From the Wall Street Journal online:
...across the country the costs of maintaining pensions for city and state employees more than doubled to nearly $84 billion in 2011 from 2002.
Yet the American Federation of State, County and Municipal Employees (Afscme) declares that public pensions are "modest," noting that its average member "receives a pension of approximately $19,000 per year after a career of public service."
The facts don't agree.
Data compiled from all state pensions show that, for employees who spend a career in state government, generous pensions put retired public workers among the highest earners in their state.
It is true that average public-pension benefits rarely seem extravagant. But these averages are reduced by two groups: older employees who retired many years ago and whose benefits are far less than those of an employee retiring today; and by short-term workers who often receive tiny pensions but almost surely have retirement savings from another job.
A far more relevant measure of the public-pension burden is how much a typical full-career state employee retiring today receives....
Unions claim that no one works for government to get rich, but many public employees become "pension millionaires" along the way.
In Nevada, an average full-career state worker can expect to receive $1.3 million in lifetime pension benefits. Alaska, California, Colorado and Oregon all pay lifetime benefits exceeding $1.2 million.
A wealthy, high-cost-of-living state such as Connecticut offers more than $1 million in average lifetime benefits to full-career employees who retire today; so does a relatively low-cost state such as West Virginia...
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Link: http://online.wsj.com/news/articles/SB10001424052702304360704579415173512940990?
Saturday, March 15, 2014
Thursday, March 13, 2014
Global Debt Exceeds $100 Trillion as Governments Binge
From Bloomberg.com:
The amount of debt globally has soared more than 40 percent to $100 trillion since the first signs of the financial crisis as governments borrowed to pull their economies out of recession and companies took advantage of record low interest rates, according to the Bank for International Settlements.
The $30 trillion increase from $70 trillion between mid-2007 and mid-2013 compares with a $3.86 trillion decline in the value of equities to $53.8 trillion in the same period, according to data compiled by Bloomberg...
Borrowing has soared as central banks suppress benchmark interest rates to spur growth after the U.S. subprime mortgage market collapsed and Lehman Brothers Holdings Inc.’s bankruptcy sent the world into its worst financial crisis since the Great Depression.
Yields on all types of bonds, from governments to corporates and mortgages, average about 2 percent, down from more than 4.8 percent in 2007, according to the Bank of America Merrill Lynch Global Broad Market Index....
----
Link: www.bloomberg.com/news/2014-03-09/global-debt-exceeds-100-trillion-as-governments-binge-bis-says.html
The amount of debt globally has soared more than 40 percent to $100 trillion since the first signs of the financial crisis as governments borrowed to pull their economies out of recession and companies took advantage of record low interest rates, according to the Bank for International Settlements.
The $30 trillion increase from $70 trillion between mid-2007 and mid-2013 compares with a $3.86 trillion decline in the value of equities to $53.8 trillion in the same period, according to data compiled by Bloomberg...
Borrowing has soared as central banks suppress benchmark interest rates to spur growth after the U.S. subprime mortgage market collapsed and Lehman Brothers Holdings Inc.’s bankruptcy sent the world into its worst financial crisis since the Great Depression.
Yields on all types of bonds, from governments to corporates and mortgages, average about 2 percent, down from more than 4.8 percent in 2007, according to the Bank of America Merrill Lynch Global Broad Market Index....
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Link: www.bloomberg.com/news/2014-03-09/global-debt-exceeds-100-trillion-as-governments-binge-bis-says.html
Sunday, March 9, 2014
We Can't Escape Our 'Groundhog Day' Recovery
From theatlantic.com:
The past five years have been a Groundhog Day recovery.
Every day, we wake up hoping that this will be the day that the economy finally picks up.
And every day, we wake up tohear Sonny and Cher playing find out that it hasn't.
Jobs growth just keeps chugging along at 2 percent pretty much no matter what.
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Link: http://www.theatlantic.com/business/archive/2014/03/we-cant-escape-our-groundhog-day-recovery/284301/
The past five years have been a Groundhog Day recovery.
Every day, we wake up hoping that this will be the day that the economy finally picks up.
And every day, we wake up to
Jobs growth just keeps chugging along at 2 percent pretty much no matter what.
----
Link: http://www.theatlantic.com/business/archive/2014/03/we-cant-escape-our-groundhog-day-recovery/284301/
Saturday, March 8, 2014
Our next Big Crisis: Retirement
From Marketwatch.com:
Many people are also in terrible financial shape for their retirement.
The Boston College Center for Retirement Research has just updated its “National Retirement Risk Index,” a measure of just how many people can expect to be financially comfortable in retirement.
It doesn’t make for happy reading.
According to Boston College, based on current projections, about half the country is at risk of being unable to maintain their standard of living in retirement.
Among low-income workers that rises to 60%. But it’s 40% even among the higher-income workers.
The picture has improved a bit since 2010, of course, as the economy has recovered somewhat from the financial crisis. But it remains worse than it was in 2007.
One of the stark issues that comes out of the report is how little the stock market boom has helped.
As the Boston College researchers note, citing data from the Federal Reserve’s 2010 Survey of Consumer Finances, most people don’t own many stocks. Equities account for just 17% of the wealth of high earners, 6% of middle earners and 2% of low earners.
Far more important is the value of housing — which has recovered much less dramatically than the stock market....
----
Link: http://www.marketwatch.com/story/our-next-big-crisis-will-be-a-retirement-crisis-2014-03-03
Many people are also in terrible financial shape for their retirement.
The Boston College Center for Retirement Research has just updated its “National Retirement Risk Index,” a measure of just how many people can expect to be financially comfortable in retirement.
It doesn’t make for happy reading.
According to Boston College, based on current projections, about half the country is at risk of being unable to maintain their standard of living in retirement.
Among low-income workers that rises to 60%. But it’s 40% even among the higher-income workers.
The picture has improved a bit since 2010, of course, as the economy has recovered somewhat from the financial crisis. But it remains worse than it was in 2007.
One of the stark issues that comes out of the report is how little the stock market boom has helped.
As the Boston College researchers note, citing data from the Federal Reserve’s 2010 Survey of Consumer Finances, most people don’t own many stocks. Equities account for just 17% of the wealth of high earners, 6% of middle earners and 2% of low earners.
Far more important is the value of housing — which has recovered much less dramatically than the stock market....
----
Link: http://www.marketwatch.com/story/our-next-big-crisis-will-be-a-retirement-crisis-2014-03-03
Monday, March 3, 2014
Fight Inequality With Better Jobs
Mort Zuckerman, the most accurate analyst of the joblessness disaster, writing in the Wall Street Journal:
...the fundamental economic issue facing America... is jobs—their scarcity and the quality of those that people manage to find.
The unemployment rate is about 13% if you take into account people "marginally attached" to the workforce. The Bureau of Labor Statistics reports that at the end of 2013 there were about 27.3 million part-time jobs, making up about 18% of the workforce.
Youth unemployment is a stunning 14%. It is particularly distressing that the labor participation rate has hit a 35-year low of 63.2%.
This rate has dropped most noticeably for men and women in their prime earning years between the ages of 25 and 54 and is up only slightly for those 55 and over.
No wonder recovery is a dirty word to millions of Americans who continue to experience hardship five years after the Great Recession of 2008-09. On Friday, the Commerce Department announced that fourth-quarter economic growth for 2013 was even lower than predicted, coming in at a desultory 2.4%.
That is bad news for Americans who need work.
Job losses in the low-wage and minimum-wage category is the critical issue of our day: Too many of the poor are not working full time or at all.
Income inequality isn't so much the problem as income inadequacy. A more robust economy, stoked by growth-oriented policies from Washington, would help produce the jobs and opportunities that millions of Americans need to climb the economic ladder....
----
Link: http://online.wsj.com/news/articles/SB10001424052702303426304579403711603102886?
...the fundamental economic issue facing America... is jobs—their scarcity and the quality of those that people manage to find.
The unemployment rate is about 13% if you take into account people "marginally attached" to the workforce. The Bureau of Labor Statistics reports that at the end of 2013 there were about 27.3 million part-time jobs, making up about 18% of the workforce.
Youth unemployment is a stunning 14%. It is particularly distressing that the labor participation rate has hit a 35-year low of 63.2%.
This rate has dropped most noticeably for men and women in their prime earning years between the ages of 25 and 54 and is up only slightly for those 55 and over.
No wonder recovery is a dirty word to millions of Americans who continue to experience hardship five years after the Great Recession of 2008-09. On Friday, the Commerce Department announced that fourth-quarter economic growth for 2013 was even lower than predicted, coming in at a desultory 2.4%.
That is bad news for Americans who need work.
Job losses in the low-wage and minimum-wage category is the critical issue of our day: Too many of the poor are not working full time or at all.
Income inequality isn't so much the problem as income inadequacy. A more robust economy, stoked by growth-oriented policies from Washington, would help produce the jobs and opportunities that millions of Americans need to climb the economic ladder....
----
Link: http://online.wsj.com/news/articles/SB10001424052702303426304579403711603102886?
Sunday, March 2, 2014
Putin Smashes Washington’s Cocoon
From Walter Russell Mead at the American Interest:
Headlines like “Why Russia Won’t Invade Ukraine,” “No, Russia Will Not Intervene in Ukraine,” and “5 Reasons for Everyone to Calm Down About Crimea” weren’t hard to find in our most eminent publications.
... this massive intellectual breakdown has a lot to do with a common American mindset that is especially built into our intellectual and chattering classes.
Well educated, successful and reasonably liberal minded Americans find it very hard to believe that other people actually see the world in different ways...
How many times did foolishly confident American experts and officials come out with some variant of the phrase “We all share a common interest in a stable and prosperous Ukraine.” We may think that’s true, but Putin doesn’t.
We blame this in part on the absence of true intellectual and ideological diversity in so much of the academy, the policy world and the mainstream media.
Most college kids at good schools today know many more people from different races and cultural groups than their grandparents did, but they are much less exposed to people who think outside the left-liberal box.
How many faithful New York Times readers have no idea what American conservatives think, much less how Russian oligarchs do?
Well bred and well read Americans live in an ideological and cultural cocoon and this makes them fatally slow to understand the very different motivations that animate actors ranging from the Tea Party to the Kremlin to, dare we say it, the Supreme Leader and Guide of the Islamic Republic of Iran....
----
Link: http://www.the-american-interest.com/blog/2014/03/01/putin-smashes-washingtons-cocoon/
Headlines like “Why Russia Won’t Invade Ukraine,” “No, Russia Will Not Intervene in Ukraine,” and “5 Reasons for Everyone to Calm Down About Crimea” weren’t hard to find in our most eminent publications.
... this massive intellectual breakdown has a lot to do with a common American mindset that is especially built into our intellectual and chattering classes.
Well educated, successful and reasonably liberal minded Americans find it very hard to believe that other people actually see the world in different ways...
How many times did foolishly confident American experts and officials come out with some variant of the phrase “We all share a common interest in a stable and prosperous Ukraine.” We may think that’s true, but Putin doesn’t.
We blame this in part on the absence of true intellectual and ideological diversity in so much of the academy, the policy world and the mainstream media.
Most college kids at good schools today know many more people from different races and cultural groups than their grandparents did, but they are much less exposed to people who think outside the left-liberal box.
How many faithful New York Times readers have no idea what American conservatives think, much less how Russian oligarchs do?
Well bred and well read Americans live in an ideological and cultural cocoon and this makes them fatally slow to understand the very different motivations that animate actors ranging from the Tea Party to the Kremlin to, dare we say it, the Supreme Leader and Guide of the Islamic Republic of Iran....
----
Link: http://www.the-american-interest.com/blog/2014/03/01/putin-smashes-washingtons-cocoon/
Housing recovery still going strong?
From CNBC.com:
Mortgage applications to buy a home fell last week to the lowest level in nearly two decades, according to a weekly survey from the Mortgage Bankers Association.
The report is a clear sign of weakness in buyer demand heading into the usually busy spring housing season.
"Purchase applications were little changed on an unadjusted basis last week, but this is the time of a year we would expect a significant pickup in purchase activity, and we are not yet seeing it," said Mike Fratantoni, the association's chief economist.
Total application volume fell 8.5 percent on a seasonally adjusted basis from a week earlier, while the Refinance Index was down 11 percent from the previous week.
The seasonally adjusted Purchase Index decreased 4 percent from one week earlier, to the lowest level since 1995...
----
Link: http://www.cnbc.com/id/101446044
Mortgage applications to buy a home fell last week to the lowest level in nearly two decades, according to a weekly survey from the Mortgage Bankers Association.
The report is a clear sign of weakness in buyer demand heading into the usually busy spring housing season.
"Purchase applications were little changed on an unadjusted basis last week, but this is the time of a year we would expect a significant pickup in purchase activity, and we are not yet seeing it," said Mike Fratantoni, the association's chief economist.
Total application volume fell 8.5 percent on a seasonally adjusted basis from a week earlier, while the Refinance Index was down 11 percent from the previous week.
The seasonally adjusted Purchase Index decreased 4 percent from one week earlier, to the lowest level since 1995...
----
Link: http://www.cnbc.com/id/101446044
Sunday, February 23, 2014
Walmart and the middle class, sinking together
From Rick Newman writing at Yahoo Finance:
It was once General Motors whose fortunes reflected those of the middle-class Americans who bought its products.
Now, that bellwether Goliath is Walmart.
The giant retailer has become a microcosm of the middle class, since both are mighty yet struggling, and both may be going even further downmarket...
The emerging “barbell economy” — growing clusters of high- and low-income consumers, with fewer in the middle — has driven many of Walmart’s customers either to higher-end department stores or to deep discounters such as dollar chains....
With Walmart tied so closely to the fortunes lower-middle-class Americans, it’s no exaggeration to say that, as goes Walmart, so goes America. And vice versa.
Like many struggling Americans, Walmart has plans to rejuvenate its performance and assure its relevance. It has invested more in its website and e-commerce infrastructure, to compete better with Amazon.
It also plans to open more small, neighborhood outlets that shoppers might visit for a handful of items, in contrast to the warehouse-sized stores that can take an hour or more to navigate.
There have even been rumors Walmart could buy a discount chain such as Family Dollar (FDO), giving it a sudden, large presence in the thriving lower end of retail.
----
Link: http://finance.yahoo.com/blogs/the-exchange/walmart-and-the-middle-class--sinking-together
It was once General Motors whose fortunes reflected those of the middle-class Americans who bought its products.
Now, that bellwether Goliath is Walmart.
The giant retailer has become a microcosm of the middle class, since both are mighty yet struggling, and both may be going even further downmarket...
The emerging “barbell economy” — growing clusters of high- and low-income consumers, with fewer in the middle — has driven many of Walmart’s customers either to higher-end department stores or to deep discounters such as dollar chains....
With Walmart tied so closely to the fortunes lower-middle-class Americans, it’s no exaggeration to say that, as goes Walmart, so goes America. And vice versa.
Like many struggling Americans, Walmart has plans to rejuvenate its performance and assure its relevance. It has invested more in its website and e-commerce infrastructure, to compete better with Amazon.
It also plans to open more small, neighborhood outlets that shoppers might visit for a handful of items, in contrast to the warehouse-sized stores that can take an hour or more to navigate.
There have even been rumors Walmart could buy a discount chain such as Family Dollar (FDO), giving it a sudden, large presence in the thriving lower end of retail.
----
Link: http://finance.yahoo.com/blogs/the-exchange/walmart-and-the-middle-class--sinking-together
Saturday, February 15, 2014
American dream seen as out of reach: new poll
From McClatchyDC.com:
Americans are overwhelmingly pessimistic about their chances of achieving and sustaining the American dream, according to a new Marist-McClatchy Poll.
They see an economic system in which they have to work harder than ever to get ahead, and a political system that’s unresponsive to their needs. They see the wealthy allowed to play by a different set of rules from everyone else.
Eight out of 10 Americans think it’s harder now than before, taking more effort to get ahead than it did for previous generations.
Just 15 percent think it takes the same work as it did before, and a scant 5 percent think it’s easier now.
And Americans don’t think it will get better soon, with 78 percent thinking it also will be harder for the next generation to get ahead....
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Link: http://www.mcclatchydc.com/2014/02/13/218026/mcclatchy-marist-poll-american.html
Americans are overwhelmingly pessimistic about their chances of achieving and sustaining the American dream, according to a new Marist-McClatchy Poll.
They see an economic system in which they have to work harder than ever to get ahead, and a political system that’s unresponsive to their needs. They see the wealthy allowed to play by a different set of rules from everyone else.
Eight out of 10 Americans think it’s harder now than before, taking more effort to get ahead than it did for previous generations.
Just 15 percent think it takes the same work as it did before, and a scant 5 percent think it’s easier now.
And Americans don’t think it will get better soon, with 78 percent thinking it also will be harder for the next generation to get ahead....
----
Link: http://www.mcclatchydc.com/2014/02/13/218026/mcclatchy-marist-poll-american.html
Jobless Claims Moved Up to 339,000 Last Week
From Bloomberg.com:
More Americans than forecast filed applications for unemployment benefits last week, underscoring the uneven progress in the labor market.
Jobless claims increased by 8,000 to 339,000 in the week ended Feb. 8 from 331,000 in the prior period, a Labor Department report showed today in Washington. The median forecast of 52 economists surveyed by Bloomberg called for a decrease to 330,000.
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Link: http://www.bloomberg.com/news/2014-02-13/jobless-claims-in-u-s-increased-to-339-000-last-week.html
More Americans than forecast filed applications for unemployment benefits last week, underscoring the uneven progress in the labor market.
Jobless claims increased by 8,000 to 339,000 in the week ended Feb. 8 from 331,000 in the prior period, a Labor Department report showed today in Washington. The median forecast of 52 economists surveyed by Bloomberg called for a decrease to 330,000.
----
Link: http://www.bloomberg.com/news/2014-02-13/jobless-claims-in-u-s-increased-to-339-000-last-week.html
Saturday, February 8, 2014
WSJ: More Men in Prime Working Ages Don't Have Jobs
From the Wall Street Journal online:
More than one in six men ages 25 to 54, prime working years, don't have jobs—a total of 10.4 million.
Some are looking for jobs; many aren't. Some had jobs that went overseas or were lost to technology. Some refuse to uproot for work because they are tied down by family needs or tethered to homes worth less than the mortgage. Some rely on government benefits. Others depend on working spouses.
Having so many men out of work is partly a symptom of a U.S. economy slow to recover from the worst recession in 75 years. It is also a chronic condition that shows how technology and globalization are transforming jobs faster than many workers can adapt, economists say.
The trend has been building for decades, according to government data. In the early 1970s, just 6% of American men ages 25 to 54 were without jobs. By late 2007, it was 13%.
In 2009, during the worst of the recession, nearly 20% didn't have jobs.
Although the economy is improving and the unemployment rate is falling, 17% of working-age men weren't working in December. More than two-thirds said they weren't looking for work, so the government doesn't label them unemployed. The January snapshot of the job market is due Friday...
----
Link: http://online.wsj.com/news/articles/SB10001424052702304027204579334610097660366
More than one in six men ages 25 to 54, prime working years, don't have jobs—a total of 10.4 million.
Some are looking for jobs; many aren't. Some had jobs that went overseas or were lost to technology. Some refuse to uproot for work because they are tied down by family needs or tethered to homes worth less than the mortgage. Some rely on government benefits. Others depend on working spouses.
Having so many men out of work is partly a symptom of a U.S. economy slow to recover from the worst recession in 75 years. It is also a chronic condition that shows how technology and globalization are transforming jobs faster than many workers can adapt, economists say.
The trend has been building for decades, according to government data. In the early 1970s, just 6% of American men ages 25 to 54 were without jobs. By late 2007, it was 13%.
In 2009, during the worst of the recession, nearly 20% didn't have jobs.
Although the economy is improving and the unemployment rate is falling, 17% of working-age men weren't working in December. More than two-thirds said they weren't looking for work, so the government doesn't label them unemployed. The January snapshot of the job market is due Friday...
----
Link: http://online.wsj.com/news/articles/SB10001424052702304027204579334610097660366
More weakness
From the Wall Street Journal online:
A hiring chill hit the U.S. labor market for the second straight month in January, reflecting employers' reluctance to take on new workers despite some of the nation's strongest economic growth in years.
U.S. payrolls rose a seasonally adjusted 113,000 in January after December's lackluster gain of 75,000 jobs, marking the weakest two-month stretch of job creation in three years, the Labor Department said Friday...
The confounding performance, particularly the weaker payroll gains, comes after months of mounting enthusiasm among many businesses, consumers and investors about stronger expansion.
It indicates growth in gross domestic product could be settling back near the 2% pace recorded for most of the recovery rather than the better-than-3% annualized gain in the second half of 2013...
----
Link: http://online.wsj.com/news/articles/SB10001424052702304680904579368562158283286?
A hiring chill hit the U.S. labor market for the second straight month in January, reflecting employers' reluctance to take on new workers despite some of the nation's strongest economic growth in years.
U.S. payrolls rose a seasonally adjusted 113,000 in January after December's lackluster gain of 75,000 jobs, marking the weakest two-month stretch of job creation in three years, the Labor Department said Friday...
The confounding performance, particularly the weaker payroll gains, comes after months of mounting enthusiasm among many businesses, consumers and investors about stronger expansion.
It indicates growth in gross domestic product could be settling back near the 2% pace recorded for most of the recovery rather than the better-than-3% annualized gain in the second half of 2013...
----
Link: http://online.wsj.com/news/articles/SB10001424052702304680904579368562158283286?
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