Our financial system is crumbling this week.

[planet planet]

The latest jobs numbers are [expletive] brutal. Some of it may be related to Japan and a cyclical slowdown in hiring this time of year. But it seems, to me at least, that we've been slowly taking our foot off the stimulus/QE pedal and the free market isn't picking up that slack. That's very scary. Especially in light of future austerity measures (which I have no doubt we're going to be seeing soon). I'm generally optimistic about things, and I still don't see a double-dip on the horizon, but I'm having a hard time being convinced that we won't be seeing a very slow and jobless recovery for the next 5 years or so. And that's if everything goes right (we don't default, the Euro doesn't implode, oil prices don't fly through the roof).

This [expletive] is depressing.

Great post and I totally agree. I have a hard time being convinced we don't turn into Japan post 1990. I also think it's critical to come up with some sort of medium term debt reduction plan, but stay the course, i.e. keep interest rates near zero, don't raise taxes, etc. in the short term. Interesting article from a global/OECD perspective.

Fiscal consolidation needs to continue in many countries to stabilise debt levels, let alone get them back down below pre-crisis levels, it said.

"The United States and Japan, for which such requirements are among the largest, have yet to produce credible medium-term plans while other countries need to bolster medium-term fiscal targets by specifying the measures that will be implemented to achieve them."

The easy money policies which have underpinned the recovery should be kept in place through 2012, the OECD said but also warned that interest rates should to start move up to avoid bubbles and dent inflation expectations.

[Hungary Jack]

It feels like the whole world has gone crazy.

What do you mean has?

[TimeForGuinness]

The latest jobs numbers are [expletive] brutal. Some of it may be related to Japan and a cyclical slowdown in hiring this time of year. But it seems, to me at least, that we've been slowly taking our foot off the stimulus/QE pedal and the free market isn't picking up that slack. That's very scary. Especially in light of future austerity measures (which I have no doubt we're going to be seeing soon). I'm generally optimistic about things, and I still don't see a double-dip on the horizon, but I'm having a hard time being convinced that we won't be seeing a very slow and jobless recovery for the next 5 years or so. And that's if everything goes right (we don't default, the Euro doesn't implode, oil prices don't fly through the roof).

This [expletive] is depressing.

I think I remember saying that 2016 would be optimistic with regard to getting unemployment back to pre-recession levels (5-6%). I'll still stand by that comment. I wouldn't worry about the US defaulting, it's all a political show right now. The US won't default. The Euro is interesting to follow, although I don't know whether it will hurt us or help us. Oil will continue to go up, that you can count on.

[vinsanity]

The latest jobs numbers are [expletive] brutal. Some of it may be related to Japan and a cyclical slowdown in hiring this time of year. But it seems, to me at least, that we've been slowly taking our foot off the stimulus/QE pedal and the free market isn't picking up that slack. That's very scary.

This [expletive] is depressing.

I saw this article a few days ago.

In the boardrooms of corporate America, profits aren’t everything – they are the only thing. A JPMorgan research report concludes that the current corporate profit recovery is more dependent on falling unit-labor costs than during any previous expansion. At some level, corporate executives are aware that they are lowering workers’ living standards, but their decisions are neither coordinated nor intentionally harmful. Call it the “paradox of profitability.” Executives are acting in their own and their shareholders’ best interest: maximizing profit margins in the face of weak demand by extensive layoffs and pay cuts. But what has been good for every company’s income statement has been a disaster for working families and their communities.

Obama’s lopsided recovery also reflects lopsided government intervention. Apart from all the talk about jobs, the Obama administration never supported a concrete employment plan. The stimulus provided relief, but it was too small and did not focus on job creation.

It goes on to mention that with FDR the stimulus went to the people hurt most and out of work, but now the stimulus seems to be congregated at the top and it's not trickling down.

Then there's this piece on tax levels throughout the last 3 decades that concludes simply; taxes are lower now than they were under Reagan...so where is this job creation and economic boom that should be taking place?

We do need a better plan to eliminate debt. Lets start by not giving larger corporations and the richest 2% of Americans trillions of dollars of tax cuts if they aren't going to create jobs with it.

Note - I'm not saying corporations are wrong by maximizing profit by trimming labor costs. But the CEO-worker wage gap is increasing (in 89 it was 79:1, in 07 it was 364:1) and the average salary raise in the middle class is paltry - adjusted for inflation - in 1979 the average worker made $15.91/hr (~$32k/yr). in 1995 it was $16.71 and only hit $18.33/hr in 2000. In this USA Today Article they mention that in 2010 CEO's got a 27% pay raise while workers received a meager 2.1%.

It really is kind of absurd how wide the gap is becoming.

[planet planet]

Thanks for those two links, vin. The unemployed, especially the long term unemployed, have been virtually ignored by Washington and shamed to object by everyone else. Unless one's family is directly affected by unemployment, the general populace ignore this structural employment problem even though they are/will be affected by these stagnated wages in their current job or when they go to look for a new job. It's not unlike the real estate market and the glut of housing lowering the prices.

[2nd Timer]

The unemployed, especially the long term unemployed, have been virtually ignored by Washington and shamed to object by everyone.

I ask sincerely, what can Washington do and what can the unemployed object to?

[vinsanity]

I ask sincerely, what can Washington do

Besides unemployment benefits and job creating tax policies instead of billions of dollars of tax cuts for the top 1%? Ohio had a $400M high-speed rail project that would have created around 8,000 jobs was rejected by the Ohio governor because he was a 'fiscal conservative'. If you check the first link I posted up they talk about how FDR's recovery was built largely on the back of paying people to do work and we're better off for it. The TVA and WPA added value to these areas and the people were working on it. Couldn't congress pay an unemployed worker to fix potholes? Dig ditches, clean drainage pipes, paint buildings etc etc. There's plenty of relatively unskilled labor needs that the unemployed could be used for. When those at the bottom are earning a living wage they buy food and clothes and gas and even some luxuries (alcohol, tobacco, cable) and it's this increased demand for store clerks, brewers, farmers, cable installers, electrical workers etc that creates jobs - not a few extra dollars in the pockets of the Koch brothers or CEO's or corporations.

The GOP held tax cuts for you and I as well as unemployment benefits hostage until the top 1% got their tax cut. In fact, Obama proposed creating a new tax bracket to only bump taxes by 3% on those making more than $1M/yr - and since it's a graduated tax bracket only income over $1M would have been taxed at the new rate. GOP said no. This one worked out fine (extending benefits), but was something they almost didn't get done.

Not to make it sound like unemployment is a problem the government alone can fix, but corporations have shown over and over and over their bottom is the most important. If you give them $1M they cut a few thousand jobs and send that $1M out as bonuses and dividends and pat each other on the back. They use falling demand as justification for layoffs...however this just creates even less demand. If we want companies to hire we need the 90% of Americans who have cut back on spending to have enough money to increase demand.

and what can the unemployed object to?

The tax cuts for the wealthy that could be used to keep them in their home. I know it's one of those popular rally cries from those who don't understand - but what about a private 'TARP'? The banks and congress pretty much created the housing bubble and when it burst the government took care of the banks Toxic Assets. Now, had the bank bailouts not happened my understanding is money market accounts would have frozen, money would have stopped flowing and it would have been a disaster. I'm not against TARP, but the banks had toxic assets the government assisted them for the good of the economy. However, they've failed to do so for those citizens who now own similar toxic assets or are jobless because of the banks and their quest to squeeze every last drop of blood form the turnip.

[planet planet]

I ask sincerely, what can Washington do

Besides unemployment benefits and job creating tax policies instead of billions of dollars of tax cuts for the top 1%? Ohio had a $400M high-speed rail project that would have created around 8,000 jobs was rejected by the Ohio governor because he was a 'fiscal conservative'. If you check the first link I posted up they talk about how FDR's recovery was built largely on the back of paying people to do work and we're better off for it. The TVA and WPA added value to these areas and the people were working on it. Couldn't congress pay an unemployed worker to fix potholes? Dig ditches, clean drainage pipes, paint buildings etc etc. There's plenty of relatively unskilled labor needs that the unemployed could be used for. When those at the bottom are earning a living wage they buy food and clothes and gas and even some luxuries (alcohol, tobacco, cable) and it's this increased demand for store clerks, brewers, farmers, cable installers, electrical workers etc that creates jobs - not a few extra dollars in the pockets of the Koch brothers or CEO's or corporations.

The GOP held tax cuts for you and I as well as unemployment benefits hostage until the top 1% got their tax cut. In fact, Obama proposed creating a new tax bracket to only bump taxes by 3% on those making more than $1M/yr - and since it's a graduated tax bracket only income over $1M would have been taxed at the new rate. GOP said no. This one worked out fine (extending benefits), but was something they almost didn't get done.

Not to make it sound like unemployment is a problem the government alone can fix, but corporations have shown over and over and over their bottom is the most important. If you give them $1M they cut a few thousand jobs and send that $1M out as bonuses and dividends and pat each other on the back. They use falling demand as justification for layoffs...however this just creates even less demand. If we want companies to hire we need the 90% of Americans who have cut back on spending to have enough money to increase demand.

and what can the unemployed object to?

The tax cuts for the wealthy that could be used to keep them in their home. I know it's one of those popular rally cries from those who don't understand - but what about a private 'TARP'? The banks and congress pretty much created the housing bubble and when it burst the government took care of the banks Toxic Assets. Now, had the bank bailouts not happened my understanding is money market accounts would have frozen, money would have stopped flowing and it would have been a disaster. I'm not against TARP, but the banks had toxic assets the government assisted them for the good of the economy. However, they've failed to do so for those citizens who now own similar toxic assets or are jobless because of the banks and their quest to squeeze every last drop of blood form the turnip.

Well said, vin! Sorry, 2ndTimer, I was too busy fending off my father and father-in-law after I forwarded vin's initial article.

[Freed Roger]

Uh oh. This looks like more Vegas, I mean, Wall Street funny money.

LinkedIn shares were priced at $45 in an initial public offering Wednesday night. They opened today at $83 and shot up to as high as $122.70 before dropping back to $109.44 at the close.

That values the company at more than $9 billion. Many market watchers believe the surge in the price was way too much and that social-networking companies are receiving valuations that make no sense.

The properly-connected made a [expletive] load of money today. And not one tangible item or measure of progress was produced. Then our commoner 401K mutual funds get in on the downward side.

Yeah, the "money grows on trees" people are back. Groupon some sort of coupon internet bull [expletive] that has lost $540 Mill since its beginning, expects to raise $3 Bill in an IPO. what's the price earnings ration there? Anyhow -in my opinion, this recent rumbling with fantastical IPOs for crapola businesses is an indication that the market is getting desparate, and there is a shortage of tangible productive stocks to invest in.

[Freed Roger]

Uh oh. This looks like more Vegas, I mean, Wall Street funny money.

LinkedIn shares were priced at $45 in an initial public offering Wednesday night. They opened today at $83 and shot up to as high as $122.70 before dropping back to $109.44 at the close.

That values the company at more than $9 billion. Many market watchers believe the surge in the price was way too much and that social-networking companies are receiving valuations that make no sense.

The properly-connected made a [expletive] load of money today. And not one tangible item or measure of progress was produced. Then our commoner 401K mutual funds get in on the downward side.

Yeah, the "money grows on trees" people are back. Groupon some sort of coupon internet bull [expletive] that has lost $540 Mill since its beginning, expects to raise $3 Bill in an IPO. what's the price earnings ration there? Anyhow -in my opinion, this return of fantastical IPOs for crapola businesses is an indication that the market is getting desparate, and there is a shortage of tangible productive stocks to invest in.

http://www.suntimes.com/business/roeder ... -gall.html