The fishing ban in the Gulf of Mexico has been expanded:
The National Oceanic and Atmospheric Administration greatly expanded the fishing ban in the Gulf of Mexico on Tuesday in response to spreading oil from the BP well blowout. The prohibited area now covers 19 percent of the gulf, nearly double what it was, according to the agency.
the impact of the spill is beginning to kick in:
Officials are already seeing some impact on fish and wildlife in the region. Rowan W. Gould, the acting director of the Fish and Wildlife Service, said 156 sea turtle fatalities had been recorded in the gulf since April 30, about 100 more than usual at this time of year.
Mr. Gould also said that a small number of oily birds, 35, had been recovered, including 23 dead birds directly linked to the spill.
“It’s important to note that the visibly oiled birds are a small part” of the effects of the oil spill, Dr. Gould said in a teleconference on Tuesday.
“What concerns us most is what we can’t see,” he said, adding, “We are preparing for the likelihood that it will exist in the gulf ecosystem in years to come.”
The economic impact is already being felt along the coast. In Pensacola, FL:
The spill has scared off charter fishing customers at the marina here, even though the water they’d normally trawl is still open. The 30 boats were almost all tied to their slips Tuesday and Jerry Andrews, the captain of the Entertainer, had the dock to himself.
“Usually you’d see 15 or 20 people walking up and down out here asking about the fishing. Three-fourths of these slips would be empty,” said Andrews, a Pensacola native who has been fishing here for 34 years.
and
Andrews said before the spill he was getting between 30 and 40 calls and e-mails a day asking about chartering his boat and his customers were catching their full quotas of vermilion snapper, triggerfish, amberjack and grouper.
But in the month since the spill, he gets hired for one or two trips a week, tops. Most of his customers, who come from Alabama and Georgia, are now going to the Carolinas.
In Louisiana many of the fishermen hired by BP to help try to contain the spill are getting frustrated:
Louisiana fishermen, thrown out of work by the massive oil spill that has closed coastal waters, are jockeying for jobs to contain the mess. But just who gets those jobs is a source of mounting tension. Some workers are getting paid to go out on the water multiple days in a row, while others aren’t allowed to go out at all, according to some fishermen.
They said that BP, which had promised to pay each fisherman $5,000 a month for compensation, is dallying on handing out checks. And they said that men who haven’t fished in years are getting paid to work on prevention teams, even though they’re not affected by the oil spill.
“It’s all about who you know,” said fisherman Oliver Rudesill, who was sitting in the shade beside the St. Bernard Parish home of a friend on Sunday. He has not earned a cent since the spill started, he said, while others are making hundreds of dollars a day.
His friend, David Palmer, a 33-year old fisherman with three kids, has been told his turn won’t come until June. “It’s so messed up it’s not even funny,” said Palmer, whose home sits on pylons to avoid the swampy grasses. “A person can’t wait 30 to 40 days to go work.”
No one can say with any certainty how this disaster will impact the gulf coast. The long term impact could be devastating:
If the oil penetrates deep within the estuaries around the Mississippi delta, it could devastate the salt marshes and bays that support as much as 90 percent of commercially fished species in the Gulf. That would spell long-term disaster for Louisiana’s $1.8 billion fishing industry, not to mention the other Gulf Coast states.
“You have to question what is going to come from this,” said David Wyld, a professor of management at Southeastern Louisiana University in Hammond. “Not just during the next few months, but also during the next few years and even a decade out.”
On top of it all, there’s the economic ripple effect. No fishing means fewer people chartering boats, and closed beaches lead to abandoned vacation plans and cancelled hotel bookings. All of that may only deepen the future economic misery for Gulf Coast residents to the tune of billions of dollars in lost revenue.
All the more reason to push for more job creation and more economic stimulus money to help states that have been hard hit, and aid the unemployed.
Folksingers have occupied a noble place in our history, singing about economic hard times, mining disasters, exploitation of workers, and of course, the Great Depression. In the great tradition of folk singers like Woody Guthrie and Pete Seeger, NH musicians Beverly Woods and Seth Austin have written a song called Deepwater Horizon Disaster:
The New York Times’ Floyd Norris spends more than 1,200 words wondering why on earth people aren’t more cheerful about the economy. Well, not people. Specifically, President Obama. Norris thinks that since economists say that the recession is over, Obama should take up that message and go forth with it, talking it up in his speeches. Since Obama is not doing that, Norris is looking for explanations. Or, as he puts it:
But there are, I think, a number of reasons for the glum outlook that are unrelated to the actual economic data.
So his explanations for this mysteriously “glum” decision to ignore “actual economic data”?
First, the experts didn’t see the recession coming, and
Having been embarrassed by missing impending disaster, there is an understandable hesitation to appear foolishly optimistic again.
Second,
Both Republicans and Democrats have good reasons to be negative. Republicans are loath to give President Obama credit for anything, and no doubt grate when he points to his administration’s stimulus program as a cause of the good economic news, as he did in North Carolina.
Democrats would love to give the president credit. But much of the Democratic Party wants another stimulus bill to be passed, notwithstanding worries about budget deficits. Chances for that are not enhanced by the perception the economy is getting better.
Dear Mr. Norris: Without getting into the partisan slant of those two paragraphs, I would propose a third reason people are not optimistic.
THE UNEMPLOYMENT RATE IS 9.7%Fifteen million people are unemployed. More than 9 million people are working part-time when they want to be working full time. More than 6.5 million people have been jobless for six months or more.
Basically, the issue is that Floyd Norris doesn’t give a damn about working people, and he’s bewildered by the things President Obama is saying…because he doesn’t get that at least some of the time, that’s who Obama is talking to. And when people are barely keeping their heads above water, unemployed or without the full-time work they need in many cases for more than half a year, and the Treasury Secretary has said that unemployment is going to be “unacceptably high for a long period of time,” you don’t go to them and say “well, economists tell me that the recession is over! Problem solved!” The problem is not solved for tens of millions of people. So unless you just don’t think those people matter, the question “why so glum” is not one that really needs to be asked. The answer is obvious.
The Center on Budget and Policy Priorities recently released a report on state budget cuts caused by decreasing tax revenues. Over 45 states have already made deep cuts, and in 2011, another round of cuts is expected:
With tax revenue still declining as a result of the recession and budget reserves largely drained, the vast majority of states have made spending cuts that hurt families and reduce necessary services. These cuts, in turn, have deepened states’ economic problems because families and businesses have less to spend. Federal recovery act dollars and funds raised from tax increases are greatly reducing the extent, severity, and economic impact of these cuts, but only to a point.
The cuts enacted in at least 45 states plus the District of Columbia in 2008 and 2009 occurred in all major areas of state services, including health care (29 states), services to the elderly and disabled (24 states and the District of Columbia), K-12 education (29 states and the District of Columbia), higher education (39 states), and other areas. States made these cuts because revenues from income taxes, sales taxes, and other revenue sources used to pay for these services declined due to the recession. At the same time, the need for these services did not decline and, in fact, rose as the number of families facing economic difficulties increased.
These budget pressures have not abated and, in fact, are increasing. Because unemployment rates remain high — and are projected to stay high well into next year — revenues are likely to remain at or near their current depressed levels. This is likely to cause a new round of cuts. Based on new, gloomy revenue projections, governors have begun issuing their budget proposals for the 2011 fiscal year (which begins on July 1, 2010 in most states), and the proposed cuts go even further than those that states have enacted to date.
So, as the need for services increases, the budgets for programs that help those who are most vulnerable are cut.
This slideshow gives a brief and helpful overview of the situation, and an idea of how long it’s likely to take to dig out of this.
This website has a lot of useful information, including a look at the ABC’s of State Budgets, an intro to the Federal Budget Process and some all round helpful information and definitions of terms that we hear all the time, (like Pay as You Go, Budget Reconciliation, or Earned Income Tax Credit) but may not fully understand unless we are budget geeks.
Bottom line – the news isn’t good, and the only way out is to create jobs, as quickly as possible.
Demand is escalating for multi-generational housing as buyers scale down during the deepest housing crisis since the Great Depression, according to a survey by Coldwell Banker Real Estate in Parsippany, New Jersey.
Thirty-seven percent of the company’s real estate agents polled in January said that in the past year, buyers were increasingly shopping for homes that fit more than one generation. Almost 70 percent of the agents said they expect economic conditions will drive still greater demand for this type of housing over the next year.
34% of the young workers surveyed still live with parents—theirs or a spouse’s. For those making less than $30,000 per year, 52% were still living with parents. That doesn’t just affect young people, either.
Another thing that poll found was a loss of hope among young workers. In 1999, 77% of young workers said they felt “hopeful and confident about being able to achieve economic and financial goals over next five years.” In 2009, just 55% felt that way.
This housing trend of families gathering together to buy houses that will fit multiple generations is yet another sign of a loss of optimism. People aren’t thinking that having adult children living with their parents is just temporary—they’re planning for it to continue for years to come. Do you think they’d be doing that if they thought things were going to get better any time soon?
Friday brought a quarterly estimate of Gross Domestic Product (GDP), and it exceeded expectations, growing at a rate of 5.7%, up from 2.2% the previous quarter. That sounds excellent, and it’s certainly not a bad thing. For a visual, check out the graph at Tapped.
But there are a couple of important caveats before we get too excited.
Few, if any, analysts believe the fourth-quarter number can be sustained. But if all four quarters of 2010 average even somewhat less than half that percentage, at least 2.3%, the history of previous recessions indicates a job recovery may soon be under way, with perhaps only one or two months more of net job losses. See New Deal dem’s analysis of this here. If hiring does exceed layoffs starting in February or March, that alone might improve morale for the millions who have been seeking work without success for six months or more.
What’s uncertain, however, is whether half of today’s percentage can be averaged in 2010. One reason is that GDP was held down in previous quarters because businesses sold goods in their inventories but didn’t order new goods. The pace of fourth-quarter growth was heavily driven by a slowing of this inventory liquidation. Which means that businesses, whether they were dealers in software or motor vehicles, ordered new goods to restock their shelves. Thus, 3.39% of the GDP total for the fourth quarter came from this inventory cycle. In the third quarter, private inventories came in at just 0.69%.
The economy has been able to grow even without adding workers because employers have found ways to accomplish more with fewer workers. Productivity grew at a robust rate of 8.1 percent in the third quarter of 2009, the most recent data available.
Without a much stronger GDP performance than most analysts have been predicting for 2010, we’ll be lucky to see restored a fourth of the 8 million jobs lost in the past 25 months. If something along the lines of the timid jobs bill that passed the House in December gets an OK from the Senate, it may provide modest relief, just as the small business tax incentives and export initiative President Obama outlined Wednesday may do. But these are simply not enough. The beneficial impact on growth from the existing stimulus package is already fading, even though more than half of the $787 billion remains to be spent, as explained here.
So we should be optimistic, in a cautious way. And we shouldn’t let up on the pressure for a strong jobs bill with major investment in infrastructure.
During the good years of the last decade, such as they were, growth was driven by a housing boom and a consumer spending surge. Neither is coming back. There can’t be a new housing boom while the nation is still strewn with vacant houses and apartments left behind by the previous boom, and consumers — who are $11 trillion poorer than they were before the housing bust — are in no position to return to the buy-now-save-never habits of yore.
What’s left? A boom in business investment would be really helpful right now. But it’s hard to see where such a boom would come from: industry is awash in excess capacity, and commercial rents are plunging in the face of a huge oversupply of office space.
Can exports come to the rescue? For a while, a falling U.S. trade deficit helped cushion the economic slump. But the deficit is widening again, in part because China and other surplus countries are refusing to let their currencies adjust.
So the odds are that any good economic news you hear in the near future will be a blip, not an indication that we’re on our way to sustained recovery. But will policy makers misinterpret the news and repeat the mistakes of 1937? Actually, they already are.
It was, according to a wide range of data, a lost decade for American workers. The decade began in a moment of triumphalism — there was a current of thought among economists in 1999 that recessions were a thing of the past. By the end, there were two, bookends to a debt-driven expansion that was neither robust nor sustainable.
There has been zero net job creation since December 1999. No previous decade going back to the 1940s had job growth of less than 20 percent. Economic output rose at its slowest rate of any decade since the 1930s as well.
Middle-income households made less in 2008, when adjusted for inflation, than they did in 1999 — and the number is sure to have declined further during a difficult 2009. The Aughts were the first decade of falling median incomes since figures were first compiled in the 1960s.
And the net worth of American households — the value of their houses, retirement funds and other assets minus debts — has also declined when adjusted for inflation, compared with sharp gains in every previous decade since data were initially collected in the 1950s.
But the long-term reality is that little-to-nothing has been done over the past few decades to deal with the real killer in all this, structural unemployment, the kind that permanently eliminates jobs. Some structural unemployment caused by changing technology and innovation and a shift in consumer preferences is inevitable. Driven by the right policies, equally well-paying jobs come around to replace them. But some structural unemployment comes from eliminating jobs without replacing them with anything. At least not by anything in the U.S. Workers displaced in this way, especially older but-not-yet-financially-able-to-retire workers, can find themselves in tough straits for a long time. The country’s full of those. They aren’t, of course, the only victims as any twentysomething college graduate with $35,000 in student loans and no job can attest.
America needs a transformation to put the brakes on our race to the bottom. This ought to include a lot things, not the least of which are a permanent federal jobs program, decent pay for a shorter standard work week (which hasn’t been changed for 75 years), and incentives, including legal ones, for cooperative enterprise ownership.
An essential ingredient of this transformation is an industrial policy whose components include fairer trade policy and a labor-market strategy. Most countries – including almost all of America’s leading trading partners – have such policies, each of them designed, even by the Red capitalists of authoritarian China, to make life for their citizens better.
So, in the coming weeks, while eagerly watching the news about unemployment, the GDP and all the other statistics that indicate the immediate direction of the economy, it’s well to remember that America’s fate now rests in the hands of other countries’ industrial policies. Not having our own is, ultimately, an economic suicide pact courtesy of the promoters of the same policies and behavior that got us into this gigantic economic mess.
This is where we stand as we enter a new decade. This is what we have to fight to change, and really change, not just settling for positive blips.
Ronald Brownstein has a wrap-up on the Bush administration’s economic record and how it affected working families. When we consider where we are now, economically speaking, let’s be sure to consider how we got here.
On every major measurement, the Census Bureau report shows that the country lost ground during Bush’s two terms. While Bush was in office, the median household income declined, poverty increased, childhood poverty increased even more, and the number of Americans without health insurance spiked. By contrast, the country’s condition improved on each of those measures during Bill Clinton’s two terms, often substantially.
–snip–
Consider first the median income. When Bill Clinton left office after 2000, the median income-the income line around which half of households come in above, and half fall below-stood at $52,500 (measured in inflation-adjusted 2008 dollars). When Bush left office after 2008, the median income had fallen to $50,303. That’s a decline of 4.2 per cent.
–snip–
When Clinton left office in 2000 13.7 per cent of Americans were uninsured; when Bush left that number stood at 15.4 per cent. (Under Bush, the share of Americans who received health insurance through their employer declined every year of his presidency-from 64.2 per cent in 2000 to 58.5 per cent in 2008.)
When Clinton left the number of Americans in poverty stood at 11.3 per cent; when Bush left that had increased to 13.2 per cent. The poverty rate for children jumped from 16.2 per cent when Clinton left office to 19 per cent when Bush stepped down.
We got to this economic moment not because of gremlins in the finance industry’s computers, but because of a set of policies that didn’t work for working families. We get out of it by thinking about people before profit, through health care reform, by regulating the finance industry, by making it easier for working people to join unions and bargain for better wages and working conditions. We don’t get out of it by pretending that people are not struggling:
Consider this: Some 9.4 million new jobs would have to be created to get us back to the level of employment at the time that the recession began in December 2007. But last month, we lost 216,000 jobs. If the recession technically ends soon and we get to a point where some modest number of jobs are created — say, 100,000 or 150,000 a month — the politicians and the business commentators will celebrate like it’s New Year’s.
But think about how puny that level of job creation really is in an environment that needs nearly 10 million jobs just to get us back to the lean years of the George W. Bush administration.
No celebrating the recovery of “the economy” until the people who live in it are employed and have health care and aren’t being foreclosed on. Working people are the most important part of the economy, and must be treated as such.
I got behind-hand and missed new jobless day yesterday. The news was relatively good – relative to recent months, though, not relative to non-recession times. Sometimes I feel like an oracle of doom always saying “question the cheery headline numbers,” but the thing is, it’s so important to remember that millions of people are still struggling, and that small improvements are not enough.
And to illustrate how serious the situation is despite occasional better-than-expected numbers, the New York Times has an article detailing the difficulty workers who have been laid off have finding new work.
A decline in labor mobility may help explain some of the failure of workers to find jobs even after they have been unemployed for months. In previous downturns, some regions remained relatively strong, and attracted workers from other areas. This time, the credit crisis has damaged job prospects almost everywhere, and plunging home prices mean that some who would like to move cannot afford to do so because they owe more than their house is worth.
Another factor is that workers now are less likely to be able to return to their old employers when the economy recovers. At the height of unemployment in 1982, one of every five unemployed workers was on a temporary layoff, with the expectation they would be recalled, sooner or later. Today the comparable figure is 1 of 10.
The point is to look at the whole picture, and remember that this is about working people and about economic justice.
From everything one reads in the paper, on the web, or sees on TV, you’d think it’s the end of the world. Let’s take a moment to breath and relax, because as scary as this all seems, the truth is that this economic crisis is nothing new. As you can see in the chart below, economic crises have happened before (and before, before that, and even before that), and each time working people have had to play a role in restoring order and moving the nation in a better direction that was more sustainable.
Remember the abolishment of slavery, or “The New Deal”? Someone pushed for that to happen, and if you’re reading this blog chances are it was someone like you.
(This is a chart called the Kondratieff Wave, which stated that capitalist economies held recurring periods of booms and busts. See also here. A more controversial graph which looks at the role of war and economic recovery can be seen here.)
I wouldn’t be the first to admit that the solutions weren’t perfect and had flaws, but what’s made America a beacon of hope has been our uncanny ability as a people to turn a crisis into an opportunity for advancement.
The financial crisis, if seen in this context, is our challenge and opportunity to lead the U.S. and global economy in a better direction. We have an opportunity to turn record levels of food production into a solution to the global food crisis. We have an opportunity to address inequalities like American workers making less money today than their grandparents did 30 years ago, even though the U.S. workforce is more productive today than in times past.
Over the coming weeks I hope to join my fellow editors in a conversation about how to move beyond the economic crisis, and what workers can do to ensure that they are part of finding solutions that everyday people will feel and see. Solutions like passing universal health care, leveling the playing field for workers by passing the Employee Free Choice Act, or passing comprehensive immigration reform that does not criminalize workers looking for a better life.
In that spirit, I submit that the first part of economic recovery is to figure out where you stand in relation to the economic crisis. That is to say, how did we contribute to it, what are the impacts we are feeling, and what are 2-3 things I can do to help restore the economy? Need a hand figuring out what you can do? Check out this awesome poster/tool that the folks over at Yes! Magazine put out on 31 ways to jump start the local economy (PDF).
