The Agonist - Economics: USA

Are You Currently Employed, Unemployed, or Underemployed?

Sat, 07 Nov 2009 06:26:58 -0800

China condemns US trade action

Fri, 06 Nov 2009 09:51:55 -0800

Beijing | November 6

Al Jazeera - China has described as protectionist new US anti-dumping duties on steel pipes and demanded Washington's recognition that it is a market economy.

The reaction came a day after the US imposed preliminary anti-dumping duties ranging up to 99 per cent on $2.63bn in Chinese-made pipes used in the oil and gas industry.

The Chinese commerce department issued its preliminary decision on Friday, a week before Barack Obama, the US president, heads to Asia on a trip that includes stops in Shanghai and Beijing.

"China resolutely opposes the abuse of protectionist measures, and will take measures to protect the interests of our domestic industry," the ministry said on its website.

Unemployment: 10.2%

Fri, 06 Nov 2009 07:31:32 -0800

Where are my green shoots?

The U.S. unemployment rate climbed to 10.2% in October, topping the 10% mark for the first time in 26 years, the Labor Department reported Friday.

Nonfarm payrolls dropped by a seasonally adjusted 190,000 in October, bringing to total number of jobs lost in the recession to 7.3 million. It was the 22nd straight decline in payrolls. Large losses were seen in manufacturing, construction and retail. Health care and temporary-help agencies added jobs.

10.2% is not, I repeat, is not a good number.

Obama Signs Largest Military Budget since World War II

Mon, 02 Nov 2009 13:23:22 -0800

Earlier this week, President Obama signed into law the $680 billion FY 2010 Defense Authorization Bill, the largest such budget since the end of World War II. If you missed that aspect of the story, you weren’t alone. Many news stories chose instead to focus on the hate crime provisions tacked onto the bill.

I’ve often quarreled with the inclusion of superfluous legislative riders, and the hate crime provision is more superfluous than most. (Indeed, as my Cato colleague David Rittgers has pointed out, it might be worse than superfluous.)

But I want to focus on the president’s failure to halt the inexorable growth in military spending. His capitulation on a number of spending programs — even as he complains of rampant waste and abuse within the Pentagon — signals to American taxpayers that they should expect more of the same. It sends an equally harmful message to our friends and allies around the world: stand back, we’ll take care of it.

You see, most of the money we spend on our military is not geared to defending the United States. Rather, it encourages other countries to free-ride on the U.S. military instead of taking prudent steps to defend themselves.

The massive defense bill represents only part of our military spending. The appropriations bill moving through Congress governing veterans affairs, military construction and other agencies totals $133 billion, while the massive Department of Homeland Security budget weighs in at $42.8 billion. This comprises the visible balance of what Americans spend on our national security, loosely defined. Then there is the approximately $16 billion tucked away in the Energy Department’s budget, money dedicated to the care and maintenance of the country’s huge nuclear arsenal.

All told, every man, woman and child in the United States will spend more than $2,700 on these programs and agencies next year. By way of comparison, the average Japanese spends less than $330; the average German about $520; China’s per capita spending is less than $100.

The massive imbalance between what Americans spend on our military, and what others spend, flows directly from our foreign policy. Several decades ago, Washington opted to be the world’s policeman, and has ever since discouraged other countries from spending more on their own defense. President Obama has tacitly questioned this approach in the past, and has called on other countries to step forward and do more. But by signing this monstrosity, his actions drown out his words.

The president has defended his support for continued bloated military spending, with additional monies going especially to a larger conventional army, as a way to reduce the strains on our troops and their families. This is a noble impulse. But a far better way to relieve the burdens on our overstretched force is to rethink all of our global military commitments, and align our strategy to our means. A new grand strategy, predicated on self-reliance and restraint, would relieve the burdens from the backs of our troops and from taxpayers. That new strategy would compel other countries to finally assume their rightful responsibilities in defending themselves and their respective regions.

The governing class in Washington has consistently resisted such a change. It is enamored of its ability to manage not just the rest of the country, but indeed the rest of the world, and sees no reason to change. Neither, it would seem, does President Obama. By embracing a military budget explicitly geared toward sustaining the status quo, the president virtually ensures that other countries will not share in the costs of keeping the world relatively prosperous and at peace.

I’ll be discussing our massive military spending and other aspects of U.S. national security policy next Friday with Daniel Wirls, a professor at UC Santa Cruz, and the author of a forthcoming book on U.S. military spending that looks terrific. The event is sponsored by the University of California’s Institute on Global Conflict and Cooperation and will be held at the UC’s Washington Center from 10:00 to 11:30. To learn more and to register, visit their web site.

By Christopher Preble. To read more, visit http://blog.psaonline.org

CIT’s Bankruptcy May Help Bondholders and Erase Taxpayer Stake

Mon, 02 Nov 2009 06:21:54 -0800

Linda Shen | Nov 2

Bloomberg - CIT Group Inc.’s decision to seek court protection probably will keep money flowing to bondholders and 1 million customers of the 101-year-old commercial lender. Shareholders and taxpayers won’t be as fortunate.

CIT’s Chapter 11 bankruptcy may give bondholders new notes at 70 cents on the dollar plus new common stock, and Chief Executive Officer Jeffrey Peek said clients will be able to get funds. Common stock owners could be mostly wiped out, and the U.S. Treasury Department said it won’t recoup much, if any, of the $2.33 billion of taxpayer money that went into CIT, the largest firm to go bankrupt after getting a federal bailout.

“It doesn’t look too good for the government preferred or any preferred holders,” Brian Charles, a debt analyst at New York-based brokerage RW Pressprich & Co., said yesterday. “It’s unlikely common shareholders realize any value.”

Employment turnaround likely at start of 2010: Geithner

Sun, 01 Nov 2009 14:30:42 -0800

Nov 1

AFP - High US unemployment, which has lagged in an otherwise recovering economy, likely will begin rebounding early next year, US Treasury Secretary Timothy Geithner said Sunday.

"Economists say... that they think you'll start to see net jobs created at the beginning of the year," Geithner told NBC television, adding that the US economy could see jobs added "in the first quarter some time."

The US economy is suffering the deepest recession in decades with crushing unemployment of just under 10 percent.

Audit the fed bill gutted

Sun, 01 Nov 2009 05:10:39 -0800

Damn these guys are good. At fucking us over, that is. Remember when the public rose up and rejected the TARP bail-out? Congressmen were flooded with calls, did their duty and voted against the bill. Then the propoganda machine went to work. A few meaningless concessions were made, the bill was repackaged and passed.

Not only are you going to eat shit, you're going to like eating shit. Got it?

Now it appears Ron Paul's audit the fed bill is doomed to similar fate. Congress can't ignore public outcry for tranparency so they're busy removing teeth from the bill. They'll pass some meaningless drivel that allows the powers that be to continue fucking us over and claim victory on behalf of the American public.

Ain't democracy wonderful?

Hey Obama

Sun, 01 Nov 2009 01:16:54 -0800

Nov 1

BBC - UK: Government to create bank chains

The government is to create three new High Street banking chains by 2015 as part of a major overhaul of the sector.

They will be set up by selling off parts of Royal Bank of Scotland, Lloyds and Northern Rock - the banks which had to be bailed out by the taxpayer.

Ministers and the European Competition Commissioner are in talks over the move, which would go some way to recoup the public money invested in the banks.

There is speculation that buyers might include Tesco and Virgin.

The new chains will be standard retail banks concentrating on deposits and mortgages.

In order to boost competition, they will only be sold to new entrants to the UK banking market and not to existing financial institutions.

Ministers say that creating more competitors on the High Street in this way will invigorate the mortgage market and ultimately lead to a better deal for customers.

How Goldman secretly bet on the U.S. housing crash

Sun, 01 Nov 2009 00:04:29 -0700

Greg Gordon | Nov 1

McClatchy - In 2006 and 2007, Goldman Sachs Group peddled more than $40 billion in securities backed by at least 200,000 risky home mortgages, but never told the buyers that it also was secretly betting that a sharp drop in U.S. housing prices would send the value of those securities plummeting. Now, a five-month McClatchy investigation has found that Goldman's failure to disclose those secret bets may have violated securities laws.

Goldman's sales and its clandestine wagers, completed at the brink of the housing market meltdown, enabled the nation's premier investment bank to pass most of its potential losses to others before a flood of mortgage defaults staggered the U.S. and global economies.

Only later did investors discover that what Goldman had promoted as triple-A rated investments were closer to junk.

Now, pension funds, insurance companies, labor unions and foreign financial institutions that bought those dicey mortgage securities are facing large losses, and a five-month McClatchy investigation has found that Goldman's failure to disclose that it made secret, exotic bets on an imminent housing crash may have violated securities laws.

"The Securities and Exchange Commission should be very interested in any financial company that secretly decides a financial product is a loser and then goes out and actively markets that product or very similar products to unsuspecting customers without disclosing its true opinion," said Laurence Kotlikoff, a Boston University economics professor who's proposed a massive overhaul of the nation's banks. "This is fraud and should be prosecuted."

The Point Of A Stimulus Is?

Fri, 30 Oct 2009 11:14:33 -0700

The point of an economic stimulus package is to grow the economy. There is no question in my mind that the stimulus enacted by Obama and the Congress succeeded in doing that. I've been pretty clear in giving credit where credit is due on that front. But the problem is this: it was the wrong kind of stimulus--too many tax cuts and not enough money to the states. Cash-for-clunkers? A beefed up subsidy for first time home buyers? Lots of military Keynesianism? Wasn't it this kind of free-for-all in credit what got us here in the first place?

Meanwhile, the states are still in the red, bloody oozing red that it is. And business spending, that engine of economic growth and employment? Where's that? One could go on and on.

As Krugman says, "we’ve gotten the big boost, and it’s clearly far short of what we really need."

Do you feel stimulated? Or are you still personally retrenching?

To repeat: the stimulus was good, but it wasn't enough and was targeted correctly. And we'll see the results of a committee designed stimulus plan soon enough.

"Produce Or Die"

Thu, 29 Oct 2009 13:43:50 -0700

Do you work to live, or live to work? There was a time when I asked myself that question on a regular basis. But now that I'm a complete and total corporate drop-out not so much. I think Joe Bageant sums it up nicely in this graf:

It may be my bias, or my imagination, or my distaste for toil, but from here America looks like one big workhouse, "under God, indivisible, with time off to shit, shower and shop." A country whose citizens have been reduced to "human assets" of a vast and relentless economic machine, moving human parts oiled by commodities and kept in motion by the edict, "produce or die." Where employment and a job dominates all other aspects of life, and the loss of which spells the loss of everything.

Read the whole post, Bageant captures the tedium and ennui that I feel for contemporary American life quite well.

GDP Up!

Thu, 29 Oct 2009 09:26:00 -0700

GDP was up in the third quarter, 3.5%. Barry has an analysis of the numbers, here.

Bill would force financial firms worth $10 billion or more to pay for rivals’ failures

Wed, 28 Oct 2009 00:55:50 -0700

Washington | Oct 28

AFP - Financial companies with more than 10 billion dollars in assets will have to pay for rivals' failures or rescues, under draft legislation which has been released by the US Treasury and lawmakers.

The plan to address systemic risk in the financial sector will wind down failing institutions and end "too big to fail" bailouts that have been borne by taxpayers, the Treasury and the House Financial Services Committee said Tuesday.

The proposed Financial Stability Improvement Act "provides for the orderly wind-down of failing firms and ends 'too big to fail' to ensure that industry and shareholders absorb the risks and costs of failure, not taxpayers," they said in a statement.

The measure would be a cornerstone of President Barack Obama's commitment to reform financial regulation and avert costly taxpayer bailouts of banks and other financial firms.

"The Financial Services Committee and the Obama administration are committed to ensuring that the taxpayers are never again called upon to take responsibility for Wall Street's business decisions," the bill's sponsors said.

In a letter to committee chairman Barney Frank, Obama congratulated the panel for the progress made "in designing a strong package of financial reforms."

The 253-page draft legislation would create a federal resource fund to deal with failures or rescues that would recover expended funds that had not been recouped, by imposing assessments on firms with more than 100 billion dollars in assets.

The bill would set up an interagency council to monitor and oversee the stability of the financial system and address any related threats.

It would also provide the Federal Reserve and other federal financial agencies greater authority to "regulate for financial stability purposes" and quickly address potential problems.

Among its other provisions, the bill would subject thrift holding companies to Fed supervision and give the Federal Deposit Insurance Corporation, which insures bank deposits, the ability to unwind a failing firm.

"Costs to resolve a failing firm will be repaid first from the assets of the failed firm at the expense of shareholders and creditors, and to the extent of any shortfall, from assessments on all large financial firms," the statement said.

"In this instance, we follow the 'polluter pays' model where the financial industry has to pay for their mistakes -- not taxpayers."

Obama praised the panel for acting "quickly and in the face of substantial opposition to bring strong protections to consumers from unfair and fraudulent lending practices, to regulate derivative markets and to require banks to change compensation practices."

But he admitted that more work was needed "to build a more stable financial system and safeguard our economy from future crises."

The Zombies Of AIG

Tue, 27 Oct 2009 07:20:52 -0700

I'm not really sure what the subtext of this story about Maurice Greenberg really is. Do you?

Update: I think this graf--among many others--is the most disturbing bit of the story:

After he was pushed out, Mr. Greenberg fought bitterly with A.I.G. over how to untangle assets that they both laid claim to. Over the summer, he won, earning the rights to $4.3 billion in A.I.G. stock that he had removed from an unusual offshore retirement plan. The company had argued that he had improperly cashed out the stock and used the money to finance new business ventures that were competing with his former company.

If I read that correctly he basically stole $4.3 from AIG. The money was frozen but subsequently released to him that he might build a firm to compete with AIG?

A church that pays you to attend on Sunday

Mon, 26 Oct 2009 13:18:26 -0700

Guy Tridgell | Alsip, IL | Oct 25

southtownstar.com -
The Rev. Dan Willis is passing the collection plate in reverse. He will give you money to go to church.

For the last three weeks, his Lighthouse Church of All Nations in Alsip has raffled a combined $1,000 to attendees at the three Sunday services.

Big surprise, but attendance has shot through the chapel roof.

"It is gimmicky. It is totally gimmicky. I make no bones about that," Willis said. "But if I could get someone who would not normally come to church, why not?"

If the lure of free money has you breaking out the Sunday best, be prepared for some testimony from the preacher on how to spend that money.

You will hear of the glory of paying down debt, the revelation that comes with living on a budget and the miracle of compound interest.

For Willis, the cash is a mere carrot to get you through the doors. By sowing the seeds of the responsible personal finance, he hopes to create a few converts.

"I was worried how people were going to respond," Willis said. "I thought they might be, 'Oh, yeah, a classic preacher.'

"We've been blown away by the response. (read the rest)