But the disease plaguing capitalism goes far beyond putting an end to "too big to fail." While Americans come to grips with an "unacceptably high" unemployment rate, Europeans, especially southern Europeans, have been living through an unemployment crisis for years. And a big part of the crisis in capitalism is directly related to income inequality and the fact that jobs are disappearing at an alarming rate as corporations look to increase profits with less workers. This way they don't have to go through the trouble of hiring and firing or pay pensions and benefits.
It's absolutely scandalous that the richest country in the world has 46 million people collecting food stamps. And behind the 9.1% headline unemployment there is the real unemployment scandal that nobody wants to talk about. Black unemployment surged to 16.7% in August, its highest level since 1984, while the unemployment rate for whites fell slightly to 8%. And if you think that's scandalous, the unemployment rate for disabled people, including disabled veterans, remains outrageously high -- multiples of the black unemployment rate.
I have adopted a philosophical view on my unemployment. First of all, unemployment doesn't define me, just like multiple sclerosis (MS) doesn't define me. I'll tell you straight out, the only reason that I'm unemployed is because senior officers at organizations I've applied to are intimidated by my direct, confrontational style and they discriminate against me because I'm open about having MS and treat me (and others with chronic conditions) as a liability. I make no apologies about who I am and have no more patience for weasels and nonsense. Either you accept me or get out of my way. Importantly, I know I'll beat MS and I'm learning the most important lesson in life: put myself first and learn to be financially and emotionally self-sufficient.
I love blogging and trading, especially these volatile markets. I've made and lost money but I love the game, it's in my veins and know the value of losing money. No more relying on anyone else for opportunities; I got the brains and the balls to succeed on my own. From now on, job or no job, I will kill whatever I eat and will trade till the day I die. That's how much I love it. It's my passion, my true calling in life.
But the reality is that while it sounds nice to be completely self-sufficient, trading volatile markets, it's a pipe dream for 99% of the population and it might be one for me (but I will give it my all). People need to work and the reality is that jobs are disappearing fast, especially for men. Last week, Mike Dorning of Bloomberg BusinessWeek wrote a comment, The Slow Disappearance of the American Working Man:
As President Barack Obama puts together a new jobs plan to be revealed shortly after Labor Day, he is up against a powerful force, long in the making, that has gone virtually unnoticed in the debate over how to put people back to work: Employers are increasingly giving up on the American man.
If that sounds bleak, it’s because it is. The portion of men who work and their median wages have been eroding since the early 1970s. For decades the impact of this fact was softened in many families by the increasing number of women who went to work and took up the slack. More recently, the housing bubble helped to mask it by boosting the male-dominated construction trades, which employed millions. When real estate ultimately crashed, so did the prospects for many men. The portion of men holding a job—any job, full- or part-time—fell to 63.5 percent in July—hovering stubbornly near the low point of 63.3 percent it reached in December 2009. These are the lowest numbers in statistics going back to 1948. Among the critical category of prime working-age men between 25 and 54, only 81.2 percent held jobs, a barely noticeable improvement from its low point last year—and still well below the depths of the 1982-83 recession, when employment among prime-age men never dropped below 85 percent. To put those numbers in perspective, consider that in 1969, 95 percent of men in their prime working years had a job.
Men who do have jobs are getting paid less. After accounting for inflation, median wages for men between 30 and 50 dropped 27 percent—to $33,000 a year— from 1969 to 2009, according to an analysis by Michael Greenstone, a Massachusetts Institute of Technology economics professor who was chief economist for Obama’s Council of Economic Advisers. “That takes men and puts them back at their earnings capacity of the 1950s,” Greenstone says. “That has staggering implications.”
What is going on here? For one thing, women, who have made up a majority of college students for three decades and now account for 57 percent, are adapting better to a data-driven economy that values education and collaborative skills more than muscle. That isn’t to say women have yet eclipsed men in the workplace. They continue to earn about 16 percent less than men and struggle against gender discrimination and career interruptions as they disproportionately take time away from the job to raise children. And both men and women have confronted job losses in the weak economy. In July, 68.9 percent of women aged 25-54 had jobs, vs. 72.8 percent in January 2008. (In 1969, however, fewer than half did.) After a long decline in men’s work opportunities, the recession worsened things with a sharp drop in male employment. Unemployed men are now more likely than women to be among the long-term jobless.
The economic downturn exacerbated forces that have long been undermining men in the workplace, says Lawrence Katz, a Harvard professor of labor economics. Corporations have cut costs by moving manufacturing jobs, routine computer programming, and even simple legal work out of the country. The production jobs that remain are increasingly mechanized and demand higher skills. Technology and efforts to reduce the number of layers within corporations are leaving fewer middle-management jobs.
The impact has been greatest on moderately skilled men, especially those without a college education, though even men with bachelor’s degrees from less selective schools are beginning to see their position erode. “There’s really been this polarization in the middle,” Katz says, as men at the top of the education and income scale see their earnings rise while those in the middle gravitate downward.
For generations, American workers kept up with technological change by achieving higher levels of education than their parents. High school education became the norm as the country progressed from an agrarian society to an industrial one. After World War II, increasing numbers of Americans went to college as the economy became more complex. But for reasons not fully understood, college graduation rates essentially stopped growing for men in the late 1970s, shortly after the Vietnam War ended, perhaps in part because draft deferments were no longer an inducement. Women, on the other hand, continued to pursue college degrees in greater numbers and have been more responsive to the changing economy in other ways, taking many of the nursing and technician positions in the expanding health-care industry and making greater headway in service jobs.
While unemployment is an ordeal for anyone, it still appears to be more traumatic for men. Men without jobs are more likely to commit crimes and go to prison. They are less likely to wed, more likely to divorce, and more likely to father a child out of wedlock. Ironically, unemployed men tend to do even less housework than men with jobs and often retreat from family life, says W. Bradford Wilcox, director of the National Marriage Project at the University of Virginia.
The long-term fix is simple to spell out and tough to achieve: getting more men to attend college and improving the skills of those who don’t. Reducing financial barriers to higher education would be a start. But there isn’t much political appetite for spending the billions it would take to make that happen. Even once-sacred Pell Grants are on the block as Washington looks for budget cuts. A strapped public education system that leaves many young men unprepared for the workplace, let alone college, doesn’t help. It’s noteworthy but not especially comforting to know that this is not just an American problem. The same gender differences in college attendance and employment are emerging in rich societies around the world.
Grappling with these intractable problems won’t likely be Obama’s top priority. He is under pressure to do something that will be felt now, not a generation from now. The longer people who are currently unemployed remain out of work, the more their skills will atrophy and the greater the risk of a cohort of men—and women—who become permanently detached from the workplace. Anything that raises employment overall would help. Obama is expected to propose tax incentives for employers to hire workers, a reduction in payroll taxes employers pay, and spending on infrastructure. Money for labor-intensive projects, such as retrofitting buildings for energy conservation or refurbishing aging schools, would be especially effective in putting men back to work in construction—though Washington is likely in no mood to pay for that either.
Other ideas that economists have proposed are geared toward keeping men with diminished opportunities from drifting out of the workforce altogether. They include reducing unemployment-benefits extensions for those who have been out of work for a year or more—to give those who are getting by on an unemployment check a stronger incentive to take a job, even if it’s not the most desirable one. Others have proposed modifying the Social Security disability insurance system so that it is no longer an all-or-nothing proposition and instead subsidizes employers for hiring workers with partial disabilities. Since 1970, the fraction of 25- to 60-year-old men on disability has more than doubled, from 2.4 percent to 5 percent. Once they begin receiving disability payments, few return to work.
If there is any upside to recessions, it’s that they tend to expose deep problems that go ignored or at least overlooked in better times. The short-term fixes the President proposes may provide much needed relief for the millions of people looking for a job. The danger is that the fixes will work just well enough to let us pretend—for a while longer—that the real problem is no longer there.
The bottom line: As women saw workplace gains in recent decades—68 percent of those 25 to 54 have jobs—men’s prospects have diminished.
While women might be faring better, the US is still suffering a jobs crisis. That's why it's imperative that politicians stop focusing on debt, and start focusing on jobs, jobs, jobs!!! President Obama already screwed up by repealing the EPA's stricter smog standards, buying the Republican hogwash that it's costing American jobs. He simply can't afford to make any more mistakes. He needs to focus on infrastructure, alternative energy, innovation, revamping the tax code, but most of all, he needs to be bold, focus on Main Street and stop pandering to Wall Street.
With zero jobs, the risk of recession is getting worse. I think Ken Rogoff is right, the US never really escaped the recession. Wall Street wolves escaped it, but those on food stamps, unemployed, under-employed, and millions of others employed but scared to death of losing their job, watching their home prices crumble and savings dwindle, are living the frightening reality of the "new order."
Finally, pay attention to what Paul Krugman and Jared Bernstein said on ABC's This Week in the roundtable discussion. Krugman says that 10-year Treasuries are now yielding a historic low of 2% which tells you the bond market is a lot more worried about the jobs crisis than the debt crisis (more worried about deflation than inflation). He also said the government is retracting spending at the worst possible time. Jared Bernstein rightly noted that US corporate profits reached a record level last quarter and he doesn't buy the argument that they need to reduce taxes to spur job growth.
The idiots worrying about debt and a "Greek style fiscal crisis" better get it through their thick heads: without solid jobs and job growth, the fiscal profile of the US will worsen. Importantly, if President Obama and Congress don't address the jobs crisis in a forceful and convincing way, which I doubt they will, then the debt crisis will only get worse. That's why the Fed is warning politicians to get their act together and start governing in the best interest of the US economy. And since Mr. Bernanke knows they won't do this, he will continue printing money to cushion the blow of fiscal restraint and fight the increasingly real prospect of debt deflation. Watch the videos below (second one is slow to load).