has brought about record unemployment in engineering fields and a major drop in university enrollments in technical and scientific disciplines. Even many of the remaining jobs are being filled by lower paid foreigners brought in on H-1b and L-1 visas. American employees are discharged after being forced to train their foreign replacements.

US corporations justify their offshore operations as essential to gain a foothold in emerging Asian markets. The Hira brothers believe this is self-delusion. “There is no evidence that they will be able to outcompete local Chinese and Indian companies, who are very rapidly assimilating the technology and know-how from the local US plants. In fact, studies show that Indian IT companies have been consistently outcompeting their US counterparts, even in US markets. Thus, it is time for CEOs to start thinking about whether they are fine with their own jobs being outsourced as well.”

The authors note that the national security implications of outsourcing “have been largely ignored.”

Outsourcing is rapidly eroding America’s superpower status. Beginning in 2002 the US began running trade deficits in advanced technology products with Asia, Mexico and Ireland. As these countries are not leaders in advanced technology, the deficits obviously stem from US offshore manufacturing. In effect, the US is giving away its technology, which is rapidly being captured, while US firms reduce themselves to a brand name with a sales force.

In an appendix, the authors provide a devastating expose of the three “studies” that have been used to silence doubts about offshore outsourcing-the Global Insight study (March 2004) for the Information Technology Association of America, the Catherine Mann study (December 2003) for the Institute for International Economics, and the McKinsey Global Institute study (August 2003).

The ITAA is a lobbying group for outsourcing. The ITAA spun the results of the study by releasing only the executive summary to reporters who agreed not to seek outside opinion prior to writing their stories.

Mann’s study is “an unreasonably optimistic forecast based on faulty logic and a poor understanding of technology and strategy.”

The McKinsey report “should be viewed as a self-interested lobbying document that presents an unrealistically optimistic estimate of the impact of offshore outsourcing and an undeveloped and politically unviable solution to the problems they identify.”

Outsourcing America is a powerful work. Only fools will continue clinging to the premise that outsourcing is good for America.

Dr. Paul Craig Roberts was Assistant Secretary of the Treasury in the Reagan administration. His latest book, “How The Economy Was Lost,” has just been published by CounterPunch/AK Press.

To find out more about Paul Craig Roberts, and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate web page at www.creators.com .

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Puerto Rico's Battered Economy: The Greece Of The Caribbean?

by DAVID GREENE
February 06, 2013 2:58 AM


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Coburn Dukehart/NPR

Puerto Rico's population is declining. Faced with a deteriorating economy, increased poverty and a swelling crime rate, many citizens are fleeing the island for the U.S. mainland. In a four-part series, Morning Edition explores this phenomenon, and how Puerto Rico's troubles are affecting its people and other Americans in unexpected ways.

Edward Bonet's mom no longer tries to convince him to join her in Florida. Unlike his family, the 23-year-old from Puerto Rico refuses to leave the island and its shattered economy.

Genoveva "Veva" Camacho raised her family in Puerto Rico, and still lives in the town of Cabo Rojo with her grandson, Edward. Her daughters and granddaughter moved to Florida in search of a better life.

Coburn Dukehart/NPR

With Puerto Rico's unemployment rate at 14 percent, many former residents like Edward's mom, Arlene Bonet, have left the island's economic and social troubles for better opportunities on the U.S. mainland.

"What kind of life can I give my grandchildren in the future if Puerto Rico, instead of going up, is going down?" says Arlene, who left after her real estate business died.

On the island, Edward works as a scuba instructor, trying to make a living for himself. Like many other young Puerto Ricans, he started college but couldn't afford to finish.

And though he briefly lived in Florida as a kid with his mom, Edward says he doesn't want to go back because it seems foreign. Puerto Rico may be a U.S. territory, but the move would feel like going to a new country as an immigrant, he says.

"In the U.S., at school we had to sing the national 'Star-Spangled Banner' every morning," he recalls. "And here, most schools don't do that at all."

A Love For The Island

One member of his ever-shrinking family still on the island is his grandmother, Genoveva Camacho, 74. He lives with her near the city of Cabo Rojo.

"My grandma, oh, she's great," Edward says when describing her. "She parties more than I do."

On a warm, breezy night, he sits with her on their patio listening to the chirps of coquis, or small frogs — a symbol of Puerto Rico.

Camacho is full of pride. She says she loves her island and used to go dancing with friends about every night. But today, she worries about escalating crime and paying her bills.

Her daughter, Arlene, urges Camacho to join her in Florida, but she insists she won't leave until she gets older. Then "save a room for me," Camacho tells her daughter when they speak on the phone.

As she talks about her daughter, Camacho chokes up until Edward dances with her under the porch light.

Puerto Rico's 'Informal Economy'

The failing economy may not be enough to keep Edward and his grandmother off the island, but it's a predicament that economists mull over time and again.

Rosario Rivera, an economics professor at the University of Puerto Rico, uses the phrase "informal economy" to diagnose some of the challenges facing the island.

At the Rio Piedras market in San Juan, Rivera picks up a juicy, sweet fruit for 25 cents, from a man with a shopping cart.


Coburn Dukehart/NPR

"That orange ... goes to the informal economy," Rivera explains.

Because those tax-free purchases are repeated so often, Rivera says the government is missing the chance to tax billions of dollars of income each year. Like many Caribbean islands, Puerto Rico has little industry of its own — and when times are bad, they struggle even more than other places to create jobs.

"There is a problem deep inside the economic structure, that you cannot create jobs," Rivera explains. "You cannot create productive activity, so you just have to rely on economic activity from abroad."

Around the market, men and women sell ice cream, discounted jewelry, perfumes and purses — yet most of the goods are imported and not made by anyone on the island. After a six-year recession, Puerto Rico is buried in debt.

Fiscally Similar To Greece

"They have compared us to Greece a lot of times," Rivera says. "Especially since Greece had a lot of debt, and they had to take these austerity measures. Even if we are part of the United States, we have a lot of problems that resemble those countries that we look at with such disdain."

Puerto Rico has been through austerity and made tough decisions: It's cut government jobs, privatized a couple of highways, and is in the process of privatizing the international airport.

But unlike the case of Greece, the economic mess is on America's hands.

For U.S. citizens on the mainland who have a 401(k) account or pension for retirement, it's possible that they have money invested in Puerto Rican bonds, which are now no longer worth much. So citizens in the states could feel the pain if Puerto Rico's economy collapses.

At the moment, though, Puerto Ricans left on the island are bearing the brunt of the economy, where fewer services and resources are available to people than before. With many educated people leaving the island, Rivera admits she's thought of moving to the mainland — but she won't do it.

"If you had asked me a few years ago, I would say no with capital letters — I won't leave the island. I'm here for the long haul," Rivera says. "And I am here for the long haul. But it gets tiresome."

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Barack Obama hosts Canada and Mexico leaders for talks

2 April 2012 Last updated at 13:22 ET

The three leaders are to discuss energy issues amid a backdrop of high gas prices and unemployment

US President Barack Obama is hosting three-way talks at the White House with the leaders of Canada and Mexico.

Talks usually centre on border issues and the North American Free Trade Agreement (Nafta).

This year the summit could also touch on a disputed US-Canada oil pipeline.

President Obama, Canadian Prime Minister Stephen Harper and Mexican President Felipe Calderon are meeting weeks before a broader regional summit to be held in Colombia.

The Summit of the Americas in Cartagena, Colombia, is to be held in two weeks' time.

No major agreements are expected to be signed at Monday's summit, which will see the three leaders hold a joint news conference.

The meeting was originally planned to take place in Hawaii in November, but had to be rescheduled after a top Mexican official was killed in a helicopter crash.

Thorny issues

The three leaders are expected to address ways in which to boost the economic recovery, as well as energy - with Mexico a major oil exporter and Canada unhappy over the fate of the stalled Keystone XL pipeline.

The pipeline would transport crude oil from the tar sands of western Alberta to refineries on the Texas Gulf Coast.

The White House refused to approve the project, amid concerns that the route passed through the environmentally sensitive Sandhills region of the US state of Nebraska.

Mr Harper has previously said he was disappointed by the White House decision, and indicated that Canada would consider selling oil to China, as an alternative.

Mr Obama has said exports would be a key component of the US recovery. Canada represents the biggest market for US exports, followed by Mexico. The US, though, is the biggest consumer of both Canadian and Mexican goods.

But trade between the US and Mexico has been overshadowed by violence from drug cartels struggling to control smuggling routes into the US market, and Mexico's complaints of weapons bought in the US moving south.

The leaders also face differing political climates at home. Mexico is holding elections on 1 July, and Mr Calderon is not eligible for re-election; meanwhile, Mr Obama faces re-election in November.

Mr Harper, who has been in office since 2006, won a new term in office in May 2011.

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December Payroll Jobs Report

Photo (Courtesy) http://dis-dot-dat.net/content/photos/ny/img_5505.jpg

January 6, 2012

The following report is based on the work of statistician John Williams of shadowstats.com.

Today’s (Friday, January 6) payroll jobs report of 200,000 new jobs in December is overstated by at least 82,000 jobs. As approximately 130,000 new jobs are needed each month to stay even with population growth, the December job figures actually indicate that the US economy fell another 12,000 jobs behind.

Forty-two thousand of the reported jobs are the result of a glitch in the BLS seasonal adjustment model that produces a false jump in December “couriers and messengers” jobs.

Forty thousand of the jobs result from the “birth/death” model that BLS uses to estimate the net effect of unreported jobs lost from business closures and jobs gained from new start-ups. The model is structured to represent normal times. During the bottom bouncing of this protracted downturn, the model over-estimates new jobs from start-ups and under-estimates job losses from business failures.

The official unemployment rates (U3 and U6) no longer measure all of the unemployed. The Clinton administration ceased counting as unemployed workers who had given up looking for a job for one year or longer. No discouraged workers are included in the widely reported U3 measure. The U6 measure includes workers who have been discouraged for less than one year.

In other words, the longer an economy is in the doldrums, the less the official unemployment rates are reliable measures of the extent of unemployment. The unemployment rate in December as measured by U3 is 8.5%; as measured by U6 which includes short-term discouraged workers (less than one year) is 15.2%. John Williams’ measure which includes the long-term unemployed is 22.4%.

In other words, the real unemployment rate is 2.6 times the widely reported U3 rate, which is the rate emphasized by policymakers and the financial press.

About Dr. Paul Craig Roberts

Paul Craig Roberts was Assistant Secretary of the Treasury for Economic Policy and associate editor of the Wall Street Journal. He was columnist for Business Week, Scripps Howard News Service, and Creators Syndicate. He has had many university appointments. His Internet columns have attracted a worldwide following.

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Fed Surveys: Economy in Worse Shape Than Feared, Recession Odds Spike to 50%

Monday, 14 Nov 2011 02:24 PM

By Forrest Jones

The economy is in worse shape now than feared and the outlook for the next two years looks bleak, with the probability of a recession spiking in early 2012, Federal Reserve studies show.

Economists surveyed by the Federal Reserve Bank of Philadelphia lowered their U.S. economic growth outlook for the next two years while hiking up their forecasts for unemployment rates, the bank reports.

The survey of 45 economic forecasts expect real gross domestic product (GDP) to grow at an annual rate of 2.6 percent this quarter, unchanged from a previous estimate.

It's all downhill from there for at least for another year.

The forecasters predict real GDP will grow 2.4 percent in 2012, down from a previous forecast of 2.6 percent, while growth for 2013 will come in at 2.7 percent, down from 2.9 percent once estimated.

(Getty Images photo)

Forget about unemployment rates ever returning to pre-recession levels typical of the early 2000s, as conditions today are about as good as it gets for years to come.

The unemployment rate expected to average 8.8 percent next year, up from an earlier forecast of 8.6 percent, the survey finds.

Unemployment rates for 2013 are forecast to come in at 8.4 percent, up from 8.1 percent.

"The outlook for growth and unemployment in the U.S. economy looks a little weaker now than it did three months ago," the Federal Reserve Bank of Philadelphia said in a statement.

Roll of the dice

A separate Federal Reserve study shows the European debt crisis is pushing the U.S. economy even closer to the brink of recession.

Economic contraction could come by early 2012, or just a few months away, according to research from the Federal Reserve Bank of San Francisco.

U.S. economic indicators are weak, and a default by any eurozone countries could send the chance of a recession striking early next year spiking, researchers at the regional Fed bank write, hitting a 50-50 chance during the first six months of the year.

"A European sovereign debt default may well sink the United States back into recession," Fed researchers write in a report.

"However, if we navigate the storm through the second half of 2012, it appears that danger will recede rapidly in 2013."

Stall speed

Experts point out that if the U.S. economy doesn't grow with any more speed, it runs the risk of hitting stall speed.

Like an airplane, an economy moving too slowly will fail to generate enough lift and will stall out and crash.

The U.S. economy is facing five potholes on its path to more sustained growth: Housing, unemployment, public finances, infrastructure and weak credit markets, one expert contends.

"Until we get movement on those five things, we're at stall speed," says Mohamed El-Erian, CEO of Pimco, the world's largest bond fund.

Stall speed is particularly scary when talking about the economy as large as that of the U.S.

"We can talk about the probability of recession when unemployment is already too high, when the financial deficit is 9 percent of (gross domestic product), when interest rates are already at zero percent and when a quarter of the homeowners are already underwater on their mortgages. That is a terrifying concept. That is why everything must be done to avoid a slowdown in growth," El-Erian tells CNBC.

Other analysts agree that the country shouldn't breathe a sigh of relief when hearing growth forecasts in positive territory.

Weak economic indicators show it doesn't take much to push the economy right back into the depths of recession for a long time.

"While the likelihood of a recession [in the U.S.] has eased of late, the economy is still operating at only a modest pace and remains vulnerable to shocks," says Julia Coronado, chief North American economists at BNP Paribas, according to the Wall Street Journal.

Source: http://www.moneynews.com/StreetTalk/Fed-Economy-Recession/2011/11/14/id/417981

Markets plunge on economic turmoil; fears of another recession

View Photo Gallery —  A look at the drama on Wall Street.


By Sarah Halzack, Michael Fletcher and Cezary Podkul, Updated: Thursday, August 4, 4:02 PM

Fears of worsening economic turmoil in the United States and Europe triggered a broad-based retreat on global markets Thursday, with stock market indexes plunging more than 4 percent in New York.

The Dow Jones industrial average closed down for its ninth session out of 10, finishing the day down more than 500 points, or 4.3 percent in the red; the Standard & Poor’s 500 fell 4.8 percent; and the Nasdaq tumbled 5.1 percent. All three indexes experienced their biggest weekly drops since May 2010.

The Dow was down 10 percent from highs in May, erasing all gains for 2011.

“The undertone of this is just fear that we’re rolling off again into another recession,” said Jim Paulsen, chief investment strategist at Wells Capital Management.

The losses come after nearly two weeks of declines as evidence mounts that Europe’s debt crisis is intensifying and the U.S. economy shows no signs of rebounding soon.

The steep stock market drop that accelerated Thursday is stoking fears that the economy is headed into a sustained downturn at a time when policymakers are particularly ill-equipped to fight it.

The losses, if sustained, would severely undermine the efforts of both government and individuals to dig out of the severe debt that many analysts say is at the root of the nation’s economic troubles.

The Federal Reserve already has in place policies that have kept interest rates at near-record low levels, raising doubts about what more it can do. Meanwhile, the federal government has not shown the political capacity to enact new stimulus efforts.

“If we tie the hands of fiscal policy, and monetary policy has no new weapons and households are still cutting back . . . that is what the financial markets are reflecting now,” said Dan Seiver, a finance professor at San Diego State University.

If the market losses continue, it would complicate efforts to fix the nation’s ailing housing market and it would make it more difficult for hard-pressed state and local governments to balance their books. Already, both of those sectors have been cited as drags on the nation’s overall economic growth.

“If this economy were a bicycle, it would be about to topple over,” said Jared Bernstein, a senior fellow at the Center for Budget and Policy Priorities and formerly the top economic advisor to Vice President Biden. “We need to put pressure on those pedals, but the political system is pushing us in the other direction. The economy is crying out for help and the political system is deaf to those cries.”

On Thursday, there was profound worry among investors in other markets. Oil futures fell more than 5 percent in trading on the New York Mercantile Exchange to around $86. Gold futures retreated .4 percent from yesterday’s high of $1,663.30 per ounce to $1,656.60.

Meanwhile, yield on the 10-year Treasury note hit another low for the year, 2.42 percent, indicating that investors were still flocking to the safety of government debt. A lower yield indicates investors are willing to accept a smaller return in exchange for the safety of holding government debt.

Global markets also saw declines, with major sell-offs in Britain, Germany, Italy and Spain.

Concerns heightened in Europe that E.U. leaders might have to provide financial aid to large economies such as Italy and Spain — a far greater challenge than the help it recently provided to Greece. Leaders of the European Central Bank today decided to keep interest rates unchanged at 1.5 percent.

In the United States, a steady stream of bad economic news has been depressing stocks. Economic growth is nearly at a standstill, consumers are saving rather than opening their wallets, and manufacturing, after picking up, has stalled again.

Investors largely shrugged off a Labor Department report Thursday morning that showed a slight decline in weekly jobless claims. Applications for unemployment benefits dropped to 400,000 from 401,000 the week before.

This report precedes a highly anticipated monthly jobs report Friday, which analysts expect will show that the unemployment rate held steady at 9.2 percent.

Thursday’s losses follow a volatile day of trading Wednesday in which the Dow closed up 60 points after falling nearly 200 points earlier in the day.


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Global Economic Crisis Deepening

Global Economic Crisis Deepening - by Stephen Lendman

In the 1960s, economist Arthur Okum began calculated America's Misery Index by adding the unemployment and inflation rates for a sense of public pain or lack of it in good times.

In May, it hit a record high exceeding 25, surpassing the earlier June 1980 21.98 top, based on how both measures were then calculated, not today's methodology, manipulated to hide painful truths.

At issue is:

-- over 22% unemployment, including discouraged workers and the so-called "birth-death model" estimate of net non-reported jobs from new businesses minus losses from ones no longer operating; during hard times, painful truths are hidden by creating non-existent jobs out of whole cloth instead of subtracting them to reflect fewer, not additional new businesses;

-- double digit inflation, including soaring food, energy, healthcare, college tuition, and other costs omitted or understated in core figures;

-- rising poverty, more than one in seven affected according to way understated Census Bureau figures, using threshold measures developed 40 years earlier;

-- record numbers on food stamps;

-- record measures of food insecurity - Feeding America.org reporting one in six American facing hunger;

-- predicted record 2011 numbers of home foreclosures, estimated at 1.2 million after one million lost last year;

-- record homelessness numbers up to 3.5 million on any given night, needing refuge wherever they can find it or face life on city streets; and

-- other measures of worsening conditions during a Main Street depression, affecting Europe, Japan and elsewhere like America.

Economic recovery? Explain how to millions unemployed or underemployed, foreclosed homeowners, bankrupt business owners, impoverished legions, and many others food insecure at a time US and European leaders enforce austerity when massive social stimulus is needed.

Across Europe, large deficits and public debt crises are spreading, an Economist April 29 article highlighting "a moment....when events spiral out of control. As panic sets in, bond yields lurch sickeningly upwards and fear spreads to shares and currencies."

It happened in September 2008, a decade earlier when Russia defaulted, and similar past events. "When the unthinkable becomes the inevitable," contagion and panic follow like a tsunami sweeping away everything in its path.

Numerous European countries are deeply troubled, notably Portugal, Ireland, Italy, Greece and Spain, entrapped in debt, locked in a Eurozone straightjacket. Perhaps heading for default, they've inflicted painful austerity on working households, rallying them en masse in protest.

On May 30, financial expert and investor safety advocate Martin Weiss said:

"Never before have I seen so many threats to your safety and wealth converging in one time and place," citing:

-- deteriorating bank safety, evident from increasing failures and other systemic risk measures;

-- a deepening housing market depression with no end in sight;

-- a worsening European sovereign debt crisis; and

-- most worrisome, the contagion spreading to America.

According to Weiss:

"If you thought the debt crisis of 2008-2009 was a harrowing experience, wait till you see what's coming next." Last time, corporations were affected. Sovereign states are getting hammered now, including America.

On May 16, the Global Europe Anticipation Bulletin (GEAB) headlined, "Global systemic crisis: Confirmation of a Major Alert for the second half of 2011 - Explosive fusion of world geopolitical dislocation and the global economic financial crisis," saying:

As it predicted in February 2008, GEAB again believes conditions now suggest a later in the year "explosive fusion....(a worldwide) geopolitical dislocation on the one hand and (a) global economic and financial crisis on the other."

Combined they show major economic trauma coming, extinguishing economic recovery hopes, notably in debt entrapped America, "represent(ing) the end of an era (in which the) dollar was the currency of the United States and the rest of the world's problem."

Ahead, it's becoming "the main threat weighing on the rest of the world" and America. Summer 2011 "will confirm that the Federal Reserve has lost its bet: the US economy has, in fact, never left the 'Very Great Depression which it entered in 2008 despite" massive money creation.

As a result, interest rates will rise. Government deficits will explode. Economic decline will intensify. Equity valuations will decline. The dollar will behave erratically "before suddenly losing 30% of its value" as earlier predicted.

At the same time, "Euroland," BRIC countries (Brazil, Russia, India and China) and "commodity producers will rapidly strengthen their cooperation while launching a final attempt to salvage" the remnants of Bretton Woods and a US/UK dominated world.

"(I)t's unrealistic to imagine (Obama) who has shown no major international stature so far, proving himself" statesmanlike enough to take risks ahead of the 2012 election cycle.

Under his leadership, America "is completely in dreamland. Whilst the country has reached unsustainable levels of debt, (its leaders) have made this topic an election issue."

Moreover, America today is seen as the "sick man of the world in which any sign of weakness or serious inconsistency can trigger uncontrolled panic."

In addition, the combination of "(c)razy central bankers, world leaders without a roadmap, economies at risk, inflation rising, currencies in trouble, frenzied commodities, uncontrolled Western debt, (high unemployment), (and) stressed societies" leaves little doubt about looming trouble ahead as early as second half 2011.

A Final Comment

In late May, Gerald Celente highlighted "the most trend-significant story" getting little or no coverage in Western media reports. The combination of weather, economic, and geopolitical events portend "far-reaching and disastrous" socioeconomic consequences.

"Farming, shipping, seafood, food supplies and petroleum refining will be among the foreseeable casualties, accompanied by massive population displacement. But the ensuing chain reaction (inflation, shortages, unemployment, etc.) will claim many other victims," so far unquantifiable.

Middle East and European protests "signaled a major turning point, (an unstoppable) "Off With Their Heads" mega-trend, America's media don't notice or explain.

Celente calls the European bailouts failures, creating higher unemployment, more debt, draconian austerity, and "a wholesale sell-off of valuable public resources," asset-stripping national wealth to enrich bankers, producing painful consequences.

As a result, "(e)conomic conditions will continue to deteriorate for most European nations. The worse they get, the louder and more heated the protests...." Repressive crackdowns will follow, producing greater protests this summer into 2012 and beyond as conditions worsen.

However, a potential wild card deserves watching - one or more terror strikes likely derailing angry protesters temporarily, uniting them behind national security issues, the way 9/11 worked.

More worrisome is a possible major false flag, even a nuclear one targeting a US and/or Western European city. If so, all bets are off short term, but sooner or later unmet needs will take precedence, perhaps when hungry people blame Washington for their misery and react angrily for help. It bears watching and may happen sooner than expected.

Stephen Lendman lives in Chicago and can be reached at lendmanstephen@sbcglobal.net. Also visit his blog site at sjlendman.blogspot.com and listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network Thursdays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.

http://www.progressiveradionetwork.com/the-progressive-news-hour/.

posted by Steve Lendman @ 12:43 AM


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