Is the Age of Narcissism About to End?

Posted on October 10, 2020 by Popular Economics Weekly

Answering the Kennedys’ Call

ATHENS, GREECE – OCTOBER 07: Anti-fascist protesters outside the court, where the trial of leaders and members of the Golden Dawn far-right party is taking place on October 7, 2020 in Athens, Greece. After a five-year trial, a Greek court found the Golden Dawn leader Nikos Michaloliakos and six associates guilty of running a criminal group. A supporter, Giorgos Roupakias, was found guilty of murder and 15 others were convicted of conspiracy. The neo-Nazi party won 18 MP seats in 2012 as the country grappled with a financial crisis. (Photo by Milos Bicanski/Getty Images)

Are we nearing the end of what historians and psychologists have called the Age of Narcissism, an era that has spawned populist governments and closed borders, the breakup of traditional families and communities, and the election of Donald Trump?

The Greeks may once again be an example for western liberal democracy after a multi-year struggle to reject their own neo-fascist autocracy that attempted to capitalize on this modern age of discontent.

Foreign Policy Magazine reports that the leaders of Greece’s Golden Dawn political party were found guilty on Wednesday of a range of criminal activity, including using the party as cover to run a criminal organization.

“The ruling followed a trial that lasted five-and-a-half years. Several dozen party members and associates, including 18 former lawmakers and party leader Nikos Michaloliakos, were found guilty on a variety of charges, including murder, attempted murder, assault, and possession of weapons.”

Does this sound familiar? The FBI and Michigan’s State Police just arrested 13 members of two neo-fascist Michigan militia groups for plotting to kidnap Michigan’s Governor Gretchen Witmer and try her for treason, after their plan for an armed occupation of its state capital fell through.

This is while President Trump has refused to disavow white supremacist violence as well as autocratic foreign leaders for their abuse of human rights.

Trump is the man that has been diagnosed by multiple mental health professionals with a Narcissistic Personality Disorder (NPD), “using other people as instruments of gratification even while craving their love and approval,” in the words of social historian Christopher Lasch.

While suffering from COVID-19, Trump has held several coronavirus super-spreader campaign events that infected some 34 supporters, Senators, and White House staff with COVID-19 to date; showing no concern for their health and safety.

Christopher Lasch was perhaps the first to broach the subject in various critiques of modern American society. This included his 1979 best-seller, The Culture of Narcissism: American Life in an Age of Diminishing Expectations that took “what was still mainly a narrow clinical term and used it to diagnose a pathology that seemed to have spread to all corners of American life,” per a recent NY Times summary of his book.

Lasch saw this as a societal pathology that took individualism to its destructive extreme of ‘me first’ over any concern for others with the breakup of communities and headlong rush to a post-WWII, consumer-driven economy. The extended family was transformed into the nuclear family of a married couple with children; grandparents migrating to senior living centers; as the growing middle class moved to the suburbs and away from traditional family and community values.

“In Lasch’s definition (drawn from Freud), the narcissist, driven by repressed rage and self-hatred, escapes into a grandiose self-conception, using other people as instruments of gratification even while craving their love and approval,” said the review. “Lasch saw the echo of such qualities in “the fascination with fame and celebrity, the fear of competition, the inability to suspend disbelief, the shallowness and transitory quality of persulture of onal relations, the horror of death.”

I contend that Greece’s example may be the first sign of the demise of the culture of narcissism, and it white supremacist, neo-fascist roots that has spawned so-called populist governments in Hungary, UK’s Brexit, and Presidents for life in Turkey and Russian.

We are now seeing its demise in the return to traditional households within the American populace where families are once again coming together. NY Times’ Timothy Egan wrote a wonderful Op-ed on his yearning for the extended family that he saw returning in the face of the coronavirus pandemic.

The PEW Research Center reported that 64 million Americans were living in multigenerational households—the highest number on record, and an increase of almost 70 percent from 1980. Last year, for the first time in 100 years, the average number of people in the American household started going up instead of down, to 2.63 people per unit, Egan reported.

The Age of Narcissism was probably a historical anomaly anyway, which probably began its demise before the pandemic as millennials remained stuck in their parents’ home during the Great Recession because of the lack of jobs due to Wall Street’s failure. It’s really an indictment of what our narcissistic culture has spawned since the 1970s—a modern, self-interested capitalism that enshrined “greed is good” and maximization of profits as the sole responsibility of modern corporations.

Tens of thousands of people gathered outside the courthouse to await the verdict of Greece’s Golden Dawn trial, reported Foreign Policy. When the news came, the crowds erupted in applause and cheers. “The mood here today is resonant of the celebrations we saw with the liberation of Athens from the Nazis. It’s a great day,” said Petros Constantinou, a leading anti-racism activist.

Harlan Green © 2020

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

Posted in Economy, Politics, Uncategorized | Tagged , , , | 1 Comment

Do We Want Another Great Recession?

Posted on October 7, 2020 by Popular Economics Weekly

Financial FAQs

MarketWatch

Federal Reserve Chair Jerome Powell has warned of “tragic’ economic risks if another coronavirus aid package isn’t passed by congress. This is while President Trump has just said that talks over additional aid will be suspended until after the election in order that the Senate has the time left to take up Judge Amy Barrett’s Supreme Court nomination.

“Over time, household insolvencies and business bankruptcies would rise, harming the productive capacity of the economy and holding back wage growth,” Powell said. “By contrast, the risks of overdoing it seem, for now, to be smaller.”

Employment of those in the bottom rung of the wage distribution scale remains 21 percent below its February level, while it was only 4 percent lower for workers who receive higher wages, the Fed chairman said.

It seems that Republicans have painted themselves into a corner if they expect to profit from an economy sure to get worse without another aid package before the election. Why are they writing off their chances on November 3rd with an economy sure to slow again? Your guess is as good as mine.

MarketWatch’s chart above highlights the problem. The top 10 percent of household income-earners now corral 51.9 percent of Americans’ aggregate income. That includes stocks as well as real estate and other investments by ‘rentiers’—those living off their assets, rather than the wages and salaries of most workers.

Out middle-income households now garner just 14.1 percent of household income, whereas it was closer to 20 percent in the 1960s and 1970s, before the cutting of taxes and deregulation of whole industries gave corporations the license to maximize their profits, rather than the welfare of their employees.

The predictions of future growth are dire without additional aid to households as well as certain industries his hardest by the pandemic shutdowns.

The NY Times Neil Irwin summarized best what is likely to happen without additional aid. “Business news headlines are reflecting a drumbeat of layoffs normally seen in recessions. In the last few weeks alone, oil giant Shell said it was cutting 9,000 positions, with Disney eliminating 28,000 and defense giant Raytheon 15,000.

“After shedding jobs in the spring, these sectors have brought workers back slowly, or not at all, through the summer. Some have continued cutting positions. Employment at corporate headquarters — “management of companies and enterprises,” in the official terminology — fell by 92,000 in March and April, with another 4,000 jobs lost since.”

He quotes Sophia Koropeckyj, an economist at Moody’s Analytics, who said we do expect there to be a new steady state, but not until 2023 or 2024,” In a new report, she estimates that 5 million people will find it difficult to get new work after the pandemic because their old jobs have disappeared or changed significantly. “I don’t think the severity of this downturn has been well understood yet given the bounce-back over the summer.”

Nobel-winning economist Paul Krugman has been saying what is obvious. Without additional government aid, we could sink into another Great Recession.

“The lesson I take is that our political dysfunction is even worse, our ability to rise to the occasion even lower, than I imagined. It’s hard to look at what’s happening now without feeling a sense of despair.”

Let us see what happens over the next few weeks. Few economists see good times ahead unless the 80 percent of households that earn wages and salaries; many are the essential workers that have a difficult time meeting even their living expenses; aren’t given additional aid.

Harlan Green © 2020

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

Posted in Economy, Keynesian economics, Weekly Financial News | Tagged , | Leave a comment

Unemployment Declines, Modest Hiring

Posted on October 2, 2020 by Popular Economics Weekly

Popular Economics Weekly

MarketWatch

The economy regained 661,000 jobs in September and the unemployment rate fell for the fifth month in a row to 7.9 percent, the government said Friday. It’s the smallest advance since a recovery began in May, with August revised upward to 1.49 million new payroll jobs. Private-sector payrolls rose by a stronger 877,000. A-219,000 decline in government employment reduced the overall number, mainly in state and local education.

Bars and restaurants added the most jobs in September (200,000), followed by retail, health care and white-collar businesses. Workers also put in more hours on the job, another good sign for the labor market. So far the U.S. has recovered about 11.4 million jobs since a recovery got underway in May. The economy had shed about 23 million jobs at the height of the pandemic.

We have to worry about the upcoming fall and winter COVID seasons, however, to know if employment and economic growth will continue. Consumers are more optimistic about their future with the Conference Board’s consumer confidence survey also showing increased optimism.

ConferenceBoard

“Consumer Confidence increased sharply in September, after back-to-back monthly declines, but remains below pre-pandemic levels,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “A more favorable view of current business and labor market conditions, coupled with renewed optimism about the short-term outlook, helped spur this month’s rebound in confidence. Consumers also expressed greater optimism about their short-term financial prospects, which may help keep spending from slowing further in the months ahead.”

Consumer spending also increased 1 percent, a good number, but before the latest announced layoffs by airlines and other large employers. This is happening in part because congress can’t agree on another relief package, though the Democrat-led House just passed a $2.2 trillion aid bill. No word yet on what the Republican-led Senate is doing, however.

The NY Times reports that Disney, Allstate Insurance and several airlines have announced some 60,000 job cuts or furloughs with more to follow if congress can’t get its act together on more aid.

The last estimate of Q2 GDP was barely changed, contracting at -31.4 percent vs. -31.7 percent in the second estimate, and it looks like the upcoming first estimate of third quarter GDP growth will be positive, maybe ending the pandemic-induced recession, as I said yesterday.

The employment numbers do not look to be trending in the right direction, especially with the -2.7 percent decline in personal income reported by the Commerce Department for August that is due to the ending of the $600 percent week unemployment stipend in July. Consumer spending is two-thirds of economic activity these days, so I see further headwinds ahead as we navigate the COVID-19 pandemic.

Harlan Green © 2020

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

Posted in Uncategorized | Tagged , , | Leave a comment

No Surprises in Q2 GDP. ADP Employment

Posted on October 1, 2020 by Popular Economics Weekly

Financial FAQs

FREDGDP

The last estimate of Q2 GDP was barely changed, contracting at -31.4 percent vs. -31.7 percent in the second estimate, but that isn’t dampening the stock market, as it looks like the upcoming first estimate of third quarter GDP growth will be positive, maybe ending the pandemic-induced recession.

Tomorrow’s ‘official’ Labor Department unemployment report should tell us more about third quarter growth, with the first Q3 estimate coming out at the end of October..

Why the consumers’ optimism, just as Covid-19 infection rates are beginning to rise again? Americans’ spending rose 1 percent in August for the fourth month in a row, stemming largely from the massive infusion of federal aid for the unemployed, and the reopening of more businesses. But the increase was the smallest since the U.S. reopened and pointed to a slower economic recovery.

Incomes had declined by 2.7 percent because of the end of government aid in July, the biggest drop since early in the pandemic, but spending is still positive due to accumulated savings from the lockdowns. The personal savings of 14.1 percent is still almost twice as high as it was before the pandemic.

ADP

And ADP reported on Wednesday that 749,000 private nonfarm payroll jobs were created in September, with most of the jobs in midsize (259k) and large (297k) companies. It is probably a sign that Friday’s Labor Department unemployment report will show at least 1 million new private payroll jobs being created as well.

Another positive growth sign was that initial jobless claims filed through state programs dropped to 837,000 in the week ended Sept. 26 from a revised 873,000 in the prior week, the Labor Department said Thursday.

And an estimated 650,120 people also filed new claims under the Pandemic Unemployment Assistance Act, the federal law that temporarily made self-employed workers eligible for benefits for the first time ever. That put the number of actual or unadjusted new claims at 1.49 million.

So more workers are returning to their workplace, but the question will be still whether the continuing job creation trend remains positive, given that the fall and winter pandemic/flu season is just beginning.

Harlan Green © 2020

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

Posted in Economy, Politics, Weekly Financial News | Tagged , , | Leave a comment

Why the Housing Shortage?

Posted on September 28, 2020 by Popular Economics Weekly

The Mortgage Corner

Calculated Risk

Booming Realtors’ existing-home sales are showing there is a very severe housing shortage with record sales and a record low housing inventory. Calculated Risk says the for-sale inventory is was down 18.6 percent year-over-year (YoY) in August. This is the lowest level of inventory for August since at least the early 1990s.

Forbes

Sales continued to climb in August, marking three consecutive months of positive sales gains, according to the National Association of Realtors®. Total existing-home sales, https://www.nar.realtor/existing-home-sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 2.4 percent from July to a seasonally-adjusted annual rate of 6.00 million in August. Sales are up 10.5 percent from a year ago (5.43 million in August 2019).

Reuters said recently, “With single-family building permits extending their uptrend in August, we think new home sales may continue to improve as well.  We do think any further gain in August is likely to be much more modest, and our point estimate calls for an increase of about 2 percent, to an annual rate of 920K.  That would represent a YOY increase of 30 percent, the highest monthly reading since the end of 2006. The YOY increase increase in the median price of a new home stood at 7.2 percent in July, also a new high.

And new-home sales are also booming while builders struggle to catch up to the higher demand. New home sales jumped 14 percent in July to a nearly 14-year high.  It was the third consecutive monthly increase of that magnitude or larger. Can this last?

“Home sales continue to amaze, and there are plenty of buyers in the pipeline ready to enter the market,” said Lawrence Yun, NAR’s chief economist. “Further gains in sales are likely for the remainder of the year, with mortgage rates hovering around 3 percent and with continued job recovery.”

What is going on? We know the incredibly low interest rates are a factor. Also the Great Recession caused builders to literally stop building because of so much excess inventory frpom the busted housing bubble (foreclosures, etc.).

Housing construction actually fell some 80 percent over the past 10 years since the end of the Great Recession, and hasn’t yet caught up. We also have the Covid-19 pandemic that has temporarily reduced new household formation. The Federal Reserve said in a research note that from February to June, “This decline is of essentially the same magnitude as that seen over the entire Great Recession, and it corresponds to a drop in the number of occupied housing units—or an increase in the number of vacant units—of roughly 2 million.”

But that hasn’t slowed population growth. Forbes Magazine in a recent article said, “Scarred by the housing bust, homebuilders have been sitting on their hands for the past decade. Census Bureau data shows an average of 1.5 million homes were built each year since 1959. Yet over the past decade, just 900,000 homes have been built per year.”

What can we do? It can’t just be up to local governments with exclusionary zoning restrictions that NIMBYs use to restrict affordable housing in their neighborhoods.

In the 1980s, Congress established the Low Income Housing Tax Credit program to incentivize private developers to build affordable apartment homes and communities, reports USA Today. More than 3 million affordable units have been built under the program, and if Congress were to expand this program — as proposed in new bipartisan legislation (Affordable Housing Credit Improvement Act of 2019) — experts estimate that our country could create or preserve an additional 384,500 affordable homes over the next 10 years.

There is much more that can be done on the national level. Record income inequality has made home ownership much less affordable for Main Streeters. There has been no movement to cure the problem, such as a national minimum, or to strengthen labor laws that would boost the income of working families.

There has to be a concerted national effort so reverse this trend, in other words, or the homeless numbers will continue to rise in everyone’s backyard.

Harlan Green © 2020

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

Posted in Housing, housing market, Politics, Weekly Financial News | Tagged , , , | Leave a comment

The Costs of an Extended Covid-19 Pandemic

Posted on September 22, 2020 by Popular Economics Weekly

Popular Economics Weekly

COVID Tracking Project

I have been asked many times about my thoughts on the direction of our fall and winter economies, but been hesitant to give specific answers because firstly, it depends on the November election.

Republican economics have been a disaster, from the multiple trade wars that shrank world trade, even before the coronavirus pandemic did further harm, and the 2017 corporate tax cuts that haven’t fulfilled any of their promises, just given corporations the excess profits to overinflate stock and bond prices while adding $trillions to the national debt.

And secondly, it depends on the pandemic’s outcome, which also depends on the November election, since Trump and his red state Republicans now actively oppose almost all scientific remedies for bringing down the infection and death rates—such as a national mask mandate—in their haste to open the economy before November.

We are now beginning to have a reckoning of the stunning disregard for human life by the Trump administration and Republican Party as we enter the fall season of colder weather when viruses thrive and the COVID-19 deaths in the U.S. have now reached 200,000.

Calculated Risk

The Covid Tracking Project reports that more than 40,000 Americans per day are now infected with the virus, up from 20,000 at its low point in June, as virus testing has risen to almost one million per day with newly available testing procedures.

So the question has to be why such a stunning disregard for the well-being of Americans during the worst natural disaster to hit the world since the 1918 Spanish influenza pandemic, and which now has killed more Americans (200,000) than all the world wars of the past century?

Top that with Trump administration attempts to have the Supreme Court repeal Obamacare that protects Americans with existing illnesses, which would affect more than 20 million Americans’ healthcare, thus allowing insurance companies to once again deny treatment for any after effects of COVID-19 illnesses that would be deemed a pre-existing condition.

Meanwhile, President Donald Trump last week contradicted comments made by his administration’s health experts regarding the timing of when a vaccine might be available, and the Centers for Disease Control and Prevention had to reverse course on new testing guidelines after the New York Times reported that the new guidelines were actually written by the Trump administration and not CDC scientists.

“I wanted to always play it down,” Trump told Bob Woodward in his new book, Rage, on March 19, even as he had declared a national emergency over the virus days earlier. “I still like playing it down, because I don’t want to create a panic.”

If instead of playing down what he knew, Trump had acted decisively in early February with a strict shutdown and a consistent message to wear masks, social distance and wash hands, experts believe that thousands of American lives could have been saved, maybe preventing an inevitable repeat of the 1918 horrors that should never be repeated.

The direction of our economy and who it benefits really boils down to the results of the November election, unfortunately. The most egregious cost to Americans has been the needless suffering caused by Republicans’ support of President Trump’s policies.

He has become the “useful idiot” also threatening our national security interests, in the words of Lt. Colonel Alexander Vindman, a decorated Marine veteran and former National Security Council analyst and Russian specialist, who is willing to parrot any message that will keep him in power

The populist counterrevolution espoused by the Trump Party has so weakened American values and institutions that actual law-breaking is now considered a new normal, race-baiting and the scapegoating of minorities official government policies.

These costs are no longer bearable, in part because I and many economist see very dark days ahead until and unless the Republican Party is forced to change its ways, and why would that happen unless they are prevented from causing further harm this November?

Harlan Green © 2020

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

Posted in Economy, Politics, Uncategorized | Leave a comment

Will We Repeat the Spanish Influenza Pandemic?

Posted on September 18, 2020 by Popular Economics Weekly

Answering the Kennedys’ Call

Early in Bob Woodward’s just released best-seller, Rage, President Trump said he knew by February that COVID-19 could act much like the Spanish influenza pandemic of 1918-19. It was estimated to have killed 675,000 Americans and 50 million worldwide before it was over.

“It’s deadly stuff,” he said to Woodward, “It’s also more deadly than even your strenuous flus…maybe five times as deadly as the flu.”

Yet despite Trump’s confession that he knew early of its horrendous effects, his downplaying of its dangers to Americans and the world may set the stage for a repeat performance.

This is in part because we are not yet upon the season where it did its greatest damage—the fall and winter. Then combine it with the ordinary flu season that kills from 30,000 to 60,000 every year.

John M Barry’s book, The Great Influenza: The Story of the Deadliest Pandemic in History, first published in 2004 with a 100th anniversary edition reprint in 2018, details the horrors of the Spanish flu pandemic that broke out in the last year of World War One that no one should want repeated.

In a matter of 12 weeks two-thirds of its victims died, from mid-September to mid-December of 1918, said Barry, in as quickly as 24 hours from the onset of symptoms—some symptoms resembling those of the Black Plague. There was a less-deadly surge in the spring of 1919 that sickened even President Woodrow Wilson while he was in Paris negotiating World War One peace terms with Germany.

“I wanted to always play it down,” Trump told Woodward on March 19, even as he had declared a national emergency over the virus days earlier. “I still like playing it down, because I don’t want to create a panic.”

If instead of playing down what he knew, Trump had acted decisively in early February with a strict shutdown and a consistent message to wear masks, social distance and wash hands, experts believe that thousands of American lives could have been saved, maybe preventing an inevitable repeat of the 1918 horrors that should never be repeated.

Why such a stunning disregard for human life by the Trump administration and Republican Party is now the question that needs to be answered.

President Trump is the last vestige of the conservative counterrevolution documented so accurately in Kurt Andersen’s Evil Genius, the Unmaking of America that has so weakened American values and institutions. We have come to a time when disregarding the laws of nature is the new normal, where race-baiting and the scapegoating of minorities have become official government policies.

Doctors Fauci and Redfield seem to believe 1918 may be repeated when they warned recently that the worst is yet to come this winter with a vaccine not generally available to the public before summer or fall of 2021 and the oncoming ordinary flu season that has historically killed thousands more.

Woodward also revealed Trump’s own National Security Advisor Robert O’Brien labeled the new coronavirus pandemic the greatest national security threat he will face as President.

We also now know the national security costs of electing a “useful idiot” to the Oval Office, in the words of Lt. Colonel Alexander Vindman, a decorated Marine veteran and former Russian analyst on the National Security in a recent Atlantic Monthly article.

“President Trump should be considered to be a useful idiot and a fellow traveler, which makes him an unwitting agent of Putin,” Vindman said recently. Useful idiot is a term commonly used to describe dupes of authoritarian regimes; fellow traveler, in Vindman’s description, is a person who shares Putin’s loathing for democratic norms.

He has also been a “useful idiot” for Republicans that have attempted more than 80 times to dismantle our public health system, including the repeal of Obamacare with its preexisting conditions inclusion, which has increased the risks to Americans’ health and well-being during the COVID-19 pandemic.

Even the separation of children from parents seeking asylum from corrupt Central American governments and drug gangs has been revealed to be government policy implemented by the Department of Homeland Security; as documented by the journalist Jacob Soboroff in his new book documenting the horrific Trump policies with immigrant families, Separated: Inside An American Tragedy.

These costs are no longer bearable because they reveal America has come to be governed by the useful idiots of one political party with no real regard for human life, who are determined to hold on to their wealth and power regardless of the consequences.

Harlan Green © 2020

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

Posted in Economy, Politics, Uncategorized | Tagged , | Leave a comment

Where are the Jobs?

Posted on September 14, 2020 by Popular Economics Weekly

Popular Economics Weekly

Calculated Risk

The number of job openings increased to 6.6 million on the last business day of July, the U.S. Bureau of Labor Statistics reported last week, a good sign. Labor’s JOLTS report will be an important indicator for the last (September) unemployment situation report that comes out just before the November election.

These changes in the labor market reflected an ongoing resumption of economic activity that had been curtailed due to the coronavirus (COVID-19) pandemic and efforts to contain it, said the BLS. This release includes estimates of the number and rate of job openings, hires, and separations for the total nonfarm sector, by industry, and by four geographic regions.

It is showing that certain segments of the economy are doing well, in durable goods such as autos and home sales, because the top 20 percent of white collar income earners that stay employed while working from home, but not the 80 percent of essential workers that really make our economy grow.

For instance, the unemployment rate for companies involved in travel, hotels, dining out and other forms of leisure and hospitality stood at a stunning 21.3 percent last month, whereas the unemployment rate among banks, insurers, Wall Street brokerages and other companies involved in the handling of money was just 4.2 percent in August.

The JOLTS report showed hires had decreased to 5.8 million in July from 7 million (blue line in graph). This tallied with other indicators that fewer workers were being hired in July. Total separations were little changed at 5.0 million. Within separations, the quits rate rose to 2.1 percent, a sign more workers were finding better jobs. But where are they?

Hires increased in federal government (+33,000), largely because of Census hiring. Hires also increased in real estate and rental and leasing (+26,000). But the total number of hires decreased in all four regions.

The job openings were led by the retail sector, with 172,000 new vacancies, reports the Bureau of Labor Statistics (BLS). There were an additional 146,000 jobs in healthcare and social assistance. In the construction industry, job openings increased by 90,000. The job openings rate shot up to 4.5 percent, the highest since October 2019, from 4.2 percent in June.

While schools have opened for the new academic year, many are conducting virtual classes, reports Reuters. Problems securing childcare have forced some workers, mostly women, to resign from their jobs. The labor participation rate for women dropped in April to levels last seen in the late 1980s and has not rebounded much since.

Jobs decreased in a number of industries, with the largest fall in accommodation and food services (-599,000), followed by other services (-143,000), and health care and social assistance (-137,000).

This doesn’t show a very strong job recovery, and there will be many teachers and students opting to stay at home and study online, if they can afford it.

Over the 12 months ending in July, hires totaled 70.2 million and separations totaled 78.5 million, yielding a net employment loss of 8.2 million. These totals include workers who may have been hired and separated more than once during the year.

I don’t believe the picture will change much come November. Those with jobs will spend, but not the majority of the wage-earners that must face an uncertain job future.

Harlan Green © 2020

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

Posted in Consumers, Economy, housing market, Weekly Financial News | Tagged , , | 1 Comment

Who Owns America?

Posted on September 9, 2020 by Popular Economics Weekly

Financial FAQs

seekingalpha.com

Kurt Andersen’s new best seller, Evil Geniuses, The Unmaking of America (2020, Random House), gives a terrific history of the current Gilded Age we are suffering through that has largely benefited Big Business and its enablers.

Just since 1980, Bib Business has occasioned the transfer of some $1 trillion per year in income and wealth from salaried workers that comprise 80 percent of our workforce to corporate shareholders and business owners.

“Until 1980, America’s national split of “gross domestic income was around 60-40 in favor of workers, but then it began dropping and is now approaching 50-50. That change amounts to almost $1 trillion a year, an annual average of around $5,000 that each person with a job isn’t being paid,” said Andersen.

We know this wealth transfer to be true from other sources including that of economist Thomas Piketty, sure to be a future Nobel prize-winner in his best-seller, Capital in the Twenty-First Century that documents the history of income inequality from the last Gilded Age in the early 1900s.

Our last period of greatest inequality was at the turn of the 20th century before income taxes were instituted and President Teddy Roosevelt’s trust-busters broke up the likes of Standard Oil.

Piketty showed the growth rate of capital—i.e., by the owners of businesses and financial assets—has historically been more than double that from wages and salaries of employees since the Industrial Revolution; except for a short period between 1914-1945, when major upheavals and “the consequent advent of new regulations and tax policies along with controls on capital reduced capital’s share of income to historically low levels in the 1950s.”

Andersen echoes Professor Piketty’s history, showing the slow rollback of New Deal policies with the election of Margaret Thatcher in 1979 and Ronald Reagan in 1980 that marked the beginning of the conservative counterrevolution.

Andersen wants to answer the question, How can we remake America after the COVID-19 induced recession? Looking at the history of the last great pandemic, the Spanish flu of 1918-19 that killed some 600,000 Americans, will help us to understand what we should do since we know what happened next—a recession that lasted approximately two years, then the ‘roaring twenties’.

The roaring 1920s was a euphoric surge in optimism from the devastation of World War I and that pandemic for Americans. Credit was expanded exponentially and American went on a spending spree, resulting in massive bubbles in household debt and stocks that resulted in the Great Depression.

Inequality was as great then as it is today. It unfortunately took the Great Depression and another World War to level the playing field in the 1950s to 1970s, until the Thatcher and Reagan-induced counterrevolutions.

Who should own what share of the national wealth has been at the center of all revolutions. It has to do with the “respective shares of global income going to labor and capital and on how those shares have changed since the eighteenth century,” in Piketty’s words.

So answering the question of who should own America is answering the question of whether our gross domestic income comes to be shared in a more equitable fashion, if we want to end this Gilded Age and preserve our democracy from future counterrevolutions.

Harlan Green © 2020

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

Posted in Uncategorized | Tagged | Leave a comment

Employment Picture Improving?

Posted on September 4, 2020 by Popular Economics Weekly

Popular Economics Weekly

MarketWatch

It wasn’t as much improvement as expected, and more layoffs are coming with the end of the CARES Act benefits that kept workers on payrolls, or temporarily furloughed.

The Labor Department (BLS) reported the August unemployment rate declined by 1.8 percentage points to 8.4 percent, and the number of unemployed persons fell by 2.8 million to 13.6 million. Both measures have declined for 4 consecutive months but are higher than in February, by 4.9 percentage points and 7.8 million, respectively.

One pundit opined that it could take another 8 months to return to the unemployment rate that prevailed before the pandemic.  But that was a record unemployment rate of 3.5 percent in February, which is probably not attainable in the near future since many of the larger businesses and sectors are beginning to let go of their employees with expiration of the benefits from the CARES Act.

Some 29 million were reportedly receiving jobless benefits as of the middle of last month. Also, 238,000 of the new jobs were for temporary Census Workers whose jobs will disappear once the census count is completed.

While millions of these lower-paid employees are now being brought back a whole new wave of layoffs has been building momentum, says the Wolf Street report.

“Now it’s well-paid jobs with decent benefits at big companies, including tech companies that are being shed. We got a dose of those big-company layoffs over the past few days.”

Wolf Street also reported that October 1 is the day when airlines are free under the bailout package to lay off people involuntarily. Between American Airlines, United Airlines, and Delta, the additional cuts announced so far could amount to more than 55,000 employees.

And difficulties of the airlines business are translating into layoffs at many other industries, including manufacturers of aircraft, engines, and components. Boeing said at the end of July that it is preparing a second round of buyouts this year. The 10 percent cut of its workforce unveiled in April wasn’t enough, amid a flood of cancellations of its key product, the misbegotten 737 MAX.

“So this is now a mix of new job cuts, and temporary furloughs becoming permanent layoffs. Goldman Sachs estimated that nearly a quarter of US workers that were temporarily furloughed probably won’t be called back. That’s millions of people,” says Wolf Street.

Over the past four weeks, nearly 7 million people filed initial unemployment claims under state and federal unemployment insurance programs. This means that over the past four weeks, nearly 7 million people, who were eligible for state or federal unemployment insurance, got newly laid off. That’s a huge and catastrophic number.

And we still have no agreement on another congressional rescue package.

The Fed’s so-called Beige Book, a regular survey of the economy, reported “Continued uncertainty and volatility related to the pandemic, and its negative effect on consumer and business activity, was a theme echoed across the country.”

The pickup in activity seen in May and June has slowed over the past couple of months Cleveland Federal Reserve President Loretta Mester said in a separate speech on Wednesday. She and other senior Fed officials are urging Congress to provide more help to the economy, indicating urgency on the part of a the central bank that historically has shied away from offering advice to lawmakers.

USA Today reports House Speaker Pelosi and Treasury Secretary Steven Mnuchin came to the agreement Tuesday during a phone call about the two sides’ stalled efforts to pass another COVID-19 relief package, a source familiar with the call said. The deal would extend government funding at the same levels they are currently operating at and will likely allow both sides of the aisle to avoid a high-stakes series of negotiations before voters cast their ballots in November.

Let us hope so.  I said in a recent blog that before the pandemic the U.S. counted 30 million workers in the categories we now consider essential: grocery clerks, nurses, cleaners, line cooks, warehouse workers, bus drivers and more. But according to data from the Kaiser Family Foundation published in early May, 1 in 4 essential workers report having difficulties affording basic household expenses, and 1 in 7 are uninsured.

Harlan Green © 2020

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

Posted in Economy, Politics, Weekly Financial News | Tagged , , | 2 Comments