DoomwatchTM vs. Timesizing®
Collapse trends - Sept. 1-9, 2002
[Commentary] ©2002 Philip Hyde, The Timesizing Wire, Box 622, Cambridge MA 02140 USA (617) 623-8080 - HOMEPAGE
9/9/2002 weekend headlines from hell -
9/07/2002 today's headlines from hell -
- Long-term jobless rose by 50% over the last year, by David Leonhardt, NYT, front page.
...While the job market remains unusually healthy for the end of a recession, with the unemployment rate below 6%...
[Where'd the NY Times and this reporter get such an anorexic definition of "healthy," the idea that this is "the end" of a recession, and the notion that an official unemployment rate "below 6%" is something to write home about? Wudda buncha suckups to TPTB (the powers that be)!]
the number of people who have been jobless for months has climbed to a level more typical of a deep downturn.
[So wake up and smell the doodoo, David.]
Almost 3 million people nationwide have been out of work for at least 15 weeks, up more than 50% from a year ago. Half of them have not worked in at least 6 months, the Dept. of Labor said. Another million Americans appear to have dropped out of the labor force in each of the last two years, no longer looking for work or counted as unemployed....
[And there was great rejoicing in the Labor Dept. because that would make it easier to pretty up their already severely rouged and powdered "unemployment" rate.]
...Many people who have not worked in months have begun spending retirement savings that were already diminished by the stock market's fall.
[Phil Hyde certainly has.]
Others are considering low-wage jobs that pay a fraction of their old salaries.
[See today's eroded retirement story, 9/9/2002.]
In either case, their stretches of unemployment could define their financial futures for years to come. Scott Barry...of Tacoma...was laid off at the end of last year from Boeing. He had worked at the company since graduating from high school [almost 25 years ago]. Having applied for 350 jobs, in everything from healthcare to the candy industry, Mr. Barry said he has begun to worry that he would have to use some of his 401k retirement savings to pay taxes on his unemployment benefits....
The growth of long-term unemployment takes some of the shine off the general "decline" [our quotes - ed.] in joblessness over the last 20 years.
[There has been no general decline in joblessness over the last 20 years. There has been merely greater ingenuity in undercounting it and massive exclusions into America's world-record prison population (2.1m), homeless, disabled (5.4m), forced/early-retired, cyclical female workforce-dropouts (see below) and off-the-record contingency work. We need, for example, prison-adjusted jobless figures. Most of all, however, we need to share the vanishing work, period.]
A smaller share of the workforce is unemployed today than after the recessions of the early 1980s and 90s, but most of the decline has come among people out of work for a few weeks at a time....
[Not to mention the undercounting and the massive exclusions from the workforce mentioned above.]
...Economists say the aging of the workforce and the globalization of industries have combined to make a long stretch of joblessness more likely for many people. At the same time that millions of people have entered their 40s and 50s..., many of the middle-class jobs that sustained people without college degrees have moved to countries with lower wages. The jobs have often been replaced by service-industry jobs that either are out of reach for blue-collar workers [e.g., tech support] or pay less than $10 an hour [e.g., McJobs].
"They keep telling me I need that piece of paper," a college diploma, said Danny Hicks, who has not worked in almost 2 years. Mr. Hicks worked at a papermill for 28 years and has been unable to find a job that pays much more than minimum wage....
[Cyclical female workforce-dropout - something that we thought only existed in Japan -]
In addition, many women who lost their jobs in past downturns dropped out of the labor force until the economy improved. Today, however, most families depend on a woman's income, and women are more likely to continue looking for work.
[But not necessarily to be phoned in the surveys that determine the size of the nation's labor force for statistical purposes.]
A study last year by Katharine Abraham, a former commissioner of the Bureau of Labor Statistics [somewhat dissatisfied with their figures, perhaps??] and Robert Shimer, an economist at Princeton Universitiy, called women's "attachment to the labor market" the biggest cause of the increase in long-term joblessness.
[That would be labelled sexist if a woman hadn't said it.]
(On Friday, the Labor Dept. said the average length of unemployment fell slightly in August, to 16.2 weeks. When the jobless rate [previously] hovered around 6% in the 70s and 80s, as it has recently, the average length of unemployment was [only] 10-12 weeks.)
[So now it's 25% higher.]
The job market seems particularly harsh in the Pacific Northwest, a region that was hit hard by the recession and that has perhaps recovered least.
[Perhaps because it's been dominated by a few big companies like Microsoft, Intel and Boeing, instead of many smaller companies?]
For the 12th consecutive month, Oregon and Washington had the nation's highest unemployment rates - above 7% - in July, the last month for which the Labor Dept. has released data.... Some [there] are growing increasingly nervous because unemployment benefits that were extended - as part of federal laws to help workers whose jobs moved overseas or who were laid off after 9/11 - will expire soon....
During past downturns, many of today's unemployed workers [would have been] able to switch to healthier parts of the economy, using skills that applied to more than one job.... This time, however, all of the big local industries seem to be contracting at once. For workers who have lost their jobs, the current recession feels no less severe than past downturns that sent the unemployment rate spiraling toward 10%....
[Economists have become very adept indeed at undercounting and "externalizing" the problem.]
- Orders for machine tools were lower in July, Bloomberg via NYT, C8.
...the lowest level in more than 6 years, according to an industry survey released today [by] the Assoc. for Mfg Technology and the American Machine Tool Distributors Assoc... 21% lower than in July 2001 and...the weakest since the 2 groups began publishing the figures in January 1996....
Orders fell in 3 of the 5 regions surveyed, with the South reporting a 51.6% drop.
[That's the region closest to 3rd world conditions, evidence that the differential deterioration of its regions may be tearing America apart as it slides.]
Orders dropped 41.5% in the Midwest and 37.1% in the West. They rose 9.2% in the Northeast and 1.8% in the central region. Machine tools are used to make a variety of parts, like tractor hoods or airplane wings....
Researcher cuts sales forecast for computers through 2003 - While consumers buy cars, companies aren't buying PC's, by John Markoff, NYT, C8.
SAN FRANCISCO - Citing growing fears of a prolonged economic malaise, the market research firm International Data Corp. is scaling back its forecast on global PC sales.....
[Hey, maybe they need to start giving them away, like the car companies who are doing zero percent financing, etc.]
- Economic anxiety trumps war talk - Neither fear of terrorism nor debate on Iraq derails checkbook concerns in poll, by John Harwood, WSJ, A4.
[oh dear, Dubya's desperately sought war of distraction isn't working!]
WASHINGTON - The White House and Congress are awash in war talk, but ordinary Americans cling to a strikingly different election-year agenda: boosting the economy and doing more to curb corporate crime. A new WSJ/NBC News poll shows that...8 in 10 Americans [80%!] believe the economy remains in recession and 64% lack confidence to invest in stocks. Asked to identify what most affected them in the past year, more Americans cite economic problems than 9/11.
[Golly, maybe we Americans aren't as stupid as we look after all!]
"The terrorism thing - that's something we're going to have to live with for a long time," says poll respondent Dick Ruth, a computer technician in Minneapolis. "Right now," says the...political independent, Washington needs to focus on "outrageous" business misbehavior and stock declines that have wiped out $60,000 from his retirement savings.
"If our country's going to get stronger, we've got to get the economy back on track," adds Deborah Bennett...who has been laid off from her job in the timber industry in Portland, Ore. Ms. Bennett doubts that Saddam Hussein poses "that big of a threat" to the U.S., and would rather than pResident Bush and Congress mete out "really stiff punishment" to duplicitous executives beyond what has been done so far.
[But then they'd have to punish themselves, because virtually this whole administration is duplicitous executives.]
By revealing the mismatch between Washington's agenda and the public's, the WSJ/NBC poll underscores the prospect that Democrats could yet turn their advantages on domestic issues into significant gains in this fall's midterm elections....
9/06/2002 today's headlines from hell -
- Report sees gloomy side to the boom in car sales, by Danny Hakim, NYT, B1.
DETROIT...- A new report by Goldman Sachs...contends that 2 main factors that have propped up sales in the short term - huge incentives and extra consumer cash coming from a boom in home mortgage refinancing - cannot be sustained. The report, titled "After the Automotive Boom," suggests that if auto sales remain strong, the financing operations of the Big Three will have difficulty generating enough equity to continue to support deals like zero percent financing. ...It was written by Gary R. Lapidus, an auto analyst, and Jan Hatzius, an economist. ...If financing deals are cut back, or consumers tire of them - and home mortgage refinancing falls off, as expected - auto sales, and corporate earnnings, could fall sharply.... The report focused primarily on GM and Ford....
[Maybe there's some ambiguity as to whether the 3rd of the Big 3 is DaimlerChrysler or Toyota.]
- Microsoft forgives [$15m] loan to former president, Bloomberg via NYT, B4.
...Microsoft, which has more than $38B in cash and short-term investments...lent the money as an advance on the value of stock options that [Richard] Belluzzo received.... Mr. Belluzzo stepped down May 1 after one year a president.
[Hey $15m compared to $38B is peanuts, right? But clearly, Microsoft is having trouble reinvesting enough in its own consumer base to guarantee a sustainable future for itself, as is Chairman Bill Gates for himself. And regulators are having trouble checking big companies' "corporate accounting."]
- [Speaking of big companies -]
F.C.C. weighs a sharp easing of size limits on big media, by Stephen Labaton, NYT, B1.
[What does it take for the Bush-whacked US government to "get" the lessons of Enron and decrease, not increase, the chances of more big-company scandals???]
- A Summit victory for the status quo, letter to editor by Chairman Bryan Pritchett of National Wildlife Federation from Johannesburg [Jo'burg], NYT, A22.
...Re "Keeping Earth fit for development," (editorial, Sept. 6). As a participant at the World Summit on Sustainable Development in South Africa, I watched a rendezvous with destiny become a rendezvous with deadlock. In the end, other countries were simply worn down by the Americans' refusal to consider real targets and timetables for action, and gave in just to ensure something would come out of the conference....
[But if they gave in to no real targets and timetables for action, they gave in to inaction, and nothing really came out of the conference anyway. So why give in? Just crystallize the furthest possible real targets and timetables without the USA, since so much progress is happening that way anyway, and get acting on it. Why buffer the bad publicity for the 9000-pound godzilla?]
9/05/2002 today's headlines from hell -
- Reports depict 'a stumbling recovery', Reuters via NYT, C3.
Working hard or hardly working, by Jesse Eisinger, WSJ, C1.
These past couple of weeks were supposed to clear everything up about the economy but have only muddled things further....
Stocks fall again, bonds strengthen, on retailing news, by Gregory Zuckerman, WSJ, C1.
[But aren't money markets supposed to be a safe haven like bonds? Then how come -]
Money funds fall $26.06 billion, WSJ, C13.
...for the week ended Wednesday....
- [check this out for clashing stories, one above the other. First -]
Benefits for ex-G.E. chief, pointer summary (to C1), NYT, A2.
G.E. expenses for ex-chief cited in filing - Divorce case describes enormous living costs, by Geraldine Fabrikant, NYT, C1.
Papers filed yesterday in the divorce of John ["Jack"] Welch Jr., the former CEO of General Electric, by his wife contend that GE covered enormous living costs for them while he led the company and will continue to do so for him for the rest of his life. The extent of these benefits [including use of corporate aircraft and a Manhattan apartment] has never been disclosed by the company....
[Why they needed to give a guy they paid $16.7m in salary&bonus in 2000 all this extra stuff is the question. "Because he was so good for stockholders?" But is GE's stock all that high? Probably not. Then there's -]
Losing their health insurance, pointer summary (to C1), NYT, A2.
Small employers severely reduce health benefits, by Milt Freudenheim, NYT, C1.
[Looks like America is going to go all the way in seeing how long they can give more and more to fewer and fewer people and less and less to the vast majority before their consumer base collapses and America is 3rd world.]
- [but we're not going to worry about all this economic stuff, are we, because -]
With focus shifting to Iraq, domestic issues fade, by Adam Nagourney, NYT, A10.
- [and here's more on how this administration keeps this Bunuel-Kafkaesque-Orwellian operation going -]
The bully's pulpit - Chocolate, vanilla and the media, op ed by Paul Krugman, NYT, A25.
War is peace. Freedom is slavery. Ignorance is strength. Colin Powell and Dick Cheney are in perfect agreement. And the Bush administration won't privatize Social Security.
Ari Fleischer's insistence that Mr. Powell and Mr. Cheney have no differences over Iraq seems to have pushed some journalists into facing up, at least briefly, to the obvious. ABC's weblog The Note described it as a "chocolate-is-vanilla" claim, admitting that "The Bush team has always had a credibility problem with some reporters because of their insistence on saying 'up is down' and 'black is white.'" But the administration needn't worry; if history is any guide, many reporters will soon return to their usual cringe....
The Bush team's Orwellian propensities have long been apparent to anyone following its pronouncements on economics. Even during campaign 2000 these pronouncements relied on doublethink, the ability to believe two contradictory things at the same time. For example, George W. Bush's plan to partially privatize Social Security always depended on the assertion that 2-1=4 - that we can divert payroll taxes into high-yielding personal accounts, yet still use the same money to pay benefits to retirees.
The Orwellian tactics don't stop with doublethink; they also include newspeak, the redefinition of words to rule out disloyal thoughts. ...In an era of plunging stocks and corporate scandal the word "privatization" has taken on negative connotations. The answer? Deny that [moving Social Security into] personal accounts constitute[s] privatization, and bully the press into going along. A Republican National Campaign Committee memo lays out this new strategy: "It is very important that we not allow reporters to shill for Democrat demogoguery by inaccuratelyl characterizing 'personal accounts' and 'privatization' as one and the same.'
But...the push to convert Social Security into a system of personal accounts has been led by the Cato Institute.... And what's the name of the Cato project to promote personal accounts? Why, theh Project on Social Security Privatization, of course....
It's hard to see where this process stops. A habit of ignoring inconvenient reality, and presuming that the docile media [and docile Democrats - ed.] will go along, soon infects all aspects of policy. And yes, that includes matters of war and peace,
The trouble is that eventually reality has a way of asserting itself....
9/04/2002 today's headlines from hell -
- Cheney stands firm on documents, AP via NYT, A14.
Citing constitutional concerns, VP Dick Cheney and the White House are refusing to turn over information in two lawsuits against the administration's energy task force.
[Can you imagine how the Republicans would be screaming if Clinton and Gore had sandbagged like this? Btw, why is the NYT going so easy on him? "Stands firm" indeed!]
In a court filing this week, the Justice Dept. said that requiring Mr. Cheney's energy task force to provide documents and written answers to Judicial Watch and the Sierra Club would interfere with the executive branch's authority to give confidential advice to the pResident.
[What a crock.]
The 2 groups are trying to learn the details of the industry influence on the national energy plan that Mr. Cheney's task force formulated more than a year ago.
[Where is the kind of hue and cry that the Democrats put up when Nixon tried to withhold and edit the Watergate tapes?]
- [and Cheney isn't the only boiling fount of secrecy to threaten our society and the remnants of our democracy -]
Ending legal secrecy, editorial, NYT, A22.
One of the most troubling and least scrutinized aspects of the child sexual abuse scandal now roiling the Roman Catholic Church is the enabling role played by the court system. In case after case, judges have signed off on secret settlements of child-molestation suits, freeing the offending priests to molest again. In one Boston case, brought on behalf of a boy who was raped by a priest,the judge sealed all the records and the priest moved to New Hampshire, where he later pleaded guilty to abusing two more children....
- President to seek Congress's assent over Iraq action - Making his case, Bush will meet with Blair and talk to U.N., by Elizabeth Bumiller, NYT, front page.
["Desperately seeking World War III." But is Iraq going to suffice? Tony Blair is IN anyway, though he may not have much support in his own party or in his own land -]
Making the Iraq case - Tony Blair says the U.S. won't have to go it alone, editorial, WSJ, A14.
[Contrast the sense and sensibility of the rest of Europe -]
German leader's warning: War plan is a huge mistake, by Steven Erlanger, NYT, front page.
[The NYT features an interview with Schroeder -]
Perspectives/Gerhard Schroeder - 'No one has a clear idea about what the effects would be,' NYT, A9.
[Here's the Wall St Journal's spin -]
German leader rules out a role in an Iraq attack - Schroeder says 'submission' to U.S. would be wrong; At odds with rest of EU?, by Philip Shishkin, WSJ, A12.
[In your dreams, WSJ! Compare also -]
Bush returns to Congress with his hand out, by David Rogers, WSJ, A8.
After a summer of talking tough on spending, the White House is now asking Congress for money it once lectured lawmakers against adding to...Bush's budget....
- [well, we'll have lots of little Americans growing up to provide cannon and bomb fodder -]
A war room to die for...- Offering adult-rated games, PC arcades build a clientele of teenagers and children, by Matt Richtel, NYT, E1.
9/01-02/2002 the weekend's headlines from hell -
- [another deja vu from the Great Depression -]
Manufacturers reduce output as orders fall, Bloomberg via NYT, C4.
Manufacturing stalled in August, a report released today by the Institute for Supply Management showed, as orders declined for the first time in 9 months and production slowed. The drop in new orders "signals a warning," said Norbert Ore, head of the Institute's survey of mfrs and director of purchasing at the Georgia-Pacific Corp.
"We've lost a lot of momentum."...
[We didn't lose it. We downsized it instead of maintaining it by flexibly adjusting our workweeks and keeping your customers' customers employed and earning money to spend. CEOs are still in the "Gee, downturns are such unpredictable Acts of God" mode. They see no connection between their actions and economic conditions.]
- ["stock response" -]
The Dow takes another beating, falling 355 points - All stocks in index decline; Consumer confidence drops, by Jonathan Fuerbringer, NYT, C1.
Stocks plunged yesterday on a report that showed that manufacturing remained quite weak, fueling concerns about the already sluggish economic recovery.
The S&P's 500-stock index declined 4.2% for its worst single day since the period immediately after 9/11.... The market's decline on the first trading day in September is not an auspicious beginning to the fall season. September has been the worst month for the Dow.
[What about Oct. 29, 1929?!! - and Oct. 27, 1929, for that matter - Black Monday and Black Thursday, respectively.]
The index has fallen sharply in September in the last three years, and September is the only month in which it has posted a negative return on average....
Month gets off to bleak start - Dow plumments 355 points as bad news causes trouble, by Adam Shell, USA Today, B1.
Stocks tumble in global retreat; DJIA drops 4% - Economic jitters in U.S., Japan and Europe, heightening investor worries - Treasuries soar - [9/11] Anniversary worries, by E.S. Browning & Craig Karmin & Silvia Ascarelli, WSJ, front page.
A global stock market rout began in Tokyo [sure sure, blame the Japanese], cascaded through Europe [and the Europeans] and landed in the U.S. [the U.S. is a totally innocent "victim," as usual], sending the Dow Jones Industrial Average down 4.1%, its 2nd-sharpest decline of the year....
Dollar declines against rivals amid steep drops in U.S. stocks, by Grainne McCarthy & John Parry, WSJ, B11.
Japanese shares fall 3.2% to a 19-year low - Analysts say a new banking crisis may be in the making, by Ken Belson, NYT, W1.
As Japanese stocks tumble, concerns rise - Nikkei's 3.2% fall spoils recovery; Dow declines 4.1% as fears grow [of] broader economic slowdown, by Craig Karmin & Sebastian Moffett, WSJ, C1.
India injects $3 billion to rescue mutual fund, [US-64, its oldest and largest], by Saritha Rai, NYT, W1.
- Abandoned Argentina left to dance alone, by James Cox, USA Today, B1.
BUENOS AIRES...- The nation that invented the tango now dances alone. Cut off from foreign credit, given the cold shoulder by the Bush administration and stiffed by the IMF, Argentina lives in suspended animation....
[Believe it, without the "desperately seeking World War III" Bush adminstration and the "Typhoid-Mary" IMF, Argentina is better off. All it has to do to regain its former economic splendor and lead the world in solid, domestic-demand-led economic growth, is enact and implement a tax on corporate overtime with a complete exemption for overtime-targeted training and hiring, - then once that gets going, a tax on individual overwork (overtime from all sources) with the same type of exemption, - then once that gets rolling, work sharing a la flexible adjustment of the workweek against comprehensive unemployment, including welfare, disability, homelessness, incarceration, and forced retirement or forced "part" time. With this type of economic restructuring, it would be leading the world in two years. For that matter, so would Japan, or France, or any other nation worried about its image and its prosperity. Let's see which one is smart enough to do it first.]
[Followup - at least Argentina has Step One -]
Argentina criticizes demands for bailout, Reuters via 9/05/2002 NYT, C13.
...The government openly scorned IMF and US demands for a better crisis strategy....
[Basically all the IMF can think of is austerity - more austerity for people who are already verging on starvation.]
For earlier collapse stories, click on the desired date -
- 9/02 U.S. workers are thankful they have jobs, by Leigh Strope, AP via Arizona Republic, front page.
[How pathetic have Labor Day and labor in general, the American Dream and America itself become at the dawn of the Third Millennium (and all because labor has lost control of defining its own workshare per person and working-hour maximum)? -]
WASHINGTON - Many Americans this Labor Day are just thankful to have a job.
The nation's unemployment rate is hovering near a 7-year high, and jobs are not being created as the bleak economy teeters on the cusp of recovery and recession.
"To working families, it looks a heck of a lot like a recession," said Jared Bernstein, an economist at the union-supported Economic Policy Institute in Washington and an author of The State of Working America 2002-03.
The list of large employers seeking bankruptcy protection is formidable: Kmart, Polaroid, Enron, WorldCom, US Airways and more. Companies recently announcing layoffs include American Airlines, Charles Schwab, Williams Cos., Coca-Cola and Nokia.... The recent string of corporate scandals and a volatile stock market have made [the 90s'] time of freewheeling prosperity a distant memory to many workers now jittery about the future of their jobs and careers.
The unemployment rate, now at 5.9%, dropped to a 30-year low of 3.9% in 2000 as the country enjoyed the longest stretch of prosperity on record. Jobs were relatively easy to find, and many employers had to compete for workers. Between 1995 and 2000 the average income of Black and Hispanic families grew 17% and 27% respectively. For White families, it grew 11%. The median family income was $52,321 in 2000, compared with $46,857 in 1995.
"The tight labor markets of the late 1990s brought the first persistent, broad-based prosperity in decades," said Lawrence Mishel, EPI president and an author of the Working America analysis of Labor Dept. data. But the pay of corporate executives grew even faster during that time. A CEO last year was paid in one day what an average worker earned in almost a year, according to EPI figures.
[And that is an indirect but critical gauge of the surplus of labor hours in the job market, the fact that the so-called tight labor markets of the late 1990s were actually still quite loose, and the degree to which our current standard workweek is too high.]
As wages grew during the boom [better make that, "bubble"], so did the hours at work, and America remains a workaholic nation.
[Yet none of our highly paid economists or analysts can seem to connect the dots here and see the connection between the long hours of work, the relatively low pay of workers, and the astronomically high pay of top executives. These boys can't even think two moves ahead in chess!]
The average worker logged 1,877 hours in 2000 - more than any other rich, industrialized country, EPI said. The average middle-income, 2-parent family works 660 more hours per year - 16½ more weeks - than in 1979.
"But now with the 'boom' gone bust, American workers are heading back to an economy marred by slow wage growth and no job growth, with wage and income disparities widening once again," Mishel said. Employers are under less pressure to keep improving wages and benefits to attract workers. Hourly wages are growing faster than inflation, but the acceleration has slowed to the lowest since the beginning of 1995. Even a college degree doesn't provide the recession protection it used to. That group has seen a 1.4% rise in unemployment, larger than in previous recessions.
"If we are in an economic recovery, it's a jobless recovery at present," said Carl Camden, president and CEO of Kelly Services, the temporary employment firm. "Our two prime concerns about this 'recovery' [our quotes - ed.] are its fragility and the lack of strong demand for staffing services," he added....
Some frustrated jobseekers even have given up on their searches.
[Quick! Deduct them from the labor force so our unemployment rate looks rosier!]
"The labor force is not expanding," said Sun Won Sohn, economists at Wells Fargo & Co. "Many young people are going to graduate school, and people are retiring early."...
- ["Wonderful" America seems to have another dirty little secret besides the biggest prison population in the world -]
9/02 Laid-off workers swelling the cost of disability pay - Most from low-end jobs - Number rose by 2.4m in a decade, pushing pricetag to $60B last year, by Louis Uchitelle, NYT, front page.
[Here's another grotesque distortion in our society caused by our failure to design and implement a mechanism (like Timesizing) to automatically adjust our workweek downward as our level of worksaving technology moves upward, and spread the free-time benefits to all Americans in the form of financially secure leisure rather than financially anxious un- and under-employment.]
Millions of low-skilled workers have turned to federal disability pay as a refuge from layoffs in recent years, doubling the benefit's cost and, with little notice, making it by far the government's biggest income-support program.
Most of those qualifying for the benefits, parts of the Social Security system, never got past highschool and held jobs like factory worker, waitress, store clerk, laborer or healthcare aide. Their numbers have grown to 5.42 million today from 3m in 1990, swelling the program's costs to $60 billion last year. That far surpasses unemployment insurance or food stamps or any other similar program. "Show me a highschool dropout, particularly a male, who is over the age of 40 and is not working and there is a 40-45% chance that he is on SocSec disabiliity insurance," said David Autor, an economist at MIT.
It's not that disabling injuries are occurring more frequently. Research by a number of economists indicates that the growing numbers signal instead a reliance on disability benefits by low-end workers who had ignored their ailments as long as their limited skills brought them steady employment. Some who would have gone on welfare [if it hadn't been "reformed"] now apply for disability pay instead. "When you are a person who has lost a job, and you can't find another, and you are home sitting on the couch," said [Judge] Morley White, an administrative law judge in Cleveland who rules on disability claims, "you become preoccupied with ailments that do qualify in many cases as legal disability but while you were working did not come into your mind."
[The dumbing of America proceeds apace. We have not only made it easier for people to earn a dishonest living than an honest one - hence our world record prison population, 2.1m in lockup, 6.6m including probation/parole - but we have apparently made it easier to people to be parasitic hypochondriacs than handicapped self-supporters. This is what our much-touted " low unemployment rate" doesn't tell. Maybe this frontpage article in the NY Times will wake up English-speaking economists to the fact that "time is of the essence" and if we don't share the vanishing worktime and cut the outdated thinking about "technology creates more jobs than it destroys" and the attempts to ridicule the "lump of labor fallacy" - which is actually a shrinking employment truism at current levels of worksaving technology - our bloated prison-industrial complex and swollen disability rolls are going to get even worse. For many of us, George Dubya Shrub has already made it embarrassing to be an American, far surpassing the "Ugly American" syndrome of the 50s and 60s. How much further do we want this to go? It's no longer a mystery what kind of design mechanism we need at the center of our economy to automatically balance our share of market-demanded work per person. That design challenge has been solved by the Timesizing program. We already have two major and hosts of minor American companies that practice this approach, at least in primitive form. But what will it take to jog our economists and analysts into this way of thinking? They are sooo far from it now, they are wandering in a desert of ineffectuality. With them clogging the media, we will never made any signficant human progress. They refuse to even think about the problems of the concentration of wealth or even the concentration of work and skills. Everything is supposed to be solved by mere growth and expansion, and in the GDP, they count as "growth" some pretty gross and destructive, even self-destructive, behavior. Their world and their imaginations are small. Their homo economicus is a ridiculous caricature. They pull six-figure salaries for nothing. When will they get off their fat mental butts and make some serious contributions to human progress?]
Neither Congress nor the White House has challenged the skyrocketing cost of disability insurance, which will go up an additional $9 billion this year, reaching $69 billion, the Social Security Administration estimates.
[If we don't start making it easier for Americans to support themselves, we taxpayers are going to have to do it, and do it with bigger and bigger taxes. And at our levels of technology, we probably need a definition of "full-time employment" that is only 20-30 hours a week per person. Instead, we're lengthening the workweek per person, as Juliet Schor points out in today's op eds.]
By comparison, the agency expects to pay out $382 billion in traditional old-age pensions in 2002. [Although it] finances both pensions and disability payments through the same payroll tax...the debate on the financial health of Soc Sec has focused on the much larger pension system.
[Guess the disabled have been a little private preserve of votes for whoever quietly favors the system.]
...The surge in the disability rolls started with the early 1990s recession, and the numbers climbed steadily as layoffs became more common, even in the boom years of the late 90s.
[So much for the much vaunted American "efficiency" of layoffs and the supposedly "reformed" American work rules that we're constantly trying to shove down Europe's throat.]
Hard times over the last 18 months produced another surge in the disability rolls, which grew by nearly 400,000 people in that period, unevenly across the country. State officials process the disability claims, acting as agents for Soc Sec, and some states have been more generous than others. "In tough times, there is a tendency at the state level to cut people a little slack," said Charles Jeszeck, a labor economist at the GAO.
The rising numbers of people on disability take some of the gloss off the prosperity of the late 1990s. Unemployment fell and in the [supposedly] tight labor markets, jobs went begging, even at the low-paying end.
[Why shouldn't jobs go begging at the low-paying end when so many of our children in poverty have parents with multiple low-paying jobs? If you can't make ends meet on the low-paying end, you look for some alternative - disability, crime, homelessness, suicide.]
But the Labor Dept. counts as unemployed only those people actively seeking new jobs. When people stop looking and drop out, including people who go on the disability rolls, they no longer count as unemployed.
[Hence the rose-colored glasses with which America looks in the mirror.]
Those dropouts surged...in the late 1990s. There were so many of them that if they had been counted..., the unemployment rate would have been higher, perhaps by as much as half a percentage point, according to new reserach by Dr. Autor and Mark Duggan, a U. or Chic. economist....
The 5.42m people on disability pay, receiving $819 a month on average, is equal to 4% of those who hold jobs today. That increased from 2.5% in 1990, after barely rising at all in the 1980s, although Congress broadened the definition of disability and made proving it easier in 1984. It became particularly easier in the cases of back trouble and mental health problems, which can now include depression, manic behavior and other "mood disorders." Back trouble and mental stress are the two most cited ailments in disability awards....
[We know a lady on Rhode Island shore who's on disability for "back trouble," yet she's out in her garden daily, tending and bending.]
75% of those on disability have [only] a highschool diploma or less education, the Soc Sec Admin reports. Their limited skills mean they are often still without a job 5 months after being laid off - the minimum time required to file for disability pay.
[Of course, the grasping executives of the 80s and 90s, undisciplined by labor shortage, cut training budget after training budget and passed along the costs of training to taxpayers and individual job applicants. This is one of the big changes in the Timesizing program.]
Magnifying the problem, the low skilled find themselves mostly holding jobs that require physical exertion, Judge [Morely] White said, and any ailment becomes an obstacle to landing the next job. So they turn to disability....
[So the disability program functions essentially as a government subsidy on illness, and as Milton Friedman says, whatever you subsidize, you get more of.]
...On a windy day on the docks in April 1997, a rear door of a tractor-trailer swung into [Gregory] Jordan's back. "I completely blew a disk out," Mr. Jordan said, explaining that he had gone back to work after the accident and had continued on the job until Christmas, when the pain finally forced him into a hospital and he learned the extent of his injury. Workmen's compensation payments soon started, and they will continue alongside the disability checks.
[Aha, so workmen's comp is different from and parallel to Soc Sec disability, and you can get both.]
Like old-age pensions, disability pay is based on former earnings and not on need, as welfare is.... "No employer is going to hire me and take on the liability that I represent," Mr. Jordan said....
[So now we see another dimension of FDR's tragic mistake in 1933. He turned away from work sharing, which would have balanced, for the level of technology of the time, job seekers and job openings, would have disciplined employers by making them anxious enough for employees that they would implement on-the-job training all over the place (as they did later when disciplined by the War), and would have played to America's strengths all round, and instead, FDR played to America's weaknesses, with government intervention in industrial accidents a la Workmen's Comp and Social Security disability, government intervention in old age a la Soc Sec old-age pensions and government intervention in unemployment a la Unemployment Insurance and government intervention in poverty a la minimum wage. Not to mention the alphabet soup of artificial government makework programs like the WPA, CCC, NRA, TVA.... - when all he had to do was referee the private sector and keep it in better trim, job seekers with job openings, by sharing the vanishing work, thus making the private sector clean up its own mess and take responsibility for its own infirmities, instead of passing more and more of the costs of that mess and those infirmities onto the taxpayer. And later the 30-hour workweek could have been indexed to technological advance via comprehensive unemployment so it would adjust automatically to any rise in unemployment, welfare, disability, forced retirement, incarceration.... In short, it could have been gradually design-enhanced toward some variation on the Timesizing program design.]
"Pain is the most argued thing in disability cases," Judge White said, adding that "98% of the people who come before me truly believe they are disabled."
[This is the most insidious thing about these programs. They subtly encourage one to accentuate the negative.]
The rules require a disability applicant to have held a paid job for a total of 5 of the previous 10 years and to have earned wages for 25% of the time since age 22. The earnings in these years then become the basis for calculating disability.
- ...Soc Sec officials attribute the rise [in the disability rolls] to the large number of aging baby boomers.
- In addition, many women have gone to work, thus becoming eligible for benefits.
[Notice that this arbitrary age setting of 22 means that the US government has, in this legislation, set a nationwide lower-limit standard on worklife per person.]
...Despite the baby boomers [however,] the average age of people on disability has fallen.
One approach to trimming the [disability] rolls that might not be dismissed as mean spirited is a proposal by Kenneth Apfel, a commissioner of the Soc Sec Admin in the Clinton years, that would combine disability pay with retraining and part-time work....
- ...Younger people increasingly qualify on the ground of mental illness.
[Great, we're subsidizing mental illness among Americans. What a way to strengthen the future of a nation!]
- With the average age falling, the disabled are remaining on the rolls longer, and that has swelled the numbers.
- Congress helped in this process by making it harder for Soc Sec officials to declare people cured and no longer eligible for disability.
[And we have the nerve to criticize Europe for needing "labor market reforms"?! "Physician, heal thyself!"]
- ...Lawyers [now] increasingly help applicants with their claims, earning fees if the claims are awarded.
- The disability payments themselves have been rising at a faster rate than the pay of most low-end workers,
[thanks to our frozen 1940-era workweek]
gradually making paid employment less attractive for the unskilled, said Lawrence Katz, a Harvard University labor economist.
- There's another lure, particularly for the unskilled who often work without company-paid health insurance.
[And according to a recent news item, that category is increasing.]
Two years after the disability checks begin to arrive, Medicare coverage kicks in free.
[So America is going to get its shorter workweek in the worst possible, most poverty-spreading way, by having spoiled employers convert full-timers to part-time to save on benefits, especially health insurance, and then America is going to get its universal single-payer health insurance in the worst possible way, by incentivizing the working poor to go on disability and after two years of that, automatically get Medicare. Brilliant.]
[A good idea but still, just another over-specific bandaid for another over-specific problem. We have a huge general problem. Far far too many people who need to support themselves and far far too few market-demanded jobs at the 40-or-more-hours/week level to allow them to do that. Let's quit kidding around and share the vanishing work - let's cut the workweek, using a flexible market-based system such as Timesizing. Then we can gradually dismantle all these costly and overlapping low-level programs that are trying to solve a big top-central problem at the bottom and the sides and having the opposite effect to that intended. They're spreading pain and costs, not reducing them.]
[Compare an AP article today -]
Sick leave is a hot issue - Candidates in Sweden debate increase in workers absences, by Karl Ritter, AP via Arizona Republic, A21.
Swedes returning from summer vacations are grappling with the issue of why so many workers are on long-term sick leave. [photo caption]
[Hmm, is long-term sick leave a form of disability, similar to the article above, or is it just a natural response to 6-week vacations? In other words, if you try to do your work sharing on a workyear basis with long vacations instead of a workweek basis with long weekends, who the heck wants to go back to work after SIX WEEKS away from it?!]
STOCKHOLM -...One out of every six working-age Swedes is off work because of illness or injury.
[Hmm, this definitely sounds like our disability article above.]
The number of people on government-paid sick leave has doubled in five years, and welfare benefits for the sick and disabled exceed the government's military and education budgets combined.
In all, about 340,000 Swedes - one in every 26 of a population of 8.9m - are getting sick pay from the National Social Insurance Board [NSIB], a third for longer than a year. An additional 470,000 are on disability pensions - early retirement benefits paid by the government to those who stop working before the retirement age of 65. These often are bigger than regular pensions.
[Hmm, looks like Sweden is subsidizing illness as well as the U.S.]
Sick Swedes, and what makes them sick, are among the main election issues.
[As we said above, following Milton Friedman, you tend to get more of what you subsidize.]
Whatever the explanation, the cost - about $12B a year, or 16% of this year's national budget - worries officials. ...The NSIB...picks up the tab from the employer after a worker's 2nd week of absence due to sickness.
- The governing center-left Social Democratic Party, seeking to extend an 8-year spell in office, has commissioned studies and written reports saying job conditions are getting harder and more stressful.
[There's an interesting angle, and it's true insofar as Swedish companies are following our own stupid response to efficient technology and cutting jobs instead of workhours.]
- Opponents, led by the center-right Moderate and Christian Democratic Parties, say the government is looking for a cure in all the wrong places. The problem, they say, is not workers' health but cushy welfare policies that are eroding the work ethic.
[And here we have Milton Friedman's point. But the two are reconciled by cutting hours for all, not jobs for an ever-repeating few, because cutting hours replaces cushy welfare policies with cushy jobs - for everyone - jobs as cushy as they all can and should be now we've moved into the age of miraculous technology.]
...Workers who have taken time off contend the pressures and strains of the job are legitimate reasons for going on sick leave. "The wheels are spinning too quickly," said Anna Erickson...a nurse who took off for 2 months last year, blaming burnout. "The working environment simply has become tougher. You have to do twice the work you did before."
[Hmm, definitely sounds like Swedish employers are still into downsizing rather than timesizing - cutting jobs for an ever-renewed few rather than cutting workhours for all.]
Anbritt Ludvigsson, a...payroll administrator who has been on paid leave for 18 months, said a combination of family problems and a heavy workload disabled her. "I couldn't log onto the computer. I had forgotten everything," she recalled, fighting back tears..\..
Sweden has long been viewed by many as a model welfare state, characterized by high taxes, extensive government benefits and a relatively small gap between rich and poor.... The system is financed by some of the highest taxes in the world on income, wealth, property and purchases.
Sick-leave workers gets 80% of pay
...The maximum benefit is 623 kronor a day, or about $65. After taxes, that's about $1,500 a month - about what many workers get for four 40-hour weeks. Sick leave pay is subject to income tax, which ranges from 30-60%....
Frivolous claims draw some blame
Opponents of the generous policies say that paid sick leave has come to be seen as an entitlement rather than a benefit and that frivolous claims are partly to blame for the abrupt rise in sick leave since 1997, when only about 170,000 Swedes received payments. ...Book publisher Helena Riviere wrote in an opinion article for the newspaper Svenska Dagbladet...the generous leave policies invite people to abuse the system by calling in sick simply because they're "fed up with work or dissatisfied with their lives in general."
"If people continue using sickness compensation like this, there won't be much left over for those who really are sick," said Eric Jannerfeldt, a spokesman for the Confederation of Swedish Enterprise, which represents employers. The business group estimates the value of lost staff-hours at $16B a year.
Sick leave is also high in neighboring Norway, which has higher compensation than Sweden, but it is lower in Denmark and Finland, where compensation is lower.
[And cost of living? What about the often-overlooked 5th Scandinavian country, Iceland? It's more entitled to Scandinavianity than Finland because it speaks a Germanic Scandinavian language (in fact, the oldest) while Finland speaks a language completely outside the Indo-European language family. Another disability article is on 11/29/2002 #1. Expanding sicktime, a lead-in to expanding disability, is the focus of 9/03/2000 #2.]
- 9/02 Poor kids in Calif. buck national trend - Many come from working families, by Marla Dickerson, Arizona Republic, A19.
Despite a booming economic in the late 1990s, California's child poverty rates remain subbornly high, even though the state's poor youngsters are more likely to live in a family with a working parent than those in the United States as a whole. These are some of the findings in a study on Calif.'s child poverty showing that the state's changing demographics are defying conventional definitions of who is poor. Welfare reform advocates have long touted work and marriage as a way for low-income families to escape poverty. But in California, many...immigrants are doing just th[ose things but are still]..\..poor.... In contrast to the rest of the nation, where most poor children live in a household headed by a single parent, nearly half of Calif.'s poor kids live in a 2-parent household, according to research by the NYC-based National Center for Children in Poverty [NCCP], which is affiliated with Columbia University's School of Public Health. The NCCP found that most poor youngsters in Calif. are the offspring of at least one immigrant parent, and that poor immigrant families are more likely to contain a breadwinner than are US-born families in poverty....
Poverty experts said the study underscores growing income inequality in Calif., where even unprecedented job and wealth creation in the late 1990s failed to close the state's poverty gap with the rest of the nation. With the economy moving at a crawl and unemployment hitting a 5-year high this year, some worry thta the chasm will widen.
In 2000, the height of the state's economic boom, 18.6% or 2.1m of Calif.'s children were poor, compared with 15.8% nationwide, according to the NCCP's analysis of US Census Bureau data. One in six [17%] poor children in the nation now lives in Calif., compared with one in 10 [10%] two decades ago . The poverty threshold was $17,524 annually for a family of four in 2000.
The NCCP's study dovetails with other research showing that Calif.'s poverty rate, once lower than the national average, caught up with the rest of the nation in the 1980s, surpassed it in the 1990s and has remained higher than the US average ever since. Over the past 3 decades, Calif. has seen its overall poverty rate grow 3.8% to 12.9% in 2000 from 9.1% in 1969. That stands in stark contrast to the rest of the nation, as the US poverty rate fell to 11% from 12.5% over the same period.
[Still well within the range of error, especially when there's enormous political pressure to make the figures look good (corporate America isn't the only sector capable of cooking the books) and we're joking about supporting a family of four on $17,524 a year in NYC, for example. Appalachia might be a different story.]
Experts point to a variety of factors behind Calif.'s elevated poverty rates.
- For starters, Calif. got slammed harder by the early 1990s recession than the rest of the nation, hit by the collapsing defense and housing sectors.
- Another major factor is immigration. Calif. has become a magnet for the unskilled, mostly Latino immigrants, who have found low-wage employment in the state's restaurants, fields and factories. Foreign-born Latinos have the highest poverty rate of any ethnic group in Calif. at almost 27%, according to the Public Policy Institute of Calif. That in turn has had a dramatic effect on the poverty rate of Calif.'s children, given that Latinos make up the largest segment of Calif. residents younger than 18.
- 9/01 Another slap at democracy on Wall St., by Gretchen Morgenson, NYT, 3-1.
Millions of investors rushed into the stock market in the 1990's, believing that Wall Street was at least a fairly level playing field.
Although they have since learned how illusory that notion was, the myth of democracy on Wall Street took a real beating last week. One look at the Salomon Smith Barney documents detailing its allocation of IPOs, subpoenaed and just released by Congress, showed individual investors why they couldn't get the hot stocks that raced skyward during the mania. Ahead of them in line at most big firms were grasping executives who had a far greater chance of bagging hot stocks because their companies were paying investment banking fees to the firms doing the doling.
What the firms were really dispensing was free money. That is because the firms bringing shares public routinely and excessively underpriced them.... That represented a heap of money left on the table by companies selling stock. It now appears that brokerage firms used this pile to reward already wealthy executives whose companies were, or might become, their customers.
[= new kind of insider trading?!]
How big was the honey pot?... In telecom stocks alone, brokerage firms had almost $10 billion to divvy up among their "best customers."...
- 9/01 US Export-Import Bank - A guardian of jobs or a 'reverse Robin Hood'?, by Leslie Wayne, NYT, 3-1.
WASHINGTON - It is hard to imagine why Thaksin Shinawatra, a billionaire who is Thailand's prime minister, would need a helping hand from the U.S. government for his family business, an Asian telecomms giant called the Shin Corp.... But last May, to the consternation of competitors, Shin Satellite, a subsidiary, won a $160 million loan guarantee from the Export-Import Bank of the United States to buy a new telecom satellite and strengthen its grip on Southeast Asia....
For the Bank, a Depression-era agency founded to promote exports, the rationale was simple. Loral Space & Communications, an American manufacturer run by Bernard L. Schwartz, a longtime Democratic Party donor, was Shin's supplier, and commercial banks, according to the Bank, would not finance the deal without the loan guarantee....
July 1-15/2002 + Jun 30.
Earlier Y2000 months accessible via links at bottom of Dec.1-10/2000 page.
Earlier 1999 months accessible via links at bottom of Dec.1-15/99 page.
Earlier months accessible via links at bottom of Dec/98 page.
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