Reply #5: The Great Depression remake. More details in post below

[Mimosa]

A member of my home board had posted this astute analysis by a financial expert on

"Why the Rich Love High Unemployment"

http://www.washingtonsblo...e-high-unemployment.html



Guest Post by Mark Provost. Mark has more than ten years experience as an equity analyst, specializing in the semiconductor and wireless industry. Mark writes regularly about the US economy for Dollars & Sense, ZMag, Truthout, and Global Research.

Excerpt:

Another consequence of labor-market flexibility has been the shift from full-time jobs to temporary positions. In 2010, 26 percent of all news jobs were temporary <10> - compared with less than 11 percent in the early 1990's recovery and just 7.1 percent in the early 2000's. The American model of high productivity and low pay has friends in high places. Former Obama adviser and General Motors (GM) car czar Steven Rattner argues <11> that America's unemployment crisis is a sign of strength:

Perversely, the nagging high jobless rate reflects two of the most promising attributes of the American economy: its flexibility and its productivity. Eliminating jobs - with all the wrenching human costs - raises productivity and, thereby, competitiveness. Unusually, US productivity grew right through the recession; normally, companies can't reduce costs fast enough to keep productivity from falling. That kind of efficiency is perhaps our most precious economic asset. However tempting it may be, we need to resist tinkering with the labor market. Policy proposals aimed too directly at raising employment may well collaterally end up dragging on productivity. Rattner comes dangerously close to articulating a full-unemployment policy. He suggests unemployed workers don't merit the same massive government intervention that served GM and the banks so well. When Wall Street was on the ropes, both administrations sensibly argued, "doing nothing is not an option." For the long-term unemployed, doing nothing appears to be Washington's preferred policy.

The unemployment crisis has been a godsend for America's superrich, who own the vast majority of financial assets - stocks, bonds, currency and commodities.
Persistent unemployment and weak unions have changed the American workforce into a buyers' market - job seekers and workers are now "price takers" rather than "price makers." Obama's recovery shares with Reagan's early years the distinction of being the only two post-war expansions where wage concessions have been the rule rather than the exception. The year 2009 marked the slowest wage growth on record, followed by the second slowest in 2010.<2>

America's labor market depression propels asset price appreciation. In the last two years, US corporate profits and share prices rose at the fastest pace in history - and the fastest in the G-7. Considering the source of profits, the soaring stock market appears less a beacon of prosperity than a reliable proxy for America's new misery index. Mark Whitehouse of The Wall Street Journal describes <12> Obama's hamster wheel recovery:

From mid-2009 through the end of 2010, output per hour at U.S. nonfarm businesses rose 5.2% as companies found ways to squeeze more from their existing workers. But the lion's share of that gain went to shareholders in the form of record profits, rather than to workers in the form of raises. Hourly wages, adjusted for inflation, rose only 0.3%, according to the Labor Department. In other words, companies shared only 6% of productivity gains with their workers. That compares to 58% since records began in 1947.

More from above article at link:

Jobs? You don't need no stinking jobs, say Republicans