The Job Layoffs Are Just Starting - A Scary Forecast

The husband and I left Key West the day that bars and restaurants were ordered closed or allowed to open with only severely reduced capacity.  Our last day at our guest house showed 12 empty rooms in contrast to the 100% occupancy on previous trips.  Obviously, the restaurant and tourism workers will be hit hard - as will so many businesses (the husband's salon is closing for two weeks except for selected customers who make pre-arrangements).  My law firm will continue to operate and hopefully can do more through online recordings and title searches. The question obviously becomes one of how will those furloughed or outright fired survive financially, especially if they cannot qualify for unemployment benefits.  A piece in the New York Times looks at the frightening economic forecast that goes far beyond drops in the stock market.  Here are article highlights:

However events unfold, one thing is becoming clear: As the effects of the coronavirus pandemic hit the U.S. job market, the damage looks likely to be much deeper and longer lasting than seemed possible even a week ago.

Marriott International, the hotel operator, said Tuesday that it would begin furloughing tens of thousands of employees worldwide. Restaurants, coffee shops, gyms and other small businesses have begun laying off workers outright. On Monday, a flood of inquiries from newly jobless New Yorkers crashed the website for the state’s unemployment insurance system.

With striking speed, Democrats and Republicans in Washington have embraced proposals for cash payments to Americans to help offset the economic damage.

Relatively few companies outside the hospitality industry have announced significant job cuts, with many saying they will continue to pay employees even while they are closed, though often for fewer hours of work than normal.

But that cushion seems unsustainable. Most small businesses do not have the financial buffer to pay workers for long if revenue dries up. And while larger public companies may have access to cash, they also have shareholders who want executives to watch the bottom line.

The scope of layoffs will help determine how badly the outbreak will damage the broader economy. If companies largely retain workers, the downturn could be relatively shallow and the rebound relatively swift. But if people lose their jobs, and their spending power, the damage could mount.

“The question is, do we get trapped in that vicious cycle?” Mr. Challenger said. “Do we get stuck where workers who don’t have wages stop going out to buy things?”

The answer could depend in part on what happens to the retail industry, the country’s biggest private-sector employer and one that was already struggling amid the shift to online shopping.

Grocery stores and big-box chains have seen sales surge as shoppers rush to secure toilet paper, disinfectant wipes and food. And in an indication of how the outbreak has accelerated the shift to online retail, Amazon announced Monday that it would hire 100,000 workers to handle the surge in demand caused by the crisis.

For brick-and-mortar sellers of “nonessential” items, however, the spread of the virus has spelled trouble. A wave of retailers announced temporary store closings over the weekend, . . .

Meanwhile, there is this at Huffington Post:

U.S. Treasury Secretary Steven Mnuchin warned Republican senators on Tuesday that the country’s unemployment rate could hit 20% if they failed to act on a proposed coronavirus rescue package and there was lasting economic damage, a person familiar with the closed-door meeting said.

Mnuchin met with senators to persuade them to pass a $1 trillion stimulus package that would send cash to Americans within two weeks and backstop airlines and other companies.

A Treasury official said Mnuchin was not providing a forecast but trying to illustrate the potential risks of inaction.

Economic Storms Gather in Swing States

Abandoned factory.

As approval of the impeachment inquiry continues to rise, Donald Trump has continued his standard approach to everything: lie and and try to distract, even lying about knowing Rudi Giulian's newly arrested Russian cohorts. Meanwhile, his self-created trade wars are wreaking havoc on the economies of the swing states critical to Trump's re-election hopes: Michigan, Wisconsin, and Pennsylvania.  Particularly hard hit are manufacturing - which Trump promised to restore - and, of course, farming which is being further damaged by climate change in the Mid-West, a phenomenon that Trump claims is a Chinese hoax. A piece in Politico looks at the growing economic storm clouds hanging over states that, if they reject Trump, could end in his defeat in 2020, assuming his isn't removed from office before then.  Here are highlights:

Donald Trump shocked the world and won the White House in 2016 on bold promises to bring greatness back to the industrial Midwest.

But his promise now faces a brutal reality: The U.S. manufacturing sector is spiraling into recession, victimized by Trump’s trade wars and sagging confidence among corporate executives who have little idea how to plan for an uncertain economic future.

Unless Trump can ram his revised North American Free Trade Agreement through Congress and cut a deal with the Chinese to erase historically high tariffs, he may find it difficult to repeat wins in states like Michigan, Wisconsin and Pennsylvania that drove him into office in 2016 by the narrowest of margins.

“Manufacturing is in recession right now. This is what all the data show,” said Torsten Slok, chief economist at Deutsche Bank Securities. “And everywhere I go in the world, the fear I hear is that we are going to be driven deeper into recession because this is all about uncertainty caused by the trade war.”

Broad national gauges of manufacturing are already troubling, countering some of the president’s claims of success. The Institute for Supply Management manufacturing survey . . . . has shown a declining sector two months in a row, recently hitting a level not seen since the end of the Great Recession due to a sharp drop in new export orders. Respondents to the survey blamed a trade war that has reduced export demand and increased costs for parts used in manufacturing.

At the county and state level, the environment looks even darker for Trump.

The negative news on manufacturing comes as senior Chinese officials arrive in Washington for another round of talks aimed at reaching a deal with Trump that would reduce heavy tariffs that have imposed significant economic costs on both sides.

It’s unclear whether Trump would accept such a deal that could eliminate tariffs and relieve some of the pressure on the manufacturing sector, and he told reporters Wednesday afternoon that he didn’t think China was lowering expectations for a trade deal.

It’s not certain that even such a deal will reverse negative trends in the manufacturing sector, which overall is a small slice of the American economy but an important part of overall corporate profits. Manufacturing also supports all kinds of ancillary service-industry jobs that suffer whenever factory work declines.

Overall, the growth in manufacturing jobs — one of Trump’s biggest promises — has essentially vanished. After adding as many as 25,000 new manufacturing jobs per month last spring, the numbers began to decline as the trade war with China intensified. In September, the sector lost 2,000 jobs. That number could grow for October when striking GM workers are included.

“To the extent that the manufacturing slowdown continues unabated, which is likely unless there is a de-escalation in trade tensions, the electoral map could be more difficult for President Trump and Republicans in 2020,” Deutsche Bank analysts wrote in a report this week.

The still-strong national employment numbers, with a jobless rate at a half-century low of 3.5 percent, can also tell a misleading political story. . . . But dig deeper and large numbers of the jobs are coming from uncontested states like California. States that make up Trump’s coalition are not doing quite as well.

“It’s an existential political risk,” said Moody's Analytics chief economist Mark Zandi. “He won the election based on carrying Pennsylvania, Michigan and Wisconsin and appealing to those voters who work in manufacturing or related industries. He promised he would bring manufacturing jobs back and his policies are doing the precise opposite. Jobs losses are mounting, particularly in those states.”

Trump’s trade battle with China has also slammed rural states where farmers have been unable to sell soybeans and other products into one of their biggest markets. Trump has responded by moving to dole out $30 billion in bailout money and praising “patriot farmers.” Many of the states hit by the drop in agriculture exports like Indiana, Nebraska and Kansas are solid Trump country. Others like Iowa could be a problem for the campaign.

Trump is also trying to make inroads in Minnesota, where he narrowly lost in 2016, and plans to hold a rally there Thursday night. But Minnesota is feeling pressure both in manufacturing and agriculture, as are states like Iowa and Pennsylvania.

And it’s not clear that even a quick and limited deal with the Chinese could reverse some of the major negative trends in manufacturing.

Ultimately, Trump’s reelection could come down to three states — Michigan, Pennsylvania and Wisconsin — where manufacturing trends are working against him and where he will need a sharp turnaround. “In those three key states, the economies are weakening. Unemployment is low but rising,” said Zandi. “If it continues to rise between now and Election Day it will be very difficult for him to recover. The trend lines don’t look good.”

The trend lines may not look good for Trump, but are a net positive if they end up removing the orange cancer from the White House. 

Ford Motor: Layoffs After Losing $1 Billion to Trump's Trade Tariffs

America continues to caught in multiple trade wars started by narcissistic dimwit who occupies the White House.  And the consequences for average Americans is worsening as Trump's tariffs - which are in effect a tax on goods and materials - take effect.  Many businesses find their cost of doing business soaring.  As reported by Fortune, one such business is Ford Motor Company, America's second larges automaker which is estimated to have lost $billion due to Trump's tariffs and is expected to cut 24,000 jobs.  The only silver lining is that many job losses in America will be in states that voted for Der Trumpenführer.  But it is not just businesses who will pay the price for Trump's tariffs.  As the Washington Examiner reports, the added tax burden from the tariffs will greatly exceed the costs of the Affordable Health Care Act which Republicans called "job killing."  First these highlights from Fortune: 

Ford is having a bad year in 2018. Its stock is down 29%, and the tariffs imposed by President Trump have reportedly cost the company $1 billion, as the company is in the midst of a reorganization. Now, the company is announcing layoffs.

Jim Hackett, Ford’s CEO, is working to engineer a $25.5 billion restructuring of the automaker, hoping to cut costs and remain competitive, the Wall Street Journal reports. But auto sales are down, and one reason is the trade tariffs that Trump has imposed on metals and other goods. According to Bloomberg, Hackett has said they have already cost the company $1 billion in profit and could do “more damage” if the disputes aren’t resolved quickly.

Ford, the No. 2 U.S. automaker by sales, is making aggressive job cuts as part of that reorganization, NBC News reported. While the company hasn’t said how many jobs will be lost, a report from Morgan Stanley estimates “a global headcount reduction of approximately 12 percent,” or 24,000 of Ford’s 202,000 workers worldwide.”

The Kansas City Star reported Tuesday that Ford has temporarily halted production of transit vans in Claycomo, Mo. The move is intended to build up Ford’s inventories of the vans, but it will leave 2,000 workers idle between Oct. 22 and Nov. 4.

Despite news of the layoffs, Ford’s stock closed down 3.4% Tuesday.

At a time when automakers are scrambling to prepare for self-driving cars, Ford is also struggling to keep pace with the rest of the industry. September was a bad month for U.S. auto sales—with aggregate sales down 7%—but Ford’s drop off was even more severe. Ford said its sales of its vehicles declined 11.2% last month, with sales of its best-selling F-Series pickup trucks down 9%.

As for the average citizen, the tariffs are wiping out much of any alleged benefits from the Trump/GOP tax cuts that principally benefited the very wealthy. This from the Examiner:

The $67.2 billion estimated 2019 tax burden of the Affordable Care Act prior to those changes is lower than the cost of new trade taxes once a scheduled $30 billion tariff increase takes effect in January. If every currently proposed tariff is enacted, the total trade tax burden will nearly double even the tax burden of the pre-reform ACA — NTUF estimates the net total of proposed and enacted trade taxes to be $132.55 billion. That would offset more than 70 percent of the $188.8 billion in 2019 individual income tax cuts.

American businesses and consumers are slapped by tariffs just as viciously as the target countries. While tariffs make foreign goods less competitive in the American market, it's actually the importer that remits the cost of the tariff to U.S. Customs.

American consumers pay for tariffs as well. Tariff costs paid by an importing business are generally passed on to consumers in the form of higher prices. Even when a domestic business chooses to change its behavior because of a tariff and avoid foreign goods, there was likely a reason why the domestic business had previously been importing foreign goods over domestic ones. Whether it means higher prices or lower-quality goods, American consumers pay the price.

Artificially higher prices for goods through trade restrictions have ripple effects throughout the economy. Businesses experiencing increased supply costs must make up the loss elsewhere, often through reduced wages or employment.

Trump Tariffs Slam Pence's Hometown

Karma can seemingly be a bitch.  A case in point is Mike Pence's shameless self-prostitution to Donald Trump and hypocrisy-filled pretense of being a godly Christian while serving a man who is the antithesis of the Gospel message.  Now, the Trump tariffs - put in place in a fit of bullying rage and effort to appear the "tough guy" - are slamming Pence's hometown in Indiana. One can feel only so much pity for the residents since their state supported Pence for governor (although many believe he could not have won re-election, hence his prostitution to Trump) and voted for the Trump/Pence ticket. Embracing racism and religious extremism do, in my view, need to carry a severe price.  A piece in the Washington Post looks at the economic pain occurring in Pence's hometown - pain that will likely worsen if Der Trumpenführer puts additional tariffs in place.  Here are excerpts:

COLUMBUS, Ind. — One company and one family loom large over this city, intertwined for decades. Cummins Inc. is the biggest employer in Columbus, built into a $20 billon heavy equipment manufacturer with the help of Mike Pence, who as governor passed pro-business tax cuts and made trade visits to China on its behalf.
 Pence’s older brother Edward joined Cummins after graduating from college and worked there for four decades, running one of its most lucrative engine plants before retiring last December. A second brother, Greg, is running for the 6th congressional district seat and visited Cummins during a recent campaign stop.

But the alliance of the past is being threatened by the administration Mike Pence now serves, as President Trump’s trade war with multiple nations clobbers Cummins and other local companies.

According to the Brookings Institution, the Columbus area is the most export-reliant region in the country, with just over half of its economic output linked to foreign purchases. “I’m very worried,” said Tom Linebarger, the chief executive of Cummins, who met with President Trump over dinner at the White House in January in a bid to dissuade him from introducing steel and aluminum tariffs or tearing up free trade agreements. Linebarger, 55, warns of job losses ahead because thousands of jobs at Cummins and elsewhere in the area depend on trade. “We will do everything we can to mitigate . . . the impact to jobs,” he said. “It’s very clear, though, that we’re not going to be able to mitigate everything.”

Pence’s hometown oozes internationalism: 40 foreign companies have a presence, more than half of them Japanese engines and auto-parts plants, employing almost 10,000 people. The area’s schools collectively speak 51 languages. The city ranks second in the nation in the per capita percentage of H-1B visas for foreign workers.

Now the aggressive pursuit of foreign trade that made this city a recession-busting economic miracle has made it decidedly vulnerable, with businesses already canceling projects and mulling the depth of job losses. . . . Cummins alone has 25,000 different suppliers and also its own chain of distribution, both of them largely international. Its U.S. base is bolstered by operations in the United Kingdom, China and India.

Linebarger said the president’s trade war hits the company in two ways, affecting both its incoming parts, which will be subject to tariffs, and its own products, on which retaliatory penalties will be assessed by countries targeted by Trump.

[T]he most vulnerable of the company’s factories: the high-horsepower engine plant in Seymour, outside Columbus, which employs 1,000 people. Its biggest export is a 95-liter engine, which is the size of a car and can power hospitals, tanks and football stadiums. It is so specialized that only 10 can be made per day. Of these, eight will be sold abroad.

“We almost put the factory in India. We evaluated the U.K. and China too. If we’d seen trade barriers at that point, we’d definitely have made a different decision,” says Linebarger.

Other local businesses are seeing the effects as well. Harold Force, 67, has run a construction company founded by his father since 1980, which currently employs 250 people. Now he is coping with rising prices on items he needs for contracts signed in less expensive days before the trade war. Already, he said, he has had to cancel plans to expand his workforce.

“I think this is a much bigger deal than people think. When it started, it was shock. I thought, ‘Is this really happening?’ Then one of our biggest projects in recent times was canceled because of steel prices,” he said.

The city’s foreign companies are likewise worried. Jon Volz of Sunright America Inc., a Japanese-owned company in Columbus which supplies U.S. Toyota plants with millions of bolts and fasteners, said the materials required to make their parts are only available in Japan.

The Democrat running against Greg Pence has sought to make trade an issue in the campaign. Jeannine Lake, 51, a Christian newspaper publisher, said the economy was the only issue that mattered. “Tariffs are not just hitting people in places like Columbus, it’s also farms which make soy beans and corn,” she said. Pence has run a muted campaign, refusing to attend candidate debates and declining to release a public schedule. His most public comments so far came when he defended himself after it was revealed that his gas station company’s bankruptcy had cost taxpayers $20 million in contamination costs.

Across Columbus, workers are expecting the worst. “I’m very Republican, but I feel the current strategy is opinion-based, not data-based,” said Chris Tiemeier, 38, whose grandfather was also a proud Cummins employee and whose wife works at the plant. “The company has changed our town, it’s doubled in size. I’m worried about tariffs.”

Jason Hester of the Greater Columbus Economic Development Corporation has traveled to China for the last nine years to whip up investment. This year, he’s canceled his travel plans.

At the risk of sounding cruel, I hope the pain coming to Columbus is replicated all across the Mid-west, especially in districts that threw the Electoral College vote to Trump/Pence.

Job Losses from Trump's Trade War Likely Just Beginning

Much like Mussolini (for whom things did not end well), Donald Trump likes to strut around and act the tough guy. Part of this tough guy/bully routine is Trump's self-created trade war which is already beginning to kill American jobs.  But worse days are likely to come for both American workers more of whom will lose jobs and American consumers who will find themselves paying higher prices for numerous goods.  All so a foul narcissist can feed his insatiable ego and play to the knuckle dragging base of the Republican Party. A column by a former U.S. Trade Representative looks at America's increasingly alienated allies working to form new trading alliances that exclude America.  Here are highlights:

Diversification is the polite way of saying that America’s friends and allies believe we have become an unreliable partner, and they are now looking elsewhere. From Ottawa to Brussels to Seoul, our trading partners are fed up with the Trump administration’s tariffs, and they have given up on trying to charm President Trump or persuade him that free trade is good. To reduce their economic dependence on the United States and their exposure to a potential global trade war, they are forging trade deals that leave us out of the picture altogether. On June 14, Canada’s government asked Parliament to ratify a new version of the Trans-Pacific Partnership, which the United States backed out of last year. On June 18, the European Union trade commissioner visited Australia and three days later, New Zealand to begin negotiations for free-trade agreements; and on June 22, South Korea announced plans to pursue negotiations for its first free-trade agreement with Russia.

These moves are a direct response to the Trump administration’s unreliability and unpredictability, and they are a clear sign that the administration’s trade policy priorities — renegotiating deals and punishing violations — are not working out as expected.

[Trump] The president may want better deals to replace the old, “terrible” deals he doesn’t like, but so far, the rest of the world has been reluctant to negotiate new agreements with the United States. The long and growing list of tariffs, particularly those based on dubious national security grounds, has weakened the administration’s ability to form coalitions with other countries to tackle legitimate concerns, especially China’s unfair trade practices.

Instead, our closest trading partners are scrambling to find new markets for exports subject to tariff increases by the United States, and to secure new suppliers for the American products that their own countries are planning to hit with retaliatory tariffs.

Japan is thus accelerating negotiations with other countries. Japan and the European Union plan to sign their free-trade agreement in July. Moreover, it was Japan who stepped up to fill the leadership void left by the American exit from the Trans-Pacific Partnership. The Japanese Diet approved a bill to ratify the revised pact this month.

The tone and policies of the Trump administration have even managed to bring two longtime rivals, China and Mexico, closer together. The two countries once competed head-to-head as low-cost manufacturers, with the United States as the most important market. After Mr. Trump began beating the drum for tariffs and a possible withdrawal from Nafta, Mexico’s economy minister, Ildefonso Guajardo, called a visit last year to China “strategic leverage,” saying it “sends the signal that we have alternatives” to the United States.

Regrettably, this leaves the United States on the margins as the rest of the world builds a new trading structure without us. Our workers, farmers and companies will be locked out of important markets. We will lose our chance to help write the rules and set standards for trade in advanced technology, such as alternative-fuel vehicles, 3-D printing and artificial intelligence. Global and regional supply chains will increasingly bypass the United States. And years of efforts by the United States to curb China’s unfair trade practices will lose critical international support. To be sure, as the world’s largest economy, the United States will remain a major player in international commerce. . . . There is a danger, however, in overestimating our negotiating leverage. Trade patterns will shift as our partners look elsewhere. We have spent decades building trust with our allies. We are now squandering it.

Job Losses From Trump’s Ill-conceived Tariffs Begin

I will admit that I have difficulty feeling any sympathy for Trump voters who are beginning to reap what they sowed when they threw away decency and morality and voted for the malignant narcissist in the White House who ignores the advice of true experts and instead believes the world is a zero sum game and listens to nasty Christofascists and white supremacists.  Many of these voters are finding their health care coverage disappearing or their premiums soaring.  Now, some are beginning to lose their jobs as a result of the bully-in-chief's ill-conceived tariffs and trade war.  Things will likely get worse for them and their dilemma at some point will be whether to continue to put Trump's calls to racially inspired hatred ahead of common sense. Given the actions and statements of some of our "friends" who voted for Trump, I suspect it will be the former - its as if they've had lobotomies and can no longer see reason or even common decency.  A piece in the Washington Post looks at the first job losses coming home to roost.  Here are excerpts:

The first casualties of President Trump’s trade war are 60 workers at Mid-Continent Nail, America’s largest nail manufacturer. They lost their jobs on June 15 at a factory in a part of Missouri that voted overwhelmingly for Trump. The whole company could be out of business by Labor Day.

This is a potential game changer in Trump’s trade strategy, especially if it marks the start of more companies announcing layoffs. On Monday, Harley-Davidson said it will be moving some “production” offshore because of the trade war (Europe hit Harley with a 31 percent tariff in response to Trump’s steel tariffs on Europe). Harley won’t confirm whether jobs are leaving the United States, but the union representing many Harley workers, the International Association of Machinists and Aerospace Workers, is worried.

The Trump administration has argued that these tariffs will save jobs and that the cost to America will be minor. But now there are real job losses. Now there is a human face to the pain that so many trade experts have been warning about.In Missouri, a state with a close U.S. Senate race, the layoffs are already becoming a hot election issue. Sen. Claire McCaskill (D-Mo.) is planning a visit to the nail plant on Friday.

Mid-Continent Nail blames the layoffs on Trump’s tariffs, and the company says all 500 employees could lose their jobs by Labor Day.

The next round of cuts could come in a matter of days.The trouble for the company started at the end of May when Trump put a hefty 25 percent tariff on steel imports from Mexico and Canada. Mid-Continent had been importing steel from Mexico that American workers would then turn into nails.

After the tariff, the company was forced to hike its prices, and customers fled. Orders are a mere 30 percent of what they were a year ago, said George Skarich, the vice president of sales. He suspects many customers are now buying Chinese nails.

The workers who lost their jobs on June 15 were contract workers paid about $10 an hour, but the next round of layoffs will hit longtime employees, many of whom are making $13 to $14 an hour, plus benefits. That's a middle-class job in Poplar Bluff, where the median income is just over $31,000 a year.

[T]he vast majority of economists and business leaders have warned that many more jobs are likely to be lost than saved.

The Tax Foundation predicts 48,585 job losses from the tariffs Trump has already enacted on imports of washing machines, solar panels, steel, aluminum and $50 billion in Chinese products. That figure would soar to over 250,000 job losses if Trump moves forward with tariffs on another $200 billion of Chinese products, the Tax Foundation said.

[S]ome parts of the country are likely to be hit hard. Europe, Canada, Turkey and China are targeting their tariffs at towns that voted for Trump.the situation in Missouri is a warning sign of how the tariffs are helping some workers and harming others, and that's tricky politics for Trump, who looks as though he is picking winners and losers.

[Trump’s] focus has been on saving jobs that make raw steel and aluminum, but there are many more jobs that are harmed by the tariffs because they turn raw metal into something else, such as a car or airplane. The longer the tariffs are in place, the more companies are likely to have to make cuts.Experts have warned Trump that the tariffs are likely to cause more job losses than jobs saved, and the early signs of that are starting to play out in small towns south of St. Louis.  As the job losses mount, so may the pressure on Trump.

The Loss Of Government Jobs Is Holding Back The Economy

The latest jobs report was welcomed news with unemployment down to 7.5% and 165,000 new jobs.  In addition, the lack luster figures for the two prior months were sharply adjusted upward.  But despite this good news, continued cuts in government employment is undermining the private sector gains.  Also creating further drag on the economy are sequester cuts which in this area are hitting families with 20% pay cuts even as their built in expenses are at their old levels.  We have personal friends suffering this experience right now.  The ultimate irony from it all is that GOP demagogues accuse Obama of being a big spender while it was their moron president George Bush who blew the nation's budget.  A piece in Think Progress looks what the loss of government jobs is doing to the over all economy.  Here are article highlights:

The jobs report out this morning was full of good news: unemployment fell to 7.5 percent as the economy added 165,000 jobs, while big upward revisions to the past two months’ jobs numbers were added. The private sector carried those figures, adding 176,000 jobs in April. Yet the number was dragged down by the loss of 11,000 public sector jobs.

This has been a steadily recurring trend with each monthly jobs report: even when the private sector adds a solid number of jobs, the overall figure is pulled down by losses in the public sector. 741,000 jobs have been lost in the government sector since the beginning of the recovery period in June 2009, with 89,000 gone since this time last year. 

Overall, the government has shed 718,000 net jobs since President Obama took office. While often accused of bloating the government, the trends show exactly the opposite: Obama has overseen a sharp decline in public sector payrolls as compared to his predecessor President George W. Bush, as can be seen in this chart [see chart above] from Calculated Risk.

While government workers have been maligned as lazy paper pushers, many of them perform vital work that benefits their communities. Take, for example, the loss in teaching jobs. “Local government education” jobs, or in other words teachers, dropped by 1,500 last month and have declined by 355,500 since the recovery began.  

The drop in public spending and, in turn, public employment has had big consequences for the recovery. If public sector rolls hadn’t been shrinking so steadily, the unemployment rate would likely be a full percentage point lower. The furloughs and potential job losses from sequestration cuts don’t even show up in these numbers. When the full pain of those cuts is felt later in the year, the trend may look even worse.

The Republicans keep touting austerity but somehow never seem to understand - perhaps they simply don't care - that real lives and real American families are being harmed. Meanwhile, of course, the rich are getting richer.

The GOP Mission to Destroy Middle Class America

Two things are striking about today's GOP: (1) it seems determined to destroy middle class America and (2) its hypocrisy knows no limits.  Estimates are that if the scheduled sequestration cuts kick in, one million jobs will be lost.  That's one million families that will suddenly be faced with financial uncertainty and the prospects of losing their homes and/or their life savings.  Does anyone in the GOP seem to give a rat's ass about these families and employees?  Apparently not.  Then there's the unbridled hypocrisy of a political party that makes great show of supporting "family values" and "Christian values," values that one would think would include care and concern about the welfare of families and children not to mention the Gospel message that to be a follower of Christ one doesn't hoard riches while others go hungry, naked or homeless.  The true GOP agenda is the antithesis of the social message/policy advocated by Christ.  Yet in the bizarre world of the GOP and its Christofascist base, the road to Heaven is based on hate: hatred of gays, hatred of the poor, hatred of minorities, and the subjugation of women.  A piece in The Daily Beast looks at the ugly agenda of the GOP.  Here are excerpts:

We’re less than a month away now from the sequester, the beginning of the deep budget cuts that will kick in automatically if President Obama and Congress don’t come to a budget deal. I have a news flash for you: There is not going to be any deal in the next 25 days. And here’s another news flash: In the Republican tug-of-war between those who want to protect the Pentagon and those who want to cut spending and damn the consequences, it’s looking like the latter are winning. If they get their way, it’s also almost certain that the austerity the cuts induce will cost a lot of jobs and hurt the economy. So the only thing for Barack Obama to do now is start agitating to make sure the American public blames the right culpable party here.

Austerity, in difficult economic times, which these still are, is never good. Anything that takes money out of the economy isn’t good. This is the great paradox of the Republican position that “we” have to learn to live within our means. There’s never been more insidious nonsense put about the land. The only thing severe cutbacks would do is put the recovery at risk.

A New York Times editorial Monday noted that at least a million jobs might be lost, according to a Congressional Budget Office report, if the sequester cuts go into effect. To give you a point of comparison, the economy created 2.2 million jobs last year. And it was a decent year, no better. Imagine subtracting a million to 1.4 million from whatever positive number we get this year. That’s a pretty devastating hit.

Right now, though, it sounds as if that’s where the GOP wants to take us. .  .  .  .  This is an important change in momentum.

There’s something quite amusing about this, as Forbes’s Loren Thompson wrote yesterday. In allowing these defense cuts to go through, Republicans would be harming their own constituents, because there are considerably more military bases and supply depots and the like in red states than in blue states. Thompson noted that there are two bases in Mulvaney’s district where thousands of employees could be furloughed or fired.  .  .  .  .   they know better, but they figure well, if the economy does tank because of our collective stupid action, Obama’s the president, he’ll get the blame.

[W]hat I would love more than anything is to see Obama go down to Mulvaney’s district in South Carolina and several other districts like it and say that if these cuts go through, it’s going to have a serious negative impact on the local economy.  Ideally, of course, there might be some kind of agreement, which I say not for anyone’s political sake but for the sake of America’s workers and the economy. The effect of these cuts would be real and bad. If nothing else, the best Obama can do is make sure that the American people know who’s at fault when the economy does tank. Not the loftiest aspiration, but it’s hard to be lofty when you’re being dragged through the sewer.

As I have noted before, the GOP began its descent into insanity when it allowed the Christofascists to begin to take over the grass roots of the party.  This point cannot be hammered home enough.  The hate, greed and bigotry track directly to the far right Christians who make the Pharisees of the Bible look like wonderfully nice people in comparison.  In today's America, anyone proclaiming the Christianity and wearing faux religiosity on their sleeves ought to send rational, decent, caring people running and screaming. 

 

What the Romney-Ryan Budget Would Mean For Virginia

Click on Image to enlarge

Since Mitt Romney has stated that he and Paul Ryan are pretty much on the same page in terms of budget proposals, it is important that Virginians truly understand what the Paul Ryan budget would mean for Virginia.  The chart above lays it out (click on the image for a larger version).  It's not a pretty picture and only Tea Party crazies and Christianist extremists out to destroy public education could find it attractive.  Of course, the picture would look far different if the wealthy were required to pay a far percentage of their income (including investment income). 

Mitt Romney's Real Record in Massachusetts

With the recent discouraging jobs numbers the Romney campaign - or fiction writers if one is honest - are seeking to market their boss as a wonderful "job creator" during his tenure as Governor of Massachusetts.  In truth, that isn't how thinks really came down, but then, like its Christianist puppeteers, the GOP in general and Romney's camp in particular isn't very good when it comes to truth and veracity.  The truth becomes whatever they want it to be and objective facts be damned.  A piece in Think Progress looks at the real Romney record in Massachusetts and it's not pretty.  In fact, it's down right frightening.  Worse yet, Romney wants to now take his failed approach nationwide.  Here are some story excerpts:

Republican Mitt Romney’s presidential campaign whipped out a new number over the weekend to dispute federal government data that ranked Massachusetts 47th in job creation during Romney’s time as governor there. Three campaign surrogates used the Sunday morning news circuit to claim that the state was actually 30th in job growth in Romney’s final year in office.

Of course, moving the state to 30th would still mean it was in the bottom half of the nation, a fact that would seem to fit assertions from local experts that the state’s economy was “below average and often near the bottom” while Romney was governor. Here are five facts about the Massachusetts economy from Romney’s 2003-2007 tenure:

1. Ranked 47th in job growth: Despite Romney’s professed expertise in creating jobs, Massachusetts ranked 47th in job growth during his time as governor. The state’s total job growth was just 0.9 percent, well behind other high-wage, high-skill economies in New York (2.7), California (4.7), and North Carolina (7.6). The national average, meanwhile, was better than 5 percent. 

2. Suffered the second-largest labor force decline in the nation: Only Louisiana, which was ravaged by Hurricane Katrina in 2005, saw a bigger decline in its labor force than Massachusetts during Romney’s tenure as governor. The US Census Bureau estimated that between July 2002 and July 2006, 222,000 more residents left Massachusetts for other states than came to it.

3. Lost 14 percent of its manufacturing jobs: Massachusetts lost 14 percent of its manufacturing jobs during Romney’s time in office, according to [Northeastern University economics professor Andrew] Sum. The loss was double the rate that the nation as a whole lost manufacturing jobs. In 2004, Romney vetoed legislation that would have banned companies doing business with the state from outsourcing jobs to other countries.

4. Experienced “below average” economic growth and was “often near the bottom”: “There was not one measure where the state did well under his term in office.  .  .  .  the state was more comparable to Rust Belt states like Illinois, Michigan, and Ohio than it was to other high-tech economies it typically competes with.

 5. Piled on more debt than any other state: Romney left Massachusetts residents with $10,504 in per capita bond debt, the highest of any state in the nation when he left office in 2007. The state ranked second in debt as a percentage of personal income.

Very inconvenient facts, but facts nonetheless.  Hence why the image at the top of this post seems all too appropriate.

Bob McDonnell's Sorry Record on Job Creation

Given Bob McDonnell's political ambitions for national office, he's busy touting himself as a job creator, but many of the jobs are low end of the sort Rick Perry bragged about in the false "Texas miracle." Yes, the economy sucks, and yes there is stiff competition with other states, but nowhere in McDonnell's snake oil sales pitch does he admit that Virginia's reactionary image which has been worsened by both his own actions and the actions of Ken "Kookinelli" Cuccinelli and Republican Party of Virginia lunatics like Bob Marshall knocks Virginia off the list of potential relocation/expansion sites for many businesses. Most job growth in the state has been concentrated in Northern Virginia close to the far more liberal District of Columbia with liberal jurisdictions like Fairfax County and the cities of Arlington and Alexandria. Among the areas of Virginia seeing the least job growth is Hampton Roads which continues to experience the flight of young college educated individuals who seek jobs in more liberal and progressive states and cities. The Virginian Pilot looks at "Taliban Bob's effort to cast himesrlf as something that he's not. Here are highlights:

While Northern Virginia has garnered the largest number of new jobs during his [Bob McDonnell's]time in office, Hampton Roads also lags slightly behind the Richmond area, which just before Christmas landed the state's single biggest jobs deal since 2004: two distribution centers for the online retailer Amazon.com Inc.

In all, the administration says it has brought 5,515 jobs to Hampton Roads. Of those, more than 2,100 came with pledges of government financial aid and other public assistance totaling nearly $5 million, according to a review of economic development announcements by The Virginian-Pilot.

Yet those anticipated gains aren't nearly enough to offset the 45,000-plus jobs the region has shed since the start of the recession, according to federal labor statistics.

State officials say they showcase Hampton Roads assets to prospective corporate tenants, but the ultimate decision on where to relocate or expand is up to the businesses. And even when companies select this area, McDonnell said, it can take a few years for them to start hiring.

Saddled with a sluggish economy, the governor has aggressively marketed the state as "open for business." He's worked to promote its corporate-friendly reputation and reduce regulations, and he won legislative approval for a $100 million package of tax credits and other financial incentives.

[T]he bright spots emphasized by state officials don't overshadow anemic job growth that is "but a drop in the bucket to what we need" to reverse years of losses, according to Michael Cassidy, president of the Commonwealth Institute for Fiscal Analysis, which advocates for policies to help low- and middle-income Virginians.

Factoring in growth in the working-age population, the institute estimates Virginia needs another 291,400 jobs to return to pre-recession levels. The latest employment data back that up - labor figures show about 127,000 fewer people are working in Virginia now than before the downturn became evident in the state labor market.

[W]ith federal budget cuts looming, there's cause for concern in Hampton Roads, a region acutely vulnerable because of its reliance on defense spending, said James Koch, an economist and former Old Dominion University president. Koch sees other trouble spots in the lack of a robust recovery in port activity and in housing prices, which have a direct impact on real estate taxes that are a key source of revenue for localities.

McDonnell's claims about his job creation prowess deserve about as much credibility as the "ex-gay" myth peddled by his buddy, Pat Robertson.

It's the Housing Market Stupid

It's been about three years now that I have been stating that until the residential housing market is stabilized and prices stop falling, the economy is NOT going to truly improve. Nonetheless, the Obama administration doesn't seem to grasp that reality and measures implemented to date to assist homeowners have been abysmal at best. As one who has assisted homeowners facing foreclosure and those seeking to sell homes through "short sales" I have witnessed first hand that the programs just plain suck and the mortgage lender staff handling such properties are beyond incompetent. The result: more and more foreclosures that can drastically drive down neighborhood prices and in turn set off another whole round of owners who are now "underwater" on their mortgages. The Washington Post looks at this ongoing fiasco. Here are some highlights:
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A new wave of distressed home sales is rippling, more quietly this time, through American cities and suburbs. Its unsettling effects are playing out here in Manassas, along Brewer Creek Place, a modest, horseshoe-shaped street lined with 98 brick townhouses. Several years after the U.S. foreclosure crisis erupted, the U-Hauls are back. The last time, banks seized nearly every fourth house on the street through foreclosure. This time, homeowners are going another route: a short sale.
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Harris and her husband, both bartenders, paid what seemed to be a bargain price, $289,000, in 2008. But they have fallen behind on their mortgage payments, in part because her husband was out of work. Now they have a $246,000 offer for the home, and the balance on their mortgage is more than that. They want to accept the offer. All they need is their bank's okay. That kind of deal is called a short sale, and it's sweeping the country. In these deals, a lender allows a troubled borrower to sell a home for less than what's owed on the mortgage.
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For lenders, short sales are less expensive than foreclosures to handle and help ensure that homes transfer in good shape. And for the wider real estate market, these sales could help shore up the floor under housing values because homeowners - unlike with foreclosures - have a vested interest in getting the best price. That's because the higher the offer, the more likely the lender will approve the sale.
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Clearing the way for a short sale has often proved cumbersome because there can be so many parties to a potential deal. Aside from lenders, transactions may also have to be green lighted by investors who own the mortgages, local tax authorities, appraisal firms, escrow companies, homeowners associations, mortgage insurance companies and subordinate lien holders.

Hampton Roads' Rising Foreclosures Not Letting Up

Despite some uptick in refinances, the local real estate market remains devastated and the number of foreclosures continues to rise. Indeed, the only growth areas in the legal realm is in foreclosures and bankruptcies. While the President continues to roll out purported plans to save homeowners from losing their homes, the plans are not well explained - many lenders do not seem to even know the details - and the downward pressure on home prices continues unabated. For new first time home buyers the $8,000 tax credit does not seem to be doing much of anything to stimulate purchases. Unless and until lenders - many of whom have received billions in bailout funds - begin lending again in earnest, I do not see any looming recovery. It continues to be a bleak landscape for firms that work heavily in the real estate industry. Worse yet, commercial transactions appear to be slowing as well. Back in the summer of 2007 I said that the housing market was going to trigger disaster and it has. Sadly, nothing seems to be happening to stop the blood bath yet and so the downward spiral continues. Here are highlights from the Virginian Pilot.

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Foreclosure filings in Hampton Roads rose again last month, to the highest point on record, as many lenders continued to repossess and auction off homes in the area despite national efforts to stem foreclosures, a report to be released today found.

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Foreclosure prevention specialists in the area said the majority of the clients they see facing foreclosure have been put into that position because of a job loss. "Very few of the ones we're seeing now are people who were put into loans they couldn't afford," said John Allen, a vice president of The Up Center, a Norfolk organization that provides foreclosure prevention counseling. "It's almost always job loss, or reduction in hours, or something revolving around that."

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Dotty Acampora, a foreclosure prevention counselor for the nonprofit Virginia Beach Community Development Corp., has seen a similar trend in recent months. More than half of her current clients have recently lost jobs or had their hours cut back. "The problem is the lenders are just not going to work with someone who is unemployed," said Acampora, who spent nearly two decades as a mortgage banker and is a former president of the Tidewater Mortgage Bankers Association. "They're not going to do a typical forbearance, because unemployment is too widespread."

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For the second consecutive month, foreclosure activity nationally was at the highest point RealtyTrac has recorded.

Wall Street Firms Cut 34,000 Jobs; Home Prices Drop the Most in 40 Years

While Hillary Clinton doggedly refuses to admit that she has lost the Democratic Party nomination and prefers to destroy the Democratic Party to satisfy her own ego, the GOP economic program just keeps on giving campaign issues that are being lost in all of the noise Billary is generating. We have plunging home prices (http://www.bloomberg.com/apps/news?pid=20601087&sid=atzjOWZh4RUU&refer=home) combined with more big lay offs (http://www.bloomberg.com/apps/news?pid=20601103&sid=aTARUhP3w5xE&refer=news). Meanwhile, the Chimperator has not been out of his bubble suffieciently and still doesn't understand the economic free fall and McCain "doesn't understand the economy." Instead of fighting off Hillary's deadhand grasp for the nomination, the Democrats should be running with these issues. On the housing front, where those who put 5% down on a purchase are now underwater, here are some story highlights:

The median price of single-family homes dropped 8.7 percent from February 2007, the most in four decades of record keeping. ``It looks like this may be a temporary pause,'' said Nigel Gault, chief U.S. economist at Global Insight Inc. in Lexington, Massachusetts. ``The price declines have helped, and people are still getting financing, though not on the good terms they could before. We're still a long way from a recovery in housing.''

Inventories may remain at elevated levels as foreclosures rise, continuing to pressure prices down, Briefing.com economist Timothy Rogers said. The Realtors group has said a five to six months' supply is needed to stabilize the market. Home foreclosure filings jumped 60 percent and bank seizures more than doubled in February from the same month last year as rates on adjustable mortgages rose and property owners were unable to sell or refinance, according to RealtyTrac Inc., a seller of foreclosure data.

On the employment front, the news of more big layoffs certainly will not help the economy rebound and likely will only add to the number of people unable to make their mortgage payments:

March 24 (Bloomberg) -- Wall Street banks hit by mortgage losses and writedowns have cut more than 34,000 jobs in the past nine months. ``This crisis is much worse than 2001 and we don't know how long it's going to last,'' said Jo Bennett, a partner at executive search firm Battalia Winston International in New York. Job cuts ``could be more than 100,000 in a few years.''

Securities firms started eliminating positions in mortgage departments as early as last July, when rising delinquencies on home loans to borrowers with poor credit histories led to a decline in the prices of bonds tied to the loans. Between July and December, almost 17,000 jobs were lost, according to data compiled by Bloomberg.

The bursting of what Glenn Reynolds of CreditSights Inc. has called the ``securitization bubble'' is affecting other industries. Lawyers who helped create mortgage-backed bonds, realtors who sold more houses as home ownership in the U.S. rose and mortgage brokers who found new customers as lending standards were relaxed are now looking for work, according to Jeanne Branthover, a managing director at Boyden Global Executive Search in New York. Some firms haven't fully disclosed their job cuts because they don't want to appear financially weak, according to Battalia Winston's Bennett. ``They're all dribbling people out the door, so the numbers don't show the true extent of the problem yet,'' said Bennett.