Politiconomist

Where are the jobs? Not in the middle...

2011-02-17T12:22:44Z

The structure of job opportunities in the United States has sharply polarized over the past two decades, with expanding job opportunities in both high-skill, high-wage occupations and low-skill, low-wage occupations, coupled with contracting opportunities in middle-wage, middle-skill white-collar and blue-collar jobs. Concretely, employment and earnings are rising in both high education professional, technical, and managerial occupations and, since the late 1980s, in low-education food service, personal care, and protective service occupations. Conversely, job opportunities are declining in both middle-skill, white-collar clerical, administrative, and sales occupations and in middle-skill, blue-collar production, craft, and operative occupations.

The hollowing of the middle in one graph [Ezra Klein]

The Polarization of Job Opportunities in the U.S. labor Market [Center for American Progress]

Fed upgrades growth forecasts. U.S. may grow as much as 3.9% in 2011

2011-02-17T12:13:47Z

Top Fed officials now expect the output of goods and services to grow by 3.4 to 3.9 percent this year, up from the previous forecast, released in November, of 3 to 3.6 percent. But their grim outlook for the job market was largely unchanged: 8.8 to 9 percent unemployment this year, only one-tenth of a percentage point lower than its November forecast.

If the Fed’s most optimistic forecast were realized, it would be the fastest annual growth since 2004, when the economy expanded by 3.6 percent. But experts say even that rate of growth would only bring unemployment, now at 9 percent, down slowly — to slightly less than 8 percent by the end of 2012, when President Obama will seek re-election.

Fed Forecasts Faster Growth as Economy Improves [NYT]

This. Is. Davos.

2011-01-27T20:00:53Z

The global brainstorming panels at Davos are largely a sideshow. The main reason that the world’s top business leaders are here (there’s John Chambers! Michael Dell! Leo Apotheker!) is not to listen to debates about whether China is growing too quickly. It’s to conduct business. The main reason why the world’s top private equity executives are here (there’s Steve Schwarzman! Steve Pagliuca! Glenn Hutchins!) is not to solve global warming. It’s to conduct business.

A senior executive at a Fortune 500 company told me Wednesday that his boss trudges through Davos in his snow boots because he can efficiently hold meeting after meeting with his worldwide customer base. Another founder of a successful technology company with backing from some of the world’s largest banks and venture firms told me that he doesn’t go to any of the panels because he has back-to-back-to-back meetings when he’s here.

And business is why seemingly all of the world’s largest accounting and consultancies are here and such high-profile sponsors at Davos have their names plastered prominently on the walls of hotels and the conference center. Their market positions depend upon their being hired by the big-name chief executives who populate the conference.

Here’s just a sampling of the professional services firms with high-level sponsorships at Davos: Deloitte, PwC, Ernst & Young, McKinsey, Booz, Bain, Accenture, BCG, Agility, Manpower. A senior partner at one of the above firms who requested anonymity because he wants to come back, told me said that they had to have a “presence” at Davos because their competitors do. “We have to be here because everyone else is,” he said.

“Shared Norms for a New Reality” is the theme of this year’s World Economic Forum. But next year it might want to consider “We Have to Be Here Because Everyone Else Is.”

Why Executives Really Attend Davos [Dealbook]

Uh oh! 2011 budget deficit forecast upgraded to $1.5 trillion

2011-01-27T18:53:28Z

The still-fragile economy and fresh tax cuts approved by Congress last month will drive the federal deficit to nearly $1.5 trillion this year, the biggest budget gap in U.S. history, congressional budget analysts said Wednesday.

The grim forecast from the nonpartisan Congressional Budget Office came hours after President Obama called in his State of the Union address for Republicans and Democrats to work together to rein in record deficits that are pushing the national debt into uncharted territory. At $1.5 trillion, the deficit would equal 9.8 percent of the economy, the CBO said, making it one of the largest by that measure since the end of World War II.

BO projects U.S. budget deficit to reach $1.5 trillion in 2011, highest ever [Washington Post]

Rich countries pledge $50 billion to World Bank fund for poor countries

2010-12-17T19:00:10Z

The 18 percent boost marked the arrival of some previous aid recipients as donors. World Bank President Robert Zoellick said he could not provide details on individual donors until the World Bank board approves the funding package early next year.

The United States pledged $3.7 billion in the last funding round, negotiated in 2007. Treasury Department officials would not release the amount of the latest U.S. pledge. Britain, which topped the United States last year as the largest single donor, said it had promised $4.2 billion over the next three years. British officials said that represents a nearly 25 percent increase in local currency at a time when the government in London is pressing painful spending and benefits cuts on its citizens.

The fund, known as the International Development Association, supports health, education, food security and building programs through grants and long-term, interest-free loans to the world's 79 least-developed countries. The fund is replenished every three years at a donors conference. This year it marked a record for giving, with 51 countries agreeing to contribute.

Full Story: Donors pledge $49.3 billion to World Bank fund for poor nations

Unemployment extension does nothing for 99ers

2010-12-17T16:23:02Z

The extension for unemployment benefits that is part of the compromise tax deal is good news for many of the unemployed, but it won’t provide aid to anyone who’s been out of a job over 99 weeks.

As we’ve explained previously, the extension worked out by President Barack Obama and congressional Republicans only lets unemployed workers continue to draw benefits for up to 99 weeks, it doesn’t extend the duration of the program beyond that point. Those who have exhausted all currently available benefits — so-called 99ers — won’t be granted an extension.

That’s a concern because the number of 99ers may be increasing. The number of people who have received their final payments from extended-benefits programs this year through the end of October — the most recent month for which data are available — is over one million, and that number has been steadily increasing. Separately, the Labor Department reported that nearly 10% of the unemployed in the third quarter of 2010 — more than one million people — had been out of a job and looking for work for about two years or more. Meanwhile, initial claims for unemployment have been trending lower recently, but the biggest surge came in early 2009. The peak of 643,000 claims in a single week came in March of last year, 89 weeks ago. Anyone still unemployed since that peak is likely to run out of benefits soon, if they haven’t already.

Full Story: Unemployment Extension Won’t Help 99ers [WSJ]

Only one in four young black men in NYC has a job

2010-12-17T15:16:18Z

The headline on a new report tells the bad news: “Only One in Four Young Black Men in New York City Have a Job.” The report, prepared by the Community Service Society of New York, has other unhappy news about this group — that the unemployment rate for African-American men in New York, age 16 to 24, was 33.5 percent from January 2009 through June 2010, while the labor force participation rate was 38 percent.

“The recession has created a landscape of the unemployed and underemployed with particular catastrophic consequences for young African-American men,” said David R. Jones, president of the Community Service Society, an advocacy group for New York’s low-income residents. “Now young black men between 16 and 24 years have become the banner of hopelessness, particularly here in New York City.”

The report, written by Michelle Holder, a labor market analyst with the Community Service Society, noted that during the recession that began in December 2007, working-age black men suffered an especially large increase of unemployment. The jobless rate for that group jumped to 17.9 percent in 2009 from 9 percent in 2006. Among young men of all races, age 16 to 24, the overall jobless rate rose to 24.6 percent during the recession.

The report, entitled “Unemployment in New York City During the Recession and Early Recovery,” noted that the jobless rate for Hispanic men, age 16 to 24, rose to 24.7 percent during the recession, while their labor force participation rate was 42 percent. For all men age 16 to 24 in New York City, the jobless rate was 22.4 percent during the period studied, while the labor force participation rate was 42 percent. According to the report, women with less than a high school diploma had the lowest labor force participation rate of any group: 28 percent.

The group with the lowest jobless rate during the recession and the early part of the recovery — the recession ended in June 2009 — was Asian women, age 55 to 64. Their unemployment rate in 2009 was 4.5 percent, the report found.

Full Story: Study Shows Depth of Unemployment for Blacks in New York [NYT]

Energy companies implore regulators to 'go easy' on derivatives regulation

2010-12-14T01:25:31Z

Banks, asset managers and energy companies are imploring regulators to go easy in writing new capital and margin requirements for derivatives trading, escalating the debate about some of the thorniest provisions in the Dodd-Frank Wall Street overhaul legislation.

The capital and margin rules are “as challenging as any that we’re going to need to grapple with,” said John Ramsay, a deputy director for the Securities and Exchange Commission, which will write the new rules along with the Commodities Futures Trading Commission. Banking regulators, including the Federal Reserve and the Federal Deposit Insurance Corporation, also will have a hand in crafting the rules.

At a gathering in Washington on Friday, Mr. Ramsay and other regulators met with executives from Shell, Chesapeake Energy and smaller energy companies that frequently use derivatives to mitigate risk. The companies typically use swaps, a common type of unregulated derivative.

While Morgan Stanley, Goldman Sachs and TIAA-CREF also attended the meeting, the loudest pleas came from the energy companies.

Their simple message for regulators? Just trust us. Some companies said that they already posted margin, or collateral, whenever they executed an unregulated swaps deal.

Full Story: New Derivatives Rules Could be ‘Disastrous,’ Energy Companies Say

Bloomberg wants to be president, but he can't win. Here's why.

2010-12-14T00:53:19Z

Visit msnbc.com for breaking news, world news, and news about the economy

Jonathan Capehart:

Let's say Bloomberg gets the dream scenario that gives him the opening to jump in the race: Palin (or another ultra-conservative) as the Republican nominee and a politically weakened President Obama suffering from a still-sour economy. The problem wouldn't be that the American people wouldn't vote for him. The problem would be securing electors in enough states to put him over the 270 electoral vote threshold.

Remember, presidents aren't elected directly by the people. They are voted in by the electors in each state. It's a complicated legal affair that would require Team Bloomberg to battle the Democratic and Republican parties in every state to get on the ballot and, thus, have electors in place to vote for him. Then the new Congress gets into the act by certifying the votes of the electors that were cast on the Monday after the second Wednesday in December. Objections can be raised at this meeting. And if no presidential candidate wins a majority of the electoral vote, each state delegation in the House would vote for the president. The Senate would vote for the vice president. You think a Republican-controlled House (or Democratic-controlled if they win it back in 2012) is going to let an independent take the presidency without a fight? Hahahaha.

Cathie Black says she was Bloomberg's first choice for schools chancellor

2010-12-14T00:26:53Z

NYT:

Cathleen P. Black, the chairwoman of Hearst Magazines, on Friday rebuffed reports suggesting that she was not Mayor Michael R. Bloomberg’s first choice to be schools chancellor, saying the mayor told her personally that he had not offered the job to anyone else.

The New York Times reported on Friday that Mr. Bloomberg had originally tried but failed to persuade Geoffrey Canada, the Harlem education leader, to take the job.

Ms. Black suggested the report did not jibe with what Mr. Bloomberg had told her in October, when he invited Ms. Black to the offices of his foundation to offer her the chancellor’s position.

“What he said to me is, ‘You’re the first person I’ve offered this job to,’ ” Ms. Black said on Fox 5’s “Good Day New York.”

Ms. Black praised Mr. Canada, a prominent figure in the charter school movement and a political ally of the mayor. “Geoffrey is fantastic,” she said. “He’s an amazing educator.”

A spokesman for Mr. Bloomberg declined to comment. Mr. Canada has declined to say whether he was offered the position, but he has acknowledged that the mayor solicited his advice on the search a month before he announced the selection of Ms. Black.

In the interview on Friday, Ms. Black said she was unsure whether Mr. Bloomberg knew that she lacked graduate degrees when he offered her the position. “I don’t know that for a fact,” Ms. Black said. “I assume he had done his homework — as he should have.”

Ms. Black, who will start her job next month, said she was not fazed by lawsuits seeking to block her appointment. Parents and lawmakers have argued that she does not have enough experience in education or government.

“None of this is productive,” Ms. Black said. “I’ve got the job; I’ve got the job. I am their chancellor.”

Economists expect 3% growth in 2011, decreased chance of douple dip recession

2010-12-14T00:04:10Z

Economists have grown more optimistic about the outlook for U.S. growth next year, predicting the expansion will accelerate as 2011 progresses, according to the latest Wall Street Journal forecasting survey.

The 55 respondents, not all of whom answer every question, raised their growth projections for gross domestic product for nearly every period, including the current quarter. On average, the economists now predict GDP will grow 2.6% in the current quarter at a seasonally adjusted annual rate, up from the 2.4% growth they projected in last month's survey. The economy grew 2.5% in the third quarter.

The economists now see stronger expansion in the first half of 2011, with growth picking up speed as the year progresses. For the year, they expect GDP will rise 3%. Meanwhile, they have reduced the odds of a double-dip recession to 15%, the lowest average forecast of the year, from 22% in September survey.

Full Story: Economists Predict Growth in 2011 [WSJ]

NY Gov. Cuomo will try to cap property taxes

2010-12-13T15:50:30Z

Mr. Cuomo is proposing a limit on the total amount of property tax dollars that can be collected annually by a school district, municipality or special district by capping the increase in the local tax levy at 2 percent or the rate of inflation, whichever is less, according to his campaign literature. Schools traditionally receive the largest share of property taxes. Over all, the amount that New York’s schools have raised in property taxes — their tax levy — has climbed an average of 6.9 percent annually in the past decade, to a total of $29.1 billion in 2009, according to the state comptroller’s office.

Full Story: Cuomo Plans to Push for a Cap on Property Taxes [NYT]

In northeast states, school spending and high property taxes go hand in hand

2010-12-13T15:35:55Z

(click to enlarge)

(via NYT)

Why the left should like the tax cut deal --and why the right should hate it (INFOGRAPHIC)

2010-12-12T20:15:48Z

(via Ezra Klein)

Tax cut deal could create 3 million jobs

2010-12-12T14:30:54Z

The Center for American Progress, a liberal research organization, has crunched a back-of-the-envelope estimate. Its numbers, shown right, are based on the models used by the Congressional Budget Office and the economist Mark Zandi to project the bang-for-the-buck of various kinds of stimulus.

“We estimate that the deal as described would save or create 2.2 million jobs, excluding jobs associated with the extension of the broader-based portions of the Bush tax cuts on which all parties were agreed,” write Michael Linden and Michael Ettlinger of the Center for American Progress.

Including the broader so-called middle-class tax cuts brings the total number of jobs created to 3.1 million.

Just How Stimulating Is the New Tax Cut-Jobless Benefit Deal? [Economix]