Friday, December 13, 2013

More Misleading Official Employment Statistics

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The payroll jobs report for November from the Bureau of Labor Statistics says that the US economy created 203,000 jobs in November. As it takes about 130,000 new jobs each month to keep up with population growth, if the payroll report is correct, then most of the new jobs would have been used up keeping the unemployment rate constant for the growth in the population of working age persons, and about 70,000 of the jobs would have slightly reduced the rate of unemployment. Yet, the unemployment rate (U3) fell from 7.3 to 7.0, which is too much for the job gain. It seems that the numbers and the news reports are not conveying correct information.
As the payroll jobs and unemployment rate reports are released together and are usually covered in the same press report, it is natural to assume that the reports come from the same data. However, the unemployment rate is calculated from the household survey, not from payroll jobs, so there is no statistical relationship between the number of new payroll jobs and the change in the rate of unemployment.
It is doubtful that the differences in the two data sets can be meaningfully resolved. Consider only the definitional differences. The payroll survey counts a person holding two jobs as if it were two employed persons, while the household survey counts a person holding two jobs as one job. Also the two surveys treated furloughed government workers during the shutdown differently. They were unemployed according to the household survey and employed according to the payroll survey.
To delve into the meaning of the numbers produced by the two surveys, keep in mind that payroll jobs can increase simply because the birth-death model used to estimate the numbers of unreported business shutdowns and startups can underestimate the former and overestimate the latter.
The unemployment rate can decline simply because the definition of the work force excludes discouraged workers. Thus, an increase in the number of discouraged workers can lower the measured rate of unemployment.
Before reviewing this, let’s first assume that the story of 203,000 new payroll jobs in November is correct. Where does the BLS say these jobs are? Are these the long-missing New Economy jobs that we were promised in exchange for giving China our well-paid manufacturing jobs and giving India our well-paid professional service jobs?
Unfortunately, no.
According to BLS, the jobs are mainly the same lowly-paid, part-time, nontradable domestic service jobs that I have been reporting for a decade or longer.
BLS reports that 17,000 jobs are in construction. On the surface this looks like some slight pickup in housing, but less than 5,000 of the jobs are in residential and nonresidential construction. The bulk of the claimed jobs are in “specialty trade contractors.” Specialty trade contractors are involved in repairs, alterations, and maintenance, but some of the work pertains to site preparation for new construction.
The BLS also claims 27,000 jobs in manufacturing. What precisely is being manufactured? Apparently, very little. The manufacturing jobs are spread over about 23 categories.
The manufacture of wood products gained 600 jobs. (Keep in mind that we are talking about a population over 300,000,000, and a participating work force of approximately 155,000,000.) Nonmetallic mineral products experienced, according to the BLS, 2,000 new jobs. Machinery gained 300 new jobs. Computer and electronic products gained 500 new jobs. Electrical equipment and appliances gained 600 jobs. Transportation equipment gained 4,900 jobs. Furniture manufacture gained 2,100 jobs (apparently to fill the foreclosed unoccupied houses). Food manufacturing gained 7,800 jobs. Petroleum and coal products gained 1,600 jobs, chemicals gained 2,200 jobs, and plastics and rubber products gained 1,300 jobs.You can review the remaining categories on the BLS site.
Most the rest of the 203,000 jobs–152,000–were in lowly paid domestic nontradable services (nontradable means that the jobs do not produce a service that can be exported), such as retail trade with 22,300 jobs, transportation and warehousing with 30,500 jobs, temporary help services with 16,400 jobs, ambulatory health care services with 26,300 jobs, home health care services with 11,800 jobs, and the old reliable waitresses and bartenders with 17,900 jobs.
This is the jobs profile of the American super economy. It is the profile of India 30 or 40 years ago.
Are even these lowly paid part-time domestic jobs really there? Perhaps not. According to statistician John Williams (, the government shutdown and reopening, the birth-death model, and concurrent-seasonal-adjustment problems can result in misstated jobs.
The unemployment rate is affected by not counting discouraged workers who cannot find employment. No discouraged unemployed worker and no person forced to work in a part-time job because he cannot find full-time employment is counted in the 7.0 unemployment rate (U3).
To be included in the U3 unemployment rate, an unemployed person has to have looked for a job in the past four weeks. Those who have looked for a job until they are blue in the face and have given up looking are not counted in the U3 rate. In November any unemployed workers, discouraged by the absence of jobs, who ceased to look for employment were dropped from the labor force that U3 considers to be the base for the measure of unemployment. Thus, if unemployed workers move into the discouraged category, the rate of unemployment falls even if not a single person finds a job.
The government has a second unemployment rate, U6, about which little is heard. This rate counts workers who have been discouraged for less than one year. This unemployment rate is 13.2 %, almost double the reported rate.
In other words, the U3 measure of unemployment can decline for two different reasons: the economy can create more employment opportunities or people become discouraged and stop looking for jobs. Discouraged workers move into the U6 category where they are counted as unemployed until they have been discouraged for more than one year when they are no longer officially considered to be part of the labor force. The U6 unemployment rate can rise as short-term discouraged workers are dropped out of the U3 measure and moved into the U6 measure, and the U6 rate can fall when the workers become long-term discouraged and are officially removed from the labor force.
Think about this for a minute. The BLS admits that the US unemployment rate that includes people who have been discouraged about finding a job for less than one year is 13.2%. The official line is that the US economy has been enjoying a recovery since June 2009. How is there a recovery when 13.2% of the population is unemployed?
This question becomes even more pointed when the long-term–more than one year–discouraged workers who cannot find a job are included in the measure of unemployment. The US government does not provide such a measure. However, John Williams ( does. His estimate produces a 23.2% rate of US unemployment. An increase in the number of long-term discouraged workers is consistent with the drop in the US labor force participation rate from 66% in December 2007 to 63% in November 2013.
There is no such thing as a recovery with 23.2% unemployment.
So, if there is no economic recovery, why are stock and bond prices so high, at all-time records? The answer is simple. The Federal Reserve is printing $1,000 billion new dollars annually and the newly created money is going into the bond and stock markets, driving them to high bubble levels.
So here sits the US economy with substantial unemployment, with massive trade and budget deficits that are taxing the US dollar’s credibility, with the labor force participation rate declining because there are no jobs to be found, and we are enjoying economic recovery with bond and stock prices at historic highs.
If this isn’t enough of a puzzle, consider the official second estimate of third quarter GDP growth. According to this estimate, the US economy expanded at a 3.6% rate in the third quarter; yet official U6 unemployment is 13.2%.
And if you believe the government, there is no inflation either. Yes, I know, your grocery bills go up each month.
Keep in mind that many of the new November payroll jobs could reflect seasonal hiring gearing up for the Christmas sales season. Remember, the payroll survey counts one person with two part-time jobs as two jobs.
Economic recovery requires a growth in real median family income and/or an increase in consumer debt, and, except for a rise in student loan debt, there is no sign of either.
US real median household income has declined from $56,189 in 2007 to $51,371 in 2012, a decline of $4,818 or 8.6%.
US real per capita income has declined from $29,554 in 2007 to $27,319 in 2012, a drop of $2,235 or 7.5%.
How do consumers take on more debt in order to finance their consumption when their real incomes are falling? The growth in consumer credit outstanding is due to student loan growth.
I have not seen the establishment’s explanation of how recovery can occur without growth in real purchasing power either from rising real incomes or rising consumer indebtedness.
According to the Bureau of Labor Statistics, there are 1,277,000 fewer seasonally adjusted payroll jobs in November 2013 than in December 2007.
How it is possible for the economy to have been in recovery since June 2009 (according to the National Bureau of Economic Research) and there are 1,277,000 fewer jobs today than existed six years ago prior to the recession?
How has real Gross Domestic Product recovered when jobs and real consumer incomes have not?
These are among the many questions that go unasked and unanswered.
Statistician John Williams says that the economic recovery is a statistical illusion created by deflating nominal GDP with an understated measure of inflation.

Volcker rule gives free pass for Wall Street speculation

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The so-called “Volcker rule,” adopted Tuesday by the main US bank regulatory agencies, is being hailed by the Obama administration as a major reform that will rein in Wall Street speculation and hold bankers accountable. In fact, it is a toothless measure that will do nothing to stop the speculative and fraudulent activities that triggered the financial meltdown of 2008 and have continued unabated since then.
The rule, named after former Federal Reserve chairman and Obama economic adviser Paul Volcker, is among the most contested parts of the Dodd-Frank financial regulatory overhaul that was signed into law by President Obama in July of 2010. The rule ostensibly bars commercial banks, which benefit from federally guaranteed retail deposits and other government backstops, from speculating with bank funds, including customers’ deposits, on their own accounts—a practice known as proprietary trading.
The 1933 Glass-Steagall Act, which established a legal wall between deposit-taking commercial banks and investment banks/brokerage houses, and led to the breakup of major Wall Street firms such as the House of Morgan, was finally repealed under the Clinton administration and then-Treasury Secretary Lawrence Summers (who later became Obama’s top economic adviser). There is nothing in the Volcker rule or the Dodd-Frank law as a whole that comes close to establishing similar restraints on the banks.
Unlike the aftermath of the 1929 Wall Street crash, the collapse of 2008 has led to no serious reform of the banking system. On the contrary, the regime of taxpayer bailouts and other government subsidies has been used to make the biggest banks even bigger and to strengthen their grip on the economy.
Wall Street has lobbied furiously to either block or eviscerate the new rule, which is the main reason it has taken nearly three-and-a-half years since the enactment of Dodd-Frank for it to be finalized and approved by federal bank regulators. Nearly two-thirds of some 400 rules mandated by Dodd-Frank have yet to be approved, rendering the already largely token provisions of the financial “reform” a dead letter. The delay in implementation is itself a measure of the domination of the banks over the political and regulatory system.
The document approved Tuesday by the Federal Reserve Board, the Securities and Exchange Commission (SEC), the Office of the Comptroller of the Currency (OCC), the Commodity Futures Trading Commission (CFTC) and the Federal Deposit Insurance Corporation (FDIC), spanning 953 pages, nominally restricts proprietary trading. But it incorporates loopholes and exemptions that will enable the banks to continue to make risky bets on stocks, bonds and other securities for their own profit.
The rule delays the date for compliance by the banks to July 2015, three years after the date laid down in the Dodd-Frank law. This is designed to give the banks and their lawyers ample time to devise ways to evade the rule’s provisions and, if they so decide, mount lawsuits to block all or part of the measure.
The government capitulated to the central demand of bankers such as JPMorgan Chase CEO James Dimon, who insisted that the language on proprietary trading permit banks not only to make bets in order to “hedge” their other investments, but to carry out so-called “portfolio hedging.” The latter term refers to the practice of speculating under the cover of reducing risk exposure on broad portfolios of holdings, not just a single asset.
On this basis, banks can justify almost any bet on risky assets such as derivatives as a legitimate exercise in financial prudence. This is precisely how Dimon and JPMorgan defended the bank’s massive bet on derivatives last year that led to a $6.2 billion loss in the so-called “London whale” scandal.
While the rule includes language requiring banks to show that such hedging is tied to specific holdings and is not intended to generate profits, it will not be difficult for banks to get around such caveats.
Moreover, the rule gives banks virtually unrestricted leeway to use “market-making” as a cover for proprietary trading. Banks “make markets” for their brokerage clients by buying and selling stocks, bonds and other securities. In practice, they often acquire large holdings in certain assets even when there is no immediate demand for them from a client.
The new rule allows this practice to continue, as well as activities related to underwriting new stock and bond offerings, by employing deliberately loose language that is more banker-friendly than previous drafts. It states that banks can build up positions to meet “the reasonably expected near-term demands of clients, customers, or counterparties.” [Emphasis added]
Such “market-making” activities generate $40 billion a year in profit for the major US banks. The rule also exempts from limits on proprietary trading government securities, including Treasury bills, state and local government bonds, securities issued by the government-backed mortgage finance companies Fannie Mae and Freddie Mac, and some foreign government bonds. It exempts as well loan securitizations, such as the mortgage-backed securities and collateralized debt obligations that played the central role in the housing market collapse and 2008 Wall Street meltdown.
Gambling on physical commodities such as oil and gold and speculating on spot foreign exchange contracts is specifically allowed under the new rule.
The rule also imposes certain limits on commercial bank investments in hedge funds and private equity firms, although it does not ban such investments.
The measure requires bank CEOs to affirm annually that they have established programs to ensure that their firms are complying with the rule’s provisions. However, in another concession to Wall Street, its does not require that the executives attest that their companies are actually in compliance with the rule.
That the banks consider the new rule relatively harmless was shown by the response of key bank stocks on Tuesday. On a day when the Dow Jones Industrial Average declined by 48 points, Goldman Sachs shares rose 1.2 percent and Morgan Stanley ended the day up 1.3 percent. Bloomberg Businessweek wrote: “Initial analyses of the hedging and market-making restrictions conclude that Wall Street can live with the rule.”
Bloomberg News quoted Richard Kovacevich, the former chairman and chief executive officer of Wells Fargo, as saying, “It appears to be reasonable and one that the industry can live with.”
The Wall Street Journal in an editorial Wednesday was more blunt. The newspaper wrote: “Rest assured banks will find loopholes. And rest assured some of the Volcker rule-writers will find private job opportunities to help with that loophole search once they decide to lay down the burdens of government service.”
In cynically alluding to the incestuous relationship between the banks and the regulatory agencies, and the revolving door between the two, the Journal knows whereof it speaks.
Obliquely referencing the porous language of the Volcker Rule, Janet Yellen, Fed vice chairman and nominee to be the next chairman, said, “Given the absence of a lot of bright-line distinctions, I think supervisors are going to bear, going forward, a very important responsibility to make sure this rule really works as intended.”
She, the Obama administration and the banks know very well that the regulators will do virtually nothing to enforce even the mild provisions of the new rule.
As the Wall Street Journal noted on Thursday, “Consultants wasted no time in starting to work with their banking clients on how to put in place the new rules… Law firm Shearman & Sterling LLP last year hired Donald Lamson, who had been a banking regulator at the OCC [Office of the Comptroller of the Currency] to help focus on Volcker-rule matters… ‘We’re already getting inquiries from our clients,’ said Robert Cook, a partner at Cleary Gottlieb Steen & Hamilton LLP, who until earlier this year was helping write the new financial rules as a lawyer at the SEC.”

US mayors’ report: Hunger and homelessness rise as aid programs are cut

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A new report on hunger and homelessness paints a devastating picture of the conditions facing millions of workers and poor people in America. The new US Conference of Mayors’ Task Force annual survey highlights the extent and causes of hunger and homelessness in 25 cities for the year between September 1, 2012 and August 31, 2013.
The report finds that 83 percent of the cities surveyed reported an increase in requests for emergency food assistance over the past year, and 52 percent saw an increase in the total number of people experiencing homelessness. Despite this growing need, mayors in the surveyed cities expect assistance for the hungry and homeless to decrease in the coming year.
This social catastrophe is unfolding as the federal government prepares deeper cuts to the food stamp program, now known as SNAP (Supplemental Nutrition Assistance Program), and Congress allows federal extended jobless benefits for 1.3 million long-term unemployed to expire after Christmas.
Helene Schneider, Task Force co-chair and mayor of Santa Barbara, California, stated, “At a time when our cities are bracing for greater demands on emergency providers, most foresee a cut, not an increase, in the resources at their disposal.”
She added, “Nearly three-fourths of the cities expect that resources to provide emergency food assistance will decrease over the next year, and more than one-fourth expect that decrease will be substantial.”
All but four of the surveyed cities reported a rise in emergency food assistance requests, and across all cities this need increased by an average of 7 percent. Among those seeking assistance, 58 percent were persons in families, 21 percent were elderly, and 9 percent were homeless. The working poor made up 43 percent of those requesting food assistance.
The surveyed cities listed unemployment as the leading driver of hunger, followed by low wages, poverty and high housing costs. With unemployment insurance claims jumping to 368,000 in the week that ended December 7, from 300,000 the week before, and the Obama administration and Congress prepared to cut jobless benefits, the need for food assistance is certain to rise even further.
While cities reported a 7 percent average increase in the amount of food distributed during the past year, budgets for emergency food purchases increased by less than 1 percent. As a result, more than one-fifth of those needing emergency food assistance—21 percent—did not receive it.
In all of the 25 cities surveyed, food pantries were forced to reduce the quantity of food people could receive at each visit, and emergency kitchens had to cut back on the amount of food offered per meal. In two-thirds of the cities, people were turned away due to a lack of resources. All but one city expect requests for emergency food assistance to increase over the next year, with 12 cities expecting this increase to be substantial.
After job-creation, city officials point to increasing SNAP benefits as key to reducing hunger. This call for aid was cruelly answered in the negative on November 1, when the federal government began implementing $11 billion in cuts over three years to the food stamp program. This across-the-board cutback is estimated to have reduced benefits to less than $1.40 per person per meal.
Even deeper cuts to SNAP are threatened over the next decade. A Republican proposal to slash $39 billion will be reconciled with a Democratic proposal to cut $4 billion, resulting in a cutback that will inevitably cause increased hunger. The Congressional Budget Office estimates that a $39 billion cut would deny benefits to approximately 3.8 million people in 2014.
City officials in the Mayors’ Task Force Survey were asked to describe the potential impact of such a massive cutback. Some of the responses included:
Charlotte, North Carolina: “Food costs are up eight to 15 percent over the same time last year. Already, 40 percent of the families in our area must choose between paying rent or buying food.”
Dallas, Texas: “The proposed cuts would force over 18,000 Dallas County residents out of the [Texas Food Bank Network] program and eliminate 51.3 million meals provided with SNAP assistance.”
Providence, Rhode Island: If $39 billion is cut, “14,000 people will be terminated from the [SNAP] program statewide, including approximately 10,000 in Providence.”
Cleveland, Ohio: “There is no way that the charitable food system can make up for cuts of this magnitude.”

The extent of homelessness

Based on a single-night count in 3,000 US cities and counties, the Department of Housing and Urban Development (HUD) estimates that more than 610,000 people were homeless across the US on any given night last year. Of these, 65 percent were living in emergency shelters or transitional housing, while 35 percent were living in unsheltered locations such as under bridges, in cars, or in abandoned buildings. Individuals comprise 64 percent of those experiencing homelessness, while families make up 36 percent.
The number of homeless families increased in 64 percent of the cities included in the mayors’ report. Sixty-eight percent of cities cited poverty as the main cause of homelessness among families, followed by lack of affordable housing (60 percent), unemployment (54 percent), eviction (32 percent), family disputes (28 percent), and domestic violence and low-paying jobs (12 percent each).
The surveyed cities were also asked to provide information on the characteristics of their adult homeless populations. The cities reported that, on average, 30 percent of homeless adults were severely mentally ill, 19 percent were employed, 17 percent were physically disabled, 16 percent were victims of domestic violence, 13 percent were veterans, and 3 percent were HIV Positive.
Seventeen of the 25 cities surveyed reported that emergency shelters had to turn away families with children experiencing homelessness because there were no beds available, while two-thirds of the cities were forced to turn away homeless unaccompanied individuals. The unmet need for emergency shelter ranged from 25 percent to 50 percent in eight cities. Fully half of those seeking shelter in Des Moines, Iowa were turned away, while in Phoenix, Arizona, 45 percent of the need for homeless accommodation was not met.

Wrecking Societies for the Benefit of Big Capital and the Super-Rich

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The evidence suggests that capitalism has become wholly predatory and has given up all pretense of being "socially responsible."

Are all of the socioeconomic issues confronting Europe and the United States - recession or stagnant growth, skyrocketing unemployment, lowered prospects for new job creation, a demand shortage, a widening gap between the haves and have-nots, social malaise - merely consequences of the financial crisis of 2007-08?

A strong case can be made that what we have been witnessing since then is not simply a severe financial crisis centered in the developed world but the fact that today's capitalism is simply incapable of functioning in an economic way conducive to maintaining sustainable and balanced growth.

The so-called "financialization" of the economy, so prone to financial crises and meltdowns as the late Hyman Minsky has shown, cannot be understood independent of the production processes or developments in the real economy. Advanced capitalism had been facing severe structural stresses, strains and deformations - including overproduction, trade deficits, lack of job growth and elevated public and private debt levels - for quite a few decades prior to the eruption of the financial crisis of 2007-08.

Indeed, the "financialization" wave - which many have labeled "casino capitalism" or "stock market capitalism" but which amounts essentially to the deregulation of giant financial entities capable of shaping and controlling the fate of national economies - began as a result of the structural problems associated with the postwar regime of capital accumulation, whose collapse in the mid-1970s threatened the growing expansion of capitalism. Thus, "financialization" does not spring out of the blue but emerges as an alternative model to the decay of the postwar regime of accumulation.

What is accumulation, you ask? Well, in the Marxist tradition dating back to Marx himself and to his Theories of Surplus Value, capitalist accumulation is the conversion of surplus value into capital for the purpose of producing more surplus value. Keynes disagreed on this point with Marx's contention by ignoring it completely, but if you believe in the Freudian/Lacanian analysis, that meant that he opted to repress its truism. At any rate, the accumulation of capital is projected to be an objective movement that develops on the basis of the appropriation of unpaid labor power. From a historical perspective, the scale of accumulation depends on the specific form of the expansion of capital and on the productive power of social labor. Hence, when the capitalist class faces capital expansion with a low organic composition of capital (which refers to the ratio of the value of the constant capital to variable capital), the increase of capital is actualized by the growth of absolute surplus values (i.e., by increasing the length of the working day and hence of exploitation).1

In the age of "financialization," and particularly in the austerity-driven period following the financial crisis of 2007-08, the drive to maximize profit takes the form of absolute wage suppression and other means of exploitation, including the socialization of private losses, forcing the transfer of public assets to the private sector and creating debt peonage.

With the onset of the "financialization" of the economy (a driving force behind globalization and the shaping of the current and on ongoing neoliberal project), economic growth, employment prospects and the standards of living deteriorate significantly throughout the advanced industrialized world. This is easily proven by comparing growth and unemployment rates under the era of "managed capitalism" (1945-73) versus rates of growth and unemployment under the neoliberal world order (1979-present).

In the United States, for instance, as throughout the advanced capitalist world, the impact of finance on growth has been negative2 as investment in the real economy has fallen significantly, and wages have remained stagnant since the late 1970s. The outcome has been the rise of a new Gilded Age, with renewed claims about the superiority of Darwinian capitalism. At the same time, the poor and working-class populations have come to be seen throughout the advanced capitalist world as a sort of nuisance in the galaxy the rich occupy, with attacks being launched by the rich on their wages and working conditions and the media often carrying out derogatory campaigns against working-class identity.3

As for the increase in public deficits and government debt accumulation, these developments have been largely the result of insidious tax policies favoring the rich and corporate assets, which are related to the dominance of finance capital in contemporary capitalist society. Even in today's economically troubled southern Mediterranean nations (Greece, Portugal and Spain), which have been demonized by their northern eurozone "partners" and the international media and are allegedly paying the price of their "profligacy," so-called socialist governments pursued regressive rather than progressive social policies methodically over the past three decades.4

From this perspective of political economy, the end of the social contract in Europe and the dismantling of public social benefits in the United States must be understood as a reflection of the shift in the balance of power between capital and labor rather than as the outcome of the logic of pure economics. The neoliberal counterrevolution initiated in the early 1980s by the likes of Margaret Thatcher and Ronald Reagan in the UK and the United States, respectively, constitutes a class struggle from above at the behest of finance capital and big business through the use of state power.

It is through the application of this analytic lens that we can make sense today of the Republican mania over the debt ceiling and the onslaught on benefits and public services in contemporary America. The same analysis also leads us to a sound understanding of the EU's anorexic mindset in spite of the lack of growth and the serious unemployment problem confronting the eurozone.

In sum, actually existing capitalism has given up any pretext of being a "socially responsible" socioeconomic system and caters almost solely to the needs and interests of the rich and powerful by enforcing policies that are detrimental to the rest of society. Actually existing capitalism is a system that favors passionately and defends ruthlessly the interests of the 1% over those of the rest of society. This explains why the rich, big corporations and big banks have been doing so well at a time when the ranks of the unemployed keep growing and a sizable percentage of the working population struggles to merely survive. This is not then so much a capitalist crisis as an orchestrated putsch on the part of the most powerful faction of capital attempting to roll back the course of history to the detriment of the working populations.

In this context, the economic and social crisis facing advanced capitalist societies today is manufactured by the pursuit of a ruthless class struggle by the economic elites and the national governments they control against labor for the purpose of transferring wealth from the poor and the working class to the rich, making the rich even richer and the poor poorer.

How to halt the further deterioration in the standard of living of the working people and stop the ongoing onslaught on the social state under actually existing capitalism unmistakably represents one of the biggest challenges facing progressives and the labor movement today throughout the advanced capitalist world.


1 This brief discussion on the dynamics and contradictions in the accumulation process is derived from the author’s own analysis in a book of his titled Marxist Perspectives on Imperialism: A Theoretical Analysis. New York/Westport. Conn.,/London: Praeger, 1991), p. 26-27

2 This is clearly shown in a working paper produced for the Bank for International Settlements (BIS). See Stephen Gecchetti and Enisse Kharroubi, “Reassessing the impact of finance on growth,” BIS Working Papers No. 381, July 2012.

3 See, for example, Owen Jones’ investigation of neoliberalism’s attacks on the welfare state and working class identity in Britain in Chave: The Demonization of the Working Class, Verso Books, 2nd Revised edition, 2012.

4 See C. J. Polychroniou, “The Mediterranean Conundrum Crisis in the European Periphery.” Economic and Political Weekly, Vol – XLVII, No. 21, May 26, 2012

37 Reasons Why “The Economic Recovery Of 2013″ Is A Giant Lie

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"If you repeat a lie often enough, people will believe it."  Sadly, that appears to be the approach that the Obama administration and the mainstream media are taking with the U.S. economy.  They seem to believe that if they just keep telling the American people over and over that things are getting better, eventually the American people will believe that it is actually true.  On Friday, it was announced that the unemployment rate had fallen to "7 percent", and the mainstream media responded with a mix of euphoria and jubilation.  For example, one USA Today article declared that "with today's jobs report, one really can say that our long national post-financial crisis nightmare is over."  But is that actually the truth?  As you will see below, if you assume that the labor force participation rate in the U.S. is at the long-term average, the unemployment rate in the United States would actually be 11.5 percentinstead of 7 percent.  There has been absolutely no employment recovery.  The percentage of Americans that are actually working has stayed between 58 and 59 percent for 51 months in a row.  But most Americans don't understand these things and they just take whatever the mainstream media tells them as the truth.
And of course the reality of the matter is that we should have seen some sort of an economic recovery by now.  Those running our system have literally been mortgaging the future in a desperate attempt to try to pump up our economic numbers.  The federal government has been on the greatest debt binge in U.S. history and the Federal Reserve has been printing money like crazed lunatics.  All of that "stimulus" should have had some positive short-term effects on the economy.
Sadly, all of those "emergency measures" do not appear to have done much at all.  The percentage of Americans that have a job has stayed remarkably flat since the end of 2009, median household income has fallen for five years in a row, and the rate of homeownership in the United States has fallen for eight years in a row.  Anyone that claims that the U.S. economy is experiencing a "recovery" is simply not telling the truth.  The following are 37 reasons why "the economic recovery of 2013" is a giant lie...
#1 The only reason that the official unemployment rate has been declining over the past couple of years is that the federal government has been pretending that millions upon millions of unemployed Americans no longer want a job and have "left the labor force".  As Zero Hedge recently demonstrated, if the labor force participation rate returned to the long-term average of 65.8 percent, the official unemployment rate in the United States would actually be 11.5 percent instead of 7 percent.
#2 The percentage of Americans that are actually working is much lower than it used to be.  In November 2000, 64.3 percent of all working age Americans had a job.  When Barack Obama first entered the White House,60.6 percent of all working age Americans had a job.  Today, only 58.6 percent of all working age Americans have a job.  In fact, as you can see from the chart posted below, there has been absolutely no "employment recovery" since the depths of the last recession...
Employment-Population Ratio 2013
#3 The employment-population ratio has now been under 59 percent for 51 months in a row.
#4 There are 1,148,000 fewer Americans working today than there was in November 2006.  Meanwhile, our population has grown by more than 16 million people during that time frame.
#5 The "inactivity rate" for men in their prime working years (25 to 54) has just hit a brand new all-time record high.  Does this look like an "economic recovery" to you?...
Inactivity Rate Men
#6 The number of working age Americans without a job has increased by a total of 27 million since the year 2000.
#7 In November 2007, there were 121.9 million full-time workers in the United States.  Today, there are only 116.9 million full-time workers in the United States.
#8 Middle-wage jobs accounted for 60 percent of the jobs lost during the last recession, but they have accounted for only 22 percent of the jobs created since then.
#9 Only about 47 percent of all adults in America have a full-time job at this point.
#10 The ratio of wages to corporate profits in the United States just hit a brand new all-time low.
#11 It is hard to believe, but in America today one out of every ten jobs is now filled by a temp agency.
#12 Approximately one out of every four part-time workers in America is living below the poverty line.
#13 In this economic environment, there is intense competition even for the lowest paying jobs.  Wal-Mart recently opened up two new stores in Washington D.C., and more than 23,000 people applied for just 600 positions.  That means that only about 2.6 percent of the applicants were ultimately hired.  In comparison, Harvard offers admission to 6.1 percentof their applicants.
#14 According to the Social Security Administration, 40 percent of all U.S. workers make less than $20,000 a year.
#15 When Barack Obama took office, the average duration of unemployment in this country was 19.8 weeks.  Today, it is 37.2 weeks.
#16 According to the New York Times, long-term unemployment in America is up by 213 percent since 2007.
#17 Thanks to Obama administration policies which are systematically killing off small businesses in the United States, the percentage of self-employed Americans is at an all-time low today.
#18 According to economist Tim Kane, the following is how the number of startup jobs per 1000 Americans breaks down by presidential administration...
Bush Sr.: 11.3
Clinton: 11.2
Bush Jr.: 10.8
Obama: 7.8
#19 According to the U.S. Census Bureau, median household income in the United States has fallen for five years in a row.
#20 The rate of homeownership in the United States has fallen for eight years in a row.
#21 Back in 1999, 64.1 percent of all Americans were covered by employment-based health insurance.  Today, only 54.9 percent of all Americans are covered by employment-based health insurance, andthanks to Obamacare millions more Americans are now losing their health insurance plans.
#22 As 2003 began, the average price of a gallon of regular gasoline wasabout $1.30.  When Barack Obama took office, the average price of a gallon of regular gasoline was $1.85.  Today, it is $3.26.
#23 Total consumer credit has risen by a whopping 22 percent over the past three years.
#24 In 2008, the total amount of student loan debt in this country was sitting at about 440 billion dollars.  Today, it has shot up to approximately a trillion dollars.
#25 Under Barack Obama, the velocity of money (a very important indicator of economic health) has plunged to a post-World War II low.
#26 Back in the year 2000, our trade deficit with China was 83 billion dollars.  In 2008, our trade deficit with China was 268 billion dollars.  Last year, it was 315 billion dollars.  That was the largest trade deficit that one nation has had with another nation in world history.
#27 The gap between the rich and the poor in the United States is at anall-time record high.
#28 Right now, 1.2 million students that attend public schools in the United States are homeless.  That is a brand new all-time record high, and that number has risen by 72 percent since the start of the last recession.
#29 When Barack Obama first entered the White House, there were about 32 million Americans on food stamps.  Today, there are more than 47 million Americans on food stamps.
#30 Right now, approximately one out of every five households in the United States is on food stamps.
#31 According to the Survey of Income and Program Participation conducted by the U.S. Census, well over 100 million Americans are enrolled in at least one welfare program run by the federal government.
#32 In 2000, the U.S. government spent 199 billion dollars on Medicaid.  In 2008, the U.S. government spent 338 billion dollars on Medicaid.  In 2012, the U.S. government spent 417 billion dollars on Medicaid, and now Obamacare is going to add tens of millions more Americans to the Medicaid rolls.
#33 In 2000, the U.S. government spent 219 billion dollars on Medicare.  In 2008, the U.S. government spent 462 billion dollars on Medicare.  In 2012, the U.S. government spent 560 billion dollars on Medicare, and that number is expected to absolutely skyrocket in the years ahead as the Baby Boomers retire.
#34 According to the most recent numbers from the U.S. Census Bureau, an all-time record high 49.2 percent of all Americans are receiving benefits from at least one government program.
#35 The U.S. government has spent an astounding 3.7 trillion dollars on welfare programs over the past five years.
#36 When Barack Obama was first elected, the U.S. debt to GDP ratio wasunder 70 percent.  Today, it is up to 101 percent.
#37 The U.S. national debt is on pace to more than double during the eight years of the Obama administration.  In other words, under Barack Obama the U.S. government will accumulate more debt than it did under all of the other presidents in U.S. history combined.
Fortunately, it appears that most Americans are not buying into the propaganda.  According to a new CNN survey, the percentage of Americans that believe that the economy is getting worse far exceeds the percentage of Americans that believe that the economy is improving...
Americans views on the state of the nation are turning increasingly sour, according to a new national poll.
And a CNN/ORC International survey released Friday also indicates that less than a quarter of the public says that economic conditions are improving, while nearly four in ten say the nation's economy is getting worse.

Forty-one percent of those questioned in the poll say things are going well in the country today, down nine percentage points from April, and the lowest that number has been in CNN polling since February 2012. Fifty-nine percent say things are going badly, up nine points from April.