Month: June 2010

A Couple Quick Follow-Ups

Remember Dipak Desai? Prosecutors want to bring criminal charges. [Update: 28 charges brought, including racketeering] What will this do to the drug companies’ appeal? I am no lawyer, but it seems to me that if what happened was a criminal act, then this is no different than suing Smith and Wesson over a handgun death. Except of course for the fact that the drugs weren’t the problem.

Just yesterday we were talking about the jobs report (no, not the Apple Computer kind of Jobs). Today the federal government released it’s own version of the report. It was, well, uninspiring. Ok, no, really it sucks, and so says an actual economist. Sure, 431,000 jobs were created, but 95% of them were temp positions with the Census. That leaves only 41,000 jobs that are likely to be around at Christmas, and for a change it’s a more pessimistic number than ADP reported.

Twofer Thursday: This is Your Economy and Warren Buffett Redux

This is Your Economy:

The ADP payroll report is out today. They’re the people who print paychecks, so they have a very good idea how many private sector jobs there are. And in May, they say there were 55,000 more private sector jobs. All the gains came from the “service” sector: jobs that often begin with “how can I help you” and end with “is there anything else” (or alternatively, “would you like fries with that”). No new manufacturing jobs; no new construction jobs; no jobs doing anything that won’t be gone or irrelevant in 6 months. Tomorrow the Bureau of Labor Statistics will come out with their own numbers, which include government jobs. And since there are roughly 400,000 extra Census workers on the job right now, they are expected to announce something like 540,000 new jobs. Because those Census workers will be unemployed by Christmas, we should really call this 140,000 new and possibly permanent jobs. Once more, we haven’t added enough jobs to account for people entering the workforce (sorry, class of 2010!) let alone put the unemployed to work.

Speaking of the unemployed, the percentage of them who have been out of work more than half a year is at record levels. Sadly, unemployment is higher among parents, who have families to feed. Let’s not forget that the biggest reason for unemployment benefits is that those kids didn’t do anything wrong and still deserve roof-over-head and dinner-on-the-table. And in an unconscionable move, at least one employer is advertising that they won’t consider your application if you are unemployed! On what planet is it desirable to hire people who you know will jump ship for a better gig, when there are thousands of unemployed people desperate to work for you? Even without the public relations nightmare unfolding, how can this possibly be good business?

No wonder personal bankruptcy filings are up.

This is your economy. And now, in the face of a consumer revolt that threatens to turn into a voter revolt, Congress is actually considering doing something about the people who got us here. It sure sounds like too little too late, if it happens at all.

Warren Buffett Redux (a follow up):

Yesterday was the big day for the Oracle of Omaha. He had to sit down in front of the Financial Crisis Inquiry Commission and explain how the 3rd richest man in the world let a ratings agency he had partial ownership of overlook the real estate bubble. Well, he didn’t want to “look foolish” by sounding the alarm. After all, everybody was trying to make a buck in real estate. Nobody could have seen it coming, especially the company that was paid to see it coming. Which is it: he didn’t want to be the first to say anything, or nobody could have foreseen it?

Kind of unimpressive testimony. It’s almost like he was trying to invoke his right to remain silent.

In Closing: Androids don’t play Tetris; Wal-Mart’s lawyers warned the company not to be misogynist prigs in 1995; obligatory Gulf of Mexico oil spill items; Congressional slap-fight may make it hard to buy a home anywhere floods are a remote risk; Driving While Black (I feel certain that “brown” is close enough in many areas); cooking is hard; health insurance limbo; vaccine refusal puts everyone at risk; National Association of Evangelicals might actually be ready to face reality, that birth control prevents abortions; farewell Mercury; the 50 year “anomaly”; Governor Gibbons made the Real ID Zombie walk again, but the ACLU’s got a boomstick; and Star Trek insignia. Yes, I do try to always make the last item fun.

The Man is Right. Oops, I meant Correct.

Over the past few days, a Robert Reich piece has been making the rounds, and appeared today in the Christian Science Monitor. It’s called “Five reasons Obama should put BP under receivership.”

Now, just for review. Oil has been spewing into the gulf at roughly 3-5 times the rate BP says it has for over a month. Coverup and obfuscation from officials continue. Oil has hit multiple states. BP’s half-hearted attempts to stop the flow (and save themselves billions of dollars) are officially over, and they hope that relief wells will stop the problem when they are done — in August! The fact that it is still described as a “hope” does not instill confidence. In the meantime, hurricane season is upon us. While the problem is many feet underwater, the humans dealing with it must contend with weather on the surface. That doesn’t even address the issue of high winds and waves as a “dispersant.” It should be obvious to everyone who isn’t hopelessly addicted to wingnut commentators that there is an environmental disaster that is quickly becoming an economic disaster for the people whose livelihood depends on the Gulf of Mexico.

The CSM asks what kind of “reforms” this will trigger. If it’s anything like our health insurance “reforms” and our financial “reforms,” expect nothing and suffer no disappointment should we receive it in abundance.

Back to Mr. Reich. He’s one of the Clinton Era fixtures that wasn’t returned to the White House when Mr. Obama arrived. All things considered, I suspect it’s because he’s too “L word” and I don’t mean “Lesbian.” (as an aside, where did this idea come from??) Anyway, Mr. Reich has 5 key reasons that BP needs to be temporarily taken over by the Feds. And unfortunately they are good reasons. They’ve been lying to us. We have no idea if they really are doing enough to stop this thing. They want to go ahead with risky strategies to (maybe) stop it, and the Feds currently have no way to stop them from making matters worse. For that matter we have little authority to do much of anything. Many on the Right want to blame Mr. Obama, but he’s not in charge and can’t be unless he’s willing to nationalize BP (a very Left position), in essence making their property forfeit due to bad management.

Liberal rock, meet conservative hard spot. That oily bit in between is what’s left of the libertarian position.

Only the Federal government is big enough to stop the environmental destruction that will eventually circle the world, and they can only do that if they are willing to seize the day — and the company.

In Closing: What morons thought this was a good idea and more importantly have they been fired yet?; Bank of America doesn’t care that she owns it free and clear, they’re foreclosing anyway (why exactly do I pay my mortgage?); Congrats to the many college grads, who are unfortunately both drowning in student loan debt and unprepared for the workforce; U.S. insists that Afghan peace plan must preserve women’s rights (which means there will be no peace); Dalian, China may look like this today, but to me it will always look more like this (turns out there is a Dalian Power Plant!); We just can’t afford to continue spending 155% of our average after tax income, at least not without serious debt and destroying the worth of our assets; bank failures continue; European unemployment is as bad as ours; Brad DeLong wonders if Washington really cares about the problem of unemployment (they will when the “unemployed” turn into the “angry mob”); solve the childhood obesity problem, the reputation of cops, and the made up problem of stranger danger in one brilliant move; it’s not 1967 anymore; basic economics at work (some would argue it’s a less dangerous crop than corn); and how to put on a yukata.