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Robert Samuelson: A dishonest budget debate - The Washington Post - 0 views

www.washingtonpost.com/...2-9f54-f3fdd70acad2_story.html budget debate washington
shared by Gene Ellis on 18 Mar 13 - No Cached
  • t’s the math: In fiscal 2012, Social Security, Medicare, Medicaid and civil service and military retirement cost $1.7 trillion, about half the budget.
  • As a share of national income, defense spending ($670 billion in 2012) is headed toward its lowest level since 1940.
  • States’ Medicaid costs will increase with the number of aged and disabled, which represent two-thirds of Medicaid spending. All this will force higher taxes or reduce traditional state and local spending on schools, police, roads and parks.
  • ...5 more annotations...
  • Almost everything is being subordinated to protect retirees.
  • “for how long will we continue to sacrifice investments in our nation’s children and youth ... to spend more and more on the aged?”
  • In a Pew poll, 87 percent of respondents favored present or greater Social Security spending; only 10 percent backed cuts. Results were similar for 18 of 19 programs, foreign aid being the exception.
  • an aging America needs a new social compact: one recognizing that longer life expectancies justify gradual increases in Social Security’s and Medicare’s eligibility ages; one accepting that sizable numbers of well-off retirees can afford to pay more for their benefits or receive less; one that improves generational fairness by concentrating help for the elderly more on the needy and poor to lighten the burdens — in higher taxes and fewer public services — on workers; and one that limits health costs.
  • Government is being slowly transformed into a vast old-age home, with everything else devalued and degraded.
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As Robots Grow Smarter, American Workers Struggle to Keep Up - NYTimes.com - 0 views

www.nytimes.com/...rkers-struggle-to-keep-up.html
shared by Gene Ellis on 16 Dec 14 - No Cached
  • As Robots Grow Smarter, American Workers Struggle to Keep Up
  • Erik Brynjolfsson, an economist at M.I.T., said, “This is the biggest challenge of our society for the next decade.”
  • Americans between the ages of 55 and 64 are among the most skilled in the world, according to a recent report from the Organization for Economic Cooperation and Development. Younger Americans are closer to average among the residents of rich countries, and below average by some measures.
  • ...5 more annotations...
  • Self-driving vehicles are an example of the crosscurrents.
  • Ad sales agents and pilots are two jobs that the Bureau of Labor Statistics projects will decline in number over the next decade. Flying a plane is largely automated today and will become more so.
  • Telemarketers are among those most at risk
  • More than 16 percent of men between the ages of 25 and 54 are not working, up from 5 percent in the late 1960s; 30 percent of women in this age group are not working, up from 25 percent in the late 1990s.
  • “The answer is surely not to try to stop technical change,” Mr. Summers said, “but the answer is not to just suppose that everything’s going to be O.K. because the magic of the market will assure that’s true.”
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An Aging Europe in Decline - NYTimes.com - 0 views

www.nytimes.com/...an-aging-europes-decline.html
shared by Gene Ellis on 05 Feb 15 - No Cached
  • An Aging Europe in Decline
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Global flows in a digital age | McKinsey & Company - 0 views

www.mckinsey.com/...global_flows_in_a_digital_age
shared by Gene Ellis on 02 May 14 - No Cached
  • Global flows in a digital age
  • Global flows in a digital age
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Eurozone: Looking for growth | vox - 0 views

www.voxeu.org/...eurozone-looking-growth looking growth vox
shared by Gene Ellis on 25 Mar 13 - No Cached
  • Empirical evidence suggests deleveraging episodes accompanied by a housing crisis will take on average five and a half years across high-income OECD countries (or seven years when accompanied by a banking crisis (Aspachs-Bracon et al. 2011, IMF 2012).
  • Little resolution of banking-sector difficulties in the Eurozone suggests that deleveraging and credit will probably remain slow and impaired for much longer than previously thought. Recoveries that happen without credit are, on average, a third longer than recovery episodes with credit (Darvas 2013).
  • Damages to trend growth are notoriously difficult to assess,
  • ...10 more annotations...
  • In addition, observed GDP growth tends to be revised until several years after the first estimate
  • Our work is based on a simple Solow growth-accounting methodology.
  • A common feature of all economies is a collapse in productivity, which is typical of a big recession. In addition, Spain and Italy also underwent a very sharp labour contraction.
  • The additional effect of ageing.
  • A downside risk is that investment growth does not recover fully (for example, because banks fail to provide the necessary funding). In this case, we assume investment growth is only half what it was before the onset of economic turmoil.
  • We also estimate productivity through a convergence equation, which would slightly lift productivity in peripheral countries in the future.
  • This exercise suggests that in the absence of policy reforms, trend growth will have been damaged significantly, by at least one percentage point, post-crisis, compared with pre-crisis levels,
  • In the event that investment fails to recover quickly
  •  or unemployment levels take longer to fall than in previous recovery episodes, then trend growth would be significantly lower for longer. Trend growth might well remain negative in Spain and Italy, and may fail to increase for Germany or France.
  • this exercise shows the damage will indeed be long lasting, permanently impairing growth in a context of an ageing population that needs higher growth capacity than ever before.
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Efforts to Revive the Economy Lead to Worries of a Bubble - NYTimes.com - 0 views

dealbook.nytimes.com/...my-lead-to-worries-of-a-bubble
shared by Gene Ellis on 18 Apr 13 - No Cached
  • The Federal Reserve is well into its third round of “quantitative easing,” in which it buys longer-term assets to bring down long-term lending rates.
  • In March, a smaller percentage of working-age people were actually working than at any other time since 1979.
  • In March, a smaller percentage of working-age people were actually working than at any other time since 1979.
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  • Ben S. Bernanke and company would also like to kindle inflation expectations, spurring people to buy and companies to invest today instead of waiting until tomorrow. Supposedly, all of this will drive a self-sustaining economic recovery.
  • Alternatively, many investors look at something called the Q, devised by the economist James Tobin, which compares stock prices with corporate net worth. The nonfinancial companies are overpriced by 57 percent.
  • Investors are desperate for yield and are paying up for riskier assets.
  • There are more reliable measures of stock market value, and they look frothy. One gauge, the price of stocks based on the past decade of earnings, is named after the Yale economist Robert J. Shiller. Using that, stocks are too expensive by 65 percent.
  • Instead, the Fed has kindled speculation.
  • Last month, investors were paying more for such loans than at any time in the last five years. They are snapping up billions of dollars in securities made up of subprime auto loans.
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Global flows in a digital age | McKinsey & Company - 0 views

www.mckinsey.com/...global_flows_in_a_digital_age
shared by Gene Ellis on 18 Feb 15 - No Cached
  • Global flows in a digital age
  • Now, one in three goods crosses national borders, and more than one-third of financial investments are international transactions. In the next decade, global flows could triple,
  • we find that countries with a larger number of connections in the global network of flows increase their GDP growth by up to 40 percent more than less connected countries do. The penalty for being left behind is rising.
  • ...4 more annotations...
  • Exchanges of goods such as aircraft and automobiles, semiconductors, pharmaceuticals, and microelectronics, as well as professional services and foreign direct investment flows, are growing faster than others.
  • Digital technologies, which reduce the cost of production and distribution, are transforming flows in three ways: through the creation of purely digital goods and services, “digital wrappers” that enhance the value of physical flows, and digital platforms that facilitate cross-border production and exchange.
  • Developing economies now account for 38 percent of global flows, nearly triple their share in 1990. S
  • oday, digital technologies enable even the smallest company or solo entrepreneur to be a “micromultinational,” selling and sourcing products, services, and ideas across borders. Individuals can work remotely through online platforms, creating a virtual people flow. Microfinance platforms enable entrepreneurs and social innovators to raise money globally in ever-smaller amounts.
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Even Greece Exports Rise in Europe's 11% Jobless Recovery - Bloomberg - 0 views

www.bloomberg.com/...ope-s-11-jobless-recovery.html undefined greece exports rise europe recovery bloomberg
shared by Gene Ellis on 21 Mar 13 - No Cached
  • “The current- account deficits of countries that have been under stress diminished over the last years considerably.”
  • Just two of 14 euro-zone government leaders have kept their posts in elections since late 2009 and extremists such as Golden Dawn in Greece are gaining support.
  • “The internal rebalancing in the euro area is progressing,” said Fels. “Some of them, especially Spain but also Portugal not to speak of Ireland, are regaining competitiveness.”
  • ...18 more annotations...
    • Gene Ellis
      Gene Ellis on 21 Mar 13
       
      This is the same sort of response which companies would have made to a depreciation in the local currency without the euro, but with the added problem of deflationary effects on the rest of the economy.
  • Ford Motor Co. (F) (F) said at the end of last year it will increase capacity near Valencia as it shuts plants in the U.K. and Belgium.
  • While a slide in imports accounts for some of the correction, Greece boosted its exports outside the EU by about 30 percent in the fourth quarter of 2012 from the previous year, while Italy’s rose 13 percent in January from a year ago, he said.
  • In Ireland, U.S. companies such as EBay Inc (EBAY) (EBAY)., Google Inc. (GOOG) (GOOG) and Facebook Inc (FB). all have expanded in the past two years, taking advantage of a corporate-tax rate of just 12.5 percent compared to Spain’s 30 percent.
    • Gene Ellis
      Gene Ellis on 21 Mar 13
       
      'Beggar thy neighbor' kinds of effects.
  • The metamorphosis is known as internal devaluation
  • Prevented by membership of the euro from driving down currencies, governments and companies are squeezing labor costs to spur productivity.
  • reducing social- security payments
  • aising the retirement age, making it easier to fire workers in downturns and preventing unions from clinging to boom-time wage deals.
  • On average, the periphery is about halfway to eliminating large structural current-account deficits, which allow for declines related to recession-driven weaker import demand, estimates Goldman Sachs (GS).
  • The OECD today published an index showing that relative labor costs in Spain and Portugal have now dropped below Germany’s for the first time since 2005.
  • “It’s potentially good for the economy but only if it results in faster investment,”
  • “If not then there’s a downward spiral risk.”
    • Gene Ellis
      Gene Ellis on 21 Mar 13
       
      An important point.
  • The smaller trade imbalances really reflect a collapse in demand for imports as consumers and companies hunker down,
  • It’s the mirror image of the euro’s first decade, when historically low interest rates in the periphery fueled inflationary spending booms, reflected in credit bubbles and deteriorating current accounts and government budgets.
  • “At this stage it is still demand destruction which has helped current-account deficit countries balance their accounts,” said Mayer. “It’s not a healthy situation.”
  • They also say countries will need to run even healthier current accounts than now if they are to stabilize the debts they owe abroad.
  • Gene Ellis on 21 Mar 13
     
    Good update article, as of March, 2013.
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Europe's Two-Speed Future by Jean-Claude Piris - Project Syndicate - 0 views

www.project-syndicate.org/...ed-europe-by-jean-claude-piris
shared by Gene Ellis on 19 Dec 12 - No Cached
  • relatively small size,
  • aging populations,
  • excessive indebtedness
  • ...5 more annotations...
  • insufficient investment in research and development
  • lack of energy resources
  • But the eurozone’s architecture – in which monetary policy is centralized, but budgetary and economic policies are left up to individual governments – is not viable in the long term
  • establishing a “two-speed Europe” – in which a core group of countries pursues deeper integration more quickly than the rest – is the EU’s best option for reaching the level of cooperation needed to escape the crisis intact.
  • Pursuing this option would require that the decision-making process be legitimate. In the Council, as in all cases of “enhanced cooperation,” only participating members have the right to vote. In the European Parliament, by contrast, all 27 EU members participate in the decision-making process, even concerning measures that will affect only the 23 “eurozone plus” countries (the 17 eurozone members and the six that have agreed to the Euro Plus Pact) – a method that could pose a political problem.
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Op-Ed Columnist - Learning From Europe - NYTimes.com - 0 views

www.nytimes.com/...11krugman.html europe krugman
shared by Gene Ellis on 24 Apr 13 - Cached
  • It’s true that the U.S. economy has grown faster than that of Europe for the past generation. Since 1980 — when our politics took a sharp turn to the right, while Europe’s didn’t — America’s real G.D.P. has grown, on average, 3 percent per year. Meanwhile, the E.U. 15 — the bloc of 15 countries that were members of the European Union before it was enlarged to include a number of former Communist nations — has grown only 2.2 percent a year. America rules!
  • Or maybe not. All this really says is that we’ve had faster population growth. Since 1980, per capita real G.D.P. — which is what matters for living standards — has risen at about the same rate in America and in the E.U. 15: 1.95 percent a year here; 1.83 percent there.
  • Broadband, in particular, is just about as widespread in Europe as it is in the United States, and it’s much faster and cheaper.
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  • In 2008, 80 percent of adults aged 25 to 54 in the E.U. 15 were employed (and 83 percent in France). That’s about the same as in the United States. Europeans are less likely than we are to work when young or old, but is that entirely a bad thing?
  • And Europeans are quite productive, too: they work fewer hours, but output per hour in France and Germany is close to U.S. levels.
  • After all, while reports of Europe’s economic demise are greatly exaggerated, reports of its high taxes and generous benefits aren’t. Taxes in major European nations range from 36 to 44 percent of G.D.P., compared with 28 in the United States. Universal health care is, well, universal. Social expenditure is vastly higher than it is here.
  • So if there were anything to the economic assumptions that dominate U.S. public discussion — above all, the belief that even modestly higher taxes on the rich and benefits for the less well off would drastically undermine incentives to work, invest and innovate — Europe would be the stagnant, decaying economy of legend. But it isn’t.
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What If We Never Run Out of Oil? - Charles C. Mann - The Atlantic - 1 views

www.theatlantic.com/...5
shared by Gene Ellis on 01 May 13 - No Cached
  • Walking around town, my friend and I had noticed that almost every home had a pile of coal outside, soft dark chunks that people shoveled into stoves for cooking and heating. Thousands upon thousands of coal fires were loading the air with tiny dots of soot. Scientists have taken to calling these dots “black carbon,” and have steadily ratcheted up their assessments of its harm. In March, for instance, a research team led by a Mumbai environmental group estimated that black carbon and other particulate matter from India’s coal-fired power plants cause about 100,000 deaths a year.
  • A 31-scientist team from nine nations released a comprehensive, four-year assessment in January arguing that planetary black-carbon output is the second-biggest driver of anthropogenic (human-caused) climate change; the little black specks I found on my glasses and clothes have roughly two-thirds the impact of carbon dioxide.
  • The rule of thumb is that if a well leaks more than about 3 percent” of its methane production into the air, “natural gas actually becomes dirtier than coal, from a climate-change perspective,
  • ...8 more annotations...
  • Worse still, the aging natural-gas infrastructure is riddled with holes and seeps; early this year, a survey of gas mains along Boston’s 785 miles of road, the first-ever such examination, found 3,356 leaks.
  • What we can’t do, or at least not readily, is overcome the laws of economics.
  • As an example, typical solar cells today have an EROEI of about 10—better than tar sands but worse than most oil and gas.
  • One recent estimate put the EROEI of Spain’s extensive solar-power network at less than 3.
  • When renewables supply 20 to 30 percent of all electricity, many utility-energy engineers predict, the system will no longer be able to balance supply and demand. Brownouts will ripple across the landscape
  • To ask utilities to take in large amounts of solar power
  • is like asking a shipping firm to replace its huge, professionally staffed container ships with squadrons of canoes paddled by random adolescents.
  • But even if such techniques work in the way researchers hope, the infrastructure transformation ahead is daunting in scale and scope. It’s like setting up a second Industrial Revolution, only all over the world and in one-third the time.
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Tourists Also Tell Greece No: Drop in Summer Bookings - WSJ.com - 0 views

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shared by Gene Ellis on 29 May 12 - No Cached
  • Greek-vacation bookings from Germany and the rest of Europe are down sharply, as would-be tourists take fright at the prospect of strikes and street protests.
  • Early reservations for this summer's tourist season are down by around 15% from a year ago. Last year's record total of 16.4 million visitors is already out of reach, he says.
  • The industry accounts for about one-sixth of economic activity and nearly one in five jobs.
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  • If the decline in bookings continues, it would mean about 1.5 million fewer tourists coming to Greece this year compared to last, shaving more than a percentage point off gross domestic product and jeopardizing 100,000 summertime jobs.
  • Greece is one of the world's top 20 tourist destinations, traditionally drawing about half of its visitors from other European Union countries—especially from Germany and the U.K.
  • Prices are down some 15% from last year, according to SETE, following a 10% cut in rates charged by hotel and tour operators in 2011.
  • Leading German tour operator TUI AG says its Greek vacation bookings were down 30% up to March. European travel agency Thomas Cook TCG.LN +0.23% said German bookings for Greece so far are also down by 30% compared with 2011, despite discounts of as much as 20%.
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Banks' Fire Drill for Greece Election - NYTimes.com - 0 views

dealbook.nytimes.com/...fire-drill-for-greece-election banks fire drill greece election nytimes nytimes com com
shared by Gene Ellis on 16 Jun 12 - No Cached
  • In New York and London, banks have set up dedicated crisis teams, and rehearsed elaborate responses.
  • Citigroup has $84 billion in loans, bonds and other types of exposure to troubled European countries, plus France. The bank’s filings indicate that all but $8 billion of that exposure is offset with collateral it has collected and hedges on the portfolio.
  • Some banks are testing their systems to deal with the possibility of new currencies and preparing guidance for clients on how to operate in such an environment.
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  • Banks like Goldman Sachs and Morgan Stanley are also looking into the severe legal challenges that would arise if a country exited the euro. Contracts that govern loans, bonds and derivatives in Europe rarely take into account such a situation.
  • Consider an Italian corporation that owed a foreign bank 5 million euros, with a loan agreement struck under Italian law. If Italy left the euro, the bank might have less chance of getting euros back after the exit. In that case, the financial firm might be exposed to a new, less valuable currency.
  • Recognizing that threat, some banks are trying to move contracts into new jurisdictions like the United States or Britain. By transferring such loan agreements to English law, the banks may increase the chances of getting repaid in euros after an exit, according to legal experts.
  • The banks are also trying to protect their balance sheets if they do get stuck with large amounts of assets denominated in a new, weaker currency.
  • By doing so, they can better match their assets (the loans) within a specific country with their liabilities (the deposits). Then if a country left the euro zone, the value of the loan might fall in euros, but the banks wouldn’t owe as much to depositors in euros.
  • Mr. Lim notes, however, that some large banks, including Deutsche Bank, still have a lot more loans than deposits in countries like Italy and Spain.
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Crippled eurozone to face fresh debt crisis this year, warns ex-ECB strongman Axel Webe... - 0 views

www.telegraph.co.uk/...-ECB-strongman-Axel-Weber.html
shared by Gene Ellis on 24 Jan 14 - No Cached
  • Crippled eurozone to face fresh debt crisis this year, warns ex-ECB strongman Axel Weber
  • Harvard professor Kenneth Rogoff said the launch of the euro had been a "giant historic mistake, done to soon" that now requires a degree of fiscal union and a common bank resolution fund to make it work, but EMU leaders are still refusing to take these steps.
  • "People are no longer talking about the euro falling apart but youth unemployment is really horrific. They can't leave this twisting in wind for another five years," he said.
  • ...8 more annotations...
  • Mr Rogoff said Europe is squandering the "scarce resource" of its youth, badly needed to fortify an ageing society as the demographic crunch sets in.
  • "If these latent technologies are not realised, Europe will wake up like Rip Van Winkel from a long Japan-like slumber to find itself a much smaller part of the world economy, and a lot less important."
  • Mr Rogoff said debt write-downs across the EMU periphery "will eventually happen" but the longer leaders let the crisis fester with half-measures, the worse damage this will do to European society in the end.
  • Mr Weber, who resigned from the Bundesbank and the ECB in a dispute over euro debt crisis strategy, said new "bail-in" rules for bond-holders of eurozone banks will cause investors to act pre-emptively, aiming to avoid large losses before the ECB issues its test verdicts. "We may see that speculators do not wait until November, but bet on winners and losers before that," he said.
  • Sir Martin said the eurozone is pursuing a reverse "Phillips Curve" - the trade off between jobs and inflation - as if it were testing "what level of unemployment it is prepared to tolerate for zero inflation".
  • Pierre Nanterme, chairman and chief executive officer of Accenture, said Europe is losing the great battle for competitiveness, and risks a perma-slump where debt burdens of 100pc of GDP prevent governments breaking free by investing in skills and technology.
  • He said Europe is falling further behind as the US basks in cheap energy and pours funds into cutting-edge technology. "A lot is at stake. If in 12 to 24 months no radical steps are taken to break the curse, we might have not just five, ten, but twenty years of a low-growth sluggish situation in Europe," he said.
  • "People are no longer talking about the euro falling apart but youth unemployment is really horrific. They can't leave this twisting in wind for another five years," he said
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allAfrica.com: Ethiopia: Gambling On Education (Page 1 of 6) - 0 views

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shared by Gene Ellis on 09 Jan 14 - No Cached
  • The communist Derg junta was ousted in 1991 and five years later only 27.5% of school-aged children received primary education; today that figure stands at over 85%, according to the World Bank.
  • In August 2005 the government embarked on an ambitious expansion plan, simultaneously building 13 universities across the country at a cost of $550m, paid for out of the education budget.
  • Ten more universities are under construction, all of which have already begun to admit students, increasing even further the country's higher education capacity.
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Utilities Switch Off Investment in Fossil Fuel Plants - NYTimes.com - 0 views

www.nytimes.com/...ent-in-fossil-fuel-plants.html utilities switch investment fossil fossil fuel fuel plants
shared by Gene Ellis on 10 Jan 14 - No Cached
    • Gene Ellis
      Gene Ellis on 10 Jan 14
       
      Note:  a LARGE power station =s 40 direct jobs.
  • workers at the large power station known as Keadby 1 are preparing to shut it down at the end of the summer, with the loss of about 40 jobs.
  • fluctuations in global energy markets have made the natural gas power plant unprofitable
  • ...14 more annotations...
  • It has also delayed new energy investments and is planning to close almost a quarter of its fossil fuel power plants,
  • European energy companies, struggling to respond to weak demand in a flatlining economy, say they need guaranteed pricing to keep open unprofitable plants or to invest in new ones.
  • Their revenue is being hit by dwindling demand for electricity and by new wind and solar projects that undercut the price of the energy produced from many fossil fuel plants.
  • At the same time, record-low prices on carbon emissions trading markets, which were introduced to encourage clean and efficient energy production and use, have perversely become a disincentive to investment.
  • Many of the Continent’s aging power stations, particularly those that burn highly polluting coal, are earmarked for closure by 2020 to meet stringent local environment regulations.
  • Without these investments, industrial companies in Europe may face higher energy prices when local economies eventually recover,
  • “Energy utilities are facing a perfect storm,”
  • In a bid to generate 20 percent of the European Union’s electricity from renewable sources by 2020, Germany, Spain and other E.U. countries have provided hefty subsidies to wind and solar farms, which now constitute a sizable minority of daily electricity generation, often surpassing the 20 percent target.
    • Gene Ellis
      Gene Ellis on 10 Jan 14
       
      In effect, a cheaper overall form of energy (non-renewables) had to compete with heavy subsidies to renewables, which, once built, had low operating costs.  They cannot compete and do not invest, and there are major problems w/investing more in renewables (they are overall more expensive, and they have built-in faults, producing electricity erratically, or during the wrong times.)  The high costs of energy also lie with government, who cemented long-term deals with the ex-USSR linking other energy prices to the price of oil.  In short, they shot themselves in the foot.  Several times.
  • European utilities like E.On of Germany have announced plans to shut down less-polluting natural gas-fired plants that have been undercut by dirtier coal-burning generators benefiting from a flood of low-cost coal imports and low carbon emissions prices.
  • Despite the upfront costs associated with green energy projects, they are inexpensive to run. In contrast, Europe’s gas and coal plants, which also provide backup power when renewables cannot operate, need constant spending on fossil fuels.
  • Policy makers are debating a system of support payments to keep uneconomic power plants open,
  • “Without long-term signals of energy prices, investment won’t happen.”
  • Some analysts also expect domestic regulators to eventually create financial incentives for companies
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The Quality of Jobs: The New Normal and the Old Normal - NYTimes.com - 0 views

economix.blogs.nytimes.com/...-new-normal-and-the-old-normal
shared by Gene Ellis on 20 Sep 13 - No Cached
  • Despite 42 consecutive months of gains in private-sector employment, the unemployment rate is still at 7.3 percent; in December 2007 it was only 4.6 percent. The current unemployment rate is higher now than in 2007 across all age, education, occupation, gender and ethnic groups.
  • That’s despite the fact that about four million workers have left the labor force, driving the labor force participation rate to a historic low
  • Although the share of the long-term unemployed has fallen from its peak of 45 percent in 2011 to 38 percent today, it is still far above its 2001-7 average. And about eight million people are working part-time for “economic reasons,”
  • ...9 more annotations...
  • 60 percent of the net job losses occurred in middle-income occupations with median hourly wages of $13.84 to $21.13. In contrast, these occupations have accounted for less than a quarter of the net job gains in the recovery, while low-wage occupations with median hourly wages of $7.69 to $13.83 have accounted for more than half of these gains.
  • Over the last year, more than 40 percent of job growth has been in low-paying sectors including retail, leisure/hospitality (hotels and restaurants) and temporary help agencies.
  • Based on history, what’s distinctive about this recovery is its sluggish pace, not the composition of its jobs.
  • The economy’s growth rate has been less than half the rate of previous recoveries and the employment losses in the Great Recession were more than twice as large as those in previous recessions.
  • What is distinctive during this recovery relative to earlier ones is the growing disparity in wages across sectors, a trend that was apparent long before the Great Recession.
  • Since then, however, wage growth has fallen far short of productivity growth, and that’s true for workers regardless of education, occupation, gender or race.
  • But technological change and the globalization it has enabled have played major roles, and these driving forces have probably strengthened during the recovery.
  • Jobs that are routine, that do not involve manual tasks and that do not need to be done near the customer are being replaced by computers and automation or are being outsourced to low-cost workers in other countries.
  • According to another study, the top 1 percent of households captured 65 percent of real family income gains (including realized capital gains) between 2002 and 2007 and 95 percent of the gains between 2009 and 2012. In 2012, the top decile claimed more than 50 percent of income, the highest share ever.
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Eurozone crisis: can the centre hold? | Nouriel Roubini | Business | theguardian.com - 0 views

www.theguardian.com/...eurozone-crisis-euro-european
shared by Gene Ellis on 29 Oct 13 - No Cached
  • Several developments helped to restore calm. The European Central Bank (ECB) president, Mario Draghi, vowed to do "whatever it takes" to save the euro, and quickly institutionalised that pledge by establishing the ECB's "outright monetary transactions" programme to buy distressed eurozone members' sovereign bonds.
  • And, even if such adjustment is not occurring as fast as Germany and other core eurozone countries would like, they remain willing to provide financing, and governments committed to adjustment are still in power.
  • For starters, potential growth is still too low in most of the periphery, given ageing populations and low productivity growth, while actual growth – even once the periphery exits the recession, in 2014 – will remain below 1% for the next few years, implying that unemployment rates will remain very high.
  • ...10 more annotations...
  • levels of private and public debt, domestic and foreign, are still too high, and continue to rise as a share of GDP, owing to slow or negative output growth. This means that the issue of medium-term sustainability remains unresolved.
  • At the same time, the loss of competitiveness has been only partly reversed, with most of the improvement in external balances being cyclical rather than structural.
  • The euro is still too strong, severely limiting the improvement in competitiveness that is needed to boost net exports in the face of weak domestic demand.
  • a continuing credit crunch, as undercapitalised banks deleverage by selling assets and shrinking their loan portfolios.
  • The larger problem, of course, is that progress toward banking, fiscal, economic and political union, all of which are essential to the eurozone's long-term viability, has been too slow.
  • all imply that banks will have to focus on raising capital at the expense of providing the financing needed for economic growth.
  • Moreover the ECB, in contrast to the Bank of England, is unwilling to be creative in pursuing policies that would ameliorate the credit crunch.
  • Meanwhile, austerity fatigue is rising in the eurozone periphery.
  • And bailout fatigue is emerging in the eurozone's core.
  • But the eurozone's political strains may soon reach a breaking point,
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