[Marxism] No end in sight

Louis Proyect lnp3 at panix.com
Fri Apr 3 12:15:29 MDT 2009

(It is of some interest that the Times makes the comments of Dean Baker, 
a fairly principled left-liberal economist, prominent.)

NY Times, April 4, 2009
No End in Sight to Job Losses; 663,000 More Cut in March

The American economy surrendered 663,000 more jobs in March as the 
unemployment rate surged to 8.5 percent, its highest level since 1983, 
the government reported Friday.

The latest snapshot of accelerating decline in the national job market 
lifted to 5.1 million the number of jobs lost since the recession began 
in December 2007. More than two million jobs have disappeared over the 
first three months alone.

The severity and breadth of the job losses — which afflicted nearly 
every industry outside of education and health care — prompted 
economists to conclude that an agonizing plunge in employment prospects 
was still unfolding, with no clear turnaround in sight.

“It’s really just about as bad as can be imagined,” said Dean Baker, a 
director of the Center for Economic and Policy Research in Washington. 
“There’s just no way we’re anywhere near a bottom. We’ll be really lucky 
if we stop losing jobs by the end of the year.”

The pace of retrenchment has prompted calls among some economists for 
another wave of government stimulus spending to buttress the $787 
billion already in the pipeline.

In January, as the Obama administration drafted plans for the current 
round of stimulus spending, it assumed the unemployment rate would reach 
8.9 percent by the last three months of the year.

“We’re clearly looking at a worse downturn than they had been 
anticipating when they planned the stimulus,” Mr. Baker said. “We’re 
going to need some more.”

But others — not least, decision-makers inside the Obama administration 
— deem such talk premature. The jobs report, while dreadful, landed amid 
tentative signs of improvement in some areas of the economy, with recent 
snippets of data lifting stock markets and sowing cautious hopes that 
the beginnings of a recovery might be taking shape.

The pace of decline in auto sales, while still falling, has slowed. 
Houses have been selling in much greater numbers in important markets 
like California and Florida, albeit at substantially reduced prices. 
Consumer spending, while far from vigorous, appears to have leveled off 
after plummeting over the last three months of 2008.

Meanwhile, a surge of government spending is just beginning to work its 
way through the federal and state bureaucracies, aimed at spurring 
demand for American goods and services. This spending is expected to 
support jobs in construction and related industries later this year. The 
administration is distributing more than $3 billion in aid to states to 
train laid-off workers for new careers in so-called green industries, 
like manufacturing solar- and wind-power equipment, and in health care.

“We’re attacking this in a very aggressive way,” the labor secretary, 
Hilda L. Solis, said Friday in an interview, arguing that it was too 
early to consider another round of stimulus spending. “We will revisit 
that once we expend all the money that we have accrued.”

Much of the recent indications of potential economic improvement reflect 
temporary seasonal factors rather than a sustainable trend, some 
economists argue. Housing construction, for example, has looked more 
robust in large part because January’s construction activity was slowed 
by bad weather.

The crucial factors assailing the economy remain in force, with tattered 
banks reluctant to lend, and even healthy households and businesses 
averse to borrowing and spending in a time of grave uncertainty and fear.

The very perception that millions more will lose jobs and housing prices 
will fall have turned such outlooks into reality: As businesses scramble 
to cut costs in the face of gloomy sales prospects, many are shrinking 
work forces, removing more paychecks from the economy and further 
eroding spending power.

“There’s a lot of survival job-cutting going on throughout American 
business,” said Stuart G. Hoffman, chief economist at PNC Financial 
Group in Pittsburgh. “There won’t be any job growth at all this year. 
The economy is far, far from being out of the woods.”

Still, Mr. Hoffman is among those inclined to wait for a few more months 
and hope for improvement before unleashing a new wave of stimulus spending.

The Treasury has recently outlined plans for an expanded bank rescue 
aimed at lowering borrowing costs for businesses and households, this 
generating fresh economic activity and jobs.

In London, leaders of the world’s major economies left a summit meeting 
this week with a promise to bolster the finances of the International 
Monetary Fund by $500 billion, lending support to troubled economies 
from Eastern Europe to Southeast Asia, perhaps increasing now plunging 
global trade and thus demand for American-made goods.

“It’s a little soon to conclude politically, and I’d argue economically, 
that we need some more stimulus,” Mr. Hoffman said. “You don’t just 
double the dose if the patient doesn’t immediately improve.”

Friday’s report catalogued the myriad ways in way American working 
people remain under assault. The number of unemployed people increased 
by 694,000 in March, reaching 13.2 million. Those on unemployment for 
longer than six months reached 3.2 million.

“Almost everyone’s being touched in some way,” said Mark Zandi, chief 
economist at Moody’s Economy.com. “It seems like every business in every 
industry in every corner of the country has a hiring freeze. They’re 
just not in the mood or position to hire. They’re not taking résumés. 
They’re not looking for people.”

Manufacturing again led the way down, shedding 161,000 jobs in March. 
Employment in construction declined by 126,000, and has fallen by 1.3 
million since it peaked in January 2007. Professional and business 
services employment fell by 133,000, with more than half the losses in 
temporary help services — a sign that companies that have already 
shifted from relying on full-time workers to temporary people are 
feeling compelled to cut further.

In the suburbs of Atlanta, Meg Fisher, 46, has been looking for work 
since she lost her job as a legal secretary in the middle of February. 
Her husband’s hours at his pharmacy job were scaled back. All told, 
their previous annual income of about $79,000 has been sliced to $20,000.

Ms. Fisher is planning to apply for food stamps, while seeking out 
freelance work as a seamstress and knitting instructor.

“It’s not going to replace my salary,” she said. “It’s not even going to 
come close, but it’s better than sitting around.”

The report reinforced the reality that the pains of the downturn have 
spread far beyond the jobless. The number of those working part time 
because their hours have been cut or they are unable to find a full-time 
job climbed by 423,000 in March to reach 9 million.

In New Jersey, Henry Perez, 34, and his family are now living in the 
basement of his sister’s house and struggling to find work.

A refugee of sorts from the real estate collapse in Las Vegas, where Mr. 
Perez once lived and bet big, he has more recently worked in online 
commerce and as a marketer at an office furniture company. But after 
being laid off at the end of last year, he has found nothing, even as he 
has sharply dropped his expectations, applying for jobs at restaurant 
chains like Panera Bread and Quizno’s.

“We’re just sitting here all day long looking for jobs on the computer, 
frustrated and scared as hell,” Mr. Perez said. “I’m looking for anything.”

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