Sounding the Alarm: Update on the Economic Downturn

[Political Heretic]

Economic Policy Institute
In this new slide presentation, EPI’s president Lawrence Mishel examines the deterioration of the economy and the outlook ahead, showing the substantial rise in labor market distress and poverty overall, but especially for minorities.

This presentation examines the labor market characteristics of the current recession and the expected landscape for 2010. Unfortunately, the economy has deteriorated so much since October/November 2008 that our fears last November—that unemployment would exceed 10% in mid-2010 if there were no stimulus—will likely be realized even with the substantial, smart stimulus package in place. Consequently, there will be unacceptably high unemployment and associated income losses and poverty rates next year and beyond. For instance, some one-third of the workforce will be unemployed or underemployed at some point in 2010. Higher unemployment will drive child poverty to 27%—up from 18% in 2007—and black child poverty will exceed 50%. The analysis has led him to predict, for example, that black unemployment will reach 27.8% in Michigan and over 22% in California and Mississippi.

New York Times columnist Bob Herbert called Mishel’s analysis one that shows “the human toll caused by job losses on this vast scale.” (Read Herbert op-ed.) Mishel says “we must reexamine our policies and enact further public investments as stimulus, provide relief to the many families that are and will be struggling, and use government to directly generate jobs in areas where private sector activity is especially weak.”

Slides are here:
http://www.epi.org/publications/entry/sounding_the_alarm/#When:06:00:29Z

[SpiralHawk]

1. The putrid fruit of republiconomics

Just amazing how so-called 'conservative' republicon economics = borrow-and-spend America into the crapper. The repubs just stank the joint up with their usual corruption & incompetence, leaving the huge freaking monetary mess behind for others to clean up while they SMIRK and count up thier War Profiteering from a lie-based oil Crusade engineered by a pack of fatcat Republicon AWOL Chickenhawks and Draft Dodgers.

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[Political Heretic]

2. I agree. Although the democratic response to the crisis has been less than inspiring.

To some extent, both parties are too deeply in bed with the financial sector, and it shows at times likes this.

[madrchsod]

3. let`s throw in those over 62 who retired because there are no jobs

people like me who have been forced out of the labor market can not find part time employment because our children and grandchildren can not move into 40 hour a week jobs. if i could find a part time job my wife and i would be fine. after all, there`s just so many walmarts in america that will give senior citizens a part time job.

as an example, my 23 yr old daughter is the only person in her group of 10-15 people who has full time job with benefits.several others are do self employed construction work.one is a part time nurses aide, and the rest just do what ever they can to keep going.
none of these people have never officially counted in any employment statistics.

we have become a nation of children who are afraid to turn on the light

[izquierdista]

4. 62?

Try 52, or even 42. This labor market is so bad that anyone with experience commands too high a price. The only people getting hired are people who will agree to permanent trainee wages.

[Political Heretic]

5. kick

[slipslidingaway]

6. knr...for later nt

[Wednesdays]

7. K&R

:kick:

[Fire1]

8. k&r

[bertman]

9. This can't be true. I heard yesterday that President Obama said the recession is over.

Recommend, nevertheless.

[Political Heretic]

11. The recession is over for Wall Street, and that's all that matters.

:sarcasm:

[AdHocSolver]

10. There will be high unemployment until we stop importing everything we buy.

The stimulus spending will have minimal effect on U.S. employment so long as most of the money ends up in China, India, or Mexico.

You want to avoid the looming depression? You want to help create more jobs in America? The solution is simple. Buy American when you can. Avoid buying imported goods when those purchases are discretionary. If you don't need it, don't buy it until you can find an American source.

Just spending money won't help the U.S. economy as whatever you spend will just leave the U.S.

An economy requires the circulation of goods, services, and money within the country. Money is like the antifreeze in your car. It has to circulate between the engine (where it absorbs heat), through a hose to a radiator (where the coolant gives up the heat to the surrounding air), then through another hose back to the engine where it absorbs more heat.

The cooling system works so long as the system remains closed. If a hole develops in a hose, the coolant leaks out, it stops circulating, the engine overheats and eventually stops running.

Any economy works exactly like a car's cooling system. If the money "leaks" out because it is all going to other countries, Americans lose their jobs. Without jobs, people stop spending money, which causes more job losses. A stimulus package under these conditions is like pouring more antifreeze into the engine without fixing the hole in the radiator hose.

You want to make a "permanent" repair on the economy? There is only one two-part solution. One, stop buying imported stuff. Two, demand that Congress change trade laws and tax laws to make it less profitable to import stuff (i.e., offshore jobs) and evade taxes by importing stuff rather than making it here.

This is basic economics -- Econ. 101. Anything else you hear about economics is simply propaganda to serve the special interest agenda. It is all essentially "supply side economics" which got us into this problem in the first place.

Moreover, if you put Americans back to work, they will pay income tax and Social Security tax and that will reduce the government deficits, and shore up Social Security and Medicare funds. Clinton had a surplus, not because of any of his policies (many of which were pretty bad), but ONLY because there was high employment and many Americans had jobs and were paying taxes.