Discussion Thread: Recession Realities

In comments, Shaker CassieC writes:

I was wondering if there could be a thread for shakers to share what this recession/depression/catastrophe is doing to them and their friends and loved ones. ... I've just been reading people's accounts here and there, on various threads, and I know how strong the pressure is not to tell these stories of personal difficulties in the US, because of our society's f-ed up code of personal success/failure, which makes it so difficult for the personal to be seen as a collective, legitimate phenomenon.

Here it is.

Commenting Guidelines: Commenters are strictly prohibited from criticizing each other, auditing other commenters' choices, questioning other commenters' circumstances, or offering advice, unless it is explicitly solicited. You are being invited to talk about your own experiences, not stand in judgment of anyone else's.

Number of the Day

1.8 million: The potential number of jobs that will be lost in 2012 as a result of the debt ceiling agreement, according to the Economic Policy Institute.

In addition to the immediate cuts to spending, the debt ceiling agreement fails to continue two major policies which had been part of broad agreements in the past. The payroll tax holiday and extended unemployment insurance were passed last December along with the two-year extension of the Bush-era tax cuts; but are set to expire at the end of 2011. While Congress could still extend these policies between now and the end of the year, that scenario is looking much less likely today. (Any economic support subsequent to this deal would have to be offset by other tax increases or spending cuts in 2012 or a further increase in the debt ceiling, neither of which seems politically viable.)

...It should be noted that while the payroll holiday creates jobs, there are more effective ways to target tax policy to those most likely to spend the extra income, creating an even bigger bang-for-the-buck without some of the negative side-effects.

...If Congress fails to renew these existing programs or enact improved versions, we can expect slower growth, fewer jobs, and higher unemployment. Specifically, there could be 1.8 million fewer jobs and a 0.6 percentage point increase in the unemployment rate in 2012 as a result of abandoning current budget policies.

...Roughly one in three workers will be unemployed or underemployed in 2011 and there would be little progress on this front in 2012. This persistent high unemployment not only creates great economic distress for those families directly impacted but also undermines wage growth and continues the erosion of benefits of those still employed. Moreover, these high levels of unemployment make it more difficult to face our fiscal challenges over the long run.

And here's another number: 60% of respondents in the latest CNN poll disapprove of the debt deal failing to include tax hikes for the wealthiest Americans and corporations. Whooooooops!

Recommended Reading

On the economy...

Paul Krugman: The Lesser Depression.

Right now we're looking at not one but two looming crises, either of which could produce a global disaster. In the United States, right-wing fanatics in Congress may block a necessary rise in the debt ceiling, potentially wreaking havoc in world financial markets. Meanwhile, if the plan just agreed to by European heads of state fails to calm markets, we could see falling dominoes all across southern Europe — which would also wreak havoc in world financial markets.

We can only hope that the politicians huddled in Washington and Brussels succeed in averting these threats. But here's the thing: Even if we manage to avoid immediate catastrophe, the deals being struck on both sides of the Atlantic are almost guaranteed to make the broader economic slump worse.

...The disappearance of unemployment from elite policy discourse and its replacement by deficit panic has been truly remarkable. It's not a response to public opinion. In a recent CBS News/New York Times poll, 53 percent of the public named the economy and jobs as the most important problem we face, while only 7 percent named the deficit. Nor is it a response to market pressure. Interest rates on U.S. debt remain near historic lows.

Yet the conversations in Washington and Brussels are all about spending cuts (and maybe tax increases, I mean revisions).

And Sarah Jaffe: The Unemployed Aren't Invisible: Washington and the Media Just Aren't Paying Attention.

The New York Times said the unemployed have become invisible. Maybe in Washington, in political circles where the question is not what to spend to put people back to work but which programs to cut. But there are 14.1 million unemployed right now, scattered around the country, many of whom have been out of work for months or years.

..."People are the most precious resource that this country has; the determination that people have makes this country what it is. But they continue to step on the backs of people who have given their all, not just for one generation but for generation after generation, you work and pay taxes and try to live in a decent home, and then they say, we can't help you," Benita Johnson of Pittsburgh, Pennsylvania told me. She's been out of work since May 2010, and has only been able to find temporary positions since 2006—after taking a serious pay cut to get a job that would allow her to get her bachelor's degree at night.

Both pieces, in their entirety, are worth your time.

It is truly like the people running this country have no fucking clue what's going on. All they're talking about is deficits and cutting spending, when what they need to be talking about is jobs and increasing spending. It's jaw-dropping. I've never seen a government (executive and legislature) so wildly out of touch with the needs of its people—and I've lived through Reagan and GW Bush.

The sorts of economic turmoil in individual people's lives, from very visible high rates of foreclosure to the less obvious (or less discussed, anyway) widespread lack of employment among young graduates carrying debt, is of the sort from which people can live a whole lifetime and never recover. This is grim stuff. And our elected officials are busily bickering over how austere their austerity plan should be. HOLY SHIT.

Number of the Day

47%: The percentage of the vote a generic "Republican Candidate" is currently getting among registered voters in Gallup's latest 2012 presidential poll. President Obama is currently getting 39%.

That's people not voting on the economy and the unemployment rate, I guess.

This far out, those numbers don't mean a lot, but it is concerning for anyone who does not want a Republican to be president (by which I don't mean Barack Obama, Moderate Republican, but one of the Social Darwinist Dominionist Oligarchs currently masquerading as Republicans) that registered voters' confidence in Obama is sliding as the economy has taken center stage in the news.

Open Thread: Obama Statement on Jobs Report

You can watch it live via CNN. Also: Eastsidekate is tweeting the shit out of it.

Discuss.

Quote of the Day

This morning's release of the June 2011 Employment Situation report by the Bureau of Labor Statistics showed a labor market in retreat. Virtually every single measure was devastatingly weak: only 18,000 payroll jobs were added, average hours declined, nominal wages fell, unemployment was up in almost all age groups, more than 250,000 workers dropped out of the labor force altogether, and the public sector continued to bleed jobs. Furthermore, a downward revision to last month's data means that this is the second month in a row with job growth at 25,000 or less. This is a remarkable, across-the-board backslide. The President and Congressional leaders need to stop talking about deficit reduction and start talking about job creation.

—EPI Economist Heidi Shierholz. Emphasis mine.

More Evidence That YOU Don't Understand 12 Dimensional Chess

"Job Growth Falters Badly, Clouding Hope for Recovery," says the New York Times. "Economic outlook worsens as U.S. adds only 18,000 jobs in June," says the Washington Post. "June jobs report: Hiring slows, unemployment rises," says CNN. "U.S. jobs barely rise, unemployment up to 9.2%," says Reuters in the Chicago Tribune. "Dismal jobs report shows unemployment rising to 9.2%," says the LA Times. "U.S. Payrolls Rise 18,000; Jobless Rate Climbs to 9.2%," says Bloomberg. "Jobs Picture Gets Even Worse as Rate Swells to 9.2%," says CNBC. "June Jobs Report: Unemployment Rate Up to 9.2 Percent With Only 18,000 Added Jobs," says ABC.

"HOLY SHIT UNEMPLOYMENT IS SO HIGH AND THE ECONOMY IS SO BAD AND I AM SO SCARED FOR OUR COUNTRY," says everyone I know including millionaires who are eminently willing to pay more taxes because they are not garbage monsters.

Well, settle down, everyone! "Top Obama adviser says unemployment won't be key in 2012." Now don't you feel stupid?

President Obama's senior political adviser David Plouffe said Wednesday that people won't vote in 2012 based on the unemployment rate.

Now, if you're a big stupid-head who doesn't understand politics, like me, you're probably thinking, "Okay, player." But that's because you're a big stupid-head who doesn't understand politics. Let David Plouffe explain to you how you are going to be voting and why:

"The average American does not view the economy through the prism of GDP or unemployment rates or even monthly jobs numbers," Plouffe said, according to Bloomberg. "People won't vote based on the unemployment rate, they're going to vote based on: 'How do I feel about my own situation? Do I believe the president makes decisions based on me and my family?'"

And I guess through some magical combination of fairy dust and unicorn farts, people's personal situations will somehow stop being materially related to the GDP and unemployment rates and jobs numbers, and they'll start viewing tax cuts for millionaires and corporations as decisions for them and their families. Sure.

The remarks will likely irritate Democrats who think Obama and his political team have taken their eye off jobs.

Ya think? Possibly also people who were under the mistaken impression that Obama and his political team were capable of competent politics.

Must-Read: "BMW Layoffs Exemplify the Evisceration of the Middle Class"

BMW layoffs exemplify the evisceration of the middle class:

Every working American should be dismayed by — and afraid of — what BMW is doing.

These employees exemplified the best qualities of the American worker. They devoted their working lives to BMW, at a time when it was building and solidifying its U.S. beachhead. Their wages, with benefits, paid for a reasonable middle-class lifestyle if they managed it carefully. Throw in the job security they were encouraged to expect, and they had the confidence to make sacrifices and investments that contributed to the economy for the long term, like college education for the kids, an addition on the house, a new baby. Then one day they were handed a mass pink slip, effective in a matter of weeks.

The Corporation rules all. Just go read the whole thing.

Trickle Down Economics Rulezzz

Firms Have Record $800 Billion Of Cash But Still Won't Hire:

Companies are hoarding a record amount of cash as fears of another Lehman-like credit crisis, weak demand and a lack of incentives from the Obama Administration cause chief executives to choose a negative real return on their money over hiring workers or building a new plant.

The current members of the S&P 500 are sitting on about $800 billion in cash and cash equivalents, the most ever, according to data by Birinyi Associates, even as the unemployment rate has ticked back above 9 percent.

Lower corporate tax rates! Cut payroll taxes! Let's make those corporations filthy rich so they can KEEP NOT HIRING PEOPLE.

Also! I propose a vice tax on bootstraps!

Meanwhile...

...as the Democrats bomb Yemen and the Republicans continue their war on uteri, jobless claims are up again:

The number of Americans filing new claims for unemployment benefits rose last week, suggesting little improvement in the labor market this month after employment stumbled in May.

Initial claims for state unemployment benefits climbed 9,000 to a seasonally adjusted 429,000, the Labor Department said on Thursday. Economists had expected claims to come in at 415,000.

..."Again no quick rebound in employment. We're still in the soft patch that we have had for a couple of months now," said Sean Incremona, an economist at 4CAST in New York.

Yeah. A couple months now.

The number of people on emergency unemployment benefits rose 5,728 to 3.30 million in the week ended June 4, the latest week for which data is available. A total of 7.54 million people were claiming unemployment benefits during that period under all programs.

Long-time readers will recall my writing, oh, I dunno, a million times or so in the last seven years about the ubiquitous corporate practice of not filling jobs when people leave and simply redistributing their work among remaining staff, who aren't compensated for the additional duties.

Here's me in Jan. 2006, for example:

This is the big secret behind American productivity going up with fewer workers, especially in small companies: Someone quits, or someone gets fired, and they don't get replaced. Their work gets divided up among the remaining staff, and the extra cash goes in the coffers. Everyone I know at a corporate job complains about how they're part of a skeleton crew—and don't get paid for overtime.

It's a despicable practice, largely ignored in discussions of workers' rights, which is, in itself, an issue that barely gets lipservice even from our allegedly liberal Senators and Reps these days.

Mother Jones' Monika Bauerlein and Clara Jeffery have a great piece [TW for ableist language] this week about that very despicable practice, the "speedup." I highly recommend reading it, because the speedup is a huge part of the underlying reason for our protracted unemployment rate and wage stagnation, as well as the explanation for why productivity and profits keep rising despite high unemployment.

It also underlines why maintaining a functional democracy while selling out the government to corporations who have been granted personhood is impossible.