May 14, 2012

Posted by orrinj at 5:56 AM


Paul Krugman's Dismissal of Structural Causes for U.S. Employment Problem Is Misguided: The Nobel laureate insists our unemployment problems are part of a chronic cycle and require government action--and says arguing the issue is structural is an excuse for doing nothing. Zachary Karabell on why that stance is misguided. (Zachary Karabell, 5/14/12, Daily Beast)

For four years, the United States has been grappling with high unemployment and underemployment. While there has been noticeable improvement since the plunge in late 2008-2009, and while there is no longer a crisis of job losses, there is nonetheless a chronic employment problem in the United States.

Why this is the case has been the source of a heated and increasingly imperative debate: is the issue cyclical or structural? Is the problem the result of a particular recession and crisis that began in late 2007 and intensified in 2008-2009, or is it instead a long-term shift in the nature of our economy?

This debate has become increasingly heated, especially because those who claim the problem is cyclical have a tendency to describe those who see the problem as structural as partisan tools of a right-wing agenda that preaches slashing government spending, reducing debt, and balancing budgets in the name of long-term austerity and balance. [...]

The only correlate to the current transition occurred more than a century ago as agriculture became more mechanized, which led to the massive displacement of farmers and helped cause the Great Depression. That began a process that saw tens of millions displaced from farms to the point that fewer than 2 million farmers today produce far more food than 30 million did in1900. Today, the same transition has been occurring in manufacturing, a process that began in the 1970s and which the Internet/stock market bubble of the 1990s and then the housing bubbled of the mid-2000s only partly obscured.

The main difference between the two eras is that for thirty years we artificially boosted employment for social reasons--white men hired women and blacks--even as that domestic technological revolution and foreign economic liberalization were removing any justification for the jobs of the hirers, never mind the hired.  It's not that Mr. Krugman is necessarily wrong about employment being a cycle, just that we're at the top of it, not the bottom, and not even back down to the equilibrium point yet.  

Posted by orrinj at 5:53 AM


AP Exclusive: Moderate Taliban speaks of divisions (KATHY GANNON, 5/14/12, Associated Press)

In an exclusive and rare interview by a member of the so-called Quetta Shura, Motasim told The Associated Press Sunday that a majority of Taliban wants a peace settlement and that there are only "a few" hard-liners in the movement.

"There are two kinds of Taliban. The one type of Taliban who believes that the foreigners want to solve the problem but there is another group and they don't believe, and they are thinking that the foreigners only want to fight," he said by telephone. "I can tell you, though, that the majority of the Taliban and the Taliban leadership want a broad-based government for all Afghan people and an Islamic system like other Islamic countries."

But Motasim chastised the West, singling out the United States and Britain, for failing to bolster the moderates within the fundamentalist Islamic movement by refusing to recognize the Taliban as a political identity and backtracking on promises __ all of which he said strengthens the hard-liners and weakens moderates like himself.

He lamented Sunday's assassination in Kabul of Arsala Rahmani, a member of the Afghan government-appointed peace council who was active in trying to set up formal talks with insurgents. Rahmani served as deputy minister of higher education in the former Taliban regime but later reconciled with the current Afghan government.

"He was a nationalist. We respected him," Motasim said.

Posted by orrinj at 5:48 AM


The Boom on the Farm (Robert Samuelson, 5/14/12, Washington Post)

Sitting in the cab of a $350,000 John Deere tractor pulling a $150,000 Deere corn planter, Greg Carson embodies modern American agriculture. It's capital-intensive, high-tech, efficient -- and now immensely profitable. Looking for a bright spot in the U.S. economy? The farm belt is it. [...]

American agriculture transcends the Midwest farm belt. It also includes fruit and vegetable producers, poultry operators and cattle ranchers. But most of these others, dairy farmers excepted, are largely unsubsidized. Meanwhile, subsidies going mostly to grain and cotton now average about $12 billion annually, reports the Agriculture Department.

Begun in the Great Depression, these subsidies could once be justified as cushioning farming's enduring insecurities: bad weather, big shifts in supply and demand, crop infestations. But most industries now face comparable uncertainties from new technologies, global markets and erratic business cycles. Congress is writing a new farm bill and is struggling with how much to trim subsidies. But why should prosperous grain farmers and absentee owners receive special treatment and windfalls? The proper level of subsidies is simple: zero.