Just to briefly identify him for those of you who are unfamiliar with him ...
Luskin is the chief investment officer for Trend Macrolytics. Politically, he is a libertarian. He is also a contributing editor and columnist for National Review Online and SmartMoney.com.
And he's in his mid–50s.
Anyway, if you've been following recent economic discussions — and, I suppose, most of us have been doing so, even if we find the subject of economics boring and tedious and about as appealing as having a tooth pulled without the benefit of novocaine — you've probably heard the steady drumbeat of warnings about a "double–dip" recession.
(Personally, I find such talk baffling because it implies that the economy experienced one recession, then enjoyed a burst of economic activity, then sank into a second recession.
(It is called a double–dip recession because of the "W" shape that is created on the economic charts, like the one from the early 1980s.
(Please withhold your jokes about "W" being the middle initial of the previous president.
(My problem is this: If all those who warn us about a double dip are right, and a "second" recession is coming, when did the first one end? Oh, well, perhaps I digress.)
But back to Luskin. He says a double–dip recession is not in the cards, and investors should not hesitate to acquire stock right now. Why not?
Gold.
"If the global economy was really heading toward another big leg down," Luskin writes for SmartMoney.com, "we wouldn't see gold creeping back up to within a couple percentage points of its all–time high."
Luskin insists that, while stocks are going through a "correction," gold is doing well. He has long been an advocate of gold, and he concludes that gold's performance means "there's no way we're headed back into the vortex of despair we saw in 2008."
Well, that's fine if, like Luskin, you place a lot of faith in gold as an economic indicator — and if you have enough disposable income to make investments in stocks.
Personally, I'm not entirely convinced. Granted, I'm no economist, and perhaps I would feel differently if I had a more extensive education in economics.
But I'll be skeptical about any recovery talk until I start seeing a lot of unemployed getting jobs every month.
In 2010, however, there is an unusual confluence of issues, like two mighty rivers that meet and create an even greater force, that might make this vote different from the rest. Even if the eventual result is the same, the margin may be closer than it has ever been — and it may be a sign that the tide is turning.
The folks in Washington seem to have lost sight of the fact (assuming — and that is a huge assumption — that they ever fully realized it in the first place) that this recession — and the unemployment it has spawned — is different from the others with which they have dealt. And they appear determined to fight it the same way they initially chose to fight Saddam Hussein and the Iraqis — on the cheap.
On the cheap didn't work in Iraq, and it won't work against the recession.
Policy analyst Samuel Sherraden, in an article for CNN.com, says the new jobs bill, in which the president and the members of his party seem to place so much faith, is doomed to fail because it focuses on inadequate tax credits instead of promoting infrastructure.
Of course, it is understandable — to a point — why infrastructure is not emphasized. Infrastructure costs money, lots of money, but revenue is down because fewer people are working and paying taxes — so there isn't as much money available as there once was.
"The House of Representatives passed a relatively strong bill in December, which included $48 billion in infrastructure spending," Sherraden writes. "Now the House and the Senate have adopted a bill that consists primarily of a payroll tax deduction for employers who make new hires and keep them on for a year. The original House jobs bill was $154 billion. The new bill is one–tenth the size."
I'm not an economist, but I don't think you have to be to see that Sherraden is right. The money simply isn't there, and the jobs bill doesn't provide the sources for the kind of revenue that is needed to repair the infrastructure and put millions of unemployed Americans back to work.
Legalizing, regulating and taxing marijuana has the potential to produce the kind of revenue — I've heard it estimated that legalizing marijuana in California alone can produce $1 billion annually in tax revenue for the state — that will address the infrastructure issue. And it will keep doing so beyond 2010, unlike the tax credits the Democrats have proposed.
As Sherraden observes, "It is unwise to pass a temporary hiring incentive that will expire during a year when the unemployment rate is forecast by the Congressional Budget Office to average 9.5 percent."
Yet, in addition to providing the kind of revenue that could be used to make meaningful improvements in the nation's infrastructure, legalizing marijuana could create, virtually overnight, the demand for all kinds of jobs. Those people in occupations that would be adversely affected by legalizing marijuana — for example, lab workers who perform drug tests and law enforcement officials who have been waging a losing war against marijuana for decades — would simply be reassigned to more productive pursuits. It is doubtful that their jobs would be eliminated, only the functions of the jobs. If marijuana is legalized, attention can shift to testing for the use of demonstrably deadly drugs and the enforcement of laws against violent behavior.
Then there is health care reform, an issue that has dominated the thinking of Barack Obama (who seems to have devoted more attention to his NCAA Tournament predictions in the last couple of years than he has to unemployment) and the Democrats in Congress for more than a year. With the passage of health care reform legislation, the thoughts of many have turned to the subject of easing the pain of those afflicted with AIDS, cancer, glaucoma, etc. And that is where the issue of medical marijuana comes in.
Marijuana has been proven — repeatedly — to be effective at fighting the nausea that is a by–product of some treatments (most notably, chemotherapy). It has also been shown to stimulate appetite, which is helpful for those whose medical treatments have robbed them of the desire for food. For glaucoma patients, it eases intraocular pressure that robs people of their vision.
However, fear mongers continue to spread inaccuracies (I prefer that word to lies even though this is one of those times when the latter is more appropriate) about marijuana. I can only assume that, because medical science has established a connection between tobacco consumption and life–threatening illnesses like lung cancer, opponents of legalization have jumped to the conclusion that smoking anything will cause lung cancer, too. I am aware of no medical studies that have shown that marijuana causes cancer. In fact, the Journal of Clinical Investigation, which makes its research articles from the last 86 years freely available online, has demonstrated precisely the opposite. JCI's research shows that marijuana kills cancer cells, which is one more therapeutic benefit.
Of course, it is unlikely that most of the people who consume marijuana do so as a preventive measure — although there may be some who smoke it because they are concerned about the prevalence of cancer in their families.
But it is ironic, I believe, that this issue comes up now — not just because of the passage of health care reform but because it was one year ago that, during his celebrated online town hall meeting, Obama ridiculed the 3½ million people who submitted questions about the legalization of marijuana.
This comes at a time when officials have observed a reversal in marijuana use among the young. For many years, propaganda campaigns succeeded, to an extent, in discouraging marijuana consumption, but recent surveys have noted a shift in the behavior of the young.
Such a shift has been increasingly hard to ignore — or write off as the behavior of those who are unmotivated and untalented. Just a few days ago, Don Banks reported for SI.com that folks in the NFL "are concerned about the increased number of prospects who have a history of marijuana use in their background."
Banks' article goes on to observe that eliminating players — given the success that some marijuana users have had in the NFL in recent years — because they failed drug tests doesn't make sense if the NFL's personnel people are interested in winning — and keeping their own jobs. Some, no doubt, cling to the long–disproved allegations that have been used to justify keeping marijuana illegal — that it causes death, that it leads to madness and violent criminal behavior, that it serves as a "gateway" to other drugs.
Well, Pete Guither debunks a lot of the myths. As he clearly demonstrates, prohibition was on the wrong side of history in the 1930s.
There are a couple of things that stand out in my memory of last Thanksgiving:
The terrorist attacks on Mumbai.
The anticipation of the Barack Obama administration (accompanied by speculation that Obama's former rival for the Democratic nomination, Hillary Clinton, might be his secretary of state).
Here we are, a year later, and I'm seeing articles about a president who has been dead for more than half a century, Franklin D. Roosevelt. What gives?
Well, I guess it's only natural for thoughts to turn to FDR. He was elected to deal with the Great Depression, and Obama was elected to deal with the most severe economic downturn since the Great Depression.
For Democrats, there is no president who can match FDR's achievements. He rescued the nation from an economic calamity, and he led the nation to a victory in World War II that he missed seeing by a matter of weeks.
Today, Stephen Herzenberg writes, in the Pittsburgh Post–Gazette, about the steps FDR might have taken to breathe new life into the economy.
My eyes were drawn to an observation that, because Congress is under pressure with unemployment continuing to rise, "momentum is building for a federal tax credit that would give companies an incentive to hire new employees."
I found this interesting because it is something Obama proposed during the presidential campaign last year — but, as PolitiFact.com points out, it was not included in the stimulus package.
So, what seemed (to me) like a logical and potentially beneficial approach to the problem has never been tried. It remains where it has been since Obama first mentioned it on the campaign trail — on the drawing board, an untried theory.
From what I have been able to gather, the proposal was nixed by Democrats in Congress. But it was Obama's promise so PolitiFact.com regards it as a broken promise. If the tax credit proposal had been part of the stimulus package, would it have made a difference? Herzenberg writes that Harvard economist Kenneth Rogoff says "the real appeal of a job–creation tax credit may be that it 'beats doing nothing.' "
The psychological impact of a tax credit notwithstanding, though, Herzenberg writes that, when compared to the things FDR did to combat joblessness in the 1930s, the proposal "looks like, well, nothing." It didn't look like nothing on the campaign trail, but, admittedly, that was a year ago. Millions of jobs have been lost since then.
The question that can't be answered, though, is whether as many jobs would have been lost if the administration and the Democrats in Congress had been more proactive about unemployment.
As far as the jobless are concerned, Democratic efforts to stem the tide now — whether in the guise of a much–ballyhooed jobs summit or any legislative measure — amount to little more than last–minute scrambling designed to save their jobs. But they may be able to do better than that by learning from what FDR did.
In the 1930s, Herzenberg writes, Roosevelt "championed the 'Big Four' social policies:
"a minimum wage to lift purchasing power at the bottom;
"a law strengthening workers' rights to unionize, laying the basis for the emergence of America's middle class through manufacturing unions;
"unemployment insurance, which enabled jobless workers to feed their families; and
"Social Security, which enabled the elderly poor to avoid destitution and increase their consumption."
"So far, what is Washington offering as the Great Recession's Big Four?" Herzenberg asks. "The Big Zero."
Herzenberg tries to be fair, pointing out that the Democrats have been devoting a lot of time and energy to health care reform, and he concedes that the reform plan will yield benefits to the economy in the decades ahead. But the issue now is reinvigorating the middle class, which has been brutalized by the recession.
"There are some ideas kicking around the margins that can help shape what today's Big Four might look like," he writes, adding that some "would update elements of the New Deal."
The problem, writes Jeanne Sahadi for CNN.com, is that all the strategies that are being considered for encouraging job creation have downsides.
But that may be the inevitable result of the dithering Congress and the administration have done on this subject all year. They've squandered precious time, but time is running out for the Democrats, who have operated on the false assumption that their triumphs in the 2006 and 2008 elections entitled them to congressional majorities indefinitely. No one knows what will happen in the 2010 midterm elections, but poll numbers suggest Democrats are losing the support of independent voters who were so crucial to their successes in the last two elections.
They may be able to regain the support of some of those independents if they pass health care reform, but as long as unemployment continues to go up, any such gains will be temporary. And the electorate is likely to be in a sour mood by November 2010.
Thanksgiving is one of those holidays that inevitably produces conflicting emotions. Wherever you are, you don't have to look far to find examples of people on opposite ends of the spectrum, people who are deliriously happy and people who are despondent.
I've often heard it said that, no matter how bad things are for you, there is always someone who is worse off. And that is true. But it doesn't mean your pain isn't genuine or that you aren't entitled to it.
On this Thanksgiving Eve, there may be much to be thankful for, but there still is a lot of pain in America. Those who are in charge insist on saying that, by traditional yardsticks, the recession is over — yet the unemployment rate is higher than it has been in more than a quarter of a century and many economists are saying it is likely to continue to go up in the first half of 2010. Last Thanksgiving, many Americans probably could not say that they knew anyone who was out of work. But, with more than 8 million jobs lost since the recession began, my guess is that far more are personally touched by joblessness this year.
I think I speak with a certain amount of authority when I say that most of the unemployed understand that the recession began nearly two years ago — and anyone who comprehends chronology knows that Barack Obama had not yet been elected president at that time.
Recently, I read an article in which the author said that (a) the recession was George W. Bush's fault and (b) it is too early to reach any conclusions about Obama. My response to that is (a) I don't dispute the fact that Bush was president in December 2007, but, even though I am not an economist, I am inclined to believe that a recession as severe as this one is the result of many decisions made by leaders from both parties, and (b) it may not seem fair to draw a conclusion about Obama, but that is the nature of the political calendar. Ready or not, the midterm election season is upon us and the economy is front and center.
I have been saying all year that job creation needed to be the focal point of the administration if it wanted to minimize its losses in the midterms, but Democrats preferred to blame Bush and devote their efforts to other matters. I cannot speak for everyone, of course, but recent public opinion surveys suggest to me that, however people may feel about who deserves the blame for the poor economy, a majority of Americans is running out of patience for the president to fix it. In their eyes, Obama has not done what he was elected to do, even if he thinks that calling for a "jobs summit" next month is (however belatedly) addressing the problem.
Take the stimulus package that was passed back in February. Congressional Democrats insisted, at the time, that it would create jobs almost immediately, but this week a Chicago Tribune editorial called that "a snow job."
I have to think that a newspaper that serves a city like Chicago knows something about snow. And the Tribune makes a valid point about claims of jobs that have been "created or saved" by the stimulus. Especially in places that don't exist — like the 15th House District in Arizona — except at the government's web site, Recovery.gov.
Well, when the national unemployment rate is in double digits, that's the kind of scrutiny the party in power must expect. Like it or not.
While many Obama supporters may dismiss opinions expressed in the Tribune as the rantings of a conservative paper, it is worth remembering that the Tribune endorsed Obama's candidacy last year, the first time it had endorsed a Democrat in 161 years.
And that's a verifiable number — unlike the claims of jobs that have been "created or saved" by the stimulus.
Well, whether you have been personally affected by the recession or not, have a happy Thanksgiving.
Here's hoping that, next year, there are verifiable job gains for which we can be truly thankful.
This morning's thought is little more than a rumination, I suppose. As Scrooge told Marley's Ghost in "A Christmas Carol," it "may be an undigested bit of beef, a blot of mustard, a crumb of cheese, a fragment of an underdone potato."
If that is so, perhaps I should be able to dismiss it as easily as Scrooge hoped to dispatch Marley's Ghost by saying, "There's more of gravy than of grave about you, whatever you are!"
But, as Scrooge learned, that is not so easily done. It has become no easier in the 165 years since Dickens' holiday tale was first published.
Whatever its source, this thought has been on my mind today. And it will not rest until I address it.
When it was announced yesterday that unemployment had gone over 10% for the first time in more than 26½ years, it re–ignited the now familiar finger pointing from both sides. The Democrats continued their descent into denial, chanting the litany, "It was Bush's fault!" Meanwhile, on the other side of the aisle, the Republicans burst into a spirited rendition of their patented lockstep dance, the "The GOP One–Step." Sort of a circular firing squad.
Well, as long as we're assigning blame — and there is plenty to go around — it's a good idea to heed the musical advice of the late Michael Jackson and look at the man in the mirror. I know an individual doesn't have any clout, but this is a nation of more than 300 million individuals. How many of those are adults?
It is true that corporate greed and bankers' excesses played large roles in the economic implosion, and it is true that politicians of both stripes enabled them through legislation (or the absence of it), but many individuals were willing participants as well. They heard the admittedly self–serving sales pitch from politicians encouraging them to spend their money and juice up the economy long before September 11 (after which, urging people to travel and buy expensive luxury items was packaged as a patriotic act), and they lived beyond their means.
At first, with all that fuel being poured into it, the economic engine hummed merrily along. But the engine grew dependent on that constantly increasing fuel source, and it began to sputter when some people reached the limit of their spending potential. It had to make a downward adjustment to compensate. If you have ever gone on a diet, you know how painful that kind of adjustment can be.
Have you ever known someone who achieved an astonishing weight loss — only to gain it all back and 30 additional pounds as well? That seems to have been the case with the American economy in the last 30 or 40 years.
Take, for example, the subject of automobile fuel efficiency. As long as I can remember, there have been heated discussions about making all vehicles more efficient whenever something has caused a sharp spike in gas prices, and sales of small cars have surged. But, when those gas prices have gone back down, as they always have (although seldom, if ever, to the level that existed before the spike), those concerns have gone away, too, as have many of the small, fuel–efficient vehicles that were briefly popular. Taking their places were cars and trucks (and, in recent years, SUVs) that were bigger and gaudier and more wasteful than those vehicles that preceded them.
Ultimately, the economic engine could not be sustained. And now, as everyone tries to dig out from under this pile of rubble, there are TV commercials extolling the virtues of "getting back to basics." They're still telling you to spend your money — this time on things that are important but not always necessary.
Well, I suppose that's an improvement from hawking things which were neither important nor necessary.
It now appears that this will not be, as many had feared, a second Great Depression. Perhaps a Great Recession. Barack Obama and the Democrats are eager to take credit for avoiding a catastrophe, but educated economists never seem to agree on anything and, since their opinions are the ones that matter on economic issues, the jury is still out on whether the Democrats' actions accelerated or impeded a recovery.
For that matter, there is still plenty of debate over whether we actually are in recovery mode. It can't be a true recovery, some argue convincingly, until the economy stops losing jobs.
But, if things ever get back to "normal" — whatever that may mean — the adults of today need to take from this experience (and they need to instill in the next generation) a commitment to thrift.
Yes, the economy needs people to spend. That's the juice that keeps it going. But our parents and grandparents learned some important survival lessons during the Depression that weren't handed down to most of today's adults.
And one of the most important was saving for that rainy day.
In recent decades, personal savings declined rapidly. That needs to change. Recovering from a recession does not have to mean snapping up the first shiny bauble one sees.
There have been many technological advances in my lifetime, and each one seems designed to prove that no one can predict the future.
Paul Krugman has an interesting column in today's New York Times about the state of America's banks.
Without a doubt, the economy is complicated. And there were several factors involved in the meltdown in 2008.
To a certain extent, I guess, everyone was culpable. But some played a greater role than others.
And I don't think there can be any doubt that the banks played a huge role in what happened. Whether one is an economist or an innocent bystander, I think that much is clear.
Given the fact that the financial institutions received so much bailout money from America's taxpayers — a down payment, as it were, on the expectation that banks would, in turn, make loans available that would keep businesses afloat and help create jobs — the news that they have been rewarding their top dogs with massive bonuses (or, in the case of Citigroup, proceeding with plans to purchase a brand–new corporate jet) while, as Krugman puts it, "the rest of America, the victim of a slump made on Wall Street, continues to bleed jobs" has provoked anger and resentment.
Clearly, the nation's financial future depends upon the solvency of the banks. It would have been reckless and irresponsible to allow them to go under.
But it seems that the banks have forgotten to whom they owe their continued existence.
Ask the people at Goldman, and they'll tell you that it's nobody's business but their own how much they earn. But as one critic recently put it: "There is no financial institution that exists today that is not the direct or indirect beneficiary of trillions of dollars of taxpayer support for the financial system." Indeed: Goldman has made a lot of money in its trading operations, but it was only able to stay in that game thanks to policies that put vast amounts of public money at risk, from the bailout of A.I.G. to the guarantees extended to many of Goldman’s bonds.
Paul Krugman
It's a complicated matter, this sour economy. There are no easy answers. But Krugman's New York Times colleague, Frank Rich, lent a little perspective to things in a recent column, in which he reminded readers that John D. Rockefeller's Standard Oil was known as "the Octopus" early in the 20th century.
"Goldman is this century's octopus," he wrote, although there are differences, most notably that Goldman Sachs was not a monopoly.
But he proceeds to observe that "the tone–deaf Treasury secretary, Timothy Geithner, never ceases to amaze. His daily calendars reveal that most of his contacts with the financial sector in the first seven months of 2009 were limited to the trinity of Goldman Sachs, Citigroup and JPMorgan. ... It's hard to see how any public official can challenge a culture that he is marinating in, night and day."
It's a complicated mess, all right. And Krugman's column should be read in its entirety, but his conclusion is worth jumping to.
"The main thing for the time being is probably to do as much as possible to support job growth. With luck, this will produce a virtuous circle in which an improving economy strengthens the banks, which then become more willing to lend.
"Beyond that, we desperately need to pass effective financial reform. For if we don't, bankers will soon be taking even bigger risks than they did in the run–up to this crisis."
Someone — if not the president, who appears to possess principles but has not clearly demonstrated his commitment to most of them, then someone like a Treasury secretary, although it is far from clear that this Treasury secretary has the cojones for the task — must insist that the financial institutions understand that things are different now.
And if, as Krugman writes, they feel it is no one else's business what their earnings are, they need to be reminded, in no uncertain terms, why they are still in business.
At the end of this week, we'll get the next unemployment figures. Might want to start bracing yourself now. No matter what the jobs report says, I expect both sides to spin the heck out of it.
Personally, I don't expect much to get excited about on Friday. I was just reading in the New York Times that the ratio of job seekers to job openings is 6 to 1 — the worst it has been since the government started tracking it.
I figure that, if there is another modest drop in joblessness, it will prove to be a temporary lull, like the others. It will merely be evidence that the house is still burning down, just slower than it was.
For that matter, it could be a sign that some of those who were receiving unemployment benefits are no longer receiving them. Whether they got jobs would be beside the point.
With the unemployment rate nearing 10%, Robert Samuelson of Newsweek probably is guilty of stating the obvious when he says this is "the bleakest Labor Day since at least the early 1980s."
He goes on to say that "cheery news is scarce." To which many long–term unemployed people may be tempted to respond, "Ya think?"
In fact, though, Samuelson observes points that seem to be ignored too often these days. At the very least, they seem to be inconvenient to bring up when the president is trying to have a "teachable moment" over beer with a policeman and a tenured college professor or when Americans are busy fighting with each other over health care reform or the president's intention to address the nation's schoolchildren.
"The implications of prolonged high unemployment — should it materialize — haven't been fully explored," Samuelson writes. (I would argue that "prolonged high unemployment" already has materialized in the lives of many Americans.) "People without work don't acquire on–the–job skills. Young college graduates are already having trouble getting work. High unemployment could depress wage gains for years. It could foster protectionism and long–term poverty."
This is uncharted territory for lots of folks. Robert Gavin writes, in the Boston Globe, that "5 million Americans have been out of work for more than six months, a record number that forecasts a slow, difficult recovery and a long period of high unemployment."
That is the assessment of Northeastern University's Center for Labor Market Studies, Gavin points out, but it is the kind of thing that many people were saying in the months before Barack Obama took office. It makes me wonder — and I'm sure it makes other people wonder — how Obama and Joe Biden could plausibly say that they "misread" the economy or that they were not given all the information they needed.
Everyone else seemed to understand the severity of the situation. Why didn't they?
(Today, on the first Labor Day of his presidency — and only a few days removed from the latest joblessness report that showed the unemployment rate making its way toward 10% — Obama is in Cincinnati — promoting health care reform. He's giving a major address on the subject on Wednesday. When was the last time Obama gave a major address on unemployment and talked about what the administration was doing to promote job creation?)
The Democrats in Congress who hammered out the congressional compromise on the stimulus package in February sounded like they understood the need for job creation. Turned out they were too busy including pork in an attempt to appease their Republican colleagues.
Forgive the unemployed for feeling like an afterthought.
Secretary of Labor Hilda Solis sounds like she gets it."America's workers ... are resilient, hopeful and optimistic," she writes. "They don't want a hand out, they want to work and provide for their families."
Fine, but if nobody's hiring, it is hard to remain "resilient, hopeful and optimistic." The government has to encourage job creation in these tough times. It's fine for Solis to give displaced workers a pep talk, but what is the government doing to encourage job creation?
Talk is cheap. Paying the rent and feeding and clothing your family are not.
Maybe next Labor Day will be better. But don't count on it.
"Progress, far from consisting in change, depends on retentiveness. When change is absolute there remains no being to improve and no direction is set for possible improvement: and when experience is not retained, as among savages, infancy is perpetual. Those who cannot remember the past are condemned to repeat it."
George Santayana (1863–1952) The Life of Reason Vol. I, Reason in Common Sense
As I write this, it has been exactly one week since the funeral mass for Ted Kennedy.
During Kennedy's funeral last Saturday, his oldest son, Teddy Jr., gave the speech that was considered by many to be the most moving tribute of all the eulogies that were given in his father's memory.
That assessment probably was based on Teddy Jr.'s recollection of his struggle with bone cancer, which cost him one of his legs, and his personal comments about his relationship with his father. Those words certainly were touching.
Equally significant, though, were his memories of how Kennedy used to take him and his siblings and his cousins to Civil War battlefields. He recalled how his father and historian Shelby Foote would visit battlefields on the anniversaries of the battles in order to gain a greater appreciation for what the soldiers experienced.
"He believed that, in order to know what to do in the future, you had to understand the past," Teddy Jr. told those who were assembled in Boston.
If, before he died, Kennedy didn't impart that lesson directly to his countrymen, I hope they got it last weekend. But, with the endless fighting over health care reform and the latest firestorm over Barack Obama's intention to speak to America's schoolchildren next week, I have my doubts.
Obama fancies himself a student of history, but he often seems to lack an awareness of the lessons of history.
Well, if the president needs a little help in that regard, Matthew Rothschild can give him some historical perspective with an article he has written for The Progressive.
"It's Labor Day and the American worker doesn't have a lot to celebrate," Rothschild writes. "Unemployment stands at 9.7 percent — that's 15 million people out of work, officially, and millions more unofficially."
Rothschild goes on to observe that "the richest Americans have seen their wealth skyrocket, so much so that now we have widest gap between the rich and the poor since 1929."
Ah, yes, 1929. There are many years that would have little meaning for non–historians, even though those years brought significant developments, but it seems to me that just about anyone who ever studied American history, especially 20th century American history, would be able to tell you that 1929 was the year of the Stock Market Crash that helped to usher in the Great Depression.
Well, the prevailing belief is that the Depression began with the Stock Market Crash — but, in truth, real estate values had been declining for awhile, and the long–term influence of the crash was not clear to many Americans when it happened. Neither of my parents had been born when the stock market crashed, but my studies of that period indicate that reality didn't settle in until later on, when banks began to fail and an economic domino effect was under way.
But some people understood immediately what the crash meant. There are many stories of folks who did not wish to face what was to come and chose to end it all. Some put bullets through their heads. Others hanged themselves or jumped from tall buildings.
There are some differences between the current recession and 1929. Today, most people believe this will not turn into another Depression. They disagree over whether the actions of the Obama administration and the Democrats in Congress are responsible, but most believe an economic catastrophe like the one in the 1930s has been avoided.
And, while historians disagree over exactly when the Depression really began, economists tend to agree that this recession began in December 2007, but things didn't get noticeably bad for most until the economic meltdown late last year.
People were losing their jobs before then, of course, just as there were signs before the Stock Market Crash that the economy was dangerously unstable. And, in the year since the meltdown, the economy has been losing hundreds of thousands of jobs each month. Some of the folks who lost their jobs before the meltdown may well have found new employment, but it isn't much of a reach to say that most of the people who were unemployed last Labor Day are still unemployed.
Consequently, this is the second straight Labor Day that many people have been out of work. The Calculated Risk blog provides ample data showing that long–term unemployment is higher than it has been since the Depression.
And economist/columnist Paul Krugman observes in his New York Times blog, The Conscience of a Liberal, that long–term unemployment is "the most destructive in human terms."
How will the destructive nature of unemployment in the early 21st century differ from the 20th century? Well, I suppose the answer to that really lies in the demographic breakdown of the out–of–work labor force. And, when I say "demographic," that isn't a reference to gender or race or anything like that. It has more to do with the fact that technological advancements not only change the way we all live but also have the power to make certain job functions obsolete.
Certainly, the nature of the economy is changing, No industry of which I am aware has been immune to the poor economy, and a key to each industry's recovery will be which jobs have been permanently lost and what that means in human terms.
That's why I have been saying all along that Obama and the Democrats needed to focus their efforts on job creation. They haven't. They have permitted 7½ months to go by, and unemployment is teetering on double–digit territory.
It may not be too late to encourage job creation, although time has run out for some of the unemployed. But, while they still have huge majorities in Congress and occupy the White House, Democrats must act and act quickly. Unfortunately, they chose now to wage this fight on health care reform. After enacting a pork–laden stimulus package, this isn't the best time to be pushing for tax incentives to encourage employers to hire people — as any student of history would be sure to tell you, the last thing you want to do is wage a two–front war. Ted Kennedy was devoted to the cause of health care reform, but he knew enough about history to know that you must pick the right time to wage certain battles.
Health care is important, but first you've gotta eat and you've got to have a roof over your head and you've got to have clothes to wear.
"Obama and the Democrats have a chance to improve the lives of working people," Rothschild writes. "But if they cave on the necessary policy changes, next Labor Day may be even grimmer than this one."
I know we're all eager for the recession to be over.
Most economists say the recession began in December 2007, which means that the economy has been in the toilet for more than a year and a half. It's been just about a year since the economic meltdown that really sent things into a tailspin. Nationally, unemployment has been higher than 9% for the last couple of months — and we'll get an update tomorrow.
We could all use some good news.
But it seems a little premature for CNN.com to be wondering "Who should get credit for a recovery?"
Maybe, as Chris Isidore suggests, there really is"a growing sense that the economy is now in a recovery." As one of the millions of Americans who is out of work, I devoutly hope it is. And maybe we will see evidence of that when the monthly jobs report comes out tomorrow.
That's the real key, isn't it? Most Americans won't feel that things are getting better until they can see a shift in the jobless pattern. For the last year, the economy has been losing jobs in the hundreds of thousands every single month. The days when job losses in five figures were alarming are nothing but a distant memory now.
In fact, Americans have become so conditioned to six–figure job losses that my guess is that, if we do see job losses that drop below six figures in tomorrow's report, it will be hailed as evidence that the recovery is under way — even though the report may still show the economy losing jobs, not adding jobs.
At the moment, though, that is hypothetical.
The issue of assigning credit for a recovery is not a frivolous ego exercise, Isidore points out. "[K]nowing what policies worked, and which ones need to stay in place, could keep the recovery from stalling out."
Ah, but there is the catch. Americans haven't concluded that the recovery has begun.
In fact, CNN.com reports that "[n]early nine in ten Americans say the country's still in a recession."
CNN's Deputy Political Director Paul Steinhauser quotes CNN Polling Director Keating Holland, who says, "Economists may be speculating that the recession is over, but don't tell that to the American public."
The point is that perception is reality. And perception of the masses is more important than the perception of the few. If you have any doubts about that, I suggest that you consult George H.W. Bush.
The recession that occurred on Bush's watch was relatively mild, by historical standards, and economists proclaimed that a recovery had begun months before the 1992 election. But when Americans went to the polls, they voted for Bill Clinton. The historical indicators that a recession was over weren't evident in their own lives.
As I say, I know we're all hungry for some good news. But let's wait until there really is some good news before we start celebrating.
Not only is he a Nobel Prize winner, but he is also a good writer capable of making complex theories comprehensible for ordinary folks. His latest column for the New York Times is a good example.
His premise in the column is that big government prevented the recession, as bad as it is, from becoming a depression.
He doesn't pull any punches. He admits, as Peter Finch said in his "I'm as mad as hell" speech in the movie "Network," that "we know things are bad — worse than bad."
Just to be clear: the economic situation remains terrible, indeed worse than almost anyone thought possible not long ago. The nation has lost 6.7 million jobs since the recession began. Once you take into account the need to find employment for a growing working–age population, we're probably around nine million jobs short of where we should be.
As one of the unemployed, I can attest to the roller coaster ride out–of–work people go through on a daily basis. You get up in the morning, feeling the hope that comes with the dawn of a new day, but you get gradually beaten down as the day progresses. By the time night arrives, you crawl into bed with your tail between your legs and hope to get the rest you need to muster more enthusiasm for the next day, which is also likely to be a downer.
That is, if fear and anxiety don't invade your dreams and keep you from getting the rest you crave.
It was hard to share in the optimism of some Democrats last week, when word came out that the unemployment rate had fallen by 0.1% in July.
But Krugman wasn't drinking the Kool–Aid. Well, not entirely.
And the job market still hasn't turned around — that slight dip in the measured unemployment rate last month was probably a statistical fluke. We haven't yet reached the point at which things are actually improving; for now, all we have to celebrate are indications that things are getting worse more slowly.
Krugman himself has argued that the stimulus package was too small. But he, like many of his colleagues at the Times, has been an enthusiastic cheerleader for the Obama administration. And today, he praises what government did to put the brakes to the freefall.
A few months ago the possibility of falling into the abyss seemed all too real. The financial panic of late 2008 was as severe, in some ways, as the banking panic of the early 1930s, and for a while key economic indicators — world trade, world industrial production, even stock prices — were falling as fast as or faster than they did in 1929–30.
But in the 1930s the trend lines just kept heading down. This time, the plunge appears to be ending after just one terrible year.
So what saved us from a full replay of the Great Depression? The answer, almost surely, lies in the very different role played by government.
He praises the " 'automatic' stabilizing effect" federal spending has had, along with government's efforts to "rescue the financial sector."
You can argue (and I would) that the bailouts of financial firms could and should have been handled better, that taxpayers have paid too much and received too little. Yet it's possible to be dissatisfied, even angry, about the way the financial bailouts have worked while acknowledging that without these bailouts things would have been much worse.
The point is that this time, unlike in the 1930s, the government didn't take a hands–off attitude while much of the banking system collapsed. And that's another reason we're not living through Great Depression II.
And he praises the government's efforts to pump up the economy.
All in all, then, the government has played a crucial stabilizing role in this economic crisis. Ronald Reagan was wrong: sometimes the private sector is the problem, and government is the solution.
And aren't you glad that right now the government is being run by people who don't hate government?
Yes, frankly, I am.
And I am glad, as I usually am, that Krugman is there to remind me that things are getting better. Incrementally, perhaps. And that light at the end of the tunnel may be merely a speck in the distance right now. But at least it is there. And it seems to be on track to get larger.
But there are still problems. Unemployment benefits are going to run out for many people before long. I understand why Obama urges people to be patient. Will their patience last longer than their money does?
I'm still very worried about the economy. There's still, I fear, a substantial chance that unemployment will remain high for a very long time. But we appear to have averted the worst: utter catastrophe no longer seems likely.
And Big Government, run by people who understand its virtues, is the reason why.
I'll try to keep that in mind while I try to keep the night terrors at bay.
The recession is over — that's the good news, according to Newsweek.
At least, that is what the main headline on Newsweek's article says. But the ugly truth is to be found in the subhead: "Now what we need is a new kind of recovery."
"The Great Recession ... is most likely over," writes Daniel Gross for Newsweek. And he acknowledges that "[c]atastrophe may have been averted. But when economists proclaim a recession over, they're celebrating a technicality: they mean economic output has stopped contracting. ... GDP growth alone can't feed a family, or pay a mortgage. Cursed with a high national debt load and blessed with a dynamic, growing workforce, the U.S. economy needs annual growth of at least 1.5% just to feel like we're standing still."
Gross has more bad news, although I suspect that longtime job seekers have already figured it out.
"[T]he data point that means the most to our psychological well–being — unemployment — is likely to keep climbing. The loss of 6.5 million jobs since December 2007 has spurred the sharpest rise in the unemployment rate since the 1930s."
If you've been unemployed for awhile, you're probably feeling like a punching bag these days. And Erik Eckholm delivers an uppercut in the New York Times, reporting that up to 1.5 million unemployed Americans will run out of unemployment benefits in the coming months, "ending what for some has been a last bulwark against foreclosures and destitution."
Don't blame Eckholm. He is only the messenger.
And I'm not suggesting that anyone blame the president, either. He didn't create the situation.
But make no mistake about it. While Barack Obama is gambling his popularity on a health care reform package — the passage of which seems iffy at best — and sitting down for a beer and a "teachable moment" on race relations with a Harvard professor and a Cambridge, Mass., police officer, unemployed Americans of all races and their families are facing the loss of their meager benefits in spite of the fact that, as Eckholm writes, "unemployment in this recession has proved to be especially tenacious."
For whatever reason, some people can't get it through their bullet–proof heads that things are different than they used to be. Joblessness lasts a lot longer for most people than it used to. There was a time when employers would take a chance on people who sort of fit the bill for what they were looking for. Today, with so many people looking for jobs, employers can look for a candidate who meets their requirements precisely. That's why it is so hard for people to find work in different fields, even after retraining. Few employers seem willing to allow for a learning curve. Most want actual on–the–job experience.
It's a modern–day Catch–22. You can't get a job in a different field without experience, but you can't get experience in this economy.
The focus of this administration should have been jobs — creating new jobs, encouraging employers to give displaced workers a chance, etc. — all along. Now, millions of Americans, including children, will pay the price because it hasn't been the focus. Many will pay the ultimate price.
I'm not doubting Obama's intentions. But you know what they say about the road to hell?
Normally, I like to use this blog to write about current events or anniversaries of historic events.
I love history. I've loved history since I was a child. Maybe that's because history is really a bunch of stories about people and places. I guess that, more than anything, is why I studied journalism in college and pursued it as a career through most of my adult life. I like to tell stories.
And I like words better than numbers. I never was very good at math. If you looked at my checkbook, you could probably pick up on that right away.
It reminds me of something that one of my journalism teachers said in class once. She said that, if people who can't read are illiterate, then people who have trouble with numbers should be called "innumerate." I can't argue with her logic.
History isn't always clear when it's happening. Journalists are witnesses to history, but they seldom have the luxury of having all the facts. The other day, I wrote about the impeachment proceedings against Richard Nixon, and I remember how uncertain things seemed at the time. Woodward and Bernstein broke the story for the Washington Post, but everyone had to go through a drawn out — and often painful — process before it reached its resolution. No one really knew how it would play out.
In hindsight, it may seem that resignation was inevitable, but there were genuine concerns about other options right up until word leaked out, in August 1974, that Nixon had decided to resign. The general public was under the impression that Nixon was going to dig in his heels and fight the charges in a Senate trial, hamstringing the Congress for months. And, in the years that have passed, I have learned that there were those in the administration who were afraid that Nixon might do himself harm.
In the end, though, Nixon peacefully gave up the presidency and returned to California, expecting to have to defend himself in court. But that wasn't how it played out. His successor, Gerald Ford, pardoned him a month later — and probably doomed his own election prospects for 1976 in the process.
Today, I find myself facing a situation that millions of others are facing — and my guess is that few of us know how it will play out. I certainly don't. I'm talking about the unemployment situation. I've been out of work for more than 11 months now. My unemployment benefits have been extended a couple of times and now they will run out soon. I am frustrated. My self–esteem has never been lower. And I need some advice that will improve my odds of simply getting an interview.
But I have learned, in nearly two years of blog writing, that my colleagues in the blogging community often have some constructive suggestions to offer, whatever the situation. So I am appealing to you for your help, your insights, your advice.
I don't have any figures to back this up, but my guess is that most of today's job seekers are like me. They read articles about job seeking, trying to find tips that will help them write a more effective cover letter or a more effective résumé. But the more of these articles that I read, the more confused I become. I'll read an article in which the author suggests that a job seeker do something and it sounds logical to me. But then, in practically the next article I read, the author recommends doing something that is entirely opposite of what the first author suggested.
There's a lot of conflicting advice out there.
Cover letters: I know cover letters are important. What I don't know is how long they should be. What is your opinion?
I've read some articles in which the authors say to keep them short, maybe a few paragraphs that speak about your accomplishments or the responsibilities you have had on the job, then provide a lot of information in the résumé. Other authors have said that job seekers should really make their case in the cover letter, go into detail and let a short résumé fill in the details.
Résumés: For that matter, how long should the résumé be? And how should it be structured? I've read some articles that say you should put your skills at the top of the résumé. Others suggest putting them at the bottom. How much of your work history should you include? How should you account for gaps in your work history?
Also, for the benefit of older workers, should you include the date(s) that you graduated from college and graduate school? Are you"dating" yourself when you do that? In other words, does that invite age discrimination?
References: How many references are best? Should you include references that are primarily personal, not professional? How about teachers you have had? I have one person on my references who was my favorite professor in college. He taught reporting and he gave me an A. I was quite proud of it — still am, for that matter, because this professor only gave you an A if you earned it. He is retired now, but he is still pretty well respected. I'm glad to have him as one of my references. But I'm not sure what an employer's reaction is to former teachers on a reference list.
So, does anyone have any constructive advice for me?
When I was a teenager, there was a song by a popular band of the time that was titled, "Riding the Storm Out."
It might be a pretty good anthem for those who have been hammered by the current recession.
I know the millions of unemployed Americans are yearning for a time when, as Louis Uchitelle writes in the New York Times, help will be wanted by employers again.
"Recessions have their milestones," Uchitelle writes. "There is the start, of course, in this case December 2007; the worst months, the winter and spring of this year; the gradual return to economic expansion, late this year maybe; and, finally, adding jobs."
The improvement in the employment picture typically occurs at the end of a recession — and, given the fact that this recession is deeper than any that most people living today have witnessed, that is going to take awhile.
And even when employers start hiring again, hiring activity is apt to be "spotty and cautious."
That part, I suppose, should be obvious, even if it is an unpleasant truth that most unemployed Americans don't want to think about.
"Most Americans don't consider a recession really over until work is once again plentiful, and the unemployment rate — which is now at 9.5% — finally starts going down," Uchitelle writes. "Ask economists when that will occur this time and they hesitate. No sooner than next summer, nearly all of them say. And that's a guess, verging on wishful thinking."
Mark Zandi, chief economist at Moody's Economy.com, observes that it will take time for manufacturing and construction to stop losing jobs, and it will take time for businesses to regain enough confidence to hire employees.
So the outlook is for a "jobless recovery," Uchitelle writes, comparing it to the last two recessions. But this one is worse because, instead of job losses in the tens of thousands each month, we have witnessed an economy that has been hemorrhaging jobs in the hundreds of thousands every month.
To move things along, Uchitelle suggests another stimulus package may be necessary. But I get the sense that there isn't much of an appetite on Capitol Hill for more debt (Uchitelle suggests a stimulus package with a price tag approaching $1 trillion). The Democrats may be able to muster enough support in the House, but it's going to be another matter to get the necessary 60 votes in the Senate, even with the recent addition of Al Franken and the defection of former Republican Arlen Specter.
But what choice do lawmakers have? More than a quarter of the states already have unemployment rates in double digits, and more are likely to join them in the months ahead. The Obama administration and the Democrats in Congress were warned by economists like Paul Krugman that the first stimulus package was too small, but they made concessions and compromises in a misguided — and unsuccessful — attempt to achieve bipartisanship.
Bipartisanship must not be a concern this time. The Democrats have the numbers in Congress. They do not need to ask the Republicans for permission. They must act — boldly and swiftly — for the good of the people who sent them to Washington.
To push through another stimulus package, at the same time that he is pressing for health care reform, Obama is going to have to demonstrate whatever skills of political persuasion he possesses.
He's going to have to use whatever "political capital" he has left. If he does not, his party faces a huge setback at the polls next year.
That is the reality.
It is not a pleasant prospect, but it is the only way the Democrats will be able to ride out this particular storm.
Earlier this year, conservatives squawked loudly about the Obama economic stimulus package. Too costly, they said. Meanwhile, those on the left, including the Nobel Prize–winning economist Paul Krugman, argued that it wasn't enough.
But now, unemployment has already exceeded what the administration anticipated. Last month's unemployment figures were sobering following the prematurely giddy reaction to better–than–expected numbers in May (not "good," as I have observed before, just "less bad").
And, following Joe Biden's admission on Sunday that the administration "misread" the economy (don't you love that word? It reminds me of the 1970s when the folks in the Nixon administration said they "misspoke" on a whole range of things of which some knew little and others knew more than they were letting on), Kevin Hall and David Lightman of McClatchy Newspapers are speculating about the need for a second stimulus package.
"Only about a tenth of the money has been spent so far, and only about half of it will have been spent by October 2010, according to the nonpartisan Congressional Budget Office," they write.
"Meanwhile, the unemployment rate stands at 9.5% and is headed higher. More than 6.5 million jobs have been wiped out since the recession began in December 2007. Home foreclosures continue at record rates, despite a flurry of government programs. Remember those toxic assets clogging bank balance sheets and resulting in a credit crunch? Treasury's program to deal with them still isn't producing results.
"This wasn't what the administration envisioned."
Frankly, I find it hard to believe this is what the American people envisioned when they went to the polls last November.
But it's what they've got. And, as Hall and Lightman point out, the Obama administration has made its task much more difficult by "fostering unrealistic expectations." And now we're hearing talk about a second stimulus package.
House Majority Leader Steny Hoyer talks about being open to the idea, but Hall and Lightman observe that it will be easier said than done in the Senate, where "there's less appetite for additional stimulus — and little chance of getting the 60 votes needed to push one through."
It seems clear to me, though, that this time, if there is going to be a second stimulus package, it absolutely must focus on job creation. Long–term goals, like health care and alternative energy, are important, but we've squandered nearly six months that could have been used to put America back to work but have failed to do so. In that time, unemployment benefits have expired for many, and hundreds of thousands of people feel as if they have slipped through the cracks.
It's too late for some and getting close to it for others.
Well, where are all those jobs now, senator? If your compromise had delivered as advertised, we wouldn't need to have this conversation right now, would we?
Jack Cafferty of CNN has been asking his viewers if they think a second stimulus is needed.
But, you know, maybe the problem here is in the name. It needs a name that will address what is really the objective, and you aren't going to stimulate the economy until you start putting people to work.
As Mike Lux writes at Open Left, we need a jobs package, not a stimulus package.
The last time Mrs. Reagan was in the Capitol Rotunda was for the memorial for her husband five years ago this month.
Each state is permitted to contribute statues of two of its prominent citizens to the Statuary Hall collection. Sometimes a statue is replaced. Today, Reagan's statue replaced the statue of Thomas Starr King, a Unitarian minister who was an influential figure in California politics during the Civil War. The other Californian in Statuary Hall is Father Junípero Serra, who was beatified by Pope John Paul II a few months before Reagan left the White House.
I'm sure the timing was not coincidental, but Paul Krugman wrote in the New York Times a few days ago that, if you want to pinpoint the origin of the current financial crisis, the blame can be put at the feet of Ronald Reagan and the Garn–St. Germain Depository Institutions Act he signed into law in 1982.
"[T]he bill turned the modest–sized troubles of savings–and–loan institutions into an utter catastrophe," Krugman writes.
"Attacks on Reaganomics usually focus on rising inequality and fiscal irresponsibility," Krugman continues. "Indeed, Reagan ushered in an era in which a small minority grew vastly rich, while working families saw only meager gains. He also broke with longstanding rules of fiscal prudence."
When seen in that light, Dick Cheney's insistence several years ago that "Reagan proved deficits don't matter" would be laughably ludicrous — if millions of Americans weren't having to pay the price today.
Anyway ...
I was looking over the list of the statues in Statuary Hall today. I was curious, as someone who grew up in Arkansas, to know who represents my home state. I figure, at some point, a statue of Bill Clinton will be put up there. He had his shortcomings, but he left office with a budget surplus and he is the only Arkansan ever elected president. I'm sure he could replace either of the Arkansans currently in Statuary Hall with virtually no opposition.
The most likely prospect to give his spot to Clinton would be James Paul Clarke, a largely unsuccessful governor and a fairly modest senator. I studied Arkansas history as a part of my fifth–grade curriculum, and I remember very little about Clarke. To be honest, I'm not entirely certain why he was chosen to represent the state in Statuary Hall.
The other prospect is a statue of a fellow named Uriah Rose. I don't believe he ever held public office in Arkansas. He was a lawyer, and the law firm he joined in the 19th century bears his name — the Rose Law Firm. Its first female partner was Hillary Clinton.
Of course, lots of states have only one president — or two or three — and most of them aren't included in Statuary Hall.
You might think that former presidents occupy a large part of Statuary Hall, but that isn't the case. Some aren't there, presumably, because history judged them to be failures. But that isn't always the case, either.
Reagan is only the fifth ex–president whose statue has been placed there — and the presidents whose likenesses adorn Statuary Hall are not necessarily the ones you might expect. Abraham Lincoln, for example, is not there. Of course, he already has a monument in Washington.
But so does George Washington and his statue is one of the ones that represents Virginia. Thomas Jefferson, however, is not the other Virginian in the collection. That distinction belongs to Robert E. Lee.
Neither of the Roosevelts represent New York. John F. Kennedy doesn't represent Massachusetts. And Harry Truman doesn't represent Missouri.
The other three presidents in Statuary Hall are Dwight Eisenhower (representing the state in which he grew up, Kansas), James Garfield (representing Ohio) and Andrew Jackson (representing Tennessee).
Three former vice presidents (George Clinton, John C. Calhoun, Hannibal Hamlin) and several would–be presidents have statues in Statuary Hall, and the president of the Confederacy, Jefferson Davis, is one of those representing the state of Mississippi, but most came from other walks of life.
Considering that Statuary Hall is in the Old Hall of the House (the "People's" House), I guess that is appropriate.
He tells a tale that is all too common these days. "I lost my job back in March of 2008 and unemployment ran out in March of 2009," he writes. "My lifetime savings ran out in the beginning of May and I'm up the creek without a paddle. ... I have no idea what is going to happen to us and I'm terrified. I'm so frustrated with myself, with my life, with everything that it is truly depressing. ... I've lost all respect for myself at this point in my life."
It seems to me that perhaps the worst part of this recession is the emotional toll it takes on its victims. People like Papamoka, who have worked hard all their lives and now find themselves without jobs, through no fault of their own, blame themselves. They feel robbed of their independence and their self–sufficiency. As a result, they lose their self–respect.
He's set up a PayPal donation button on the blog for people to make contributions. I'd like to help, but I'm in a similar bind. My unemployment hasn't run out, but I expect it to before long. I've been putting out job applications for months, but I've gotten few nibbles and no offers, and I expect to be forced to move in with my brother.
So all I can do is help spread the word and sympathize — and hope things turn around before something similar happens to me. Maybe someone who reads my blog will be able to contribute to Papamoka.
I wish I could do more, Papamoka. Perhaps one or more of my readers can.
In what may be greeted in many quarters as good news, the National Association for Business Economics Outlook reports that indicators suggest the end of the recession may be in sight, according to Julianne Pepitone at CNNMoney.com.
The news will continue to be mixed, the NABE says. The panel anticipates a rebound in economic growth in the second half of 2009, but it still expects to see a decline in economic activity for the second quarter. As far as the short term is concerned, that really isn't much of a surprise. We've been seeing a decline in gross domestic product for months now, but recent months have suggested that the decline is leveling off.
But any gains that may come in the remaining seven months of this year are not likely to offset the losses we've seen. That, by the way, is my own interpretation, not the NABE's — and it's based primarily on the 6% drop in GDP that we witnessed in January.
Employment will lag behind, as it typically does during a recovery, and will show signs of turning up by the early months of next year, says NABE president Chris Varvares. The panelists predict that, nationally, unemployment will level off before it gets into double digits, with the rate dropping to 9.3% by the end of 2010, which is higher than the current rate of 8.9%. Presumably, it will take longer in some states than others.
And, as Pepitone writes in her summary of the NABE report, "Almost three out of four survey respondents expect the recession will end by the third quarter of 2009."
Since we're a little more than a month away from the start of the third quarter, that's good news, isn't it? Well, it seems to be — until you take into account what the rest of the respondents say. Granted, they are in the minority. But the majority opinion is not always right.
Are the remaining economists hedging their bets? That's hard to say. But Pepitone points out that 19% of the economists who were surveyed by the NABE say recovery won't begin until the fourth quarter and 7% believe it will begin in 2010. So, clearly, there are skeptics.
Personally, I'm doing what I can, which isn't much in the grand scheme of things. I'm trying to remain patient. But I'm not a trained economist. I've tried to understand the concepts that have been discussed, but it all comes back to my personal situation.
I didn't create the conditions that led to this recession. I didn't profit from the culture of greed that so many people say brought the economy to its knees.
I can only hope that things get better soon. For me, things will be better when I have a job.
An old friend of mine sent me an e–mail reporting that he went to his brother's son's high school graduation last night. He didn't have much to say about the actual ceremony, but he did say that he had dinner with his family afterward. His nephew apparently wants to pursue a career in law enforcement and is planning to continue his education with that in mind.
I don't know how many of my classmates went on to college. When I graduated from high school, I know there were some in my class who chose not to continue their education and went straight into the workforce. Some got married and started having kids right away.
In many ways, that was a different time — in others, it was not so different. We didn't realize it then, but we were about to encounter a severe recession that has frequently been compared to the one we face today. But when my high school friends and I walked across that stage and received our diplomas, all things seemed possible. Unemployment was a source of concern, of course — the rate at the time was around 6% — but the rate had been declining in the months leading up to graduation. So, whether our plans included college or not, the future looked bright.
Today's graduates face a different set of circumstances. There are a lot more of them, for one thing. From what I've been reading on the website for my hometown newspaper, there were nearly 600 graduates in my old high school this year. That's close to twice the number who graduated when I did.
The account of the graduation ceremony indicated that, while the graduates may have been from a different generation, they experienced the same conflicting emotions that we did. They were glad to leave, yet sad at the same time. And, in today's economy, I'm sure there's some ambiguity about what to do next.
My advice would be to go on to college or community college or trade school or whatever.
I don't know if there is a perception among today's graduates that a college degree is a ticket to a lifetime of security, as there was in my graduating class, but I think the current recession has pretty much disabused many of that notion.
From a practical standpoint, staying in college means one can continue to receive health care coverage through his/her parents' employers. Elizabeth Cohen writes about this issue for CNNhealth.com, but she approaches it from the perspective of recent college graduates, not recent high school graduates.
Even so, I think anyone who is finishing one level of schooling these days would be wise to strongly consider moving on to the next level — if only because most policies will continue to cover dependents as long as they are students. It isn't as easy as it once was to get health care benefits with a job offer.
While it is possible that current conditions are more favorable for health care reform than they were when Hillary Clinton tried to achieve it in the 1990s, that isn't a sure thing. The smart thing for young people to do these days is to remain in school and take advantage of their parents' coverage while they can.
And times may change again. An advanced education may be more valuable in the future than it seems to be today. Having a college degree may once again be the advantage that it was.
We can all hope that the recession will be over by the time today's high school graduates walk across that stage again.
"It's a measure of just how terrible the economy has become that a loss of more than a half–million jobs in just one month can be widely seen as a good sign," he writes. "The house is still burning down, but not quite as fast."
Herbert went on to say, "I can understand why people are relieved that we no longer seem to be hurtling toward a depression, but beyond that I see very little to be happy about."
Is that realistic enough for you?
We've been hearing a lot about the stock market rally. A commentary at CNN.com wonders if it is for real.
In a chilling observation for those who thought a college degree — or an advanced degree — was a ticket to a lifetime of security, Herbert reminds us, "The employment picture for even the most well–educated Americans — men and women with four–year college degrees or higher — is the worst on record."
Herbert isn't the only one who sees no signs that things are really getting better. NPR wonders if we're really seeing signs of an economic turnaround.
To his credit, Barack Obama warned Americans yesterday, as he seems to do after every monthly jobs report, that more job losses lie in the future. He may need to make that a weekly mantra.
As David Sanger observes in an analysis for the New York Times, "The formula for restoring national confidence — part good policy, part good politics, part good luck — can be hard to find." That's the unenviable challenge facing the administration.
This economic downturn is unlike anything most Americans have experienced before. For most Americans, a recession has been something to be endured for a few months, perhaps a year, and then things start to turn around. This is different, and lots of folks don't seem to have gotten that message yet.
Obama needs to impress upon people that this isn't your father's recession. Not everyone has figured that out yet. The sooner they understand it, the better. For everyone.
When I lost my job, right around the time of the economic meltdown, I called my doctor. I wasn't scheduled for my semiannual checkup for a couple of months, but I wanted to see if we could move it up so I could have it before the end of the month, when my health coverage would no longer be paid by my former employer.
The nurse I spoke to told me there was no point in moving the appointment up and then said, "Well, you'll get another job in a week or two, don't you think?"
I told her that I hoped so — but something told me this was going to be a long ordeal. Then the meltdown occurred, and here I am, more than eight months later, still looking. Last week, I had my second semiannual checkup since having that conversation. I didn't see that nurse in the office last week — maybe she lost her job, maybe she was taking that day off. But I assume she figured out, after our conversation, that this was different.
If she still hasn't figured that out, I would invite her to join me the next time I attend a job fair. We'll need to get there early. Crowds start to gather long before the doors open. And she'll see a lot of well–educated people hoping to land jobs that pay a lot less than they were making at their previous jobs.
Attitudes do seem to be changing, but there are still people who view things from the pre–meltdown perspective. In their experience, when people lose their jobs, they'll find something else soon. It just doesn't work that way these days.
"We are what we repeatedly do. Excellence is not an act but a habit."
Benjamin Franklin (1706-1790)
"Tell me and I forget, teach me and I may remember, involve me and I learn."
Unknown
"Everything in life can teach you a lesson. You just have to be willing to observe and learn."
Howard Arnold Walter (1883-1918)
"I would be true, for there are those who trust me; I would be pure, for there are those who care; I would be strong, for there is much to suffer; I would be brave, for there is much to dare."
"In the best of times, our days are numbered anyway. So it would be a crime against nature for any generation to take the world crisis so solemnly that it put off enjoying those things for which we were designed in the first place: the opportunity to do good work, to enjoy friends, to fall in love, to hit a ball and to bounce a baby."
Unknown
"If you're lucky enough to get a second chance at something, don't waste it."
Harry Truman (1884-1972)
"It is amazing what you can accomplish if you do not care who gets the credit."
George Carlin (1937-2008)
"I've got this real moron thing I do. It's called thinking. And I'm not really a good American because I like to form my own opinions. I don't just roll over when I'm told to. Sad to say, most Americans just roll over on command. Not me. I have certain rules I live by. My first rule, I don't believe anything the government tells me."
Stephen King (1947- )
"People who try hard to do the right thing always seem mad."
Dr. Seuss
"Today you are You, that is truer than true. There is no one alive who is Youer than You."
Eleanor Roosevelt (1884-1962)
"You gain strength, courage and confidence by every experience in which you really stop to look fear in the face."
Groucho Marx (1890-1977)
"Whatever it is, I'm against it."
Mel Brooks (1926- )
"If Shaw and Einstein couldn't beat death, what chance have I got? Practically none."
Edward R. Murrow (1908-65)
"The speed of communications is wondrous to behold. It is also true that speed can multiply the distribution of information that we know to be untrue."
Thomas Carlyle (1795-1881)
"Every man is my superior in that I may learn from him."
Confucius (551-479 B.C.)
"It does not matter how slowly you go as long as you do not stop."
Ancient proverb
"Those whom the gods wish to destroy they first make mad."
Blaise Pascal (1623-1662)
"Men never do evil so completely and cheerfully as when they do it from a religious conviction."
Heinrich Heine (1797-1856)
"Where they burn books, at the end they also burn people."
Kurt Vonnegut (1922-2007)
"The two real political parties in America are the Winners and the Losers. The people don't acknowledge this. They claim membership in two imaginary parties, the Republicans and the Democrats, instead."
I got my bachelor's degree in journalism from the University of Arkansas, and I got my master's degree in journalism from the University of North Texas. Most of my adult life has been dedicated to writing and editing in one form or another. Most recently I have taught writing (news and developmental) as an adjunct journalism professor at Richland College, where I advise the student newspaper staff. Go, Thunderducks!
(It is called a double–dip recession because of the "W" shape that is created on the economic charts, like the one from the early 1980s.
