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November 5, 2011

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Latest Posts from Economist's View

Links for 2011-11-05

Posted: 05 Nov 2011 12:06 AM PDT

Stiglitz: The Globalization of Protest

Posted: 04 Nov 2011 01:26 PM PDT

Swamped today -- quick one on "successful (and sometimes corrupt) rent-seekers":

The Globalization of Protest, by Joseph E. Stiglitz, Commentary, Project Syndicate: The protest movement that began in Tunisia in January, subsequently spreading to Egypt, and then to Spain, has now become global, with the protests engulfing Wall Street and cities across America. Globalization and modern technology now enables social movements to transcend borders as rapidly as ideas can. And social protest has found fertile ground everywhere: a sense that the "system" has failed, and the conviction that even in a democracy, the electoral process will not set things right – at least not without strong pressure from the street.
In May, I went to the site of the Tunisian protests; in July, I talked to Spain's indignados; from there, I went to meet the young Egyptian revolutionaries in Cairo's Tahrir Square; and, a few weeks ago, I talked with Occupy Wall Street protesters in New York. There is a common theme, expressed by the OWS movement in a simple phrase: "We are the 99%."
That slogan echoes the title of an article that I recently published, entitled "Of the 1%, for the 1%, and by the 1%," describing the enormous increase in inequality in the United States: 1% of the population controls more than 40% of the wealth and receives more than 20% of the income. And those in this rarefied stratum often are rewarded so richly not because they have contributed more to society – bonuses and bailouts neatly gutted that justification for inequality – but because they are, to put it bluntly, successful (and sometimes corrupt) rent-seekers. ...[continue reading]...

Economy Creates 80,000 Jobs in October

Posted: 04 Nov 2011 10:35 AM PDT

We need to create 100,000 to 125,000 jobs per month just to keep up with the growth in population. In order to reabsorb the millions of workers who have lost jobs during the recession back into the labor force, we need to create several hundred thousand jobs per month, and even at that rate it would take years for employment to fully recover.

Unfortunately, according to the latest employment report from the BLS, the economy only created 80,000 jobs in October:

Nonfarm payroll employment continued to trend up in October (+80,000), and the unemployment rate was little changed at 9.0 percent... Employment in the private sector rose, with modest job growth continuing in professional and businesses services, leisure and hospitality, health care, and mining. Government employment continued to trend down.

The average over the last three months was 114,000. That's enough to keep up with population growth, but no more. Unemployment did fall slightly, from 9.1 percent to 9.0 percent, and the the employment to population ratio also increased by 0.1 pp to 58.4 percent. Those numbers are moving in the right direction, but the rate of change is much slower than needed. Again, at this rate it will be years before we get back to full employment. And the fall in government employment, something under our control, at a time when we need to be creating jobs doesn't help at all.

The big picture from this report is that we are not experiencing the kind of growth typical in recoveries -- it is much slower than the recovery from previous recessions.  We are moving sideways -- we aren't losing ground but we aren't gaining ground either, at least not at a satisfactory rate -- and looking forward it's hard to see anything that will change the painfully slow recovery the economy is currently experiencing

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