Thursday, November 1, 2012

Meanwhile, the global economy still blows

What a complete surprise.  I mean, who could have predicted that pulling money out of the real economy would lead to unemployment?  That hasn't ever happened before. /snark

I believe the time has come to compile as list of the "economists" who actually told the various world governments that Neoliberalism would lead to prosperity and make sure they are NEVER listened to again—sort of an intellectual boycott of stupid.

Jobless in the Crisis

Euro-Zone Unemployment Higher than Ever Before

The European debt crisis and related austerity measures continue to drive up unemployment across the euro zone. In September, according to statistics released on Wednesday, fully 18.5 million people were without work in the common currency area, more than ever before.

Global financial markets have, for the moment, been calmed. The European Central Bank has embarked on its program to buy unlimited sovereign bonds as needed from euro-zone countries suffering from high borrowing costs and all of those countries have adopted strict austerity programs to get their budgets in order.

That, though, has not been good for economic growth -- and now the European Union has released new figures highlighting a struggling euro-zone economy. According to a report released on Wednesday by Eurostat, the European Union's statistical office, unemployment in the 17-nation common-currency area stood at 11.6 percent in September, the highest it has ever been.

The numbers represent an up-tick against the 11.5 percent rate reported for August. In total, Eurostat estimates that 18.49 million people were out of work in the euro zone, up 146,000 over August. The rate indicates a significant rise against the euro-zone unemployment rate in September 2011, which was 10.3 percent.

The trend toward spiking unemployment rates was particularly strong in those countries suffering the most under the ongoing euro-zone debt crisis. Between September 2011 and the same month a year later, the unemployment rate in Spain rose from 22.4 percent to 25.8 percent and in Portugal from 13.1 to 15.7 percent. In Greece, unemployment rose from 17.8 to 25.1 percent from July 2011 to July 2012, the last figures available for the country.

With the euro-zone economy likely headed for a year of negative growth this year -- the ECB is forecasting a 0.4 percent contraction -- it seems unlikely that employment in the 17-country currency zone will improve any time soon. Next year, the ECB foresees a mere 0.5 percent expansion in the euro-zone economy. "With surveys suggesting that firms are becoming more reluctant to hire, the euro-zone unemployment rate looks set to rise further," Ben May, a European economy analyst with Capital Economics, told the Associated Press. more
Spain is a rather special case.  This is a country that had a bitter civil war in the 1930s.  They endured a fascist government until 1975.  Neoliberalism is the last thing they needed.  And their future now looks exceedingly bleak.  This is probably the last place I would want around 50% youth unemployment—too much energy looking for trouble.

All Of Spain Is Now Paying For An Orgy Enjoyed By A Few

Maria Sainz| Oct. 31, 2012

When someone asks me about what happened in Spain I often use the same metaphor: A few people enjoyed a long and luxurious orgy and now all of us have to pay for it, without even being able to take part. It may sound hard but basically that is what it is. Bankers, politicians, the monarchy, etc, seem to have been playing tricky. And now they keep on telling us that we have been living over our capacities. Really?

Spain seemed to be going great until the recession in the US opened our eyes and struck us. Now that America seems to be recovering, Spaniards are still in shock. Speculation and the housing bust are some of our major problems but we are also having an internal fight. As ‘The Economist’ recently reported, despite being a unified country, we actually live in a complex regional system where each region has followed their own rhythms and played their own tricks with finances. Now, the areas that are doing better do not want to help those with the worse problems. And this increases the feeling of independence of some regions such as the Basque Country or Catalonia. So, if we cannot even agree in our own country, how can we reach an agreement with the European Union?

The numbers are disastrous. Around 25 percent of households do not have any family member working. As a consequence, hundreds of families are forced to leave houses they cannot pay for anymore. Those that have relatives in Spain, ask for help; the rest, try to find their way in other regions or countries. The Government can’t afford to take care of all of them anymore. There are several cases of families that have to live off a grandparent’s pension.

Also, exceptionally this year, the Red Cross decided to raise money for the victims of the recession.

It is not only about helping people that are socially excluded or that suffer chronic diseases anymore. We have new homeless in Spain.
And they do not necessarily come from the lowest classes...

Do we look for food in the trash bins? Of course, some of us need to do it. Do we wait for policemen and social workers to come and make us leave our houses? Yes, we do that too. But that is just the tip of a huge iceberg. No matter how many pictures and articles are published about that, the problem is much wider and people are losing faith on politicians as the main actors on the possible solution.

We do not understand how everything has become so terrible. We see how our politicians do not reach agreements anymore, how they keep on lying, and blurring the data. Banks gave money to anyone, even those that could not afford to pay it back; companies keep on firing people now that is cheaper to do so; taxes are higher than ever so we have to stop consuming. More children need to bring their own lunch to school because their parents can’t afford to pay the dining hall. More and more students have to work to pay for their studies (although, there is not job for everyone); youngsters are coming back to their parent’s home because they cannot live by their own anymore. What is all this leading to? more
Perhaps this one of the reasons that the UK usually has social peace.  Or maybe Aldane is buying some personal insurance in case the rabble actually organizes a revolution.  But he IS right to credit the various economic protest movements for being right in their critiques—which is pretty damn amazing for a banker!  If he is just using cheap talking points to buy his class some time, however, I hope the Occupy Economics call him out.  The economics promoted by the Bank of England has led to the current global catastrophe.  Nothing less than significant reform will save the situation.  And the rest of us will believe the "reformation of finance" exists when youth unemployment drops below 5% in the Eurozone.

Top Bank of England director admits Occupy movement had a point

Andrew Haldane praises ‘loud and persuasive’ protesters who succeeded because ‘they are right’

The Occupy movement received vindication from unlikely source tonight, as a senior executive at the Bank of England credited it with stirring a “reformation of finance”.

In a glowing appraisal of the movement’s achievements, Andrew Haldane, executive director of financial stability, said Occupy protesters had been “both loud and persuasive”, and had attracted public support because “they are right”.

“Some have suggested … that Occupy’s voice has been loud but vague, long on problems, short on solutions. Others have argued that the fault-lines in the global financial system, which chasmed during the crisis, are essentially unaltered, that reform has failed,” Mr Haldane said in a speech tonight.

“I wish to argue that both are wrong – that Occupy’s voice has been both loud and persuasive and that policymakers have listened and are acting in ways which will close those fault-lines. In fact, I want to argue that we are in the early stages of a reformation of finance, a reformation which Occupy has helped stir.”

Speaking at an Occupy Economics event in central London, Mr Haldane said that Occupy had been “successful in its efforts to popularise the problems of the global financial system for one very simple reason: they are right.” He added that protesters who camped out near St Paul’s Catherdal in London and dozens of other cities including New York,“touched a moral nerve in pointing to growing inequities in the allocation of wealth”.

Mr Haldane ended with a direct appeal to activists to continue putting pressure on governments and regulators. He said: “You have put the arguments. You have helped win the debate. And policymakers, like me, will need your continuing support in delivering that radical change.”

Mr Haldane’s comments were welcomed by Occupy activists last night. Ronan McNern, a spokesman for Occupy London Stock Exchange, said: “It’s good to hear more voices like Mr Haldane’s coming through. His comments are definitely welcome. They could have done something about this a lot faster.”

He added: “If this is a beginning, there is a long way to go. Banking reform is only part of the problem. It’s a system-wide issue where certain people are profiting of other people.” more

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