Friday, January 09, 2009

Employment Unraveling, Bushes Not Yet Burning

The US unemployment rate hit 7.2% in November, which the excellent labor journalist Louis Uchitelle notes is "the highest unemployment rate since January 1993, when the country was still shaking off a jobless recovery from the 1990-91 recession. The loss in total jobs for 2008 was the largest since 1945."

This brings Bush II's unemployment legacy exactly back to the percentage level of his father Bush I's. See the photos of the presidential gathering in which Barak Obama is flanked by the Bushes, both looking as doltish and mediocre as they are. The Bushes were arguably the worst political dynasty in US history, and should never be heard from again, except if dragged to the dock in chains for any of a range of lethal stupidities.

Most sectors are struggling, and people trying to work on their own are getting hammered. The LAT has a good piece on trucking. This used to be an industry where someone without a college degree could a) make a more or less middle class living and b) be their own boss. This workplace combination of financial stability and self-direction was supposedly the cornerstone of political democracy. It's vanishing for college folks, and even more quickly for most non-college people as well.

Nest Egg news is staying dismal. Since the residence is the main form of working class and middle class wealth, the fall is crushing the main source of psychological and actual economic advancement for the majority in our long and continuing period of stagnant majority incomes. This has been especially hard on the Black middle class. Doug Henwood of the New Left Observer (#118) points out that houses are still overpriced when expresses in relation to incomes.
Through the 1980s and 1990s, the average existing house cost 3.25 times the average household's income; it got to 4.7 times at the end of 2005. Prices would have to decline another 4% to get to their long-term average. we're getting close,though after a boom like we had, some overshoot seems likely.
Here's one of Henwood's charts, which paints a nice picture of the temporary 2000s m-c wealth effect.

Krugman is stuck in "size matters" mode for the stimulus. He's getting a bad feeling that Obama is turning Republican deficit hawk at exactly the wrong moment. It's hard to blame him.

The depth of investor sorrows is shocking. Money Morning is, like it sounds, run by pro-capitalist investment advisers. One of their main writers started the year by noting that Finance is a "bearish sector," and then saying, "The entire industry appears to be scaling down to a fraction of its 2007 size, as many of the innovations of the last 20 years turn out to have been spurious."

Well Wow! How do we bury their toxic waste without blowing ourselves up with it?

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