A Bit of Optimism in the Alps, A Lot of Pain in the Everyday World

Left Margin

A Bit of Optimism in the Alps, A Lot of Pain in the
Everyday World

By Carl Bloice

Black Commentator

February 7, 2013

http://blackcommentator.com/503/503_lm_optimism_alps.html

One thing can be said for certain: 99.9 percent of
those who gathered recently week for an Alpine
sleepover either have a job or don’t need one. The
same cannot be said of the billions who were not
there.

While some of the world’s economic and political
elite gathered in Davos, Switzerland for the annual
World Economic Forum, a United Nations agency
reported that there has been an increase in
unemployment planet-wide of 28 million since the
onset of the current economic crisis five years ago.
One million jobs were lost in western capitalist
economies last year alone and three million in the
rest of the world. And it’s getting worse. A total of
202 million people could be unemployed across the
globe sometime this year, the International Labour
Organization (ILO) said January 29.

Dominic Rushe of the British newspaper Guardian
described the findings in the annual ILO Global
Employment Trends thusly:

“. 6 percent of the world’s workforce were without a
job in 2012. The number of jobless people around
the world rose by 4 million in 2012 to 197million.
Young people were the worst affected: nearly 13
percent of those under 24 were unemployed. Some
35 percent of all young unemployed people have
been out of work for six months or longer in
advanced economies, up from 28.5 percent in
2007.”

The situation in some major European countries is
particularly dire.

Take Spain for instance. That country’s
unemployment rate reached 26.02 percent in the
fourth quarter of 2012, leaving almost six million
people out of work – 60 percent of young people
between 18 and 25 years old. The government says
nearly 700,000 more people lost their jobs last year
and there are now 1.8 million households in which
no one is working.

In the 27-member European Union as a whole, the
jobless rate stands at 10.7 percent, with 26 million
people unable to find a job.

Since Davos, there has been running commentary
assessing whether attendees from 100 countries and
up to 50 heads of state and corporate executives
attending the Forum came away optimistic or
pessimistic about the economic state of the world.
“As more than 2,500 global movers and shakers
headed home Sunday, there was broad agreement
that things are beginning to look up on the
economic front – at least in China, Africa, and
emerging markets, but not in Japan, Europe, and
the United States,” observed the Associated Press.

“The balance between optimism and pessimism is
also always affected by personal circumstances, as
much as rational analysis,” wrote Gideon Rachman
in the Financial Times January 22. “So the mood f
Davos man will be lifted by the fact that the last year
has seen a bull run for stocks. This month the S&P
500 hit a five-year high, and the FTSE All-World
index is at its highest level for 18 months. Even the
bankers are liable to arrive in Davos with some of
their old swagger restored. After all, there have been
no major scandals, collapses or arrests for months.”

In other words, how you see the economic situation
depends a lot on whether you are a CEO, banker or
well-paid government official on one hand or a
jobless worker or someone who could easily become
unable to earn a living on the other.

And that’s as true in the U.S. as anywhere else in
the world.

AP said there was “broad agreement” at Davos “that
things are beginning to look up on the economic
front – at least in China, Africa, and emerging
markets, but not in Japan, Europe, and the United
States.”

Although economy the U.S. economy added 157,000
new jobs last month, the unemployment rate rose
from 7.8 in December to a staggering 7.9 percent in
January. That number is less than the 196,000 jobs
added in December. Over the month, the ranks of
the unemployed rose from 12.2 million in December
to 12.3 million in January. African American
joblessness slipped from 14 percent to 13.8 percent
over the month and the rate for Latinos rose from
9.6 percent to 9.7 percent. About to 20 million
people are said to be unemployed or underemployed
in the country at the moment.

While the Associated Press headlined, “Stocks rise
on strong jobs numbers,” the New York Times
observed that “hiring growth has been uninspiring
in the last year, trudging along just barely fast
enough to keep up with population growth but not
nearly quickly enough to put a major dent in
unemployment. A backlog of 12.3 million idle
workers remains. The average worker who is
unemployed has been pounding the pavement for
35 weeks” and “Millions have exhausted their
unemployment benefits, and many more will roll off
the government’s system in the coming months with
no options in sight.”

While those in charge of this clearly can’t agree on
what should be done about the situation on the jobs
front, those gathered at Davos appear to have taken
note of the fact that, at least in Europe and the U.S.,
government policies are pushing things in the wrong
direction and if some powerful forces have their way,
austerity measures will be rolled out that will make
things a whole lot worse.

“Three years ago, a terrible thing happened to
economic policy, both here and in Europe,”
economist Paul Krugman wrote in the Times last
week. “Although the worst of the financial crisis was
over, economies on both sides of the Atlantic
remained deeply depressed, with very high
unemployment. Yet the Western world’s policy elite
somehow decided en masse that unemployment was
no longer a crucial concern, and that reducing
budget deficits should be the overriding priority.”
That view is shared by economist Robert Reich who
observes that “The unfortunate reality is that on
both sides of the ocean we have people making
economic policy who are largely sputtering nonsense
about how to remedy the economy. And for the
foreseeable future they will have the political power
to keep their jobs no matter how disastrous the
outcomes of their policy might be.”

As strange as it may seem, the problem of so many
people out of work for long periods of time has yet to
find a credible place on the nation’s policy agenda.
It hardly rates a mention in the policy priorities
emanating these days from either Congress or the
executive branch.

Reich says the U.S. government is “following
Europe’s sorry example of failed austerity economics

“At a point where the US could be experiencing
catch-up growth to make up for the output lost
since 2007, Washington is importing European
austerity,” wrote Edward Luce, Washington bureau
chief of the Financial Times, adding that “There is
nothing about the anemic US recovery that merits
austerity at this point.”

On January 31, President Obama killed off his high
level President’s Council on Jobs and
Competitiveness that he formed two years ago in
what was said to be an effort to enlist outside
expertise on dealing with joblessness. While the
announcement was awaited over whether the 26-
member panel’s mandate would be renewed, Erika
Eichelberger wrote in Mother Jones magazine that it
had “failed to accomplish much over its two-year life
span, and a lot of what it did turn out was more
friendly to business than to regular people.” A
spokesperson for the Council’s chair General
Electric CEO Jeffrey Immelt told her the panel,
which included the chiefs of the heads of AOL, Intel,
Xerox, Boeing, Comcast, and Intel, and other
corporate giants had come up with 60
recommendations for executive action and that
“significant progress” has been made on 54 of those.
However, AFL-CIO president Richard Trumka, one of
the two labor leaders on the Council, told
Eichelberger: “By reducing overall revenues these
reforms could easily have the opposite [of the
intended] effect. starving the government of the
revenue it needs to create good jobs and upgrade
our infrastructure and education systems, thereby
making the United States a less attractive place to
invest.”

Last January, the Council issued a report which
Trumka voted against saying, “It is clear from our
work in all of these areas that without timely action
by government on a large scale, solutions will
continue to elude us as a nation. Unfortunately, I
believe the report downplays the need for a
proactive role for the U.S. government in many of
these areas; fails to address the significant
additional revenues needed to address the
challenges identified on an appropriate scale; and in
many cases erroneously identifies the root causes of
the underlying structural problems.”

The President last met with the Council in February
2012.

On March 2011, in his last column for the New York
Times, Bob Herbert took note of the corporate
influence on the new jobs panel and commented,
“Overwhelming imbalances in wealth and income
inevitably result in enormous imbalances of political
power. So the corporations and the very wealthy
continue to do well. The employment crisis never
gets addressed. The wars never end. And nation-
building never gets a foothold here at home.”

Some observers had expected the job creation panel,
which hadn’t met for a year, would nonetheless be
reauthorized if only because not doing so would be a
bad idea from a public relations standpoint. As it
turned out, the Council’s demise went relatively
unnoticed.

According to the Washington Post, “Officials said the
president always intended for the council to fulfill
its mission and then wind down, and said Obama
would continue to actively engage and seek input
from business leaders about ways to accelerate job-
creation and economic growth. Among the steps
Obama plans to pursue are expedited permits for
infrastructure projects, plus programs to boost
entrepreneurship and workforce development.”

Simply put: that’s not enough.

Behind the statistics and projections being
circulated and discussed are real people, men and
women who lives and welfare remain precarious.
They are paying heavily for the economic policies
being hashed in the capitals of the capitalist world
and will continue to do so as long as economic
health is measured in terms of products and profits.
The aim of social policy should be to ensure that
everyone who seeks employment should have
access to a means to earn a living wage. That means
creating jobs. That means now, not somewhere
down the line after “the market” has done it dubious
magic. It’s been done before and it can be dome
again. But it takes political will.

Guy Ryder, director general of the ILO and a former
general secretary of the International Trade Union
Confederation, recently called the unemployment
crisis “a massive waste of the lives of young people
and their talents and extraordinarily damaging to
the people themselves and their societies” and a
threat to social stability.

_______________

BlackCommentator.com Editorial Board member
and Columnist Carl Bloice is a writer in San
Francisco, a member of the National Coordinating
Committee of the Committees of Correspondence for
Democracy and Socialism and formerly worked for a
healthcare union.

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