Economy

February Jobs Numbers: +227,000

Today's Balance Sheet: Job numbers keep on keeping on. 

The unemployment rate remained at 8.3 percent after a gain of 227,000 jobs this February, according to the monthly report released by the U.S. Bureau of Labor Statistics this morning. This marks the third month in a row where the economy gained more than 200,000 jobs, a streak we haven't seen since early 2011.

Tea Party Sharpens Its Budget Scissors

Today's Balance Sheet: Time for Congress to get feisty again. 

Perhaps afraid of tarnishing their hard-earned obstructionist cred, congressional Republicans look like they're heating up for another big fight over the budget. Tea Party legislators are pushing a plan that would cap agency appropriations at almost $20 billion below the $1.047 trillion limit agreed to last August as part of the Budget Control Act. This cap is already substantial and will force cuts or freeze spending in many government agencies—imagining Congress trying to agree on where to shave off an additional $20 billion the federal budget is headache-inducing.

We Want Our Money Back

Good-governance groups are fighting back against companies that take state subsidies and then head out of town.

(Flickr/401K)

One can understand why North Carolinians hold a grudge against Dell Computers. In 2009, the company shuttered its Winston-Salem plant, laid off 900 people, and made off with $6 million in state subsidies and incentives.

Most states and cities will do almost anything to induce companies to set up shop within their borders—or to keep them there. It seems no tax incentive is too plush, no subsidy too bountiful. Businesses, in turn, will make grand claims about the jobs and other benefits they bring to a community.

But what happens if they renege on the deal and pack up or simply don't live up to their promises? Too often, the answer has been "nothing." States and municipalities are left scrambling to explain why they spent the taxpayers’ money and got nothing in return.

The Cost of Financial Favoritism

If Republicans and Democrats can't find common ground on giving assistance to small banks and Community Development Financial Institutions, they aren't liable to agree on anything.

(Flickr/Images_of_Money)

America’s knack for invention and risk-taking has long been a source of competitive advantage. Entrepreneurs depend not just on ingenuity and nerve but also on capital and credit, which come, or don’t, from a variety of sources, including their own savings, venture capital, as well as loans from banks and other institutions.

Freelance Nation

Progressives need to make government work better by helping out entrepreneurs and the self-employed.

(Flickr/wili_hybrid)

The other day, on a Manhattan sidewalk, I ran into a former colleague and asked her what she was doing these days. She shrugged: “I’m in limbo.”

When I looked her up later to connect online, her LinkedIn profile listed her as CEO of her own consulting firm. That didn’t sound like limbo to me, until I saw the fine print: “self-employed, myself only.” Scrolling through the rest of my contacts, I noticed that quite a few people in my professional orbit had titles like “president” or “founder” or “principal.” Some of these people, I know, are doing quite well; others are barely making it.

Too Small to Bail?

An interview with Sheila Bair.

(Flickr/Civil Rights)

As chair of the Federal Deposit Insurance Corporation (FDIC) until last July, Sheila Bair played the role of loyal opposition to the strategy pursued by Treasury Secretary Timothy Geithner of propping up the biggest banks and deferring the issue of systemic reform. Bair argued for helping smaller banks and small businesses as well as breaking up huge banks that were deemed “too big to fail.” Now based at the Pew Charitable Trusts, Bair spoke with Prospect co-editor Robert Kuttner.

Economists Project Eight Percent Unemployment by Election Day

(The White House/Flickr)

As far as political news is concerned, I would rate this as considerably more important than the minutae of what happens in the Republican primary elections today:

The economists think the unemployment rate will fall from its current 8.3 percent to 8 percent by Election Day. That’s better than their 8.4 percent estimate when surveyed in late December.

By the end of 2013, they predict unemployment will drop to 7.4 percent, down from their earlier estimate of 7.8 percent, according to the AP Economy Survey.

Europe Teeters on the Edge

Today's Balance Sheet: The times are good for one percenters.

This week's a big one for the future of Europe, as Germany debates supporting the fiscal pact agreed to in Brussels on March 2 and investors sign onto a Greek bond swap that could write off half of the country's €177 billion debt.

Is It Springtime for the Economy?

Today's Balance Sheet: Wages are on the slow and steady rise.

Wages and salaries rose in January by 0.4 percent—up 5 percent from last year—but that extra money has yet to leave consumers' pockets and get back into the economy. Other good economic news was released yesterday, too: Filings for unemployment benefits are at a four-year low. Usually, when wages rise, consumer confidence also goes up, giving the economy a big boost. That hasn't happened yet this time.

Geithner's Latest Alibi

(AP Photo/Marco Ugarte)

Treasury Secretary Tim Geithner, chiding Wall Street for trying to undermine enforcement of the Dodd-Frank financial-reform bill, is trying to rewrite history. He would have us believe that regulators lacked the power to prevent the financial collapse. In fact, they had plenty of power. The problem was that Geithner and company were in industry’s pocket, and didn’t use the power they had.

Writing in today's Wall Street Journal, in an op-ed piece titled “Financial Crisis Amnesia,” Geithner contends:

You Can Eat Whatever You Want

(NCReedplayer/Flickr)

Mark Bittman is apparently a fan of Republican state senator Ronda Storms, who wants to prevent food stamp recipients from buying junk food:

When she introduced a bill to prevent people in Florida from spending food stamps on unhealthy items like candy, chips and soda, she broke ranks: few of her party have taken on Big Food. […]

Yet she makes sense. “It’s just bad public policy to allow unfettered access to all kinds of food,” she told me over the phone. “Why should we cut all of these programs and continue to pay for people to use food stamps to buy potato chips, Oreos and Mountain Dew? The goal is to feed good food to hungry people.”

McMansions on the Cheap

Today's Balance Sheet: Housing prices dropped to 2002 levels in December. 

Although the past few months have brough economic data that hints at recovery, one important statistic hasn't improved: housing prices. The Standard & Poors/Case-Shiller index of property values report of 20 U.S. cities released yesterday shows that national housing prices have dropped to their lowest levels since 2002. “It is hard to get entirely enthusiastic about the recovery when housing prices are still falling,” said Mark Zandi, the chief economist at Moody’s Analytics. In December, the index decreased by 4 percent from a year earlier, and Detroit was the only city to see an increase from 2010. 

A German History Lesson

Yesterday, the German Parliament relented and agreed to let the Greek debt restructuring go forward, but only the price of crushing austerity for the Greek economy. This is a widespread attitude in Germany, where aid to the Greeks is unpopular.

The other day, Jörg Krämer, chief economist for Commerzbank in Frankfurt, said of the Greeks, “If you live beyond your means, then you can repair your balance sheet only if your consumption goes down.”

But the Germans might take a moment and reflect on their own history.

Keystone Back From the Dead

Today's Balance Sheet: TransCanada's ready to break ground on the Keystone pipeline, and the White House just might give them the permit to do it.

After the Obama administration halted progress on the Keystone XL pipeline in January—stating that the 60-day window of time permitted by Republican legislators was too small for a thorough environmental review—those against the proposal cheered and hoped the pipeline was dead.

The Moral Calculus of Online Shopping

Amazon fulfillment center in Scotland (Flickr/Chris Watt)

I don't know too many liberals who shop at Walmart. The primary reason is principle—the company is notoriously cruel to its largely low-wage workforce, works to crush the faintest hint of a desire for collective bargaining with a ferocity that would be the envy of any early 20th century industrialist, and imposes vicious cost-cutting all the way down its supply chain. But not shopping at Walmart is also easy. The stores are rare in the urban areas where lots of liberals live, and elsewhere, there's probably a Target nearby where you can get stuff just about as cheaply (Target's own corporate citizenship is a complicated topic for another day). So it isn't like not shopping at Walmart is some kind of hardship or costs them any money.

But what about Amazon? A few months ago, Harold Pollack explained why he no longer shops there: nearly every sin of which Walmart is guilty, Amazon also commits. And the online world has its own particular sweatshop: the fulfilment center, where people who work not for the place you bought your book or toothpaste from but for a logistics company or a temp agency toil in conditions that are absolutely hellish. That's the topic of Mac McClelland's article in the latest Mother Jones, in which she spent some time working at a fulfilment center, and reports on the physically brutal, psychologically dehumanizing, low-paid work that drives the cyber-economy.

I tried to find one excerpt to give the flavor of the piece, but you really have to read the whole thing to grasp the full awfulness of what it's like to work at one of these places, where you're treated like crap, you run around like a maniac for 10 hours getting objects ready for shipping, and despite the low pay you know there are a dozen people back at the temp agency eager to take your place if you slip up. If you've ever ordered something off Amazon or a similar retailer and said, "How the hell can they sell that thing for only three bucks?", this is part of the reason why.

So where does that leave us consumers? It's awfully hard, if you're just getting by yourself, to choose to pay more for the things you get every day. And unlike walking by the struggling Mom & Pop's Grocery to go to Walmart, where you interact with the people whose working conditions you know to be substandard, online you interact only with a bright, cheery website where all you have to do is click "Add to Cart" and you're done. The moral implications of your consumer choices are physically remote and concealed. But as online retailers, particularly Amazon, have grown so big, it's a question all of us are going to have to confront. I'll confess that I haven't yet begun my own personal boycott—the prices are just too damn good. But the moral questions are getting harder to ignore.

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