David Leonhardt's update on joblessness in the US reconfirms the worst that many economists have believed during the recession. The jobless rate isn't "structural" or temporary. Instead, it reveals the worst about how our economy works. Other countries who have been through the same recession have nothing like our jobless rate -- with the exception "those still mired in crisis, like Greece, Ireland and Spain."
Why are we stuck on the lowest rungs of the ladder with Greece, Ireland and Spain?
Because just as we have a growing gap between rich and poor, we have a growing gap between employer and employee.
This jobless recovery, after all, is the third straight recovery since 1991 to begin with months and months of little job growth.
Why? One obvious possibility is the balance of power between employers and employees.
Relative to the situation in most other countries — or in this country for most of the last century — American employers operate with few restraints. Unions have withered, at least in the private sector, and courts have grown friendlier to business. Many companies can now come much closer to setting the terms of their relationship with employees, letting them go when they become a drag on profits and relying on remaining workers or temporary ones when business picks up.
Just consider the main measure of corporate health: profits. In Canada, Japan and most of Europe, corporate profits have still not recovered to precrisis levels. In the United States, profits have more than recovered, rising 12 percent since late 2007.
For corporate America, the Great Recession is over. For the American work force, it’s not.
Once again, it's a sign that capitalism has slipped the leash in the US and is fighting to get rid of the leash altogether. Our task will be, in part, to restructure unions and strengthen them.
One problem is that too many labor unions, like the auto industry’s, have been poorly run, hurting companies and, ultimately, workers. Of course, many other companies — AT&T, General Electric, Southwest Airlines — have thrived with unionized workers, and study after study has shown that unions usually do benefit workers. As one bumper sticker says, “Unions: The folks who brought you the weekend.”
Today, unions are clearly playing on an uneven field. Companies pay minimal penalties for illegally trying to bar unions and have become expert at doing so, legally and otherwise. For all their shortcomings, unions remain many workers’ best hope for some bargaining power.
Leonhardt, like many economists, points to successful wage cuts and job sharing programs in Canada and Germany which kept people at work. And then there's the enormously unpopular but vital effort to make sure all share the pain.
It may not be fun, but it's fairer than the current modus operandi. And it would not only restore a healthy economy but might improve our self-respect and our manners in a country whose cultural divide is no less painful than the economic divide.
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Meanwhile, the guys at the head of the line are doing better than ever. In fact, they're making bucks off the recession.
Goldman Sachs executives have long been among the most richly paid on Wall Street in the best of times. They are now poised to reap a windfall that was sown in the dark days of the financial crisis in 2008.
Nearly 36 million stock options were granted to employees in December 2008 — 10 times the amount issued the previous year — when the stock was trading at $78.78. Since those uncertain days, Goldman’s business has roared back and its share price has more than doubled, closing on Tuesday at nearly $175.
The options grant is among the many details that emerge from a study of regulatory filings and internal partnership documents by The New York Times and Footnoted.com, a division of Morningstar that scrutinizes corporate disclosures.
Goldman has been sailing pretty close to the wind, withholding information about its 475-member partnership over the years and getting away with it. The study describes the system within Goldman Sachs as "Darwinian." The partners are mostly male; information about them is scarce; the information available shows partners taking huge gains in stock deals.
The documents also show what shares partners sold before they became officers and were required to make disclosures. Lloyd C. Blankfein, Goldman’s chief executive, for example, has cashed in a total of $93.8 million in shares since 1999, a number that captures both known stock sales since he became an officer at Goldman, and sales not individually reported since before he was required to disclose such transactions.
In the eight years since becoming a senior executive in 2002, Mr. Blankfein has sold $42.5 million, roughly 45 percent of the total over the years. As of August, Mr. Blankfein and his family owned 2.03 million shares worth about $355 million if they had been cashed out on Jan. 14.
Over all for the partnership, the stock sales amount to around $24 million on average for each partner since the 1999 initial public offering — a conservative estimate since the documents do not capture every sale by a Goldman partner, or shares sold as part of the public offering. Pay packages also include cash salaries and bonuses, and this analysis does not include the billions of dollars Goldman has paid in those categories. ...NYT
I suppose there are two kinds of reactions to this kind of information: envy and pride on the one side, and disgust and dismay on the other. In the same way, there are two kind of Americans. The current wave of "incivility" has come about because neither has much respect for the other.
