Radio commentary, September 17, 2009
Mixed news on the economic front, as has been the case for weeks going on months. Which is better than what went before, meaning unmixed negatives, but is still a sign of how weak and tentative the economic stabilization has been so far.
Thursday morning we learned that first-time claims for unemployment insurance declined last week by 12,000, exending the previous week’s decline of 19,000. But over the last couple of months, the decline that began in March and ran through July, seems to have stalled. And so-called continuing claims, that is the total number of people drawing unemployment benefits, rose by 129,000. It had been improving for a while, but it too looks to have stalled. So while things in the job market aren’t getting worse, and may be getting slightly better, they’re not yet turning around.
Here’s an interesting longer-term development. Since late 2000, the Bureau of Labor Statistics has been reporting on the number of monthly hires and separations (separations being the sum of voluntary quits and involuntary terminations). What’s really distinguished this recession, in contrast to the 2001 downturn, is a near-total hiring strike by employers. The number of separations is actually at the lower end of its historical range. The problem is that if people lose their jobs, or enter or re-enter the job market, there’s no one hiring. The picture improved very slightly in July, the latest month for which data is available, but like everything else, by not very much. As I’ve pointed out here before, as brutal as the U.S. economy is, it used to have a certain dynamism. It’s now lost that, and is down to pure brutality.
Speaking of brutality, Barack Obama came to Wall Street last week and told the assembled bankers that they had to change their ways. But his speech amounted to toothless finger-wagging. He’s the president. He could have busted their chops. His administration could have come into office and immediately began a program of re-regulating finance. He didn’t. He’s dithered and postured and done approximately nothing except write the banks big checks. I’ll bet the Wall Streeters went back to their offices and had a good laugh. Maybe his talk impresses the liberals. But the bankers so far have absolutely no reason to be afraid of a crackdown.
And more brutality, health care reform. I got an email blast from MoveOn.org this morning inviting me and several million other people in their address book to a set of nationwide rallies to fight the insurance giants. Sure, I’d like to do that—but they’re organizing these rallies in support of the reform proposed by the administration and Congressional Democrats. As I’ve been saying over and over, there’s nothing in these proposals that seriously, or even semi-seriously, cramps the style of the big inscos. Quite the contrary. We’re all going to be forced to carry insurance, should this legislation pass, meaning buy it from the insurance companies. If you’re sort of poor, the gov will subsidize your purchase. They won’t be able to drop people for pre-existing conditions, but they will be able to force them to pay through the nose for crummy policies. Doesn’t MoveOn know this? Don’t they know that over the last three months Aetna’s stock has gone up 30%, about twice as much as the broad market? Is MoveOn so in thrall to the Democrats that they haven’t bothered to scrutinize the proposals? Or have they, and they don’t care? In other words, are they naïve or devious?
For a lot of liberals, it all seems to have come down to the so-called public option: will the reform create a public entity to compete with the private insurers? Never mind that in the unlikely event the public option were to happen, it would be so crippled as to be meaningless. But what about the rest of the scheme? What about the noxious habits of the insurance companies, like denying a quarter or a third of the claims that patients file? That’s likely to continue unabated.
I think we may be better off if these reform schemes fail and we have time to organize to press for something better.