Monthly Archives: December 2011

Joblessness

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Here are some data on Americans and our quests for work.

Financial Times‘ Ed Luce offers some statistics (the article may be behind a paywall):

In December 2007, the US economy employed 146 million people. Four years later, it languishes at 140 million.  At the current rate of job creation it will take another two and a half years to regain 2007 levels—taking the replacement cycle to as much as 78 months….  Even that understates the problem, since in that time the population will have risen by more than 10 million.

and

At the start of the recession, the employment-to-population rate was 62.7 per cent. The rate is now 58.5 per cent….  According to government statistics, if the same number of people were seeking work today as in 2007, the jobless rate would be 11 per cent.

Notice that last.  Here are some back of the envelopment calculations: in 2007, according to the US Census, the working-age population of the US (which I’ve unilaterally defined as men and women between 20 and 64 years old) was a bit shy of 181 million Americans.  Thus, that 4% drop in the employment-to-population rate represents a loss of some 7.25 million Americans from the labor force—7.25 million who have, with the terrible economy we’ve had for the last four years, given up looking for work.  If they still were looking, that’s what would run the “unemployment rate” up to 11 %.

In the last three years, the “official” unemployment rate has run from 7% to as high as 10%, stabilized at around 9% for most of these three years, and last month fell to 8.6%, a number that disguises the foregoing.  In all, some 2 million more Americans—that are still looking—are out of work today than at the start of 2009.

There’s one more interesting statistic.  This one does a better job of measuring the quality of the jobs available: the unemployed and underemployed combined rate is pushing 20 per cent.  This isn’t a number that says an American isn’t getting paid what he wants, or thinks he deserves—none of us are that—this is a number that says Americans don’t have as much work per day as we want—it includes all less than full time workers who want to be full time.

And there’s this from the Democratic National Committee Chairwoman and Congresswoman (D, FL), Debbie Wasserman Schulz in an exchange with Gretchen Carlson:

Carlson: Unemployment has gone up precipitously since [Obama] took office.

Wasserman Schulz: That is simply not true.

Among Luce, Carlson, and Wasserman Schulz, someone has lost track of the situation.

The European Union’s Deal

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The European Union agreed, last Friday, to the outlines of an arrangement that might leader to greater unity for the economies of the 17 nations of the euro zone plus six to nine additional members of the EU that are not part of the euro zone.  Only Great Britain has, for certain, demurred.  Leaving aside the question of the legality of the new terms (which arise because Great Britain has refused to go along, preventing the unanimity required by the EU’s governing treaties), what has actually been accomplished?

The EU other than Great Britain has agreed to a financial transactions tax.  This would be a fee that every investor, from an individual to the largest investment bank, would be required to pay on every financial transaction, from brokering a merger of large corporations to any individual buying—or selling—a single share of stock.  Britain couldn’t hack that because the financial industry is 10% of their economy, and they were concerned about the effect of such a large (in the aggregate) tax on their economy.

The biggie, though, was an agreement to more fully integrate the member nations’ economies, to the point of submitting national budgets to EU scrutiny.  Every nation, under this fiscal union, is bound to limit its budget deficit to no more than 3% of that nation’s GDP.  Failure to do so would bring virtually automatic sanctions (the sanctions could be waived on an individual basis, provided 5/6 of the fiscal union members agreed to the waiver).

This raises a critical question, though: what are those sanctions?  As I said, what’s been agreed is an outline, not anything of substance.  The specific sanctions are To Be Determined.  Further, if the negotiations of this (and other) detail hew to the schedule laid out by the fiscal union’s primary proponents, French President Nicolas Sarkozy and German Chancellor Angela Merkel, the deal must be done—and the sanctions identified and agreed—by next March, an ambitious schedule.  Also left unidentified is the or else should the deal not be done by then.  Mr. Market is likely to identify the or else in that eventuality.

There’s another critical question that’s left unanswered, also.  That’s how the fiscal union addresses the present problem of impending rampant sovereign debt insolvency.  The European Financial Stability Facility, the new European Stability Mechanism (which in the end replaces the EFSF; it does not complement it), and the IMF together aren’t enough to bail out Italy and/or Spain (assuming a bailout is appropriate in the first place).  And that’s a problem: the fiscal union sidesteps this question.  The EU is left to hope for the change of heart that will allow the European Central Bank to print euros and/or buy sovereign bonds in quantity and/or sell Euro Bonds.  The wisdom of any of these three ECB options is an open question.  Mr. Market is likely to forcefully express an opinion here, too.

There is yet another question.  How does the fiscal union address lack of homogeneity in the social, economic, and money imperatives of fiscal union members?  It does not; instead, the union attempts a Procrustean chopping and stretching to jam all the nations into a single, ill-shaped bed.

Layered on top of this is the EU leadership’s differing views of the EU’s  and the fiscal union’s role:

  • Merkel sees the EU as a political partner of the United States;
  • Sarkozy (ignoring the likelihood of Sarkozy’s defeat in next year’s elections) sees the EU as an independent power bloc competing with the United States.
  • Merkel sees the fiscal union (I’m reluctant to abbreviate this similarly) as a means of imposing extra-national discipline and control over national budgets;
  • Sarkozy sees the (structure of the) fiscal union as preserving an essential national sovereignty—most especially French sovereignty.
  • The existing EU governance power structures—the ECB, the European Commission, and the European Council—are allying with each other in order to preserve their own turf, power, and prerogatives against the (apparent) supremacy of Sarkozy and Merkel, of Germany and France, in the new fiscal union.  And they’re attempting to use Euro Bonds as their tool of artifice.

I remain not sanguine about the euro’s long-term survival as the common currency of 17 nations, nor am I sanguine about the long-term survival of the 26- or 27-nation European Union.  I’m also not convinced that a breakup of either is necessarily a bad thing.  A collection of four or five groups, each consisting of truly homogeneous nations, with Great Britain and France back in their traditional roles, and all operating in a grand free trade comity, will serve all the nations, and Europe as a whole, better.

Update: Withdrew an editorial note.

Democracy

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Paul Krugman wrote this in his The New York Times column yesterday:

Fidesz won an overwhelming Parliamentary majority last year, at least partly for economic reasons; Hungary isn’t on the euro, but it suffered severely because of large-scale borrowing in foreign currencies and also, to be frank, thanks to mismanagement and corruption on the part of the then-governing left-liberal parties. Now Fidesz, which rammed through a new Constitution last spring on a party-line vote, seems bent on establishing a permanent hold on power.

Krugman is talking about the current sovereign debt crisis in the European Union and its effect on Hungary, but there’s a ring to it.  Let’s see if it can be domesticized….

[The Democratic Party] won an overwhelming [Congressional] majority [in 2008], at least partly for economic reasons; [the US] isn’t on the euro, but it suffered severely because of large-scale borrowing…and also, to be frank, thanks to mismanagement and corruption on the part of the then-governing…parties. Now [the Democrats], which rammed through [Stimulus Bill of 2009, Obamacare, Dodd-Frank] on…party-line vote[s], seem bent on establishing a permanent hold on power.

Sound familiar?

America’s Future—Foreign Policy Principles, Part V

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I have posted here (which has links to my other posts on this subject) on other aspects of our necessary future foreign policy.  In this post, and as a segue to an upcoming series on defense policy and force structure, I want to talk about the meaning of “war” and “state of war”  from a diplomatic perspective and then suggest some things that such an understanding might imply for foreign policy.  There is far more to war than shooting and exchanging missile fire; although overtly military actions are certainly central aspects of war, especially in the end game.  A clear understanding also is necessary if State and Defense are to work together as the unified whole they must in order for the United States to effectively defend itself in wars of any type.

“War” or “state of war” are more than just formalistic, legalistic conditions involving Congress announcing that we’re at war.  A “declaration of War” by Congress under Article I, Section 8 is in the end only an acknowledgment that we’re already in a war.  For instance, FDR’s 8 December 1941 request for Congress’ declaration of war against Japan closed with this acknowledgment:

I ask that the Congress declare that since the unprovoked and dastardly attack by Japan on Sunday, December 7, a state of war has existed between the United States and the Japanese empire.

Congress’ subsequent declaration also acknowledged that it was simply codifying with its declaration that war was already in progress:

Whereas the Imperial Government of Japan has committed unprovoked acts of war against the Government and the people of the United States of America….

and

That the state of war between the United States and the Imperial Government of Japan which has thus been thrust upon the United States is hereby formally declared….

Thus, with the legalism of a declaration, we merely acknowledge that a state of war has existed and that we’ve been in a war for some time.  A formal declaration finds use only insofar as it triggers certain legal conditions and parameters that exist in a formal state of war that do not exist in an on-going war that has not been officially announced.

It’s necessary, at this point, to understand what an “act of war” is.  An act of war has meaning on three levels: one is a precipitating action that triggers a formal acknowledgement that a war is in progress: the Japanese attack on Pearl Harbor, for instance.  A second meaning includes an action conducted within the confines of an ongoing, declared war and in prosecution of it: shooting down enemy aircraft, or foot soldiers fighting a battle against each other, for instance.  A third meaning is an action conducted within the confines of an ongoing war that is as real as the formally declared war but which has not been formalized by the participants’ public declarations of war.  A terrorist attack by a non-national organization on buildings and the occupants of them (the World Trade Center and the Pentagon, various centers in Mumbai, India) and the killing of terrorists for these and in preempting other attacks are examples of this third meaning.

It’s this third meaning that is of interest in this series of foreign policy principles, and it is the non-national organizations, the terrorist organizations, with which this post is primarily concerned.

Being at war, from a diplomatic perspective, is more than just the tautology of Carl von Clausewitz’ remark about war being an extension of diplomacy.  There are diplomatic considerations applicable during war, including the not-formally-declared war, as well.  These begin with understanding the goals of the nation or non-national organization that is attacking us, a critical matter of catch-up if the strike was unpredicted, and an equally critical matter of anticipation when the enmity has been well-known for some time, and the tensions observed to have been building through that time.  But the diplomatic considerations also apply to hidden wars, especially when we finally realize that we are under attack (vis., cyber war.  This and other forms of “hidden” war are described briefly below).

For instance, the goals Islamic terrorists have for their war on us are not well understood, not least by our politicians.  The present administration, and its predecessors, have long shown little interest in understanding their goals, satisfying themselves with bringing the perpetrators to “justice.”  The Clinton administration considered terrorist acts simply to be crimes.  The succeeding Bush administration understood that we were at war, in some sense, but did not look into the terrorists’ purposes, satisfying itself solely with making war on Al Qaeda and “every terrorist group of global reach;”  although President Bush did understand one goal of Al Qaeda, in particular: “Its goal is remaking the world and imposing its radical beliefs on people everywhere.”   The Obama administration has been even less investigative of terrorist goals, satisfying itself with killing Al Qaeda leaders and “bringing the troops home.”

Yet buried in the incuriosity is a statement by a terrorist leader, Hussein Massawi, a former leader of Hezbollah:

We are not fighting so that you will offer us something. We are fighting to eliminate you.

And there’s this from Sayyed Hassan Nasralleh, Hezbollah’s Secretary General:

“Death to America!” was, is, and will stay our slogan.

Within this clear, but not yet internalized by our government, statement of the purpose of a terrorist war, for instance, we can gain a clearer understanding of what’s included in “acts of war.”

Beyond the overt actions of forces invading another nation, or bombing its harbors and ports, or the like, acts of war also include, within this third meaning, such things as the following, which is an illustrative list, only (other examples are described here):

  • attacking another nation’s embassy and imprisoning the diplomats, staff, and families within it
  • sending personnel—terrorists—into another nation to murder citizens of a third nation
  • sending personnel—terrorists—into another nation to murder diplomats of a third nation
  • actively supporting piracy

In addition to these plain acts of terrorism, which are a subset of acts of war, are these additional acts of war—acts that often begin as part of a hidden war:

  • shipping, as part of ordinary trade, poisoned products: formaldehyde-laced gypsum board, or toxic baby food, for instance.
  • manipulating currency values so as to damage our economy.
  • attacking our computing and/or communications networks, or our computer-controlled infrastructure, with cyberware capable of damaging/destroying those targets, or planting malware that will be used “later” for that purpose.
  • actively supporting nations and non-national organizations that do the above

With this understanding, from a diplomatic perspective, of the nature of war, what can foreign policy do to support the successful prosecution of such a war thrust upon us?  It’s important to understand that these are actions that occur in parallel, and in coordination, with military actions; they are not limited to being prior to military action, nor are they conducted instead of military action.  They are not merely a point of departure from which military action extends.

The first thing foreign policy can do is to guide our efforts to help our enemies find a way to stop being our enemies.  They do not need to become friends or allies, although this certainly would be desirable, but by no longer being our enemies, they will no longer be getting killed by us, and more importantly, they will no longer be killing us (or trying to).  In practice, this will most likely apply to our enemies’ allies, but it does not automatically exclude the enemies themselves.  Plainly, this must begin with an understanding of our enemies’ motive in attacking us.  In the case of Islamic terrorists, it would seem that convincing our enemies will not occur; we can, though continue to work on their allies and supporters.

Along with this, foreign policy can guide our efforts to convince other nations to allow us entry into their jurisdiction so as to bring down enemy individuals—terrorists—or gain other nations’ cooperation in their bringing to justice those individuals.  Additionally this can facilitate our efforts to engage foreign intelligence and law enforcement organizations to share information and to obtain assistance in identifying, tracking down, and capturing active terrorists before they can strike.

Finally, foreign policy can guide our efforts to understand the needs and imperatives of relevant nations and non-national organizations (both outright enemies and those who, by supporting our enemies have demonstrated their own enmity and complicity), the better to target such other actions as embargos of critical resources and isolation from the global network (or outright disruption) of their financial systems, including the central banks of relevant nations.

Update: Corrected some (egregious) formatting problems.

Do-Nothing…Congress?

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That’s the mantra of President Obama, Progressives generally, and the NLMSM.  But what’s actually going on?

In the Senate, we’ve had no budget offering, despite a legal requirement for one, for 900 days.  Indeed, the Senate has actively refused to propose a budget for those two and a half years.  We see legislation offering tax cuts blocked unless those cuts can be “paid for” with tax increases elsewhere.  We see active suppression of legislation encouraging pipeline infrastructure development which would produce tens of thousands of jobs promptly.  We see legislation sent directly to the floor of the Senate, bypassing committee opportunities for debate, with debate on the floor further blocked, thus rendering the legislation’s movement to a vote impossible.

In the House, we have a budget passed that actively cuts spending and offers reform for Social Security and Medicare so those programs can survive.  We have 17 separate jobs-related bills passed.  We have 5 bills related to American energy independence passed.  We see active support for fiscal moves that contribute both to reducing the nation’s debt and eliminating the annual budget deficit (a necessary prerequisite to lowering the debt).  We have a procedure that requires committee debate followed by floor debate.

The budget, the jobs bills, and the energy bills sit idle in the Senate, as the world’s greatest deliberative body refuses to consider them in any way.

Do-nothing Congress, indeed, but is it Congress as a whole, or one house of Congress that is bent on doing nothing?

Hmm….