This statistic provides a pretty compelling snapshot of the severity of our income gap: In 2014, Wall Street’s bonus pool was roughly double the combined earnings of all Americans working full-time jobs at minimum wage.
Brent crude oil fell toward $59 a barrel on Monday as the dollar strengthened and a supply glut pushed global oil inventories to record highs.
The dollar hit a more than 11-year high against a basket of currencies after the U.S. unemployment rate in February fell to its lowest level since May 2008, making commodities priced in the greenback more expensive for holders of other currencies. [USD/]
Oil inventories are rising across the world as production outstrips demand, offsetting tensions in the Middle East and the risk of output cuts in Libya and Iraq. [EIA/S]
Bureau of Labor Statistics: Employment Situation Summary
While economists were expecting a decent job report of 230,000 new jobs, February proved to be another very strong month of job creation as 295,000 new jobs were created. This caused the headline unemployment rate to drop to 5.5%, though that was ironically mixed news because it was partly caused by more unemployed people giving up the job search than actually getting jobs. On the other hand, the broadest measure of unemployment, the U-6 rate, which includes people marginally attached to the workforce and part-time workers who can’t find full-time work, dropped .3 points to 11% (the normal U-6 rate is about 9%) because lots of part-time workers found full-time employment. Wage growth was also weak, which isn’t surprising given the deflationary environment that currently exists. If job growth continues this strongly, by the end of the year employment levels should be very close to normal, and a tightened labor market should create enough pressure to create real wage gains over the inflation rate.
The conditions of the idealized market model do describe ordinary retail markets, where there are plenty of restaurants, supermarkets, dry cleaners, and hardware stores, and consumers are competent to shop around for price and quality. They don’t accurately characterize the markets in health, education, labor, finance, or technological innovation, to name just five. (What is efficient about a hedge fund mogul taking home $2 billion, or a life-saving pill that retails for $5,000 a dose?)
To produce an economy that is more equitable as well as more efficient, government uses a variety of tools. It regulates to counteract market failure. It taxes to provide revenues to pay for public goods that markets under-provide at affordable prices—everything from education to health to research and development. Sometimes government passes laws to sustain other elements of a social contract, such as the laws protecting workers’ rights to form unions and to collectively bargain.
There is another, more fundamental point ignored by libertarians: The market itself is a creature of government. As Karl Polanyi famously wrote in a seeming oxymoron, “laissez-faire was planned.” Markets could not exist without states defining the terms of property ownership and commerce, creating money, enforcing contracts, protecting patents and trademarks, and providing basic public institutions. A Robinson Crusoe world never existed. So the real issue is not whether government “intrudes” on the market—the capitalist system is impossible without government. The practical question is whose interests the state serves.
A number of social scientists and journalists, such as Tom Frank (who is both) in his book, What’s the Matter with Kansas?, keep wondering why working-class voters, especially whites, fail to vote their economic self-interest. In surprisingly large numbers, they support Republicans, who would remove the weakened social protections that remain, cut back Social Security and Medicare, make the tax code even more regressive, and make American workers even more vulnerable to low-wage competition from overseas. Frank blames the cultural conservatism of much of the white working class.
But there is a more disconcerting explanation. It has been a long time since government effectively did its job of tempering the market in the interest of ordinary people. A further problem of this blurring between the public and the private is that it adds great complexity. That makes regulations and government programs harder to administer, and diffuses blame when citizens find themselves frustrated with the result. Ultimately, the government tends to take the fall more than the market.
So if we are to win the argument with the libertarians, we need to take back effective government. Friedman was wrong to argue that the cure for market failure is more market. However, the cure for weak or corrupted democracy has to be more democracy. The only way to redeem public confidence in government as a necessary check on the market is to repair faith in democracy itself. It is not difficult to prove that the claim of market efficiency is delusional. Reclaiming our democracy will be harder—but it must be done.
More: The Libertarian Delusion
Lloyds Banking Group is paying its first dividend in more than six years after reporting a rise in profit and improvements in its capital strength, a milestone in the bank’s recovery after it was bailed out during the financial crisis.
The bank, which was rescued at a cost of 20 billion pounds ($30.9 billion) to British taxpayers, said it would pay a dividend of 0.75 pence for the 2014 financial year.
Chief Executive Antonio Horta-Osorio said Lloyds, which offered some of the highest dividends in Britain before the crisis of 2007-2009, intended to pay out at least half of its sustainable earnings in the medium term.
The U.S. Justice Department is investigating whether the world’s biggest banks manipulated prices of precious metals such as silver and gold, according to people with knowledge of the matter.
At least 10 banks, including Barclays Plc, JPMorgan Chase & Co., and Deutsche Bank AG are being probed by the Justice Department’s antitrust division, said one of the people, who asked not to be named because the matter is confidential.
The metals investigation, which is in the early stages, broadens the Justice Department’s ongoing scrutiny of banks over manipulation of financial benchmarks. Prosecutors are conducting criminal investigations into the alleged rigging of interbank lending rates and currency markets.
Greece formally requested a six-month extension to its euro zone loan agreement on Thursday, offering major concessions as it raced to avoid running out of cash within weeks and overcome resistance from skeptical partners led by Germany.
With its EU/IMF bailout program due to expire in little more than a week, the government of leftist Prime Minister Alexis Tsipras urgently needs to secure a financial lifeline to keep the country afloat beyond late March.
Euro zone finance ministers will meet on Friday afternoon in Brussels to consider the request, the chairman of their Eurogroup, Jeroen Dijsselbloem, said in a tweet.
That raised hopes of a deal to avert possible bankruptcy and a Greek exit from the 19-nation currency area.
New York City has created more jobs over the past five years than during any five-year period in the last half century. But the city is not pulsing with the same boomtown swagger it radiated in past growth spurts.
What’s missing? Wall Street.
The big investment banks and brokerage firms used to form the powerful engine that pulled New York’s economy out of recessions. During the boom years of the 1990s, the high-paying securities industry accounted for more than 10 percent of all of the jobs added in the city’s private sector. This time around, it has contributed less than 1 percent.
To city officials and economists, this is extraordinarily good news. For the first time in decades, New York is proving that it can grow at a rapid pace without leaning on Wall Street.
The Sacramento Kings are now building their 3rd arena since moving from Kansas City in 1985, this one looks like it might get the job done.
A 16-story hotel and condo tower planned for the downtown Sacramento arena complex got the green light from the city’s Planning Commission on Thursday, a pivotal step that allows the Kings to begin construction of the project.
Planning commissioners praised the project before voting unanimously to approve the design plans. Commissioner Kim Mack said changes made to the design were “phenomenal” and joked that she wanted to get on the list for one of the 69 apartments that will fill the top four floors of the building.
Other commissioners lauded the design for complementing public spaces that will surround the $477 million arena and said the tower would become an iconic structure downtown.
From my own experience as a retail worker over 3 decades, the only stores in which I was treated as a professional valued employee are the upscale stores in which sales people earned commission. With a book of loyal customers, employers take notice of the sales persons needs.
My last job in retail was with a large retail drug store. While I was valued at the store level, it was very obvious that corporate only considered the store manager as an asset. The rest of us were grist for the mill. The biggest insult, I felt, was never having a set schedule. This resulted in my leaving the company after 5 years.
Most of my co-workers were adults, not students or high-schoolers, many with college degrees. People who depended on the job to pay the rent and for benefits. Only a few of us worked enough hours to qualify for benefits. Young adults with children and/or car payments were truly wage-slaves. They couldn’t depend on any set schedule and it made child care and planning any activities for their children difficult.
As a middle-class, old(er) white woman who was working mostly for something to do and for extra savings, it was a BIG WAKE-UP CALL when I learned that most of my co-workers with children qualified for WIC. This meant that the government paid for their baby formula and other staples because they did not earn enough to do so.
My co-workers were not lazy or stupid. They were individuals doing the best they could in a complex world. It is a honor to call many of them friend to this day.
Never again will I complain about my tax dollars going to social services. There is such a thing as the working poor in the United States of America.
The Retail Action Project conducted a study of retail workers called Discounted Jobs: How Retailers Sell Workers Short. The results from the report, published in 2012, show alarming trends in the retail sector — trends that make it difficult for workers to cover basic needs and raise families on the salaries they earn.
The study found that
Only 17% of retail workers surveyed have a regular schedule
About 34% of relied on public assistance
Over half earn less than $10/hour
More than 70% don’t get health insurance from their jobs
77% of Latina retail workers made under $10/hour