Sunday, June 3, 2012

More fallout from neoliberal madness

I have been working on a post about the gathering of the Bilderbergers (maybe Monday or Tuesday).  I have NO idea if my list of attendees is correct, nor do I imagine this group somehow runs the world.  But as I analyzed the list I had, it struck me just how narrow was the intellectual monoculture it represented.  For example, the only folks representing traditional industry were young slash-and-burn-style CEOs.  The up and comers were mostly represented by software execs.  Of course, there are plenty of evil banksters along with academics, think tanks, and politicians who support their worldview.

Well sorry folks, it doesn't much matter how much power you have (or think you have) if the best you can come up with is some minor variation on neoliberalism.  Because that set of ideas is just as big a failure as Marxism—and look how happy people were to see Marxism go.  Actually these twin failures are not really a surprise as Marxism AND neoliberalism are variations on Predator Class thinking.  Bilderberger cluelessness reminds me of Chekhov's Three Sisters who cannot imagine why people are so pissed off at them.  By their own standards, these are highly accomplished and very self-satisfied people.

The Bad Jobs Report Is Just A Very Small Taste Of The Economic Nightmare That Is Coming

Michael Snyder, Contributor  Saturday, June 2, 2012

Another month, another bad jobs report. For the month of May, the U.S. economy only added 69,000 jobs and the unemployment rate rose to 8.2%.

Many are calling this a total "disaster" and are worried that the U.S. economy could be headed back into another recession. Economists had been expecting 150,000 payroll jobs would be added, so the 69,000 number really shocked a lot of people.

The truth is that the economy needs to add approximately 125,000 new jobs every single month just to keep the unemployment rate steady. So yes, this bad jobs report is not welcome news at all - especially for the Obama administration. When Barack Obama first took office the unemployment rate was sitting at 7.6 percent and now it is sitting at 8.2 percent. Some "recovery", eh?

But the reality is that this jobs report was really not that "devastating" even though the stock market had its worst day of the year. Unemployment in America is still about at the same level as it was back at the beginning of 2012. The tough stretch that we are going through right now is only a very small taste of the economic nightmare that is on the horizon. If you think that things are a "disaster" right now, just wait until you see what is coming.

At the moment, 53 percent of all Americans with a bachelor's degree under the age of 25 are either unemployed or underemployed, and there are more than 100 million working age Americans that do not currently have jobs.

But this is only just the beginning.

During the next major economic downturn, the unemployment rate in the United States is going to soar well up into the double digits. more
We have just seen a textbook example of what happens when we listen to austerians during a global depression.  The question is, why did we need it?  Wasn't the example from the 1930s good enough?  Historical illiterates—bah!

Eurozone unemployment reaches all-time high

Unemployment across the beleaguered eurozone hit a record high of 11 percent in April, according to gloomy new figures released on Friday. The data revealed more than 17.4 million people were jobless across the 17 nations sharing the euro currency.
By News Wires (text)

AP - Unemployment across the 17 countries that use the euro stuck at 11 percent in April – the highest level since the single currency was introduced back in 1999, piling further pressure on the region’s leaders to switch from austerity to focus on stimulating growth.

The eurozone’s stagnant economy left 17.4 million people out of a population of some 330 million without a job, with rates continuing to climb in struggling Spain, Portugal and Greece. The EU’s Eurostat office said 110,000 unemployed were added in April alone.

In recession-hit Spain, unemployment spiked to 24.3 percent, the worst rate in the EU. It was up 0.2 points since March, and 3.6 percentage points compared to last year. Youth unemployment ballooned to a 51.5 percent, up from 45 percent last year.

Friday’s seasonally adjusted figures follow on from last week’s European Union summit, where leaders including the new socialist President of France Francois Hollande called for measures to boost growth and employment to offset the impact of stringent austerity policies.

Experts argue that targeted measures could help get people, especially youngsters, off the unemployment lines.

Austerity has been the main prescription across Europe for dealing with a debt crisis that’s afflicted the continent for nearly three years and has raised the specter of the breakup of the single currency. Three countries – Greece, Ireland and Portugal – have already required bailouts because of unsustainable levels of debt.

Investors are concerned that Spain, which is the eurozone’s fourth-largest economy and is currently struggling to contain a banking crisis in the middle of a recession, may soon be joining them in seeking international assistance.

Financially shaky countries such as Spain are facing rapidly rising borrowing costs on bond markets, a sign that investors are nervous about the size of their debts.

Austerity was intended to address this nervousness by reducing a government’s borrowing needs, but there has been a side effect: Economies are shrinking across the eurozone as governments cut spending and raise taxes to reduce deficits.

This has prompted economists and politicians to urge European policymakers to dial back on short-term budget-cutting and focus on stimulating long-term growth. more
Oh, and this genius is essentially telling us were are going to need some more bank bailouts.  This is a guy who directed the World Bank.  Whether his assessment is naked self-interest or institutional impairment, it's damn sad that such a fool was given so important a job.

WORLD BANK BOSS: We're Headed For "Impending Catastrophe" -- "A Rerun Of Great Panic Of 2008"

Henry Blodget | Jun. 2, 2012

The head of the World Bank, Robert Zoellick, is about to step down after a 5-year term.

That means he can say what he really thinks.

Here, via the Daily Mail, is what he really thinks about what's going on in Europe and the global financial markets: financial markets face a rerun of the Great Panic of 2008.

It's ‘far from clear that eurozone leaders have steeled themselves’ for the looming catastrophe amid fears of a Greek exit from the single currency and meltdown in Spain.

‘Events in Greece could trigger financial fright in Spain, Italy and across the eurozone. The summer of 2012 offers an eerie echo of 2008.... ‘If Greece leaves the eurozone, the contagion is impossible to predict, just as Lehman had unexpected consequences.’

'There will not be time for meetings of finance ministers to discuss the outlook and debate the politics.... 'In panicked markets, investors flee to safe assets, sparking other flames.’

Cheery stuff.

Zoellick's recommendation?

Huge, quick government bank bailouts. more


  1. I call these groups Over-think Tanks, where they go to meet to polish their new stones of economic thought. They might look pretty on one side, but don't turn it around, and ignore the fact they don't produce anything.

    History will record their thoughts and mis-applications in a chapter called 'The Folly of Financial Man.' In their hubris, they broke the socio-economic contract in the world with their neo-liberal ideas; then when faced with the damage, they doubled-down on stupid with austerity; and even now five years into the post-bust of their ideas they show no ability to change course...when all they needed to do was go to the library and read Keynes again.

    They built a boat with no steering, only throttle.

  2. To veer to the discussion to the side a bit--Just to update you because I thought you might be interested. When you posted that Nick Hanauer issue, I commented on one of the defensive articles from Forbes called--The Real Reason That TED Talk Was 'Censored'? It's Shoddy And Dumb.

    Here's what I wrote there, first in response to a commentor robertinseattle who was claiming the high economic ground for his neo-dont-tax-me-bro theories--
    "To robertinseattle...please consider yourself called out. You obviously are smart and smart with your money, unfortunately that is precisely the economic problem the world is facing.

    Because you and all others are being smart with your money, you expect ROI from your spending and investments, and you only donate what you can afford...very sensible. Even if you do donate all your money to charity when you die, it creates a lag now while we wait years for you to pass on. But, this means too much money sits idle, which means too many people sit idle...the population grows, but the money in the economy is being pooled by smart people who cannot spend it fast enough to fuel the economy.

    Our own 'smarts' are causing us to strangle our own economic engine. This was the advantage of taxing the rich as they earned it, it kept the money moving. Here is the craziest part--It is also good that this money went to gov't to 'waste' it on supporting research and development in universities and gov't projects like NASA...and even experiencing those boondoggles along the way, because it wasn't you or your company enduring that risk or trial/error.

    It kept the economy moving. It is our own demand for ROI that strangles us now. It is our bondholders/mortgageholders now that, even proven to be post-boom by 5 full years, that by refusing to markdown their assets and take haircuts, are strangling any economic growth.

    Oh, it is smart from a money-counting point of view, but it is literally killing people and our economy. I hope I did my homework, but it is hell sleeping at night. "

    And then a follow-up comment to return to the topic of the Forbes posting--
    "Here robertinseattle, let me also speculate why Nick went to do a TED talk and maybe why he is being persistent, why he just doesn't give up all his money and call it good. It is because of the scale of the problem.

    There are 12.5 million unemployed americans, which means Nick's Billion dollar contribution would result in-- 1 000 000 000 / 12 500 000 = $80 --An $80 job for each of these unemployed...hmm.

    How about if he limited his largesse to Washington state's 360,683 unemployed-- 1 000 000 000 / 360 683 = $2,772.52 --hmm, tough to live on that, eh?

    How about just Seattle's unemployed (March 2012 = 143,656), that would do it, right-- 1 000 000 000 / 143 656 = $6,961.07 --well, you know Seattle better than I, what do you think Robert, someone could live on that there, right?

    This is why Alexander Hamilton's "The American Way" of government, where taxes were levied for the construction of American infrastructure, was so important and critical to our national growth and thus wealth.

    Because a single man, regardless of how rich, cannot muster the scale or sustain the risk of failure or research & development of large scale projects that the national government can. To really create jobs, you need the scale of a government, because even the wealthiest companies and people cannot do this on the scale of the problem at hand.

    This is probably why Nick has opened the TED debate, he is appealing to the best and brightest to discuss this issue nationally."

  3. So again, to steer back to your topic, I agree with your assessment. A big part of our problem is how these over-think tanks limit the attendees and acceptable voices in the room to their own echo chamber.

    It causes a one-sided debate, where only one side is polished while the other is left untouched and neglected.

    Is anyone in their room saying 'trickle-down has not worked' and 'how can we restore taxes on the rich now that the lemmings are following it off the cliff?' Can we only hope...can we somehow regain enough control over our destiny?