Friday :: Nov 7, 2003

Someone Is Sure Working Hard Claiming More Jobs


by pessimist

The debate has raged since the announcement that the economy improved in the third quarter, a claim based largely on the initial eceonomic numbers from July. This is to figure somewhat as this was the month that most got their tax loans (supposed to be "paid back" next April) and spent them on long-delayed necessities.

Because they did so, there was certainly a large bubble in the results. But anyone tracking the data would notice that this effect had worn off by the end of September. This is not good news for the Bush (mis)Administration as we are going into the end-of-year holiday season, the time when many companies see as much as 40% of their annual profits. Thus, a weak holiday buying season could spell disaster for Bush's election (not re-election!) chances, particularly as the news from Iraq continues to worsen with six more GIs killed by an RPG while in a helicopter.

Thus, the motivation for the Bushistas to over-hype ANY good news. They know better than anyone that within two weeks all the Sheeple will have forgotten anything negative. Think they remember that Osama guy? And just who is this Valerie Plame broad, another Clinton bimbo? And isn't Anthrax in Washington a live CD by a speed metal band?

Whoever does the job spin on George's watch deserves a big bonus - and an all-expense-paid one-way trip to Beautiful Downtown Baghdad!

UPDATE - Check out the job graphs here, especially the second one.

One commentator on a previous thread suggested that there was an economic improvement, and that Bush deserves the credit. I thought I'd take a closer look at this idea. We'll start with a commentary from a Buzzflash reader:

Is The Government Exaggerating Job Creation? Does The Sun Rise in the East?

Who you are you going to believe: the company that tracks job losses and has nothing to gain by misrepresenting jobs data or the Bush administration that has everything to gain? If you just look at the numbers, Challenger, Gray and Christmas, an outplacement firm, said that there were 171,874 layoffs in October. The Bush administration, under the cover of the Labor Department, said 126,000 new jobs were added (mostly in the low-paying service sector industry) in October. On BuzzFlash's planet that means there were 50,000 MORE Americans without jobs. And knowing this administrations penchant for obfuscation, exaggeration and lying, we'd say that the number of jobs that they said they created is probably a lot lower. So, don't believe Bush's hype. Bush's economy -- the one he created by running record deficits, cutting taxes for the rich, and cutting programs for the rest of us -- doesn't look very good, no matter how much make-up they slather on the jobs data.

The Challenger, Gray and Christmas take on the situation:

The number of job cuts announced by U.S. employers more than doubled in October, after declining for two months, calling into question the strength of job market as other segments of the economy surge. Planned layoffs at U.S. firms shot up to 171,874 jobs in October, from 76,506 in September, job placement firm Challenger, Gray & Christmas said on Tuesday. Layoffs were at their highest since Oct. 2002, when 176,010 job cuts were announced.

The Bush (mis)Administratiion claims:

The U.S. economy added more than twice the number of jobs expected in October, the third straight monthly gain, and the jobless rate fell, the government said on Friday in a report pointing to a labor market recovery. The Labor Department also made substantial upward revisions to payrolls for August and September, a sign sizzling economic growth in the third quarter translated into more jobs. The number of workers on U.S. payrolls outside the farm sector in October soared 126,000, the largest rise since January, after climbing 125,000 in the previous month. The number far outstripped analyst expectations.

This seems to reinforce the claims of the Buzzflash commentator. Further research reveals:

U.S. companies set 172,000 job cuts last month, the highest in a year, outplacement firm says.

NEW YORK (CNN/Money) - U.S. job-cut announcements rose in October to their highest level in a year, according to a report Tuesday by an outplacement firm that keeps track of job cuts. U.S. businesses announced 171,874 job cuts in October, up 125 percent from September's level of 76,506, according to Chicago-based Challenger, Gray & Christmas. It was the greatest number of job cuts since 176,010 in October 2002. Challenger CEO John Challenger noted that October has in recent years become one of the worst job-cutting months of the year, since it's a time when many companies are finalizing budgets and plans for the following year.

Nevertheless, Challenger said he doubted new jobs would be quick in coming. "With factors like technology, outsourcing and consolidation working against job creation, any job market rebound we see in the near future will be relatively small," Challenger said. Challenger's firm also surveyed about 50 human resources executives and found that 78 percent don't expect to see a "significant" upturn in hiring until the second quarter of 2004. Eleven percent of those surveyed said the pick-up would be delayed until the third or fourth quarter of 2004. Another 11 percent said there would be no hiring rebound at all in 2004.

Though unemployment is typically a lagging economic indicator, the U.S. economy has enjoyed eight straight quarters of economic growth, including a growth rate of 7.2 percent in the third quarter of 2003, without significant job creation.

So far this year, there have been 1.04 million job-cut announcements, making 2003 the third straight year in which more than a million cuts have been announced. The automotive industry led the payroll-trimming, with 28,363 announced cuts. Retail followed with 21,169 cuts, the long-suffering telecommunications sector announced 21,030 cuts, the "industrial goods" sector announced 17,484 cuts and the consumer products sector announced 12,077 cuts. Among U.S. states, Michigan had the most job-cut announcements, with 31,105. Texas followed with 21,033 cuts, New York had 20,486 cuts, New Jersey had 10,750 cuts and California had 10,719 cuts.

Paul Krugman weighs in:

A Big Quarter

The Commerce Department announces very good growth during the previous quarter. Many observers declare the economy's troubles over. And the administration's supporters claim that the economy's turnaround validates its policies.

That's what happened 18 months ago, when a preliminary estimate put first-quarter 2002 growth at 5.8 percent. That was later revised down to 5.0. More important, growth in the next quarter slumped to 1.3 percent, and we now know that the economy wasn't really on the mend: after that brief spurt, the nation proceeded to lose another 600,000 jobs.

The same story unfolded in the third quarter of 2002, when growth rose to 4 percent, and the economy actually gained 200,000 jobs. But growth slipped back down to 1.4 percent, and job losses resumed.

My purpose is not to denigrate the impressive estimated 7.2 percent growth rate for the third quarter of 2003. It is, rather, to stress the obvious: we've had our hopes dashed in the past, and it remains to be seen whether this is just another one-hit wonder.

Stephen Roach of Morgan Stanley has suggested, plausibly, that much of last quarter's consumer splurge was "borrowed" from the future: consumers took advantage of low-interest financing, cash from home refinancing and tax rebate checks to accelerate purchases they would otherwise have made later. If he's right, we'll see below-normal purchases and slower growth in the months ahead.

The big question, of course, is jobs. Despite all that growth in the third quarter, the number of jobs actually fell. And new claims for unemployment insurance, a leading indicator for the job market, still show no sign of a hiring boom. (By the way, for the last month there's been a peculiar pattern: each week, headlines declare that new claims fell from the previous week; a week later, the past week's number is revised upward, and the apparent decline disappears.) And unless we start to see serious job growth — by which I mean increases in payroll employment of more than 200,000 a month — consumer spending will eventually slide, and bring growth down with it.

So let's assume for the moment that we are in a growth period. How then to explain this?

Long queue at drive-in soup kitchen

The free food is handed out at nine, but the queue starts forming hours earlier. By dawn, there is a line of cars stretching half a mile back. The cars come out of the Ohio hills in all shapes and sizes, from the old jalopies of the chronically poor, to the newer, sleeker models of the new members of the club, who only months ago considered themselves middle class, before jobs and their retirement funds evaporated.

In Ohio, hunger is an epidemic. Since George Bush won Ohio in the 2000 presidential elections, the state has lost one in six of its manufacturing jobs. Two million of the state's 11 million population resorted to food charities last year, an increase of more than 18% from 2001.

George Bush's America is the wealthiest and most powerful nation the world has ever known, but at home it is being gnawed away from the inside by persistent and rising poverty. The three million Americans who have lost their jobs since Mr Bush took office in January 2001 have yet to find new work in a largely jobless recovery, and they are finding that the safety net they assumed was beneath them has long since unravelled. There is not much left to stop them falling.

Last year alone, another 1.7 million Americans slipped below the poverty line, bringing the total to 34.6 million, one in eight of the population. Over 13 million of them are children. In fact, the US has the worst child poverty rate and the worst life expectancy of all the world's industrialised countries, and the plight of its poor is worsening.

The ranks of the hungry are increasing in step. About 31 million Americans were deemed to be "food insecure" (they literally did not know where their next meal was coming from). Of those, more than nine million were categorised by the US department of agriculture as experiencing real hunger, defined by the US department of agriculture as an "uneasy or painful sensation caused by lack of food due to lack of resources to obtain food."

That was two years ago, before the recession really began to bite. Partial surveys suggest the problem has deepened considerably since then. In 25 major cities the need for emergency food rose an average of 19% last year. Another indicator is the demand for food stamps, the government aid programme of last resort. The number of Americans on stamps has risen from 17 million to 22 million since Mr Bush took office.

In Logan, over 500 families regularly turn out twice monthly at the food pantry run by the Smith Chapel United Methodist Church. "In all our history starting in the mid-80s we've never seen these numbers," said Dannie Devol, who runs the pantry. The food comes from a regional food bank, which is stocked by a mix of private donations and food bought from local farmers by the government.

"I would have a real problem putting food on the table if it wasn't for this," Dan Larkin said, his car inching towards Logan's church-run food pantry. Since the glassware company he worked for closed its doors this time last year, he has found it hard to pay his bills. His unemployment benefits ran out six months ago and his groceries bill is the only part of his budget that has some give. He and his wife sometimes skip meals or eat less to make sure their six-year-old daughter has enough. As the queue rolled forward, he reflected on the ironies of being a citizen of the world's sole superpower. "They're sending $87bn to the second richest oil nation in the world but can't afford to feed their own here in the States."

Karin Chriss brought one of her three children in a 10-year-old Chevrolet van. "If they stopped this I'd be hurt food-wise. I'm cutting down the amount we eat as it is," Mrs Chriss said. Her husband is a truck driver but does not earn enough to pay the bills. The people in Washington, she says, "need to come down and see how many people are in these lines". Not many Washington politicians do.

Of course they don't! It would put the lies of welfare reform and economic growth to the light. These politicians, of both parties, would much rather believe the following:

Melissa Pardue, a specialist on poverty at the market-oriented Heritage Foundation, reflects the beliefs of many in the administration when she argues welfare reform has not gone far enough. "The impact of the recession would have been far greater without welfare reform," she said. "The people who continue to be affected are not working. People who choose not to get a job are not going to see more income. It's all the more reason to give greater incentives to looking for work."

Hunger is a powerful motivator to seek employment. Most people would rather work than accept handouts, no matter what the fascists at the Herr-itage Foundation believe. So why are they unemployed?

A string of local factories have closed in the past two years to relocate to Mexico, a delayed consequence of the North American Free Trade Agreement established by Bill Clinton in 1994. Another impact of the 1996 welfare reform was that the unemployed were obliged to take service jobs at the minimum wage (now $5.15 per hour) without benefits such as paid holidays or health insurance. The harsh impact of welfare reform was initially mitigated by the 90s boom and Clinton-era social programmes to support the working poor and retrain the unemployed. Those programmes are now disappearing under an administration which fundamentally does not believe government should have a direct role in alleviating poverty.

And two years later, it was Clinton, in cooperation with a staunchly Republican Congress, who dismantled much of the welfare system built in the New Deal and the Great Society. Clinton's welfare reform set a time limit on how long the poor and unemployed could draw social security payments. It helped force people back into work with the encouragement of an array of federally funded job training programmes. It worked well while the economy was booming, cutting the number on welfare from 12 million to five million in a few years.

On paper they were part of the success of the welfare-to-work project, but the jobs stocking supermarket shelves or cleaning offices usually left them worse off, especially if someone in the family fell sick. But now there are no jobs. Those who went to work under welfare reform are among the first to be fired, and often find that welfare is no longer available to them. Some have used up their lifetime maximum. Some have accumulated too many assets to qualify, such as a car or a house that they do not want to sell for fear of falling yet further into destitution.

It is hardly surprising the very poor feel they have no one to turn to. In Ohio, according to Lisa Hamler-Podolski, more than 40% of the people in the food lines are the working poor. So, while poverty rates have been rising in the past few years, the number of Americans on welfare has been steadily declining.

A study this year by Washington-based think tank the Urban Institute found that 63% of this forgotten category sometimes or often run out of food each month. All these factors explain why, although the current slump in America has not been as deep as the last major recession a decade ago, the food lines this time are longer. They also explain why hunger remains a largely invisible problem. The Americans in the food lines often do not show up in the statistics and usually do not turn up for elections.

"Hunger is a hidden thing," said Lynn Brantley, who runs a food bank in Washington where the very poor live within sight of Congress. "It's something we don't really want to look at. We don't want to admit it."

"There's resentment down deep but people don't know what to do with it. A lot of people turn inward, rather than outward. You think it would be ripe for an outcry. But it's not, it's all kind of dulled," said Bob Garbo, who runs a regional food distribution centre in this corner of Ohio. "There's a feeling you can't do much about it, that politicians are all bad. Voting rates are down, and politicians are taking advantage of that. Here, only 20% turn out to vote in some counties."

These are the people that the Democrats are failing. If they were really serious about returning George Warmonger Bush to private life, they would motivate these people to vote. Traditionally, the Democrats won handily when they took notice of this.

There was a time when fighting this kind of poverty was at the core of American politics: Franklin Roosevelt made it his life's work; Lyndon Johnson declared a war on poverty with his Great Society programmes in the 1960s. There are more Americans living in poverty now than there were in 1965, but neither party has much to say about it.

The Bush Republicans see it as a matter for "faith-based charities", the status quo before Roosevelt's New Deal in the 1930s. The trouble is that hard times are drying up donations at the very time private charities are being asked to take on most of the burden.

Think the Democrats just might be overlooking a campaign issue here?

Democrats, meanwhile, are anxious not to appear as class warriors, and most of the Democratic presidential contenders in this election portray themselves as champions of the middle class, for good reason. Americans who see themselves as middle class are much more likely to vote than those who know they are poor.

Have the Democrats already forgotten the mid-1960s and the effort to get out the newly-enfranchised Black voters? In the South? Where today they are harrassed in Mississippi for voting? And in Kentucky as well? Were not the obstacles then a lot more dangerous and vicious than they are now? Have they already forgotten Goodman, Cheney and Schwerner? No longer remembering Viola Liuzzo? If so, then they are all no better than Zell Miller.

I think we have demonstrated that the acclaimed economic boom is not - yet. For example, Tyco has announced 7200 further layoffs. So why all the hoopla? Richard Walrath wonders as well.

Walrath on the Bush Regime's New Employment Propaganda

The economy either creates jobs, or it doesn't. You can screw around with the number of unemployment claims all you want. Unemployment claims can be down for any number of reasons, one of which is the jobless have just run out of their benefits. The only really meaningful number is how many are on the payrolls, and that number comes out only once a month. In between reports on job numbers, you get cheerleading and hoopla about productivity increases, decreases in unemployment claims and growth in the economy. For the record, factory jobs in the last report were down for the 38th straight month. Cheering on Wall Street because they were down "only" 29,000 jobs gives you an idea of just how one-sided the reporting is on the failure of this economy to create jobs. Coupled with the fact that 33,000 of those jobs created last month [September] were temporary jobs makes the 57,000 increase in jobs look really bad, but you would never know it to listen to the shills on the Money shows.

So it appears that all of the hoopla is to cover up the facts.

Unless and until economic growth exceeds productivity increases, there will be no increasse in jobs. In fact, as long as productivity is greater than economic growth, the economy grows by reducing the cost of labor. This may be good for business profits and the stock market in the short run, but it can't last much longer. Either the economy starts to produce jobs in the 100,000 per month range, or the cheerleading on Wall Street is going to end abruptly and very soon.

It would certainly make it harder for Bush if the truth were known more widely!

Humping the Pantleg of the Economy

Bush is on the campaign trail, spreading the word that we have just experienced the highest quarterly growth rate in nearly 20 years. He's getting standing ovations with his "I toldja so" mantra that his tax cuts to the nation's wealthiest corporate donors were what it took to stimulate the sinking economy that he inherited from the Clinton administration. Bush is having no trouble selling his economic snake oil.

During the 2000 presidential campaign, George W. Bush is alleged to have explained his recipe for success with a flippant, "I am a pitbull on the pantleg of opportunity." It must be true. Can anyone deny that Bush has frantically humped the pantleg of 9-11 -- or that such an atrocity was a golden opportunity for BushCo warmongers who were scratching their heads trying to figure out how to bring about a corporate coup here at home while destroying all mechanisims of diplomacy and civilized relations abroad?

While you're at it, check out Bush's feverish activity on the domestic pantleg. Each hump is an assault on civil society -- on labor, the elderly, science, the environment, civil rights -- and each hump becomes law at blinding speed. There is no time for discussion or debate -- only lies, followed by new offensives and more lies.

However, Bush failed to explain, if we're so rich, why more and more Americans are going hungry.  According to the Agriculture Department, as many as 12 million American families last year couldn't afford to buy food. The U.S. media will not address, nor will it ask Bush to explain to hardest-hit Americans such as those in Ohio, why they are forced to stand in soup lines to stave off hunger, even starvation.

Do I hear a "Standing O" for these accomplishments, other than from the corporate media and its pantleg-humping, tax-cutting front man?  I thought not. Admidst a growing scandal in the mutual fund industry and abusive market-timing practices, all eyes are on the DOW, which corporate behemoths manipulate up and down like a grotesque musical scale. Nobody seems to notice that, in addition to jobs being outsourced overseas at an alarming rate, thousands each month are being lost due to corporate downsizing and restructuring. The October good news, it seems, is nothing more than a surge in corporate profits, brought on by pocketing the salaries and costs of benefits of employees who were axed.

All of this does not bode well for the magnificent recovery heralded by the Bush administration, especially for the jobless and the increasing numbers of Americans sinking into hunger and poverty. Millions of the unemployed have given up in despair and no longer look for nonexistant jobs. Since they are no longer counted, they are invisible to the media -- they've become this country's "disappeared." This is good news for Bush as he revs up his 2004 presidential campaign. Now he doesn't have to worry about a particular voting bloc because (hump, hump) -- it's simply "not there."

No biggie. Bush will be the first to admit it doesn't have to last forever -- just until November 2, 2004, and the next leg-humping round of tax cuts.

This IS, however, a big deal to some Congressional members of the GOP, who ARE beginning to hear the anguished cries of their constituents:

Some in GOP Challenge Business Tax Cuts

Some House Republicans are rebelling against a $128 billion package of business tax cuts aimed at helping U.S. manufacturers and endorsed by GOP leaders, griping that it offers too much to multinational corporations that are moving plants and jobs overseas. "Who wants to vote for a bill to make cheap imports cheaper?" asked Rep. Donald Manzullo, R-Ill. "It is looked upon as a trade bill because we're going to reward companies to move production offshore. Who wants that?" Twenty-three Republicans, including Manzullo, have told the House's Republican leadership they don't want that. They signed a rare public letter declaring they want the bill changed.

Many of the members publicly opposed to the bill come from regions with manufacturing job losses, such as Illinois, Pennsylvania, North Carolina and Ohio. Rep. Jack Quinn, R-N.Y., said many lawmakers from New York remain undecided and will formally present their concerns to GOP leaders.

Most frustrating for some members is that they have to debate the bill at all. Congress has been forced into rewriting its tax laws because the World Trade Organization declared a $5 billion annual tax break for exporters illegal. The manufacturing and international tax breaks are designed to replace the benefits that will be lost when Congress abolishes a disputed break for exporters. The European Union will impose as much as $4 billion in sanctions beginning next spring if the rules aren't changed.

Now we can't have our corporations having to pay their taxes, can we? Better we let them continue to screw Americans so that their shareholders benefit, and who knows how many of them are even citizens?

New bumper sticker--- Recall Bush OR Lose Your Job (from Richard Walrath)

pessimist :: 1:44 PM :: Comments (5) :: Digg It!