January 2011

The State of the Spinon

Submitted by on

The State of the Union is spinning and weaving a tall economic tale to avoid offending corporate donors and super rich pals. spinInstead of confronting China on currency manipulation and trade barriers, we get almost identical recommendations that Bush made. Community colleges can fix it all, Americans can compete with anyone, more bad trade deals, we'll just simply innovate our way out of this, and finally the claim that somehow Americans are not educated when employers offshore outsource job after job, including the jobs which require that very advanced education. Education is once again being touted as a cure all, ignoring the fact unemployed Americans already have those skills and some of them have 20 years or more of direct experience. To make the situation worse, Obama touts an agenda to flood our labor markets and educational system with more foreign workers instead of hiring Americans who need a job and guaranteeing more Americans have an opportunity to go to the college of their choice.

Paul Krugman calls it The Competition Myth:

Beyond Protection vs. Liberalization - Thinking Historically About Trade and Policy

Note: this is a cross-post from The Realignment Project. Follow us on Facebook!

Introduction:

In about two years of blogging at TRP (and another two years’ policy-blogging elsewhere), I’ve never discussed trade. It’s not because it’s unimportant, because trade is clearly a major issue within economic policy and politics, but rather because of when I came of age politically. In 2001 student politics, the free trade vs. anti-globalization/protectionism debate seemed remarkably deadlocked and somewhat sterile. Twin camps of policy contenders required allegiance with either side, and I found myself unhappy with the analysis and debate and more drawn to questions of domestic economic policy.

However, in the wake of the Great Recession and the increasingly-urgent need to reassess the structure of the U.S economy, I can’t avoid it any longer. The trade question isn’t the whole of our economic problems, I think it can be exaggerated in a way that obscures a more important class conflict inside nations. And yet, the global balance of trade – between Germany and the rest of Europe, between China and the U.S, and so on – is clearly out of whack.

Case-Shiller Home Price Indices Through November 2010

Submitted by on

The S&P/Case-Shiller Home Price indexes for November 2010 were released today. The composite-10 index is down -0.8% for the month and the composite-20 index decreased -1.0%. For the year, the composite-10 index is -0.4% lower and the composite-20 is -1.6% lower than November 2009. Below are the 20 city and 10 city S&P/Case-Shiller monthly indices.

Healthcare Reform - Abandoning the Self Employed

Michael Collins

The most creative sector of the business community has a dagger at its heart in the form of the relentless, unyielding, and over burdening cost of health insurance. The self-employed and very small businesses have seen their insurance premiums climb 20% to 75% since 2009. To purchase an adequate family plan, a self-employed person will pays an amount 50% to 70% of the nation's median personal income, $32,000 a year, for family health plan. This includes premiums, deductibles, and out of pocket expenses. That is twice the cost for relatively generous plans at medium to large size companies. Very small businesses, two to twenty employees, pay about the same (Image: Paul Henman)

Wasn't health reform supposed to take care of just this sort of inequity? Didn't the title of the bill say it all? The Patient Protection and Affordable Health Care Act There is no protection for the self-employed when they have these stark choices facing them due to unaffordable insurance rates. They can give up working for themselves; buy adequate insurance and take a huge hit to income; buy a substandard plan and hope that whatever comes up is covered; or, abandon insurance at real risk to their health and, in some cases, their lives.

Who Are Getting the Jobs? Immigrants

Submitted by on

Reuters has taken the plunge and released a comprehensive study on the foreign born versus U.S. born workers and who is getting the jobs. The time period is from 2008-2010.

From 2008 to 2010, 1.1 million new migrants who have entered America since 2008 landed jobs, even as U.S. household employment declined by 6.26 million over that same period.

But in a sign of the times, the pace of job growth for new arrivals has also slowed, to an average of 550,000 a year from 2008 to 2010 from over 750,000 a year from 2000 to 2008.

Sum said it was fair to estimate that around 35 percent of these workers were undocumented or illegal.

Many immigrants acquired jobs in traditional low-wage work associated with foreign, undocumented and especially Mexican labor: hotels and food services, retail trade, sanitation, cleaning and construction.

The BLS does not release or collect data by country of origin and actual immigration status. Therefore, one has mixed in to the foreign born BLS labor statistic, those who arrived in the United States as infants, those on temporary guest worker Visas, those who immigrated permanently and those who border hopped, visitor Visa jumped and are here illegally.

Watch out for some quotes in the article. There are many legitimate methods for unskilled workers to enter the country legally. About 13 of them, such as the H-2B Visa, the AG worker Visa (H-2A), the L-1 Visa and the list goes on and on.

About That GM China Sales Report

Submitted by on

The headlines are blaring how GM sold more cars in China, a first for the corporation, than the United States. Their sales in China alone are up 28.8% from a year ago.

GM's sales in China rose 28.8% last year to 2,351,610 vehicles, GM said Monday. U.S. sales rose just 6.3% to 2,215,227

Unfortunately the financial press then tries to tie those sales to mean more U.S. jobs. That is simply not the case.

The company said the expansion will generate 750 jobs for the Flint plant, which makes Chevrolet Silverado and GMC Sierra pickups and has been operating on two shifts per day. The last time the plant worked around the clock was in the second quarter of 2008.

GM will fill the shift by recalling laid off workers who will start arriving in the second quarter. It expects to hire no new employees.

The Flint factory employs about 2,100 hourly and salaried workers. It made 115,000 trucks last year.

Last year, GM sold 8.39 million autos. Toyota is still #1 with 8.42 million car sales.

What the press and GM are not telling you is that sales in China are extensively through Joint Ventures. A joint venture means a Chinese company is partnering with GM, but they have their own plants, their own factories, their own manufacturing and their own workers.

As an example of the media spin, recently an export deal to China of $400 million in vehicle exports and $500 million in components over two years was announced.

What they are not telling you is this very JV, or Chinese company, made & sold 1.03 million of the 2.35 million GM cars sold in China.

Fannie Mae & Freddie Mac Hold $24 Billion in Foreclosed Properties

Submitted by on

Fannie Mae & Freddie Mac now hold $24 billion in foreclosure inventory:

Fannie Mae and Freddie Mac’s combined inventory of foreclosed residential property has quadrupled in just three years and now stands at a record $24 billion. The number of properties on their rolls -- now at nearly 242,000 -- has increased fivefold.

That’s roughly a third of the total U.S. portfolio of repossessed homes.

So far, Fannie & Freddie have been holding those foreclosures to not flood the real estate market. With foreclosures projected to increase 20% in 2011, eventually they are going to have to sell those foreclosed properties, which will cause home prices fall. On top of Fannie & Freddie there is a glut of shadow inventory, all being held back to avoid the inevitable foreclosure dump. Bottom line, housing prices must fall and you can't pay for a house when don't have a paycheck or a shrinking one.

Now, Banks want to securitize mortgages held by the GSEs, yes those derivatives which caused the financial crisis, plus have the government guarantee them.

The Banks have set their lobbyists upon this socialize the risk, privatize the gain Freddie and Fannie agenda and notice how lobbyists write white papers full of spin to met their objective of more taxpayer subsidies.

Sunday Morning Comics - The Private Socialist Corporate Network Edition

Submitted by on

Brought to you by Pundit Spin-O-Matic - Obama is a Socialist! Health care was handed over to insurance companies, Goldman Sachs and JP Morgan run financial regulation and employment is outsourced to multinational corporations who create jobs in China, India and Mexico. Obviously, that's socialism.
Cup O' Joe

 

Pages