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We’re Starting to Feel Like There’s Nothing Left to Lose

November 2, 2021

Striketober is just the beginning.

Adobe Stock

Everyone’s had enough.

…click on the above link to read the rest of the article…

Chokepoint democracy: Workers capitalize on global system weak spots

October 23, 2021

Chokepoint democracy: Workers capitalize on global system weak spots

In his book Carbon Democracy Timothy Mitchell attempts to explain the rising and falling political power of the working class in terms of the evolution of the world’s energy system. The first fossil fuel, coal, required hoards of men (and it was almost exclusively men) to bring it to the surface, get it to market, and bring it to its final users.

Since coal was the largest fossil fuel energy source for human societies from the early days of the Industrial Revolution until the 1950s and its extraction employed a large number of workers who over time unionized, strikes among coal workers severely impacted energy supplies. Those strikes riveted the attention of the authorities and the public as the health and economic well-being of society was at stake.

The rise of oil as the world’s dominate energy source changed all that. Oil required many fewer workers to bring it out of the ground and distribute it. Oil production utilizes pumps and pipelines instead of people to move fuel. The decline of the power of coal miners followed in the wake of oil’s rise. Oil did not similarly empower workers because so much of the system to extract and refine it runs automatically and can often be overseen temporarily by a few management personnel in the event of a strike or work stoppage.

Fast forward to today and we see for the first time in a very long time, workers in a variety of industries are showing renewed political and economic power as a variety of causes have created a labor shortage. Strikes are spreading across the United States and include workers in (not surprisingly) health care, manufacturing (farm implements, food), food service, public transit, building trades, and coal mining…

…click on the above link to read the rest of the article…

Closer to the edge

October 23, 2021

Closer to the edge

There may well be worse to come.  With the end of the various government support schemes, redundancies have shot up once more.  According to the BBC:Earlier this year when the establishment media was running fear stories about excess savings, the opening up of the economy was predicted to result in a massive consumer boom.  It didn’t happen.  Rather, as happened in the summer of 2020, people emerged from house arrest in need of a haircut, some new – mostly larger – clothing, and a thirst for a pint of beer down the pub.  Once these desires had been sated, most returned to their homes and continued with lockdown spending habits that have now become ingrained.  Not least because, while a small minority at the top may have accumulated £125bn in savings since the first lockdown, the majority of us had been running up even more debt.  The people with savings were hanging onto them while the crisis continued.  Everyone else was unable to consume anyway.  And so, after a brief rally in July, growth fell in August.  Today the UK economy is officially still 0.8 percent smaller than at the start of the pandemic.

“The number of businesses that failed in England and Wales last month was the largest since the Covid pandemic began.  Company insolvencies in September totalled 1,446, increasing from 1,349 in August and 56% higher than the same month last year, data from the Insolvency Service shows…

“The Bank of England earlier this month said one third of small businesses in the UK are classed as ‘highly indebted’, where their debt levels are more than 10 times their cash balances.”

…click on the above link to read the rest of the article…

That Untraversed Land

October 11, 2021

That Untraversed Land

It’s been just over a month since I started talking about how the predictions set out in 1972 by The Limits to Growth were coming true in our time. Since then the situation has become steadily worse. As I write this, rolling blackouts are leaving millions of people in China to huddle in the dark and shutting down yet another round of factories on which the West’s consumer economies depend, while China’s real estate market lurches and shudders with bond defaults.  In Europe, natural gas supplies have run short, sending prices to record levels, while in Britain, the fuel they call petrol and we call gasoline is running short as well.  Here in the United States, visit a store—any store, anywhere in the country—and odds are you’ll find plenty of bare shelves.

Insofar as the corporate media is discussing these shortages at all, they’re blaming it on the shutdowns last year and on a lack of truck drivers to haul goods to market. They’re not wholly mistaken. During last year’s virus panic, many firms closed their doors or laid off employees, and production of energy resources, raw materials, and finished goods fell accordingly.  Now that most countries have opened up again, the energy resources, raw materials, and finished goods needed for ordinary economic life aren’t available, because the habit of just-in-time ordering that pervades the modern global economy leaves no margin for error.

The shortage of truck drivers is another product of the same set of policies.  During the shutdown period, many people—truck drivers among them—got thrown out of work. Because of the same  regulations that deprived them of work, they couldn’t look for other jobs, and the assistance programs meant to help people deal with the impact of the shutdowns weren’t noticeably more effective than such programs ever are…

…click on the above link to read the rest of the article…

Biden’s Crime Against the Economy

June 26, 2021

Biden’s Crime Against the Economy

Biden’s Crime Against the Economy

I try to keep politics out of my economic analyses, and my approach is non-partisan. But sometimes I can’t avoid it because political policies can have significant economic impacts. Today is one of those times.

One of Joe Biden’s first acts as President was to kill construction of the Keystone XL pipeline. This is a pipeline that would bring oil from the tar sands of Alberta, Canada to the Midwest United States. From there it would be moved through other pipelines or refined and distributed to gas stations and industrial users in America.

Biden’s decision was destructive for a long list of reasons.

The immediate impact was to kill about 10,000 high-paying union jobs with benefits in construction, transportation and expert services. The ripple effects were even greater. Once a pipe delivery operation is killed, the trucking company and pipe manufacturer lay off more personnel and those workers stop spending at local restaurants and so on.

But killing the pipeline accomplishes nothing from an environmental standpoint. The decision to end the pipeline is pointless because the oil still moves out of Alberta. In the absence of a pipeline, the oil moves by railroad tanker cars on rail lines owned by Warren Buffett.

Pipelines Are Better for the Environment

It’s just that the railroad uses more energy and has higher CO2 emissions than a pipeline. If you cared about the environment, you’d favor a pipeline over railroads. But opponents don’t really care about the environment, they just want to shut down the oil and gas industries completely.

Shutting the pipeline is a step in that direction. Claims about local environmental damage and crossing Native American tribal areas were just feel-good red herrings. The goal was always just to kill the pipeline. Mission accomplished. Now, the Biden administration may have done more damage than thought at first.

…click on the above link to read the rest of the article…

Say Goodbye To Millions Of Jobs As Events Unfold

October 5, 2020

Say Goodbye To Millions Of Jobs As Events Unfold

Society Needs Good Jobs

Many jobs will not be coming back after the covid-19 crisis ends. We can say goodbye to millions of jobs as events unfold and markets evolve. Millions of small businesses being decimated by Fed policies that favor huge companies coupled with a surge in automation bodes poorly for those looking for work. Over the last three decades, robots have become far more common in factories. In many manufacturing facilities, robots do most of the work. A typical factory may contain hundreds of robots working on fully automated production lines, as it rolls by on a conveyor, a product can be welded, glued, painted, and finally assembled at a sequence of robot stations.Robots are rapidly replacing humans in performing repetitive and dangerous tasks that people prefer not to do or are unable to do due to size limitations. This includes working in places such as in outer space or at the bottom of the sea where humans cannot survive the extreme environments.  Industrial robots are also used extensively for placing products on pallets and packaging of manufactured goods, for example for rapidly taking drink cartons from the end of a conveyor belt and putting them into boxes, or for loading and unloading machines.

Factories Are Now Full Of Robot Workers

The rise in populism and Trump’s trade war has brought front and center how globalization has often put America’s self-interest behind that of corporate profits. In an article written in April of 2013, I claimed that if factories filled with mostly robot workers are the future then we should do all that we can to see that they are located in America. 

…click on the above link to read the rest of the article…

Never Before Have I Seen So Much Fake Unemployment & Jobs Data by the Bureau of Labor Statistics. Labor Department Nails It

July 5, 2020

Never Before Have I Seen So Much Fake Unemployment & Jobs Data by the Bureau of Labor Statistics. Labor Department Nails It

Labor Department today: People on state & federal unemployment insurance jumped to 31.5 million, worst ever.

Bureau of Labor Statistics today: 4.8 million jobs created, unemployment dropped by 3.2 million.

BLS under-reported unemployment by 13.7 million, based on data from the Labor Department. What’s happening is infuriating. Read and cringe.

Normally, the jobs report by the Bureau of Labor Statistics is released on the first Friday of the month. And the unemployment claims report is released Thursday every week. But this month, the monthly jobs report was also released today because of the 4th of July weekend. And now we have this delicious situation of both reports on the same day, with the Labor Department’s unemployment insurance data – people who are actually receiving unemployment benefits under state and federal programs – calling the Bureau of Labor Statistics’ survey-based report a liar. And we’ll go through them.

What the Labor Department reported today:

The total number of people who continued to receive unemployment compensation in the week ended June 27 under all state and federal unemployment insurance programs, including gig workers, surged by 937,810 people in the week, to 31.49 million (not seasonally adjusted), the highest and worst and most gut-wrenching ever:

The number of people receiving state unemployment insurance (blue columns in the chart above) has essentially been flat for three weeks (it ticked up this week), as many people got their jobs back while many other people were newly laid off. But the number of people on federal unemployment programs, including gig workers (red columns), has been soaring.

What the Bureau of Labor Statistics reported today:

…click on the above link to read the rest of the article…

Week 9 of the Collapse of the U.S. Labor Market: Still Getting Worse at a Gut-Wrenching Pace

May 22, 2020

Week 9 of the Collapse of the U.S. Labor Market: Still Getting Worse at a Gut-Wrenching Pace

Federal Pandemic Unemployment Assistance (PUA) for gig workers doubles initial claims under state programs. Here are the “Insured Unemployment Rates” for each of the 50 states & DC.

The moment the unemployment crisis stops getting worse and bottoms out would signal the beginning of a recovery of the job market. But instead, it’s still getting worse at a gut-wrenching pace.

In the week ended May 16, state unemployment offices processed 2.438 million “initial claims” for unemployment insurance under state programs, bringing the total number of initial claims over the past nine reporting weeks since mid-March to a mind-bending 38.6 million (seasonally adjusted). The claims reported by the US Department of Labor this morning were over three times the magnitude of the prior weekly records during the unemployment crises in 1982 and 2009.

But it’s even worse: 4.4 million initial claims with PUA.

These “initial claims” exclude the gig workers, self-employed, and contract workers who are now eligible to receive unemployment insurance under the special and temporary federal program in the stimulus package, called Pandemic Unemployment Assistance (PUA).

In the week ended May 16, an additional 2.23 million people (not seasonally adjusted) filed initial claims under the PUA program, up from the 850,000 that had filed the week ended May 9, and the 1 million that had filed in the week ended May 2. So in total, when regular initial claims (not seasonally adjusted) and PUA initial claims are combined for the week ended May 16, the total of initial claims (not seasonally adjusted) more than doubles to 4.4 million.

The number of “Insured Unemployed” spikes after last week’s calm.

…click on the above link to read the rest of the article…

Job Loss Disaster Slams Low-Wage, Young Workers

May 12, 2020

Job Loss Disaster Slams Low-Wage, Young Workers

April numbers show three million lost jobs, while another 2.5 million people had their hours cut in half.

BakeryHoursClosed.jpg
‘Half of all those earning $14 an hour or less have been laid off or have lost all their hours.’ Photo by Joshua Berson.

We thought the March jobless numbers were bad, but it is almost a good news story compared to what we saw Friday in the April figures.

The unprecedented closure of major sections of Canada’s economy in mid-March is finally being reflected in the jobless numbers. Of course, without those closures we would be in a historic health crisis with emergency rooms overflowing and our health system shutting down, as we saw elsewhere.

In that sense, this shutdown was exactly the right thing to do. I look at these unprecedented joblessness numbers and think: this is how we protected many workers from contracting the virus — though they sacrificed their income.

The official unemployment rate for April is 13 per cent. This is a historic high. There was a single month, December 1982, when unemployment was slightly higher at 13.1 per cent. But after that one month you’d have to go back to May 1936 at the end of the Great Depression to see anything similar. Put another way all jobs created since October 2005, 15 years ago, have been lost by April 2020. While the March data was collected as the shutdown was in progress during the third week of March, the April figures show the full impact of a month’s worth of pandemic lockdown.

UnemploymentOverTimeCanada.jpg
There have been few precedents for April’s dramatic jump in the unemployment rate. Source: Statistics Canada.

…click on the above link to read the rest of the article…

Economy Still Falling Off a Cliff – John Williams

December 9, 2019

Economy Still Falling Off a Cliff – John Williams

Economist John Williams says don’t put too much faith in the good employment numbers that came out last week because “It’s not as happy of a picture as it looks.” Williams is the founder of ShadowStats.com. His calculations strip out government accounting gimmicks to give a more accurate picture of economic data. Williams explains, “What the Fed has done with their easing, according to the Fed, is they created a circumstance of sustainable moderate economic growth. So, they don’t need to cut rates anymore. That’s nonsense. You don’t have sustainable moderate growth. For example, look at this last month, industrial production is in a state of collapse. . . . Manufacturing is negative. . . . Oil production is collapsing year to year as oil and gas exploration has plunged. . . . Retail sales have been overstated in employment . . . . That’s going to be revised lower. . . . We have been getting better numbers as of late, and the economy is still falling off a cliff.”

Maybe that explains the Fed’s panic moves with $60 billion a month QE, which it says is not QE, and extreme intervention in the repo market where the Fed routinely pumps out tens of billions of dollars in liquidly a night. Williams says, “The system is not stable, and it probably is insolvent. They blew the system back in 2007. They gave up on the domestic economy to save the banking system. . . . They spent all their resources propping up the banks, and they are still doing the same thing, and it’s still costing us in terms of economic growth.”

So, the Fed is pumping out billions of dollars every month, and yet, the economy keeps sinking. What does this tell Williams? “The system is not operating properly. These are stopgap measures, stopgap liquidity that the Fed is putting into the system.

Economy Still Falling Off a Cliff – John Williams

Canada Catches America’s Cold – PMI Plunges To 4 Year Lows

October 4, 2019

Canada Catches America’s Cold – PMI Plunges To 4 Year Lows

As goes America, so goes Canada it seems. Following the collapse in both Manufacturing and Services survey data in the US, Canada’s PMI just collapsed most since Feb 2016, back into contraction for the first time since March 2015.

From a 12-month high of 60.6in August, Ivey PMI collapsed to a 4-year lows of 48.7…

Source: Bloomberg

Under the hood things are mixed (but hurting in the most important areas)

  • Ivey employment index decreased to 49.6 in September from 52.7 in prior month
  • Ivey inventory index decreased to 50.5 in September from 54.8 in prior month
  • Ivey supplier index increased to 50.2 in September from 49.9 in prior month
  • Ivey prices index increased to 56.9 in September from 51.3 in prior month

Time to restart rate-cuts.

Icebergs and bankers

March 22, 2019

Icebergs and bankers 

On Saturday March 16, tens of thousands of people marched through the streets of Paris demanding action on climate change.  At the same time and not far away, a group of gilets jaunes protestors were demonstrating, sometimes violently, against the economic policies of President Macron—one of which increased the tax on gasoline and diesel fuel. This was intended to reduce emissions of greenhouse gases from the transport sector and help France meet its commitments under the Paris Agreement.  

Something is wrong here.  Both groups of protesters agree that climate change is a problem that needs to be urgently tackled, but they disagree vehemently about how this should be done. 

Pricing carbon is a delicate instrument that needs to be wielded with care. Either Macron doesn’t understand this or doesn’t care. Either way his policies to reduce carbon emissions are incredibly cack-handed.

Increasing taxes that push up the price of gasoline and diesel fuel is likely to be unpopular almost everywhere that people drive vehicles, and where agricultural produce and goods are delivered by road.  Which is to say just about everywhere in North America and Europe.

There is only one way to sweeten this bitter pill and that is to make carbon pricing revenue neutral. Households are compensated for the additional costs they will incur paying for fuel, and receive a modest annual payment–ideally in advance. 

End of the month, end of world. Same people responsable, same fight

In some places, communities will swallow this pill and grin and bear it.  But this requires a widespread understanding of the urgency of climate action and a willingness to pay the price of being a polluter–which in fact is what all of us who operate a gasoline or diesel vehicle actually are.  But in many jurisdictions, and obviously in France, an increase in the price of fuel is going to be met with strong resistance.

 …click on the above link to read the rest of the article…

Weekly Commentary: Global Markets’ Plumbing Problem

January 6, 2019

Weekly Commentary: Global Markets’ Plumbing Problem

“Goldilocks with a capital ‘J’,” exclaimed an enthusiastic Bloomberg Television analyst. The Dow was up 747 points in Friday trading (more than erasing Thursday’s 660-point drubbing) on the back of a stellar jobs report and market-soothing comments from Fed Chairman “Jay” Powell.
December non-farm payrolls surged 312,000. The strongest job gains since February blew away both estimates (184k) and November job creation (revised up 21k to 176k). Manufacturing jobs jumped 32,000 (3-month gain 88k), the biggest increase since December 2017’s 39,000. Average Hourly Earnings rose a stronger-than-expected 0.4% for the month (high since August), pushing y-o-y gains to 3.2%, near the high going back to April 2009.

Just 90 minutes following the jobs report, Chairman Powell joined Janet Yellen and Ben Bernanke for a panel discussion at an American Economic Association meeting in Atlanta. Powell’s comments were not expected to be policy focused (his post-FOMC press conference only two weeks ago). But the Fed Chairman immediately pulled out some prepared comments, perhaps crafted over the previous 24 hours (of rapidly deteriorating global market conditions).

Chairman Powell: “Financial markets have been sending different signals – signals of concern about downside risks, about slowing global growth particularly related to China, about ongoing trade negotiations, about – let’s call – general policy uncertainty coming out of Washington, among other factors. You do have this difference between, on the one hand, strong data, and some tension between financial markets that are signaling concern and downside risks. And the question is, within those contrasting set of factors, how should we think about the outlook and how should we think about monetary policy going forward. When we get conflicting signals, as is not infrequently the case, policy is very much about risk management.

 …click on the above link to read the rest of the article…

Dear Canada, WTF?

December 7, 2018

Dear Canada, WTF?

Just hours ago, The Bank of Canada held rates steady and complained about various internal and external factors that were negatively impacting the Canadian economy…

Holding rates unchanged at 1.75%, the BOC cited almost everything that has gone wrong:

moderating global growth,
a “materially weaker” outlook for the oil sector,
a faster-than-expected deceleration of inflation,
a drop in business investment and downward historical revisions to output

And today we get this…

Canada added 94,100 jobs in November – the most ever! Sending the Canadian unemployment rate to a record low 5.6%…

So WTF!?

Climate Jobs for All

December 3, 2018

Climate Jobs for All

Building Block for the Green New Deal

It was an iconic moment: Young people occupy Rep. Nancy Pelosi’s office demanding a Green New Deal to put millions of people to work making a climate-safe economy — when suddenly newly-elected Congressional representative and overnight media star Alexandria Ocasio-Cortez joins them with a resolutionin hand to establish a Select Committee for a Green New Deal. But those who actually read her resolution closely may have been puzzled – or stunned – by its call for “a jobs guarantee program to assure a living wage job to every person who wants one.” What is a “jobs guarantee program” and what does it have to do with protecting the climate?

The federal jobs guarantee (JG) is a concept also known as “jobs for all” and the federal government as “employer of last resort.” It envisions a federal program somewhat like the New Deal’s Works Progress Administration (WPA) that would provide funds for non-profit organizations, local governments, and other agencies serving the public to employ anyone who wants a job at a wage roughly comparable to the demands of the Fight for $15 campaign. According to columnist Jonathan Chait, the jobs guarantee plan “has materialized almost out of nowhere and ascended nearly to the status of Democratic Party doctrine.”

The advocates of JG generally include climate protection as one of many types of work beneficial to the public that might be included in a jobs guarantee program. However, they generally have not said how such a program might specifically address the climate emergency.

This May Varshini Prakash and Sarah Meyerhoff, two leaders of the youth climate movement Sunrise, wrote an article titled “It’s Time for the Climate Movement to Embrace a Federal Jobs Guarantee.” They called for a policy through which “the government directly employs anyone who wants a job but doesn’t have one.

…click on the above link to read the rest of the article…

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