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Recession Briefing: African-American Unemployment Rate Tops 17 Percent
What you need to know today to survive and thrive in the recession.
Unemployment for African Americans is projected to reach a 25-year high this year, according to a study released Thursday by an economic think tank, with the national rate soaring to 17.2 percent and the rates in five states exceeding 20 percent. (Washington Post)
Major U.S. banks and securities firms are on pace to pay their people about $145 billion for 2009, a record sum that indicates how compensation is climbing despite fury over Wall Street’s pay culture. (Wall Street Journal)
The federal foreclosure prevention program was designed to help struggling homeowners reduce their monthly payments, but housing advocates say they frequently see homeowners rejected or kept in a trial modification for questionable reasons. “There’s a real resistance on the servicers’ part to making permanent modifications,” said Diane Thompson of the National Consumer Law Center. (ProPublica)
Ferdinand Pecora turned a tame United States investigation of the 1929 Crash into an exposé that spawned far-reaching banking reform. Despite flashes of incisiveness from Chairman Phil Angelides, the Financial Crisis Inquiry Commission’s debut with Wall Street bosses Wednesday lacked that kind of promise. It’s early days, but the panel needs to sharpen up. (Reuters)
PR is thriving in the recession. According to data from Veronis Suhler Stevenson (VSS), a private-equity firm, spending on public relations in America grew by more than 4% in 2008 and nearly 3% in 2009 to $3.7 billion. (Economist)
With sneaky new fees, many banks and credit cards are squeezing consumers already struggling through the recession. Finance columnist Kathy Kristof discovered that one of her credit cards is charging her the equivalent of 703.8% interest. (BNet)
Consumer inflation was tame in 2009, with prices rising 2.7%. Yet families felt squeezed as their spending power sank in the face of falling wages, job losses and higher prices for energy, medical care and education. (Associated Press)
In a remarkable rebound from the depths of the financial crisis, JPMorgan Chase earned $11.7 billion last year, more than double its profit in 2008, and generated record revenue. The bank earned $3.3 billion in the fourth quarter alone. (New York Times)
Spending on clothes and shoes fell to record lows as the recession started to bite in the U.K. in 2008. This fall in spending could signal people’s desire to cut back on non-essential items. (Independent)
Don Reisinger gives ten reasons why the so-called “tech recession” isn’t over yet. (eWeek)
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Unemployment, both in the U.S. and the world as a whole, marches ever higher because the field of economics doesn’t account for the relationship between population density and per capita consumption.
Following the beating the field of economics took over the seeming failure of Malthus’ theory, economists adamantly refuse to ever again consider the effects of population growth. If they did, they might come to understand that once an optimum population density is breached, further over-crowding begins to erode per capita consumption and, consequently, per capita employment.
And these effects of an excessive population density are actually imported when a nation like the U.S. attempts to trade freely with other nations much more densely populated – nations like China, Japan, Germany, Korea and a host of others. The result is an automatic trade deficit and loss of jobs – tantamount to economic suicide.
Using 2006 data, an in-depth analysis reveals that, of our top twenty per capita trade deficits in manufactured goods (the trade deficit divided by the population of the country in question), eighteen are with nations much more densely populated than our own. Even more revealing, if the nations of the world are divided equally around the median population density, the U.S. had a trade surplus in manufactured goods of $17 billion with the half of nations below the median population density. With the half above the median, we had a $480 billion deficit!
If you‘re interested in learning more about this important new economic theory, then I invite you to visit my web site at http://PeteMurphy.wordpress.com.
Pete Murphy
Author, “Five Short Blasts”