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Economy
High unemployment rate "new normal" for U.S., says Stiglitz
2010-10-08
(Xinhua) -- Even if U.S. economy manages to grow, it will be too slow to provide enough jobs needed and high unemployment rate will be a new normal for Americans, said Nobel laureate Joseph Stiglitz on Wednesday.
It's just 'funemployment' anyway ...
Speaking at the 7th World Business Forum, an annual symposium regarded as the world's most influential management forum, in New York, Stiglitz warned that the U.S. economy is "still not out of the woods yet" and even risks slipping into a Japanese-style malaise.

Asked how he sees conditions one year from now, Stiglitz said that the economy probably is not going to be a disaster, and there may be positive growth. But, he continued, the growth will be too slow compared with demand for jobs, and the unemployment rate will possibly stay above nine percent, or even ten percent.

"Much higher unemployment is the new normal," he said.

Although the recession officially ended in June 2009, as the U. S. National Bureau of Economic Research announced last month, main street has not experienced the comeback as their Wall Street counterparts, and jobless rate has remained at record-high levels.

Economists are expecting zero jobs growth and an unemployment rate inching up to 9.7 percent from 9.6 percent in the most- watched September jobs report, which is scheduled to be released this coming Friday.

Unlike many who criticized the B.O. regime's stimulus measures, Stiglitz said the first stimulus package did work, helping prevent unemployment rate from soaring to 13 percent. But it was too small and was not well-designed, Stiglitz said.
Posted by:Fred

#21  Instead of a tariff on Chinese goods, just do safety testing on them at the border. They won't do it themselves, so we'll do it for them. Bad goods get returned to sender at the importer's expense, and the cost of testing gets passed onto the importer whether it fails or not.

Rinse and repeat until China figures it out.

AFAIAC, no testing is one of the contributing factors to their low prices.
Posted by: gorb   2010-10-08 23:59  

#20  Anon1,

This is the problem. Nearly 50% of GDP is consumed by federal, state & local government spending. Add another 20-25% for the imposed cost of federal, state & local regulation and you're left with perhaps 25% of GDP trying in vain to support the unproductive 75% that's dragging it down. Want jobs? Kill off government spending & regulation. Nothing else will work, probably not even in the short term.
Posted by: AzCat   2010-10-08 23:44  

#19  I expect that those other countries will buy enough politicians to overcome the obstruction of the watermelon green crowd to get to secure and cheap sources of oil which will stabilize the price of domestic supplies.
Posted by: Procopius2k   2010-10-08 19:29  

#18  When the dollar does collapse, suddenly labor costs in the US will be very competitive.

Should that happen, US laborers will also be faced with gasoline well north of $5/gal, higher prices for everything imported, and an even worse credit market than exists now. Other countries will not need to erect trade barriers, since the $ won't buy much in other countries. China & the US are closely linked. A drop in China's exports to the US may well hurt them much more than it hurts us.


High unemployment in the US results from many different bad policies, aggressively pursued over decades. Now we are reaping what we have sowed. The simple answer to that problem is that there are no simple answers. There is a lot of pain ahead for the electorate.

Posted by: Anguper Hupomosing9418   2010-10-08 16:22  

#17  Obama,lol.

Obama's new National Security Advisor Tom Donilon, from Wikipedia:

He worked as Executive Vice President for Law and Policy at Fannie Mae, the federally-chartered mortgage finance company. This line on his resume raised eyebrows when his appointment to the Obama transition team was announced, given that the company had been seized by federal regulators.[13] The Washington Times reported that Donilon made millions for work that included supervising Fannie Mae's lobbying against increased regulation.[14]

Before his appointment to the Obama Administration, Donilon was a partner in the Washington law firm O'Melveny & Myers, where he advised companies and their boards on a range of "sensitive governance, policy, legal and regulatory matters." [10] His previous year's income, in a 2009 report, was reported by The Wall Street Journal to have been $3.9 million; his clients included Citigroup, Inc., Goldman, Sachs & Co., and Obama fundraiser and heiress Penny Pritzker.[1]

Posted by: Black Charlie Chinemble5313   2010-10-08 12:40  

#16  I'll take.... "Third World" and a fresh startover Charlie, as long as Obama resides elsewhere.
Posted by: Besoeker   2010-10-08 12:10  

#15  The US is being controlled by those who consider themselves "citizens of the world" or "global citizens" for the new multi-national corporations and couldn't give a whoot about the United States and the people who live there. Have money, will travel. We will be third world before you know it if we continue on this course.
Posted by: Black Charlie Chinemble5313   2010-10-08 12:07  

#14  Preceeded by decades of "Giant Sucking Sounds"...... High unemployment rate "new normal" for U.S., says Stiglitz

In socialist and top down command economies, high unemployment is a feature, not a bug.
Posted by: badanov   2010-10-08 11:49  

#13  When the dollar does collapse, suddenly labor costs in the US will be very competitive. When that happens watch all the foreign scolds warning the US about 'tariffs and trade wars' start to erect just exactly that against US products.
Posted by: Procopius2k   2010-10-08 11:45  

#12  I'm curious about the trade war fears. We have exported a huge percentage of our maufacturing jobs, decimated much of the agricultural infrastructure, and exhausted the reservoir of equity in our homes. Either we continue down the path of being a bankrupty 1st world power (for now) with a 3rd world economy, or we make structural changes to the post-Bretton Woods agreements regarding world trade. Clearly, it is foolish and naive to think the Chinese will change their policies to anything approaching genuine freee trade, so what alternative is there to re-invigorating our domestic manufacturing base through some forms of protectionism and tariffs to punish currency manipulation.
As an aside, China's economy is based much more on our exporting wealth than many believe. Their violent reactions are to be anticipated, but do you really think waiting will be a better course of action?
Posted by: NoMoreBS   2010-10-08 11:32  

#11  Preceeded by decades of "Giant Sucking Sounds"...... High unemployment rate "new normal" for U.S., says Stiglitz
Posted by: Besoeker   2010-10-08 11:12  

#10  Nobody even dare to think about revising NAFTA, GATT/WTO. Just close your eyes and think of England.
Posted by: Black Charlie Chinemble5313   2010-10-08 11:06  

#9  anon1

Regarding tariffs. If we place a tariff on imports from China, it risks a trade war. A trade war might result in a world wide recession (or re-recession). Even if it doesn't result in a trade war and even if China doesn't impose tariffs in return, it would raise the cost of retail goods for just about everybody in the US and also raise the cost of doing business for US companies that use Chinese components.
Posted by: lord garth   2010-10-08 11:05  

#8  anon1,

Let's just say I disagree with almost everything you said.
Posted by: Bright Pebbles   2010-10-08 10:21  

#7  forgot to add: Tariffs on Chinese imports will reverse the damage from the artificially pegged Yuan.

But to really boost employment, the US Government needs to stop giving US taxes away to third world countries (Aid) and the UN.

Charity begins at home.

Those billions upon billions of dollars could instead be used to fund roads, garbage collection, sewage treatment, water and electricity provision, public hospitals and schools. Free health and dental care - if only you spend US taxes on services for US citizens.

This creates the kind of jobs that can't be exported to China.

Sure the UN bureaucrats lose their 5-star hotel stays for conferences, but who cares about that?

and a few african nations lose their entire GDP but tough cheddar. It's time their people felt a bit of starvation so they throw out the corrupt fools running them so badly in the first place.

Posted by: anon1   2010-10-08 09:30  

#6  US jobs have been exported to China.

To reverse the trend, put tariffs on Chinese imports.

Simple, really.
Posted by: anon1   2010-10-08 09:25  

#5  "Much higher unemployment is the new normal," he said.


& we have to learn to live with the Soviets, right?

Posted by: anonymous2u   2010-10-08 08:59  

#4  From BLS a few minutes ago:

---------------------------
Nonfarm payroll employment edged down (-95,000) in September, and the unemployment rate was unchanged at 9.6 percent. Government employment declined (-159,000), reflecting both a drop in the number of temporary workers for Census 2010 and job losses in local government. Private-sector payroll employment continued to trend up modestly (+64,000).
Posted by: lord garth   2010-10-08 08:57  

#3  hopefully there will be a lot of Democrat politicians enjoying the fruits of their own policies November 3rd
Posted by: Frank G   2010-10-08 08:52  

#2  the U.S. economy is "still not out of the woods yet" and even risks slipping into a JapaneseCarter-style malaise.
Posted by: Pappy   2010-10-08 08:50  

#1  Good news for Obama. His policies are working. Too many employed people vote Republican.
Posted by: gromky   2010-10-08 04:28  

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