While leisurely browsing the FT on Friday it is possible that you may of come across the co-location of two articles that, although directly applicable one another, contained no mutual consideration. These articles, considering respectively President Obama’s bite into banks (see article) and the US Supreme Court’s ruling on Thursday to lift spending limits of corporations during campaigns (see article), cry out from the page to a major implication that is seemingly not consider elsewhere.
“It’s payback time for Wall Street” the initial article begins, but a successful crack down on the banks, which have led discussions in American and the World about the way financial services are conducted for the past 20 years, is at best unlikely.
Goldman Sachs’ declared net profits in 2009 of $13.4 billion, alongside bonus packages of $16 billion, dwarfing the 2006 Midterm election spending. Suggesting that the ruling will “make it much harder to get… …common-sense financial reforms” Obama has clearly become master of understatement. Today the crackdown has not only to face the already strong Wall Street lobbyists in Washington, alongside Republicans who want to see Obama unable to progress on key election promises, but will confront a record spend on election campaigning by corporates that may not be matched for many decades to come.
John Gapper, of the FT (01/22/10), writes that: “Banks, which are good at making financial bets, have been bad at making political ones”
The statement that banks have been good at making financial decisions does not stand out as the most apparent truth, but the idea that banks are not politically adept is, frankly, naive. The next step for Obama to take is far from clear, but for success in both his financial and healthcare reforms the decision of the Supreme Court needs to be mitigated. Obama may be keeping his characteristic cool for now but lets see what happens as we get closer to November.
Circa deci dies por li tremore de terre in Haiti secun opinion del General secretario del UN, Ban, li auxilie por li superviventes successe plu e plu bon.
Sur avanplan sta nu li furnition del homes e li re-construction, dit li General secretario del UN.
Li nov commissionat por extern afferes, sra Ashton, viageat ad-in li USA por interparoles pri li situation in Haiti. Li ministra pri extern afferes del USA, Clinton, dit pos li incontra, que li USA vole infortiar lor auxilie. Li mult persones sin hem besona asyles, nutriment e pur aqua.
Something weird is happening to labour markets in the rich world. The link between depth of recession and rise in unemployment is broken. And for the first time in a generation, Europeans can bask in the knowledge that their unemployment would have to rise in order to approach US levels.
In some countries – the US stands out – the decline in output has not been so terrible but the employment shake-out has been brutal. Many more American jobs have been lost than in other countries – and many more than in the past.
In large northern European economies – Germany, the UK and France – the loss of output has been exceptionally nasty and far surpassed expectations, but the loss of jobs has been relatively modest. In countries around Europe’s geographic and economic periphery, meanwhile – Spain and Ireland in particular – the economic crisis has taken its toll on both employment and output.
Around the world, the accepted relationship in economics between employment and output – known as Okun’s Law – does not even appear to be a dependable rule of thumb. Instead, it seems to be an arbitrary relationship. As for the effect of the financial and economic crisis on households and society, collateralised debt obligations are an irrelevance; jobs are everything, as President Barack Obama saw to his cost in Massachusetts this week.
The loss of a breadwinner’s job shocks and angers families; if unemployment persists it can rob individuals of hopes and dreams, add to already growing burdens on taxpayers, limit rises in living standards and transmit its malign influences across regions and generations.
The failings of flexibility
Macroeconomics has learnt the art of eating humble pie. Since the onset of the financial crisis, long-cherished predictions, theories and rules of thumb about the way whole economies work have fallen by the wayside. Is it now the turn of microeconomists to taste some of the same medicine when it comes to the labour market?
For years, it has been the settled view in economics that, in most cases, flexible labour markets are best. More jobs might be lost in a downturn, but this cost was far outweighed by the benefits of flexible pay and the ease of reallocating jobs from dying industries to dynamic ones. No body was more closely aligned with such recommendations than the Organisation for Economic Co-operation and Development, the Paris-based club of developed nations.
But now the OECD is modifying its view. “We have been promoting flexibility, not for the sake of it, but for economic performance and for workers to get into new jobs,” says Stefano Scarpetta, the OECD’s head of employment analysis.
This motivation is allowing a change of view. “Judging from the outcomes so far, short-time working schemes seem to have been rather successful in containing the job haemorrhage,” he says, adding that even his organisation is “a little bit more positive on public works programmes: we argue that as part of a labour market approach, they might be worthwhile”.
While this is not a wholesale repudiation of the OECD’s former views, it reflects the fact that, according to the organisation’s own analysis, the gains in employment flexibility of recent years have failed to protect employees from the economic crisis. “There do not appear to be any clear grounds for concluding that workers, generally, are any better or worse prepared to weather a period of weak labour markets than was the case for the past several recessions,” the OECD concluded in its latest Employment Outlook.
Some top economists argue that the theory of superiority of flexible labour markets applies only at full employment. It will not work well when there has been a large shock to demand, output is well below potential and jobs are effectively rationed. In these circumstances, German-style institutions that cushion and spread the pain are probably superior.
For professor Richard Freeman of Harvard University, the problem is simpler. Microeconomists and policymakers spent much too much time fiddling with the work incentives of poor people. “If the unemployed person or the welfare mother . . . doesn’t do quite as much work as we would like them to do, or as they should, that’s a very small cost to society; when a big banker takes excessive risks, it can bring the whole system to a disaster . . . so we took the eyes off the ball of the really risky part of capitalism.”
So what is going on in global labour markets? The standard and dependable theory is that the US, with its hiring and firing culture, has suffered sharp rises in unemployment but also achieved gains in relative and absolute productivity. That will see it in good stead in the years to come. By contrast, employers in big European countries and Japan have been slow to recognise the seriousness of the recession and have often been more hidebound, both by law and cultural obligations, in addressing it – and so have held on to staff at the expense of plunging labour productivity.
The prediction flowing from this line of thinking is that in the recovery, the US will have much more rapid jobs growth than Europe and will be better positioned globally because it has already endured the pain and, having taken the medicine, can enjoy the recuperation.
There has to be truth in the explanatory part of the theory, since it is a description of the data. The Conference Board, a global business organisation, calculates that output per hour worked rose 2.5 per cent in the US in 2009, while it dropped 1 per cent in the eurozone and 1.9 per cent in the UK. “These are unusually large differences in productivity growth between the US and Europe,” says Bart van Ark, the board’s chief economist. “US employers have reacted much more strongly to the recession than their European counterparts in terms of cutting jobs and hours.”
Europeans are already nervous about what the theory predicts. Lorenzo Bini Smaghi, European Central Bank executive board member, warned last week that “if capacity utilisation remains at low levels, job losses may increase further”.
But there are some big problems with the productivity story, both in explaining the trends in unemployment and in predicting what will happen next. The theory does not really explain why the UK, also with a hiring and firing culture, looks more like Germany and France than the US – in fact, even worse. It does not explain why US employers have shed staff much more readily in this recession than in the past; nor why British and German employers have clung to their labour this time round; nor why employers in Spain and Ireland are rather like those in the US and unlike those in northern Europe.
One issue that cannot be discounted is that the figures on output might simply be wrong. Statisticians around the world have a habit of miscounting gross domestic product, the output of an economy. Intriguingly, the mistakes made in recent years, as painstakingly documented by Kevin Daly at Goldman Sachs, have reflected certain national stereotypes. Between 1999 and 2006, gung-ho American statisticians overestimated the first stab at US annual economic growth by 0.3 percentage points. Their more sober European counterparts underestimated growth by about 0.5 points.
So while the news has persistently implied that the US is a far more dynamic economy than Europe, the later reality is that at least two-thirds of that superior performance was a statistical mirage. If the traditional patterns of revisions are repeated for 2009, the fall in US output will grow, bringing it more in line with the loss of jobs, while the opposite will occur for Europe.
Stefano Scarpetta, head of employment analysis at the Paris-based Organisation for Economic Co-operation and Development, provides a second reason to doubt the simple productivity story. Advanced economies, he argues, have suffered from two quite distinct types of recession. One, characterised by an initial bust in housing construction before a drop in aggregate demand, is true of Ireland, Spain and the US; the other, hitting Germany, Japan, France and the UK, came predominantly via a collapse in consumer and business confidence and trade.
The argument that differing routes to collapse resulted in different impacts on jobs has much going for it. While a Californian housebuilding company knows it will be able to rehire a plasterer when a recovery comes, a Rhineland machine toolmaker cannot have the same confidence it will be able to find someone with the precise skills it needs when demand picks up.
Using this logic, Willem Buiter, chief economist of Citigroup, even dares to envisage a relatively optimistic outlook for the global jobs scene, saying: “The really good news might be that both [the US and Europe] have done the right thing given their institutions and demand.” But he adds that it is far too early to be sure this positive conclusion will survive the coming year.
T he detail of individual labour market stories gives good reason to doubt the strength with which the US labour market will bounce back. It also casts a shadow over some European prospects, particularly in peripheral economies.
The US has experienced the worst recession in terms of jobs for at least a quarter of a century, with the early 1980s as the only recent parallel. Data (for job openings and labour turnover and supply) initially showed unemployment surging, because hiring evaporated at the same time as fewer people left their jobs voluntarily and firing stepped up a little from its naturally high level. More recently, the less rapid rise in unemployment has come as the rate of firing has declined but hiring rates have remained stubbornly low.
The fear has to be that hiring might not return to its former levels and might be weaker than in the 1980s. A perception is emerging that America’s wheels of economic adjustment are not turning as rapidly as normal.
Like Europe in the 1980s, the US unemployed are finding themselves out of work for increasingly long periods. Four in 10 have been unemployed for more than six months and many more have quit the labour market entirely, with the participation rate at its lowest level since 1985. The long-term unemployed, becoming less and less likely to land a job, are thus also less likely to act as a restraint on the working population in seeking inflationary wage increases. That raises the possibility that the sustainable growth rate of the entire US economy could fall.
Part of the reason for the persistence of joblessness and the high numbers of dropouts from the labour market in the US this recession appears to be a decline in the mobility of Americans. The latest census data show a sharp drop in the proportion of Americans moving from one part of the country to another between 2004 and 2008 – perhaps a result of the housing boom-turned-bust that has left so many in negative equity.
“This is a serious long-term issue,” says David Autor, an economist at the Massachusetts Institute of Technology. “People who are discouraged may have trouble getting back into the labour market and, when they do, they generally have lower wages and less stable employment.”
Worst placed are the peripheral European economies, particularly Spain. There, companies have been firing the young, ethnic minorities and the low-skilled while hoarding older, more costly labour. The OECD’s Mr Scarpetta calculates that 85 per cent of jobs lost in Spain have been temporary contracts, a figure that rises towards 100 per cent in Italy.
So with a vicious unemployment problem touching 20 per cent of the labour force, Spain also lacks flexibility within companies. The danger is that these countries will lose both employment and productivity in the years ahead.
Big European economies, by contrast, are happy that growth in long-term unemployment is low, that the rise in joblessness has been so limited and that their temporary jobs programmes have received unexpected praise.
Alistair Darling, UK chancellor, told the Financial Times this week that the active role of government has helped, saying: “In the olden days, when you went along to the benefits agency, the discussion was about how much benefit, whereas the discussion now is, ‘how can we get you a job?’ ”
There are, nevertheless, country-specific fears for the future. In Germany, concerns centre on joblessness rising once the government’s Kurzarbeit (short-time working) scheme comes to an end. In the UK, the worry is that unemployment will rise again once the government begins to cut public spending next year. Moreover, the tendency for European companies to hang on to labour at the expense of lower profits may not be sustainable. Nor does it suggest the recovery will be rich in new jobs.
Although northern Europe is feeling pleased with its labour markets right now, the details suggest a need to be cautious about expecting either a US hiring boom or rapid European adjustments to new patterns of demand and employment. Around the world, weirdness in labour markets may turn out to be far from wonderful.
Copyright The Financial Times Limited 2010. You may share using our article tools. Please don’t cut articles from FT.com and redistribute by email or post to the web
Being from New York, and being a Yankee fan from birth, I never thought I would appreciate anything that the far left state to my right…but let me give it a try. Thanks to the voters of Massachusetts the Democrats will have to talk to a Republican in order to get their bills past. Now the health care debate can begin.
Congratulations also to Senator Scott Brown and his campaign staff for standing up to the norms of a blue state and running a successful campaign. Now do what you said you would do and do not become a run of the mill politician and let Washington corrupt you.
NEWS Analysis: Brown’s win changes political narrative for 2010 By Mark Preston, CNN Political Editor
January 20, 2010 3:24 a.m. EST
Washington (CNN) — Look no further than the two warning flares shot up from Virginia and New Hampshire Tuesday evening to understand how concerned Democrats are about the political consequences of losing the late Sen. Edward Kennedy’s seat to Republican Scott Brown.
Sen. Jim Webb, D-Virginia, called on his Democratic colleagues to suspend votes on their controversial health care legislation, warning it would be wrong to try and muscle a bill through Congress before Brown was sworn into office.
“In many ways, the campaign in Massachusetts became a referendum not only on health care reform but also on the openness and integrity of our government process,” Webb said in a statement.
Some 500 miles to the north, New Hampshire Democratic Party Chairman Ray Buckley sent out an urgent plea for donations to help fund a special election next month for a state senate seat he fears losing.
“Over the past few weeks, radical right-wing activists turned Massachusetts into ground zero for the Tea Party movement, and we saw a taste of what’s to come in 2010,” Buckley wrote.
Brown’s victory has changed the political narrative in 2010.
Traditionally, the president’s party loses seats in the midterm elections. But now there is concern among some politically savvy Democrats who worry that the losses could be greater than originally anticipated in November all because of Brown’s win.
“It makes it really hard,” a senior Democratic operative, speaking on the condition of anonymity, said Tuesday evening. “The frustrating thing for (Democratic) members is that it was preventable, it affects them and it was something that never should have gotten to this point.”
In a matter of two weeks, Democrats witnessed a sleeping Republican base come to life to rally around a little-known GOP candidate, who defied the odds to win the race to succeed the liberal lion from Massachusetts.
And after watching two governorships slip from their grasp in November, many Democrats have come to realize that the American public is not particularly happy with their stewardship of the nation.
Democrats have 10 months to try and regain the momentum, but the wind is now at the Republicans’ backs, and their first legislative victory will likely be slamming the brakes on President Obama’s signature domestic issue: health care reform. It is a mighty blow for a president, who just one year ago seemed unbreakable, unstoppable, unbeatable.
If we don’t figure out a way to talk to independent voters, we are done.
–High-level Democratic official
Brown is an unlikely savior for the Republican Party, which one year ago was disoriented, disorganized and disillusioned. A Massachusetts Republican has successfully brought together — for the time being — a party at war over the ideological purity of its membership.
There is still discord in the GOP, but Brown’s win gives Republicans another case study in how to run a successful campaign after their two gubernatorial wins in New Jersey and Virginia.
Martha Coakley’s loss provides Democrats with yet another example of how not to run a campaign after their earlier losses in New Jersey and Virginia.
One of the biggest challenges for Democrats is wooing back independent voters, who broke Brown’s way Tuesday to help him beat Coakley.
“If we don’t figure out a way to talk to independent voters, we are done,” lamented another high-level Democratic staffer, speaking freely on the condition of anonymity.
Republicans wake up Wednesday morning with a new vigor, and GOP strategists vow to try to use this win to broaden a playing field that one year ago seemed unrealistic. The GOP’s top target is Senate Majority Leader Harry Reid of Nevada, who is in danger of losing re-election, according to public polls.
But Republicans hope Tuesday’s victory also convinces some fence-sitting Democrats to follow the leads of Dennis Moore of Kansas or Rep. John Tanner of Tennessee and choose to retire instead of running for re-election.
For Obama, the loss will likely force him to reconsider his legislative priorities, as his support on Capitol Hill wanes in this midterm election year.
Conservative Democrats are less likely to back him on controversial issues such as health care and cap and trade, fearing that to do so would be political suicide. After all, Republicans were able to win Kennedy’s seat by running against the Obama agenda.
China May Pip USA to Become World largest Economy by 2030
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As per the latest report by Deutsche Bank, the economic and financial status of emerging market economies such as India and China will continue to do well in the future and the recent downturn will help accelerate the trend.
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Report also suggests that the (BRIC) economies” increasing size will be making itself increasingly felt in the world markets, ranging from trade and investment to commodity markets.
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Meanwhile, the BRIC economies of Brazil, Russia, India and China are likely to achieve significant growth in future.
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Meanwhile, BRIC nations are already ranked among the top 10 on a PPP (Purchasing Power Parity) basis.
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The impressive economic growth rates and greater participation in global trade and financial flows by the BRIC economies are re-shaping the global economic and financial architecture of these economies.
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It is expected that with the constant present growth of the BRIC economies, political, economic and financial realities of the world is going to change to the extent that China will replace the US as the World’’s largest economy by 2030.
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All the four big BRIC economies carry at least one investment grade rating, currently, at the same time.
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Moreover, China’’s and Russia’’s international status has been enhanced due to their substantial holdings of government controlled foreign assets.
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Trong động Craighead dưới chân núi vườn quốc gia Great Smoky thuộc Tennessee, một kỳ quan thiên nhiên của Hoa Kỳ (National Natural Landmark), có một hồ nước khổng lồ lớn nhất nước Mỹ, lớn nhất thế giới trong nhiều năm, hiện lớn hạng nhì trên thế giới, mang tên “The Lost Sea”, một vùng biển đã mất.
Tại sao mất? Theo truyền thuyết, một cậu bé 13 tuổi trong lúc rong chơi khu này, tình cờ đã khám phá ra hồ nước khổng lồ này, sâu trong lòng đất ở động Craighead. Cậu bé kể lại cho ba má biết. Mấy ngày sau gia đình trở lại đây tìm hồ nước này. Vì mưa gió nhiều trong mấy ngày liền, cửa hang nhỏ dẫn cậu bé vô hồ nước đã bị lấp. Hồ nước nầy mất tích suốt 60 năm.
Sáu chục năm sau, do một tình cờ khác, người ta đã tìm ra được biển hồ dưới lòng đất này. Người khám phá ra nhớ lại câu chuyện cậu bé đã kể 60 năm trước, mời ông cụ 73 tuổi tên Ben Sands trở lại để xem, đúng là hồ nước ông đã tìm được 60 năm trước, nhưng đã mất tích. Những người khám phá dành cho Ben Sands danh dự đặt tên cho biển hồ này. Ông đặt tên biển mất tích “The Lost Sea”.
Hồ nước này rất lớn, rộng hơn 4.5 mẫu Anh, dài 800 feet, rộng 220 feet. Tuy nhiên đó chỉ là một phần thấy được của hồ. Những chuyên viên lặn (divers) đã thám hiểm và thăm dò nhiều phòng ngập nước khác dưới đáy hồ, rộng mênh mông, nhưng vẫn chưa thấy được hạn định của hồ nước này. Kết quả công trình thám hiểm này trong những năm 1970 được đăng tải trên website của Jim Wyatt.
Vợ chồng tôi đã viếng động Craighead, đi tới tận hồ nước khổng lồ này, dùng tàu đi du ngoạn trong biển mất tích (The lost sea) này, đặc biệt lắm. Trong động Craighead có một loại thạch nhủ rất quí, ít thấy trong các hang động khác trên thế giới, có một thác nước nhỏ, nhỏ hơn thác Ruby tôi đã chia sẻ với các bạn trong một entry trước đây.
Đặc biệt động này là nơi một bộ xương Jaguar (beo đốm) đã được tìm thấy. Bộ xương nầy được 20,000 năm tuổi, và hiện được trưng bày ở bảo tàng viện American Museum of Natural History tại New York.
Tại hồ nước khổng lồ mang tên The Lost Sea, vợ chồng tôi đã xuống tàu đi dạo một vòng, cá trout lội nhởn nhơ dưới hồ vui quá. Cá trout ở đây lớn lắm, vì cấm câu cá nên chúng sống lâu, và được nuôi nấng tử tế nên lớn không thể tưởng. (Sẽ bổ túc sau).
Craighead Caverns: có vết tích của mọi da đỏ, và bình lính miền Nam đã ẩn náu ở đây trong trận chiến tranh Nam-Bắc.
The lost sea, biển hồ sâu dưới lòng đất lớn nhất Hoa Kỳ. Biển hồ tối om, xa xa nơi vách đá có để một bóng đèn nhỏ, để người chèo thuyền biết được hạn định của hồ..
“Craighead Caverns is an extensive cave system located in Sweetwater, Tennessee. It is most well known for containing the United States’ largest and World’s second largest underground lake, The Lost Sea. In addition to the lake, the caverns contain an abundance of crystal clusters called anthodites, stalactites, stalagmites and a waterfall.
Located in the foothills of the Great Smoky Mountains, the caverns are named after their former owner, a Cherokee native american, Chief Craighead. The caverns were formerly used by the Cherokee as a meeting place and later they were mined by Confederate soldiers for saltpeter, a commodity necessary to the manufacture of gunpowder.
In 1939, explorers found the remains of a Pleistocene jaguar. The persons who made the discovery were cave guides Jack Kyker and Clarence Hicks, who were exploring in the cave during their off hours. They reported their find to Dr. W. J. Cameron and W. E. Michael of Sweetwater, who were the current owners of the cave. The owners submitted the bones to the American Museum of Natural History in New York City, where they were identified as bones of a very large jaguar and an elk fawn. George Gaylord Simpson, a vertebrate paleontologist at the museum, subsequently visited Craighead Caverns in May, 1940 where he recovered additional jaguar bones and made casts of several jaguar footprints in the mud floor of the cave. His excavation and findings are reported in American Museum Novitates, No. 1131 (August 6, 1941) on pages 1-12. The report includes photographs of the bones and footprints.
A mushroom farm was operated in the cave from 1939 to 1940. The manure for this operation was supplied from Fort Oglethorpe, where many horses were stabled. The mushroom beds were located in the Big Room, a few hundred feet northeast of the Historic Entrance. In 1947, a wooden dance floor was built in this same area of the cave, and a nightclub, know as the “Cavern Tavern”, was operated in the cave.
Craighead Caverns was added to the National Park Service list of National Natural Landmarks in 1973.
The lost sea
The lake was discovered in 1905 by a thirteen-year-old boy named Ben Sands. As the story goes, Sands, who often played in the cave, happened upon a small opening and crawled through. The room was so large he was unable to see the ends of the room with his lantern, so he threw balls of mud in all directions and heard splashes. When he went back home and told people of his discovery, they were hesitant to believe him. By the time they went back down to explore it with lanterns, the water had receded, leading to the name “The Lost Sea.”
The surface of the lake measures 800 feet long and 220 feet wide (4.5 acres) at normal “full” capacity. Cave divers have explored several rooms that are completely filled with water, without reaching the end of the cave. This exploration was conducted in the 1970s. A web site by Jim Wyatt, one of the main cave divers during this period of exploration, can be located on the internet. This site gives a very detailed description of their explorations.
For many years The Lost Sea was considered the World’s largest underground lake and is still recognized as the World’s second largest underground lake.
Boat tours of the lake are still given and for many people are the highlight of the tour. In times of extreme drought (such as 2007-08) the lake recedes significantly and the management had to extend the walkway and the boat dock in order to be able to provide the boat tours. According to the management of the Lost Sea, the water level in the lake dropped 28 feet below its normal level at the height of the drought. At such times, visitors see a much larger cavern above the lake surface.”
Circa deci dies por li tremore de terre in Haiti secun opinion del General secretario del UN, Ban, li auxilie por li superviventes successe plu e plu bon.
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