So where are the jobs? (And are they ever coming back?)

We've already thanked Mike Keefe and R. J. Matson and of course Tom Tomorrow for another year's worth of inspiring cartooning. Here's the appropriate hat tip to the great Pat Bagley.

by Ken

I've been futzing around with a post about the sleight-of-hand the entrenched opponents of Social Security as we know it pulled with the innocent-seeming "payroll-tax holiday" built into the "compromise" tax package. Earlier in the week I got waylaid by by a column by Michael Gerson, "Face Social Security," which packs in more lies and obfuscations per column inch than even the docile corporatist whore Mr. Gerson customarily manages. The obvious thought was that the Gerson column needed to be raised in connection with the Social Security heist Mr. G's owners are closing in on, and obviously it does. Then it occurred to me, perhaps prodded by an assist from this week's "Financial Page" by The New Yorker's financial columnist, James Surowiecki, that the Gerson column has a more immediate importance, for an accidental bit of truth that slipped in.

As I read the Surowiecki piece, "The Jobs Crisis," playing in the back of my head was this eye-popping paragraph from our Mikey G:

The main achievements of the lame-duck session of Congress were reminders of what might have been. President Obama gave something to get something. To secure a second stimulus, he accepted Republican economic methods. To pass the New START treaty, Obama offered assurances to Republican senators on nuclear modernization and missile defense. Contrast this with health-care reform, imposed in party-line maneuvers that left an aftertaste of ideological radicalism.

Considering how hard our Mikey has worked to ensure that every single word is a lie, I feel bad having to point out the clearly inadvertent truth that slipped in. As anyone knows who isn't (a) an absolute moron or (b) a paid-up whore of the economic elite, describing the "compromise package" as including "a second stimulus" is a mischaracterization so complete as to constitute an out-and-out, knowing falsehood. And the president didn't provide "assurances" to the sociopathic senators fighting New START; what he did was a clumsy two-step of humoring their mental illnesses and buying them off.

And you'd think that not even as blithely shameless a liar as Mikey G was capable of maintaining Obama health care package contains even a micrograin of "ideological radicalism." Before Republicans decided to embrace the imbecility and insanity so prized by their financial masters, the "ideology" of the health care package essentially written by the insurance industry (with the drug industry already having been bought off, leaving effectively nothing left to fight for) is old-style moderately conserative Republicanism. You'd think that after spewing so much ignorance and dishonesty in such a tiny paragraph, our Mikey would be too ashamed to show his corrupt caracass in public. But the corker is that morsel of truth:

"he accepted Republican economic methods."

And this, alas, is the God's honest truth. But again, you'd think that hired whores like Mikey G would have the discretion to keep their trap shut about "Republican economic methods," now that the wholly bought-off Republican Party has made clear what those principles are: that the U.S. economy exists only for the well-being of its masters, with everyone else -- apart from the government and media whores paid to do their dirty work -- being relegated to the status of slaves, except without even the degree of responsibility once accepted by the slave-holding class for maintaining the physical survival of its property.

And it turns out that the Obama administration is cool with it.

Republican economic methods are tried-and-true winners at causing recessions and depressions, which really doesn't worry them because they understand that only the nonprivileged classes consider recessions and depressions. For the people who matter, which is to say the people for whose exclusive benefit the American economy is now structured, recessions and depressions, like disasters generally, are a bonanza, as long as you know how to play them right. As witness the current boom times the financial-services-industry types who produce nothing more substantial, even at their most productive, than "deals."

So they've been made whole -- by taxpayers -- and at this very moment are gorging themselves on their year's unearned, stolen "bonuses" while the rest of the country either ekes out a survival existence or doesn't. The official philosophy of the Republicans' (and of course most of Democratic officialdom's) masters toward the rest of the country is: Go perform an unnatural act on yourself. A certain percentage of the rest of us lucky duckies will be allowed to slave away for whatever pocket change our masters consider fair, and if we don't like it, well, what's massive unemployment for if not to make us all feel eminently replaceable?

The question The New Yorker's James Surowiecki is pursuing in his piece this week is: Given that "the recession has been over for more than a year now,"

"Why have new jobs been so hard to come by?"

There are, broadly, two markedly contrasting views:

One view blames cyclical economic factors: at times when everyone is cautious about spending, companies are slow to expand capacity and take on more workers. But another, more skeptical account has emerged, which argues that a big part of the problem is a mismatch between the jobs that are available and the skills that people have. According to this view, many of the jobs that existed before the recession (in home building, for example) are gone for good, and the people who held those jobs don’t have the skills needed to work in other fields. A big chunk of current unemployment, the argument goes, is therefore structural, not cyclical: resurgent demand won’t make it go away.

And it matters, urgently.

If the problem is a lack of demand, policies that boost demand—fiscal stimulus, aggressive monetary policy—will help. But if unemployment is mainly structural there’s little we can do about it: we just need to wait for the market to sort things out, which is going to take a while.

Now I don't know about you, but the "structural" argument prompts an immediate visceral response from me:

(1) What are all these jobs "in other fields" that no one knows about?

(2) Where are all these jobs "in other fields" that no one knows about?

(3) How is it that no one knows about all these imaginary jobs?

And sure enough, Surowiecki argues that, plausbile though the structural argument may sound,

[T]here’s surprisingly little evidence for it. If the problems with the job market really were structural, you’d expect job losses to be heavily concentrated in a few industries, the ones that are disappearing as a result of the bursting of the bubble. And if there were industries that were having trouble finding enough qualified workers, you’d expect them to have lots of job vacancies, and to be paying their existing workers more and working them longer hours.

As it happens, you don’t see any of those things. Instead, jobs have been lost and hiring is slow almost across the board. Payrolls were slashed by five per cent or more not just in the bubble categories of construction and finance but also in manufacturing, retail, wholesale, transportation, and information technology. And take hiring: one of the industries that have been most cautious is the hotel and leisure business. Needless to say, there’s no shortage of people with the skills to be maids or waiters; there just isn’t enough work. Another sure sign of weak demand is that people with jobs aren’t deluged with overtime; hours worked have barely budged in the past year.

Professional liars like "Sunny John" Boehner and Dicky "The Sheik of Alabama" Shelby and their party of economic ignoramuses and thugs blither that all we need to do is get government out of the way and let "small business" do its thing. Of course the ignoramuses don't know what they're talking about, and the thugs unfortunately do -- they're just slinging the lingo to hornswoggle the economically shut-out masses, now for the first time reaching way up into the middle class. Probably the fantasy of the ignoramuses and thugs alike is the "miracle" of the "Celtic Tiger," the orgy of unabashed criminal collusion between government and the private sector to squeeze every squeezable euro out of the economy and into their pockets. We mustn't forget what slavering admirers of the Irish miracle the American right-wingers were, up to the time it all unraveled and the whole house of cards collapsed.

As it happens, Surowiecki deals with the myth of salvation via small business. Economists at the Cleveland Federal Reserve, he notes, have found that, as in previous recessions,

there are as few job vacancies as you’d expect, given how desperate people are for work. The percentage of small businesses with so-called “hard-to-fill” job vacancies is near a twenty-five-year low, and open jobs are being filled quickly. And one recent study showed that companies’ “recruiting intensity” has dropped sharply, probably because the fall-off in demand means that they don’t have a pressing need for new workers.

What's more, the argument that massive unemployment is the result of structural rather than cyclical factors isn't new. "It’s a perennial: nearly every recession leads pundits to proclaim that the job market is facing structural challenges, and that higher unemployment is here to stay." It was trotted out in the 1981-82 recession.

Yet, by 1984, unemployment was back to where it had been before recession hit. A 1964 survey of economists found that more than half believed structural issues were playing a significant role in limiting the number of jobs; three years later, unemployment was below four per cent.

Surowiecki doesn't discount the reality of structural change in the economy. ("[T]here are certainly plenty of construction workers who are going to have start plying a new trade.")

But what defined the recent recession was the biggest decline in consumption and investment since the Depression. Dealing with that is the place to start if we want to do something about unemployment.

It's important to stress that Surowiecki isn't any sort of wild-eyed liberal. In fact, I've never heard anyone of a progressive persuasion say a kind word about his writing. I like it because it usually makes economic (and real-world) sense to me, and though he doesn't exactly come out and say so, the impulse behind those advancing the "structural" argument isn't economic -- because from an economic standpoint the argument is indefensible -- but political. Sunny John Boehner and Sheik Dick Shelby don't give a damn about the American people, or even the portion of the American people they represent. Their allegiance is to the moneyed classes whose payrolls they're on. And this is what we have to understand by Mikey G's truly explosive phrase "Republican economic methods." Pillage and plunder would be another way of describing those methods.

Here's how Surowiecki concludes his consideration of where the jobs have gone:

The structural argument makes government action seem irrelevant. But if we don’t do more to get the economy back up to speed, it won’t be because stimulating demand won’t work. It will be because we’ve chosen not to do it. If we can’t find the way, it’s because we don’t have the will.

POSTSCRIPT: AN EXCELLENT READING RESOURCE --

THE CORPORATISTS' BIGGEST LIES OF 2010

Excellent piece by Les Leopold on AlterNet: "Wall St's 10 Biggest LIes of 2010."

What a great year for Wall Street: profits up, bonuses up and, best of all, criticism down, especially from Washington. Somehow Wall Street has much of America believing its lies and rationalizations. We're even beginning to forget that Wall Street is largely responsible for the economic mess we're in.

So before we're completely overtaken by financial Alzheimer's, let's revisit Wall Street's greatest fabrications for 2010.

Leopold starts with the obvious No. 1 lie, "Honest, we didn't do it!" And while denying "all culpability," they "pointed the finger everywhere else."

Sadly, their blame-shifting strategy worked, bamboozling the media and people across the political spectrum. The GOP members of the Financial Crisis Commission are so drunk with this Kool-Aid that in their minority report, they refuse even to use the words "Wall Street" or "speculation" in assessing the causes of the crash. Hypocrites? Crooks? Morons? Take your pick.

He proceeds to some of the more familiar lies, and some of the more eccentric ones, and of course the shiftier ones that may be true but not in the way the elites mean. There is, for example, the president's "hard truth": "that getting this deficit under control is going to require some broad sacrifice, and that sacrifice must be shared by employees of the federal government." "But not by Wall Street," Leopold adds.

Mr. President, the "hard truth" is that you're slapping around public sector workers because you don't have the nerve to take on Wall Street. If you had the guts, you could raise real money by going to war with Steven Schwartzman and eliminating the hedge fund tax loophole. By the way, closing that loophole for just the top 25 hedge fund managers would raise twice the revenue than you'll get by freezing the wages of all two million federal workers!

There's a lot more, targeting not just "Tiny Tim" Geithner but the latest stud in the corporatist-whore stable Peter Orszag, and the popular right-wing canard that the unemployed choose to be jobless. Yeah, right. This way they can live the high life off of unemployment benefits, while moving their families into tents after losing their homes.

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