Tag Archives: NPR

Unemployment Drops Slightly in January, 2012

In Jobless Rate Fell To 8.3% in January, 2012, as, according to the Bureau of Labor Statistics, approximately 243,000 new jobs were added in the economy, here. This is good. But an unemployment rate of 8.3% means there are 13 million people out of work and looking for jobs. That doesn’t count the millions that are out of work and not even looking. We need 13 million new jobs – 52 months of 243,000 new jobs per month.

On NPR’s Morning Edition, Friday, Feb. 3, 2011, here, Renee Montagne interviewed Yuki Noguchi on the Bureau of Labor Statistics January jobs report, the Employment Situation Summary, here, on jobs in the economy. Early on, at about 1 minute 30 seconds, Ms. Montagne asked, “What about government jobs?”

Ms. Noguchi replied, “Government job loss is minimal.”

This is a critical piece of the puzzle. Toward the end of the segment, at about 3 minutes, 14 seconds, Ms. Noguchi said “let’s say the hiring stays at this level, with nearly 13 million people unemployed, it would take nearly four years for all those people to find jobs. And that number doesn’t count people who are not even looking.”

President Roosevelt and John Maynard Keynes proved that during economic times such as these, while business owners are capable of hiring, they are reluctant to hire because they are reluctant to risk capital. The only entities that are both willing and able are agencies of the government and not-for-profits such as schools, hospitals, etc. This is because they serve their stakeholders, not their stockholders.

Keynes wrote his seminal General theory on Employment, Money, and Interest During the Depression. He looked at the classical theory which said, essentially, the Depression can’t be happening, and at the empirical data which said “It is happening” and concluded that if the theory is out of sync with the facts, then the theory must be flawed. His theory is described by Paul Krugman, here, and Aaron Schwartz, here.

Sustainability v Globalization

Olive Trees

“Think Global, Act Local,” – Anonymous.

“Re-localization is a critical step in moving toward sustainability. The “global economy” is one of the culprits of our present mess,” – John Ehrenfeld.

“Sustainability is the possibility that human and other life will flourish on the planet forever,” – John Ehrenfeld.

Ehrenfeld, author of “Sustainability by Design,” here,   lectures at Marlboro College in its MBA in Managing for Sustainability.

In “Italy’s accordion Industry: Tiny and Thriving“, NPR’s Morning Edition, on 1/9/12, discussed globalization in the context of the accordion industry in Italy. The piece began: “More than 70% of Italy’s gross domestic product comes from small businesses – and they’re not growing. Economists are worried that this will make it impossible for Italy to climb out of it’s massive $2.6 Trillion debt.”It concluded “But until more small companies [coalesce into giants like Prada] things in … Italy will stay out of tune with the global eonomy.

But the piece also reported that the Italian accordion makers focus on quality. They don’t make many instruments – make about 20% of what they made in their heyday, one company makes 180 to 200 per month, but they make the Ferraris of the accordion world.  More accordions are made today are by China, Inc., but those are cheap, low quality things.  The Italian instruments sell for up to $50,000 each, to professional musicians such as Bjork  and “The Decemberists.”

The story also asks about the long term consequences of 70% of a nation’s GDP coming from small businesses?

But it doesn’t ask:

  • What is the standard of living and quality of life for craftspeople in Italy? Are people happy? Fulfilled?
  • What is the wage and income differential between the workers and the owners? Between the manufacturers and the suppliers?
  • How interconnected are the local economies? Are they using locally sourced materials? Is the economy local?  How much of the economy is local?
  • Aside from Italy’s debt, is their economy sustainable? Another way of asking this is “Could Italy service the debt with a 30 or 50 year payment schedule, with interest set at 2.5% or 3.5%? According to the CIA Factbook, (here) Italy has a population of about 61 million people. While NPR puts the Italian debt at $2.6 Trillion, according to CNN Money, (here) Italy’s debt is about $262 Billion. That’s a per capita debt load of about $4300, according to CNN Money, and $41,995. $4,300 doesn’t seem too bad. Even $42,000 isn’t too bad, over a person’s lifetime. In the United States, $43,000 buys one or two years of college at the undergraduate level.

As noted, the piece ended with “But until more small companies [coalesce into giants like Prada] things in … Italy will stay out of tune with the global eonomy.”  This leads me to my final unanswered questions:

Is it a bad thing for Italy to be out of tune with the global economy? and

Is Italy really out of tune with the global economy?

The first two things that come to my mind when I think of “The Global Economy” are China, Inc. / WalMart, and oil. (I see China, Inc. and WalMart as one thing, but that’s another story). I see environmental degredation, poverty of mind, body, and spirit, and working conditions that equate to slavery.Personally, I’d rather be making accordions for a living wage in Italy, where I have a chance to open my own shop, than in China where conditions are equivalent to slavery.

Bjork, a singer from Reykjavík, Iceland, and the Decemberists, from Portland, Oregon, are buying Italian accordions. They would rather spend $50,000 on accordions from Italy than $399 on accordions from China.  This suggests that the Italian accordion makers are, in fact, in the global economy, albeit on a different scale of that of the Chinese and one that economists don’t understand.

This brings me to the olive trees pictured above. Olive trees take a long time to mature – 35 to 150 years. But they live, thrive, and produce olives – for a very long time – hundreds of years, thousands of years with luck and proper cultivation. (Achaia Olive Groves).

And just as I would rather be making accordions that sell for $50,000 than those that sell for $399, I would rather sell 200 units for $50,000 each than 25,063 units for $399.

Return To The Giant Pool of Money

The Giant Pool of Money is an outstanding radio documentary which explains, in United States Dollar - via Wikimedia Commons

large part, our current economic woes. If we have the chronology right, this episode of This American Life – now rebroadcast as “Return To The Giant Pool of Money” led to NPR’s creation of the blog Planet Money.  

Click here for other economic coverage by This American Life.

Why is this subject relevant at Popular Logistics? Because widespread poverty – or its effects, fear, limits on health care, housing, and food – constitute disasters, whether caused by a hurricane, indusstrial accident or by  failure.