One might notice the comment, Woe to the U.S. worker when productivity metrics are reported. Over and over again, I note that offshore outsourcing is the taboo word among mainstream economists, regardless of the numbers.

Well, it seems I am not alone in that assessment. A New York Times op-ed drives home the point:

There’s a problem: labor productivity figures, which are calculated by the Labor Department, count only worker hours in America, even though American-owned factories and labs have been steadily transplanted overseas, and foreign workers have contributed significantly to the final products counted in productivity measures.

It may be the one-year anniversary of an amazing stock market rally, but economists are sounding rather pessimistic these days.

A growing expectation of a double-dip recession is evident in a new poll of financial executives...the poll found more than half of financial executives predicting another downturn, and most expecting jobs recovery to lag into 2011.

The predictions don't end with just this poll. Nouriel Roubini is also warning of a second leg down, and even more disturbing is this report.

The public is angry. Why should the public pay for the bankers mistakes. Iceland blogger Halldor Sigurdsson

Note: this is a cross-post from The Realignment Project.

Introduction:

Even under the relatively optimistic economic forecast included in the 2011 Federal Budget, unemployment will remain at the 9.8% rate through the end of this year, dropping to 8.9% in 2011 and 7.9% in 2012.  In other words, after four years since the first stimulus, unemployment will remain at recessionary levels. To be fair, the passage of a jobs bill – and the promised efforts to pass further stimulative elements (aid to states, highway money, public works, etc.) – lends some slight hope that this catastrophe might be averted.

However, as we’ve seen with the jobs bill, it’s incredibly hard and slow to get even the smallest elements of a jobs bill through Congress; this makes it highly unlikely that sufficient actions will be taken to bring down the unemployment. However, I do think that it is possible to push through more aggressive jobs measures at the state level in heavily Democratic states that aren’t hamstrung by the Senate’s rules and the Blue Dog Caucus. As I’ve discussed in my 50-State Keynesianism and Job Insurance series, I believe that it’s possible to reform state governments to be successful anti-recession institutions, complementing Congressional action.

Today, I’ll take California and New York as two heavily Democratic states that are also large enough to have a significant impact on the national economy.

One sometimes hears a repeated exaggeration of the Inuit (inappropriately referred to as Eskimos) language, claiming that they have hundreds of words to describe snow. While the actual number is considerably less, this exurban legend does make its point.

I suspect that centuries from now, historians will remark similarly about 21st century America, stating that they had one thousand names for fraud.

The Blackstone Group: Tax Fraud Incorporated

A year or so ago, it was reported that the private equity firm, the Blackstone Group, was going public. Like many, I gave little thought beyond the fact that they had sought investment from China due to their brittle financial position at that time.

Recently, I came across an excellently written research paper by a law professor at the University of Illinois College of Law, Victor Fleischer, titled Taxing Blackstone.

It's interesting to read the news on today's unemployment numbers with a first line of WORST OVER?. It then goes on to explain how the numbers were "better than expected" even though the economy continues to bleed jobs.
Sure, not everything in the report was bad news...just most of it. The media was quick to report that temporary jobs were increasing, but failed to mention that the U-6 was also increasing, that the number of people on permanent layoff was increasing, and that people not in the labor force but still want a job was increasing.

The February 2010 Unemployment figures came in at 9.7% Unemployment rate, a U6 of 16.8% and 36,000 more jobs lost.

Upon first glance the unemployment rate looks like it is on the pause button.

Below is the nonfarm payroll, seasonally adjusted:

Let me take you back to Christmas Eve, 2009. It was a time to wrap gifts for loved-ones. That's how the Obama Administration felt about the financial industry when it lifted all caps in emergency bailout money to Fannie Mae and Freddie Mac. That means the taxpayer was on the hook for all losses at these two mortgage giants no matter how large the losses.
The move caused a slight stir, but never got the attention of the American public because the announcement was timed to coincide with the peak season of distraction. And so it was forgotten...but not by Fannie and Freddie.

This may be the only time in my life I will ever utter these words: "We could learn a lot from Indonesia."

Indonesian police have used tear gas and water canon to disperse about 2,000 anti-government protesters who tried to enter the parliament building in the capital, Jakarta.
The scuffles broke out on Tuesday as members of parliament began a debate over the possible impeachment of the country's vice-president and finance minister.
...
His vice president, Boediono, and finance minister, Sri Mulyani Indrawati, approved the bailout and opposition leaders have demanded their resignation saying they must be held accountable for losses to the state.

What an amazing concept!

Believe this or not, Whirlpool received Stimulus funds to create jobs and instead they are closing plants! This is obscene that they are being given funds to create jobs and instead offshore outsourcing them. We should demand at least those funds be rescinded.

It can barely get greedier than this: We're in tough economic times, so Whirlpool receives $19 million in taxpayer funds to create jobs. Then it turns around and announces it will shutter its Evansville, Indiana refrigerator plant and displace the 1,100 workers there. Disgusting.

Because of the Republicans new found concern for budget deficits, 1.2 million American families will be cut adrift today.

Nearly 1.2 million unemployed Americans - including 27,000 in Wisconsin - face an imminent cutoff of government unemployment checks if Congress cannot pass emergency legislation to extend federal benefits before funding expires Sunday.

All the attention of the financial world has been focused on Greece. This is captured in one alarming statement made by the head of the German debt management agency.

"I think if one of the 16 members would default, it would be a collapse of the whole system," German Finance Agency managing director Carl Heinz Daube told a bond conference in London.
"If a country goes bankrupt, it will be the end (of the euro zone)," he told a panel discussion at a bond conference in London.

You would think that Greece is suffering from an epic economic collapse. In fact their economy has shrunk less than 3%.

It is counter productive to destabilize or destroy a nation through derivatives according to Federal Reserve Chair Ben Bernanke.

Counter productive. Hmmmm, if it was a military weapon I do believe it would be called something else but as long as it's financial....well, ain't thems just fightin' words.

Obviously, using these instruments in a way that intentionally destabilizes a company or a country is -- is counterproductive, and I’m sure the SEC will be looking into that. We’ll certainly be evaluating what we can learn from the activities of the holding companies.

The SEC? Like Madloff? Bernanke said this during testimony before the Senate Banking Committee.

Chris Dodd asks:

Should there be limits on the use of credit default swaps to prevent “runs against governments?

I'm not so arrogant as to believe that I know the perfect solution to our economic problems. Anyone that tells you they know is either a fool or a liar.

However, that doesn't mean we can't discover where we went wrong once you apply a little logic and data to the situation.
For instance, if you realize you have taken a wrong turn, it makes more sense to turn around and go back to the corner where the mistake was made, than it does to drive in a general direction and hope you can find your way home.

When it comes to the economy, its pretty easy to discover when the wrong turn was made - 1972.

New Home Sales are at record lows.