Anglonautes > anglais / English > vocabulaire / vocabulary > économie / economy

Les anglonautes

Tab (Thomas Boldt)

The Calgary Sun, Alberta, Canada Cagle

1.11.2008

Scott Stantis

Alabama, The Birmingham News Cagle

18.9.2008

Brian Fairrington

Cagle

22 January 2009

President Barack Obama

Credit Crisis — The Essential 2008-2009
http://topics.nytimes.com/top/reference/timestopics/subjects/c/credit_crisis/index.html

downturn
http://www.nytimes.com/2010/08/07/us/07cutbacksWEB.html
http://www.guardian.co.uk/business/2008/oct/25/globalrecession-globaleconomy

deep downturn 2009
http://business.timesonline.co.uk/tol/business/economics/article5708039.ece

severe downturn
http://www.guardian.co.uk/politics/2008/dec/16/alistair-darling-chancellor-tessa-jowell

slowdown 2009
http://www.ft.com/cms/s/0/b97c5ca0-30ad-11de-bc38-00144feabdc0.html
http://business.timesonline.co.uk/tol/business/economics/article5985900.ece

crunch 2009-2008
http://www.independent.co.uk/news/uk/politics/cameron-urges-ethical-capitalism-after-crunch-1222122.html
http://www.reuters.com/article/reutersEdge/idUSTRE4AK00320081121

recession UK
http://www.guardian.co.uk/business/recession

Britain's 10 worst recessions ever July 22, 2008
http://timesbusiness.typepad.com/money_weblog/2008/07/britains-10-wor.html

domino effect 2008
http://www.independent.co.uk/news/uk/this-britain/the-domino-effect-road-to-recession-1012202.html

recession USA 2008-2009
http://topics.nytimes.com/top/reference/timestopics/subjects/r/recession_and_depression/index.html

http://www.nytimes.com/aponline/2009/07/31/business/AP-US-Economy.html
http://submit.nytimes.com/picturing-the-recession
http://www.nytimes.com/2009/03/04/business/04leonhardt.html
http://www.nytimes.com/slideshow/2008/12/06/business/1206-JOBS_10.html
http://www.usatoday.com/money/economy/2008-12-01-recession-official_N.htm
http://www.reuters.com/article/reutersEdge/idUSTRE48S8X320080929
http://www.reuters.com/article/politicsNews/idUSTRE48O0PT20080925
http://www.reuters.com/article/politicsNews/idUKTRE48O0UE20080925?virtualBrandChannel=10112

recession > living with less USA
http://projects.nytimes.com/living-with-less

worldwide recession > worst-affected countries 2008
http://www.guardian.co.uk/business/interactive/2008/oct/08/recession.creditcrunch

deep recession 2008-2009
http://www.telegraph.co.uk/finance/financetopics/recession/4589501/
Bank-of-England-Governor-Mervyn-King-says-UK-economy-is-in-deep-recession.html
http://www.guardian.co.uk/business/2009/feb/11/inflation-bankofenglandgovernor
http://www.guardian.co.uk/politics/2008/dec/14/gordon-brown-borrowing-recession
http://www.guardian.co.uk/business/2008/nov/13/inflation-deflation-interest-rates-recession

worsening recession

fears of deep worldwide recession
http://www.guardian.co.uk/business/2008/oct/27/shares-crash-world-recession

Great Recession 2008-2009
http://www.nytimes.com/2009/11/03/opinion/03zandi.html
http://www.nytimes.com/2009/09/13/business/economy/13manufacture.html
http://www.reuters.com/article/newsOne/idUSTRE5291O520090310

global recession
http://www.boston.com/bigpicture/2009/03/scenes_from_the_recession.html
http://www.guardian.co.uk/business/2009/feb/18/inflation-global-recession

head towards a depression

plunge into a deep recession
http://www.nytimes.com/2008/12/13/business/13private.html

gross domestic product GDP USA
http://www.nytimes.com/2010/08/27/opinion/27krugman.html
http://topics.nytimes.com/top/reference/timestopics/subjects/u/united_states_economy/gross_domestic_product/index.html
http://www.nytimes.com/aponline/2009/07/31/business/AP-US-Economy.html

gross domestic product GDP 2010-2009-2008
http://www.guardian.co.uk/business/2010/jul/12/experts-on-revised-gdp-figures
http://www.guardian.co.uk/business/2009/jul/24/uk-gdp-record-fall
http://business.timesonline.co.uk/tol/business/economics/article6159893.ece
http://www.guardian.co.uk/business/interactive/2008/oct/22/creditcrunch-recession
http://www.guardian.co.uk/business/economicgrowth

grim / bleak GDP figures 2008
http://www.guardian.co.uk/business/2008/dec/23/economicgrowth-recession
http://business.timesonline.co.uk/tol/business/economics/article5005207.ece
http://www.guardian.co.uk/business/interactive/2008/oct/22/creditcrunch-recession

UK GDP since 1948
Gross Domestic Product is the output of Britain.
Find out how this recession compares to the others
http://www.guardian.co.uk/news/datablog/2009/nov/25/gdp-uk-1948-growth-economy

Office for National Statistics
http://www.statistics.gov.uk/hub/

UK growth 2008
http://business.timesonline.co.uk/tol/business/economics/article5387735.ece

recession > Hight street
http://www.guardian.co.uk/business/2008/dec/29/high-street-retailers-administration

shrink
http://business.timesonline.co.uk/tol/business/economics/article5010581.ece
http://www.guardian.co.uk/business/2008/oct/25/recession-credit-crunch-economy-ftse

dip

double dip
http://www.guardian.co.uk/commentisfree/2010/jul/13/george-osborne-hold-hike-double-dip

double-dip downturn

double-dip recession
http://www.guardian.co.uk/business/2010/jul/12/economic-growth-recession-uk

misery 2008
http://business.timesonline.co.uk/tol/business/economics/article5010645.ece
http://business.timesonline.co.uk/tol/business/economics/article5010623.ece

Monte Wolverton

The Wolvertoon Cagle

4 July 2010

recovery / "green shoots of recovery"
http://www.nytimes.com/2010/08/29/business/economy/29fed.html
http://www.nytimes.com/2010/08/27/opinion/27krugman.html
http://www.guardian.co.uk/business/2010/jul/13/house-prices-no-recovery-five-years
http://www.nytimes.com/2010/06/05/business/economy/05jobs.html
http://www.guardian.co.uk/business/economic-recovery
http://www.nytimes.com/2009/09/13/business/economy/13manufacture.html
http://www.nytimes.com/2009/01/03/business/economy/03econ.html
http://www.timesonline.co.uk/tol/money/property_and_mortgages/article5158359.ece

depression
http://www.nytimes.com/2010/06/28/opinion/28krugman.html

How the Government Dealt With Past Recessions
Since the Great Depression,
presidents have frequently experimented with Keynesian economics to combat recessions.
Three economists chronicle the history of government policy during past recessions
and explain what worked and what didn’t
http://www.nytimes.com/interactive/2009/01/26/business/economy/20090126-recessions-graphic.html

the Great Depression USA 1930s
http://www.pbs.org/wgbh/amex/dustbowl/peopleevents/pandeAMEX05.html
http://www.nytimes.com/2008/12/22/opinion/22gup.html
http://www.usatoday.com/money/economy/2008-10-22-depression_N.htm
http://www.loc.gov/search/greatdepression.html

Selling Christmas during the Great Depression USA
Tribune ads from the era show retailers in aggressive pursuit of those spare dimes
http://www.chicagotribune.com/chi-081209-depression-xmas-ads-pg,0,742816.photogallery

Six vital lessons of the 1931 depression
http://www.timesonline.co.uk/tol/comment/columnists/william_rees_mogg/article5408194.ece

Sights and sounds of the Great Depression USA
http://www.usatoday.com/money/economy/2008-10-22-great-depression-audioslides_N.htm

Gerald Scarfe cartoon

Sunday Times

November 16, 2008
http://www.timesonline.co.uk/tol/comment/article5180525.ece

L to R: Chancellor Alistair Darling (?), British Prime Minister Gordon Brown, French President Nicolas Sarkozy.

Gerald Scarfe cartoon

Sunday Times

October 26, 2008
http://www.timesonline.co.uk/tol/comment/article5014205.ece

L to R: British prime minister Gordon Brown, Chancellor Alistair Darling

This Is Not a Recovery

August 26, 2010
The New York Times
By PAUL KRUGMAN

What will Ben Bernanke, the Fed chairman, say in his big speech Friday in Jackson Hole, Wyo.? Will he hint at new steps to boost the economy? Stay tuned.

But we can safely predict what he and other officials will say about where we are right now: that the economy is continuing to recover, albeit more slowly than they would like. Unfortunately, that’s not true: this isn’t a recovery, in any sense that matters. And policy makers should be doing everything they can to change that fact.

The small sliver of truth in claims of continuing recovery is the fact that G.D.P. is still rising: we’re not in a classic recession, in which everything goes down. But so what?

The important question is whether growth is fast enough to bring down sky-high unemployment. We need about 2.5 percent growth just to keep unemployment from rising, and much faster growth to bring it significantly down. Yet growth is currently running somewhere between 1 and 2 percent, with a good chance that it will slow even further in the months ahead. Will the economy actually enter a double dip, with G.D.P. shrinking? Who cares? If unemployment rises for the rest of this year, which seems likely, it won’t matter whether the G.D.P. numbers are slightly positive or slightly negative.

All of this is obvious. Yet policy makers are in denial.

After its last monetary policy meeting, the Fed released a statement declaring that it “anticipates a gradual return to higher levels of resource utilization” — Fedspeak for falling unemployment. Nothing in the data supports that kind of optimism. Meanwhile, Tim Geithner, the Treasury secretary, says that “we’re on the road to recovery.” No, we aren’t.

Why are people who know better sugar-coating economic reality? The answer, I’m sorry to say, is that it’s all about evading responsibility.

In the case of the Fed, admitting that the economy isn’t recovering would put the institution under pressure to do more. And so far, at least, the Fed seems more afraid of the possible loss of face if it tries to help the economy and fails than it is of the costs to the American people if it does nothing, and settles for a recovery that isn’t.

In the case of the Obama administration, officials seem loath to admit that the original stimulus was too small. True, it was enough to limit the depth of the slump — a recent analysis by the Congressional Budget Office says unemployment would probably be well into double digits now without the stimulus — but it wasn’t big enough to bring unemployment down significantly.

Now, it’s arguable that even in early 2009, when President Obama was at the peak of his popularity, he couldn’t have gotten a bigger plan through the Senate. And he certainly couldn’t pass a supplemental stimulus now. So officials could, with considerable justification, place the onus for the non-recovery on Republican obstructionism. But they’ve chosen, instead, to draw smiley faces on a grim picture, convincing nobody. And the likely result in November — big gains for the obstructionists — will paralyze policy for years to come.

So what should officials be doing, aside from telling the truth about the economy?

The Fed has a number of options. It can buy more long-term and private debt; it can push down long-term interest rates by announcing its intention to keep short-term rates low; it can raise its medium-term target for inflation, making it less attractive for businesses to simply sit on their cash. Nobody can be sure how well these measures would work, but it’s better to try something that might not work than to make excuses while workers suffer.

The administration has less freedom of action, since it can’t get legislation past the Republican blockade. But it still has options. It can revamp its deeply unsuccessful attempt to aid troubled homeowners. It can use Fannie Mae and Freddie Mac, the government-sponsored lenders, to engineer mortgage refinancing that puts money in the hands of American families — yes, Republicans will howl, but they’re doing that anyway. It can finally get serious about confronting China over its currency manipulation: how many times do the Chinese have to promise to change their policies, then renege, before the administration decides that it’s time to act?

Which of these options should policy makers pursue? If I had my way, all of them.

I know what some players both at the Fed and in the administration will say: they’ll warn about the risks of doing anything unconventional. But we’ve already seen the consequences of playing it safe, and waiting for recovery to happen all by itself: it’s landed us in what looks increasingly like a permanent state of stagnation and high unemployment. It’s time to admit that what we have now isn’t a recovery, and do whatever we can to change that situation.

This Is Not a Recovery, NYT, 26.8.2010, http://www.nytimes.com/2010/08/27/opinion/27krugman.html

Going to Extremes as the Downturn Wears On

August 6, 2010
The New York Times
By MICHAEL COOPER

Plenty of businesses and governments furloughed workers this year, but Hawaii went further — it furloughed its schoolchildren. Public schools across the state closed on 17 Fridays during the past school year to save money, giving students the shortest academic year in the nation and sending working parents scrambling to find care for them.

Many transit systems have cut service to make ends meet, but Clayton County, Ga., a suburb of Atlanta, decided to cut all the way, and shut down its entire public bus system. Its last buses ran on March 31, stranding 8,400 daily riders.

Even public safety has not been immune to the budget ax. In Colorado Springs, the downturn will be remembered, quite literally, as a dark age: the city switched off a third of its 24,512 streetlights to save money on electricity, while trimming its police force and auctioning off its police helicopters.

Faced with the steepest and longest decline in tax collections on record, state, county and city governments have resorted to major life-changing cuts in core services like education, transportation and public safety that, not too long ago, would have been unthinkable. And services in many areas could get worse before they get better.

The length of the downturn means that many places have used up all their budget gimmicks, cut services, raised taxes, spent their stimulus money — and remained in the hole. Even with Congress set to approve extra stimulus aid, some analysts say states are still facing huge shortfalls.

Cities and states are notorious for crying wolf around budget time, and for issuing dire warnings about draconian cuts that never seem to materialize. But the Great Recession has been different. Around the country, there have already been drastic cuts in core services like education, transportation and public safety, and there are likely to be more before the downturn ends. The cuts that have disrupted lives in Hawaii, Georgia and Colorado may be extreme, but they reflect the kinds of cuts being made nationwide, disrupting the lives of millions of people in ways large and small.

EDUCATION: HAWAII FURLOUGHS ITS CHILDREN

MILILANI, Hawaii — It was a Friday, and Maria Marte, an administrator for an online college that caters to members of the military, should have been at her office at a nearby Army hospital. Her daughters, Nira, 11, and Sonia, 9, should have been in school.

Instead, Ms. Marte was sitting with a laptop in the dining room of her home in this neatly manicured suburb of Honolulu. “Did you already send your registration in?” she asked a client on the phone, trying to speak above the peals of laughter coming from the backyard, where the girls were having a water-balloon fight with some friends.

It was the 17th, and last, Furlough Friday of the year, the end of a cost-cutting experiment that closed schools across the state, outraging parents and throwing a wrench into that most delicate of balances for families with children: the weekly routine

“I have to pay attention to the customers, and make sure that I’m understanding what they need,” said Ms. Marte, 37, whose husband, Odalis, an Army major, had been deployed in Afghanistan for nearly a year. Then she nodded at the window, toward the girls. “But at the same time, I have to make sure that they’re not killing each other.”

For those 17 Fridays, parents reluctantly worked from home or used up vacation and sick days. Others enlisted the help of grandparents. Many paid $25 to $50 per child each week for the new child care programs that had sprung up.

Children, meanwhile, adjusted to a new reality of T.G.I.T. Getting them up for school on Mondays grew harder. Fridays were filled with trips to pools and beaches, hours of television and Wii, long stretches alone for older children, and, occasionally, successful attempts to get them to do their homework early.

But if three-day-weekends in Hawaii sound appealing in theory, many children said that they wound up missing school.

“I’m really not a big fan of furloughs,” said Nira Marte, a fifth grader, explaining that she missed the time with her friends and her teacher.

Four-day weeks have been used by a small number of rural school districts in the United States, especially since the oil shortage of the 1970s. During the current downturn, their ranks have swelled to more than 120 districts, and more are weighing the change.

But Hawaii is an extreme case. It shut schools not only in rural areas but also in high-rise neighborhoods in Honolulu. Suffering from steep declines in tourism and construction, and owing billions of dollars to a pension system that has only 68.8 percent of the money it needs to cover its promises to state workers, Hawaii instituted the furloughs even after getting $110 million in stimulus money for schools.

Unlike most districts with four-day weeks, Hawaii did not lengthen the hours of its remaining school days: its 163-day school year was the shortest in the nation.

The furloughs were originally supposed to last two years, but the outcry was so great — some parents were arrested staging sit-ins at the office of Gov. Linda Lingle, a Republican — that a deal was hammered out to restore the days next year.

On the last furlough day, Ms. Marte toggled back and forth between her girls — making them pizza, taking them to swim practice — and a stream of e-mails and calls. At one point, a soldier on the mainland was interrupted when his baby started bawling.

“Don’t worry, that’s fine,” Ms. Marte reassured him. “I’m in the same boat.”

TRANSPORTATION: A COUNTY SHUTS ITS BUS SYSTEM

RIVERDALE, Ga. — Kelly Smith was reading a library copy of “The Politician,” the tell-all about John Edwards, as his public bus rumbled through a suburb of Atlanta. It was heading toward the airport, where he could switch to a train to his job downtown, in the finance department of the Atlanta Public Schools system. But his mind was drifting.

It was March 31, the last day of public bus service. Clayton County had decided to balance its budget by shutting down C-Tran, the bus system, stranding 8,400 daily riders. Mr. Smith, 45, like two-thirds of the riders, had no car. He needed a plan.

“I think that what they’re doing is criminal,” Mr. Smith said as his 504 bus filled up. “I’ll figure something out, but I see a lot of people here who don’t have an out.”

The next morning, this is what he had figured out: a state-run express bus stopped around three miles from his apartment in Riverdale. So Mr. Smith rose at 5, walked past the defunct C-Tran bus stop just outside his apartment complex and hiked the miles of dark, deserted streets, many of which had no sidewalks.

“If I get hit by a car, it’s my fault,” he said as he crossed a highway. “Who wants to start their day off like this? This is why I don’t get up and jog.”

Mr. Kelly was determined to get to the job he had landed in November, and to get there on time. “I was out of work for two and half years, with the economic crisis,” he said. “So the last thing I want to do is walk away from a job.”

Around the country, public transportation has taken a beating during the downturn. Fares typically cover less than half the cost of each ride, and the state and local taxes that most systems depend on have been plummeting.

In most places, that has meant longer waits for more crowded, dirtier and more expensive trains and buses. But it meant the end of the line in Clayton County, a struggling suburb south of Atlanta where “Gone With the Wind” was set and which is now home to most of Hartsfield-Jackson Atlanta International Airport.

The county — hit hard by the subprime mortgage crisis and the wave of foreclosures that followed — decided it could no longer afford spending roughly $8 million a year on its bus system, which started in 2001. It hoped that some other entity — like the state — would pick up the cost.

If the threat to shut the system down was a game of chicken, no one blinked.

Now all five bus routes are gone, and riders are trying to adjust.

Jennifer McDaniel, a hostess at a Chili’s in the airport, was forced to spend her tax refund, and take out a big loan, to buy a car. Jaime Tejada, 36, a Delta flight attendant, wondered why transit was so much better in the countries he flies to.

And Tierra Clark, 19, who studies dental hygiene and works five nights a week at the Au Bon Pain at the airport, was left with an unwanted new expense. “I’ll have to call a taxi from now on — $13.75 every night,” Ms. Clark said, as she rode the very last C-Tran bus home.

Now there is talk of levying a new sales tax so the county can join the Metropolitan Atlanta Rapid Transit Authority, which it voted not to join when it was created nearly four decades ago. That could get the buses up and running again.

Even if that happens, though, it could be years off — too late for Mr. Smith. After spending a carless Easter vacation trying to figure out a better way to get to work, or even to get his groceries, he ended up quitting his first job in two and a half years and moving just outside Dallas, where his girlfriend had landed a job with a bank.

“A lot of people are leaving Riverdale,” he said.

PUBLIC SAFETY: LIGHTS OUT IN COLORADO SPRINGS

COLORADO SPRINGS — It was when the street lights went out, Diane Cunningham said, that the trouble started.

Her tires were slashed, she said. Her car was broken into. Strange men showed up on her porch. Her neighborhood had grown deserted at night, ever since four streetlights in a row were put out on Airport Road, the street outside her mobile home park.

That is why Ms. Cunningham, 41, and her son Jonathan, 22, were carrying a flat-screen television out of their mobile home on a recent afternoon. “I’m going to pawn this,” Ms. Cunningham said, “to get a shotgun.”

It is impossible to say whether the darkness had contributed to any of the events that frightened the Cunninghams. But ever since Colorado Springs shut off a third of its 24,512 streetlights this winter to save $1.2 million on electricity — while reducing the size of its police force — many resident have said that they feel less safe.

A few miles down Airport Road a 62-year-old man, Esteban Garcia, was shot to death in April when he was robbed outside his family’s taqueria and grocery in a parking lot that had lost the illumination of its nearest streetlight. Gaspar Martinez, a neighboring shopkeeper, said that he believed the lack of the light was partly to blame.

“You figure the robbers think that if it’s dark, it’s the best time to hit,” said Mr. Martinez, 34, whose store, Ruskin Liquor, is in the same small strip mall. Mr. Martinez said that he put more lights up outside his store after the shooting.

The police, who arrested several suspects, said that there was no indication that the doused light had played a role in the crime — or, indeed, in any crimes in Colorado Springs, which remains safer than most cities of its size. But this might be a case, they said, where perception is as important as reality.

“All the sociologists have said this for years: what matters to people isn’t really the number of reported crimes, it’s their perception of safety,” said the city’s police chief, Richard W. Myers. “And let’s say we don’t see any bump in crime — that would be a good thing. But people don’t feel as safe. They’re already telling us that, even if the numbers don’t bear that out. So do we have a problem? I think so.”

Chief Myers said he worried that if law-abiding citizens stopped going out at night or visiting parks, the city’s deserted open spaces could attract more criminals.

One of most influential policing concepts in recent years has been the “broken windows” theory, which holds that addressing minor crimes and signs of disorder can head off bigger problems down the road. Colorado Springs is taking a different tack.

To close a budget gap — the city’s voters, many of whom favor smaller government, turned down a property tax increase in November, and a taxpayer’s bill of rights makes it hard for city officials to raise taxes — Colorado Springs has stopped collecting trash in its parks, stopped watering many medians on its roads and reduced its police force.

The sprawling city of roughly 400,000 at the foot of Pike’s Peak — which covers 194 square miles — made national news when it auctioned off its police helicopters. But less-heralded police cuts could have more impact: the force, which had 687 officers two years ago, is down to 643 and dropping. At any given time, the department estimates that there is a 23 percent chance that all units will be busy.

So it has reduced the number of detectives who investigate property crimes, cut the number of officers assigned to the schools and eliminated units that tracked juvenile offenders and caught fugitives. Officers no longer respond to the scene of most burglaries, at least if they are not in progress.

At the same time, the city joined others — from Fitchburg, Mass., to Santa Rosa, Calif., and began turning off streetlights. Several recent studies have suggested that streetlights help reduce crime — something residents here say is obvious.

Natalie Bartling, a new mother, could not believe it when the light outside her home was shut off in April. Ms. Bartling, 38, had successfully lobbied for the light five years ago after a wave of vandalism and petty thefts hit her middle-class block. So this time she called daily until the city agreed to turn it back on.

“When it got shut off, it was like missing something,” she said on a recent night, standing under its glow. “Part of your life.”

Going to Extremes as the Downturn Wears On, NYT, 6.8.2010, http://www.nytimes.com/2010/08/07/us/07cutbacksWEB.html

Still in the Time of Economic Anxiety

August 4, 2010
The New York Times

To the Editor:

Re “Welcome to the Recovery,” by Timothy F. Geithner, the secretary of the Treasury (Op-Ed, Aug. 3):

Forgive me, Mr. Geithner, if I remain skeptical. Recovering? I think a very temporary remission is more accurate.

“We suffered a terrible blow, but we are coming back,” you say. No one I know went anywhere. Their savings went, their investments went, their jobs went, their homes went. And those who took them — and received obscene bonuses for doing so — are coming back for even more.

My question is, Where are we going? We, the public, the average person upon whom the health and well-being of the nation rests. The reality is that there are not enough good jobs for everyone, housing prices are still far too high, lenders are making it increasingly hard to borrow, credit card companies are still being allowed to charge exorbitant interest and no one that I know is saving; every penny goes to keep body and soul together.

Insecurity — financial, emotional and physical — is creating increasing health problems, yet crucial public services, which could at least help in the short term, are being cut to the bone.

What I have learned in the last few years is that the private sector plays fast and loose with the public welfare, and no one seems to care. The gulf between rich and poor is huge and getting wider every day.

Coming back? We’re still on the edge, and it’s still crumbling.

Susan A. McGregor
North Kingston, R.I., Aug. 3, 2010

•

To the Editor:

Re “Defining Prosperity Down,” by Paul Krugman (column, Aug. 2):

Maybe now we can finally admit that “trickle down” economics doesn’t work. We’ve had 25 years of tax cuts (cuts in income taxes, estate taxes and capital gains taxes) for the wealthiest Americans. The myth was that the wealthy would invest that money in ways that would create more jobs and prosperity for the rest of us. It’s not working, obviously.

Our return for trickling so much of our wealth upward was supposed to be good jobs and a solid income for the middle class. Instead we’ve got the wealthy playing hedge fund roulette on Wall Street, while one-sixth of American workers are unemployed or underemployed.

Trickle-down policies increased the wealth gap, but didn’t create jobs. The only time in the past decade that we’ve approached full employment was when the middle class went into debt and spent virtually 100 percent of its income or even more, as it did over the four years before 2008. That “mortgage and credit” bubble taught us that the real “jobs engine” is middle-class spending.

To get our economy running again (instead of wheezing along), we need to eliminate the Bush tax cuts, eliminate the tax break for hedge fund managers and establish a meaningful estate tax. Keep that money out of the Wall Street casino; invest instead in the middle class.

John Ranta
Hancock, N.H., Aug. 2, 2010

•

To the Editor:

Re “99 Weeks Later, Jobless Have Only Desperation” (front page, Aug. 3):

The story of Alexandra Jarrin’s odyssey from middle-class striver to unemployed and homeless graphically illustrates the terrifying underside of what’s left of the American dream.

A week after the 9/11 terror attacks, I was laid off from my position as head of public relations at a publishing house. For the next year and a half, with increasing desperation, I tried to claw my way back into a corporate life in which I had thrived for nearly 20 years.

As it turns out, I was actually one of the lucky ones. My skills were transferable to the entrepreneurial world, and I eventually started an independent public relations firm. But what I learned from that experience is just how far one can fall — and is allowed to fall — in the 21st-century United States.

There is very little safety net in this country. For those who make it, this can still be the land of opportunity. But for those who, for whatever reason, lose their grip on what we take for security — job, home, bank account — the drop is very long indeed, with no one or nothing to catch you.

Alan Winnikoff
Sleepy Hollow, N.Y., Aug. 3, 2010

•

To the Editor:

In what state of callous cruelty is this country living when it can allow a sizable number of its people to live in cars or on the streets because their unemployment has run out during this long and protracted recession — all while it still manages to send expensive armaments halfway around the world?

Should we start a citizens’ emergency fund, or a clearinghouse where people can donate available housing, or a sponsorship program where you can help someone for six months, since the government does not seem to have the will to do any of this?

Forget about will, how about heart? Where is it?

Shameful, shameful, shameful.

Lynn Lauber
Bridport, Vt., Aug. 3, 2010

•

To the Editor:

Re “Four Deformations of the Apocalypse,” by David Stockman (Op-Ed, Aug. 1):

During the past 30 years in which Republicans largely dominated the White House and Congress, these so-called conservatives have mortgaged our country to the brink of bankruptcy via reckless spending, borrowing from abroad and giving tax breaks to the rich only to run up today’s obscene national debt and trigger our current deep recession.

And when President Obama increases deficits to stimulate the moribund economy — a strategy recommended by virtually all reputable economists — the irresponsible Republicans have the nerve to blame his administration for our national debt.

Will the American voters see through this charade? Given our propensity to run up personal debt to buy stuff we don’t need with money we don’t have, I fear that the answer is no. What a legacy we are leaving future generations.

James G. Goodale
Houston, Aug. 1, 2010

•

To the Editor:

To David Stockman’s perceptive analysis, one must add the basic Republican financial strategy dating back at least to Ronald Reagan: Pushing up the deficit makes it difficult or impossible for the Democrats to finance, increase or develop programs disfavored by Republicans. It’s that simple.

The Republican arguments for deficit reduction fly in the face of fact, as the Bush administration’s policies so clearly show. “Tax and spend” Democrats have been upstaged by “spend and don’t tax” Republicans. The cynicism exceeds imagination.

Doug Giebel
Big Sandy, Mont., Aug. 1, 2010

Still in the Time of Economic Anxiety, NYT, 4.8.2010, http://www.nytimes.com/2010/08/05/opinion/l05econ.html

Welcome to the Recovery

August 2, 2010
The New York Times
By TIMOTHY F. GEITHNER

Washington

THE devastation wrought by the great recession is still all too real for millions of Americans who lost their jobs, businesses and homes. The scars of the crisis are fresh, and every new economic report brings another wave of anxiety. That uncertainty is understandable, but a review of recent data on the American economy shows that we are on a path back to growth.

The recession that began in late 2007 was extraordinarily severe, but the actions we took at its height to stimulate the economy helped arrest the freefall, preventing an even deeper collapse and putting the economy on the road to recovery.

From the start, President Obama made clear that recovery from a crisis of this magnitude would not come quickly and that the recovery would not follow a straight line. We saw that this past spring, when the European fiscal crisis posed a serious challenge to the markets and to business confidence, dampening investment and the rate of growth here.

While the economy has a long way to go before reaching its full potential, last week’s data on economic growth show that large parts of the private sector continue to strengthen. Business investment and consumption — the two keys to private demand — are getting stronger, better than last year and better than last quarter. Uncertainty is still inhibiting investment, but business capital spending increased at a solid annual rate of about 17 percent.

Together, private consumption and fixed investment contributed about 3.25 percent to growth. Even the surge in imports, which lowered the rate of increase of G.D.P., actually reflects healthy and growing American demand.

As the economists Ken Rogoff and Carmen Reinhart have written, recoveries that follow financial crises are typically a hard climb. That is reality. The process of repair means economic growth will come slower than we would like. But despite these challenges, there is good news to report:

• Exports are booming because American companies are very competitive and lead the world in many high-tech industries.

• Private job growth has returned — not as fast as we would like, but at an earlier stage of this recovery than in the last two recoveries. Manufacturing has generated 136,000 new jobs in the past six months.

• Businesses have repaired their balance sheets and are now in a strong financial position to reinvest and grow.

• American families are saving more, paying down their debt and borrowing more responsibly. This has been a necessary adjustment because the borrow-and-spend path we were on wasn’t sustainable.

• The auto industry is coming back, and the Big Three — Chrysler, Ford and General Motors — are now leaner, generating profits despite lower annual sales.

• Major banks, forced by the stress tests to raise capital and open their books, are stronger and more competitive. Now, as businesses expand again, our banks are better positioned to finance growth.

• The government’s investment in banks has already earned more than $20 billion in profits for taxpayers, and the TARP program will be out of business earlier than expected — and costing nearly a quarter of a trillion dollars less than projected last year.

We all understand and appreciate that these signs of strength in parts of the economy are cold comfort to those Americans still looking for work and to those industries, like construction, hit hardest by the crisis. But these economic measures, nonetheless, do represent an encouraging turnaround from the frightening future we faced just 18 months ago.

The new data show that this recession was even deeper than previously estimated. The plunge in economic activity started an entire year before President Obama took office and was accelerating at the end of 2008, when G.D.P. fell at an annual rate of roughly 7 percent.

Panicked by the collapse in demand and financing and fearing a prolonged slump, the private sector cut payrolls and investment savagely. The rate of job loss worsened with time: by early last year, 750,000 jobs vanished every month. The economic collapse drove tax revenue down, pushing the annual deficit up to $1.3 trillion by last January.

The economic rescue package that President Obama put in place was essential to turning the economy around. The combined effect of government actions taken over the past two years — the stimulus package, the stress tests and recapitalization of the banks, the restructuring of the American car industry and the many steps taken by the Federal Reserve — were extremely effective in stopping the freefall and restarting the economy.

According to a report released last week by Alan Blinder and Mark Zandi, advisers to President Bill Clinton and Senator John McCain, respectively, the combined actions since the fall of 2007 of the Federal Reserve, the White House and Congress helped save 8.5 million jobs and increased gross domestic product by 6.5 percent relative to what would have happened had we done nothing. The study showed that government action delivered a powerful bang for the buck, and that the bank rescue on its own will turn a profit for taxpayers.

We have a long way to go to address the fiscal trauma and damage across the country, and we will need to monitor the ups and downs in the economy month by month. The share of workers who have been unemployed for six months or more is at its highest level since 1948, when the data was first recorded, and we must do more to ensure that they have the skills they need to re-enter the 21st-century economy. Small businesses are still battling a tough climate. State and local governments are still hurting.

There are urgent tasks to be undertaken to reinforce the recovery, and Congress should move now to help small business, to assist states in keeping teachers in the classroom, to increase investments in public infrastructure, to promote clean energy and to increase exports. And while making smart, targeted investments in our future, we must also cut the deficit over the next few years and make sure that America once again lives within its means.

These are considerable challenges, but we are in a much stronger position to face them today than when President Obama took office. By taking aggressive action to fix the financial system, reduce growth in health care costs and improve education, we have put the American economy on a firmer foundation for future growth.

And as the president said last week, no one should bet against the American worker, American business and American ingenuity.

We suffered a terrible blow, but we are coming back.

Timothy F. Geithner is the secretary of the Treasury.

Welcome to the Recovery, NYT, 2.8.2010, http://www.nytimes.com/2010/08/03/opinion/03geithner.html

UK recession even deeper than first thought

Six successive quarters of negative economic growth from spring 2008 until autumn 2009
were the toughest for the economy since the Great Depression of the 1930s

Monday 12 July 2010 17.12 BST
Guardian.co.uk
Larry Elliott, economics editor
This article was published on guardian.co.uk at 17.12 BST on Monday 12 July 2010.
It was last modified at 17.12 BST on Monday 12 July 2010.

The deepest recession in Britain's post-war history was even more severe than previously feared, the government said today.

Fresh information collected by the Office for National Statistics showed that the peak to trough decline in output was 6.4% of gross domestic product rather than the original 6.2% estimate.

The new figures confirmed that the six successive quarters of negative growth from spring 2008 until autumn 2009 were the toughest for the economy since the Great Depression of the 1930s, harsher even than the slump of the early 1980s.

Growth resumed in the final three months of 2009 as the UK economy responded to the emergency cuts in interest rates, the cheaper pound and higher government spending. The ONS made no changes to its estimate of a 0.4% expansion in the fourth quarter of last year or its 0.3% growth estimate for the first quarter of 2010, but said the role of government spending in the first three months of this year in underpinning the economy had been more significant than first thought.

Consumer spending fell slightly in the first three months of 2010, with individuals running down their savings in order to finance purchases.

Despite the pick up in activity at the end of last year, output was 0.2% lower at the end of the first quarter of 2010 than it had been a year earlier.

Jeremy Cook, chief economist at World First, said: "Although the headline figure remained unchanged at 0.3%, government spending was revised up from 1.1% to 1.5% signifying that the recovery is still very reliant on state spending and that consumers are not stepping up to the plate quite yet."

Howard Archer, chief economist at IHS Global Insight, said: "The picture remains one of only gradual recovery so far following a record six quarters of deep overall recession through to the third quarter of 2009. The main message coming from the revised data was that the recession was even deeper than previously reported."

UK recession even deeper than first thought, G, 12.7.2010, http://www.guardian.co.uk/business/2010/jul/12/uk-recession-deeper-than-first-thought

The Third Depression

June 27, 2010
The New York Times
By PAUL KRUGMAN

Recessions are common; depressions are rare. As far as I can tell, there were only two eras in economic history that were widely described as “depressions” at the time: the years of deflation and instability that followed the Panic of 1873 and the years of mass unemployment that followed the financial crisis of 1929-31.

Neither the Long Depression of the 19th century nor the Great Depression of the 20th was an era of nonstop decline — on the contrary, both included periods when the economy grew. But these episodes of improvement were never enough to undo the damage from the initial slump, and were followed by relapses.

We are now, I fear, in the early stages of a third depression. It will probably look more like the Long Depression than the much more severe Great Depression. But the cost — to the world economy and, above all, to the millions of lives blighted by the absence of jobs — will nonetheless be immense.

And this third depression will be primarily a failure of policy. Around the world — most recently at last weekend’s deeply discouraging G-20 meeting — governments are obsessing about inflation when the real threat is deflation, preaching the need for belt-tightening when the real problem is inadequate spending.

In 2008 and 2009, it seemed as if we might have learned from history. Unlike their predecessors, who raised interest rates in the face of financial crisis, the current leaders of the Federal Reserve and the European Central Bank slashed rates and moved to support credit markets. Unlike governments of the past, which tried to balance budgets in the face of a plunging economy, today’s governments allowed deficits to rise. And better policies helped the world avoid complete collapse: the recession brought on by the financial crisis arguably ended last summer.

But future historians will tell us that this wasn’t the end of the third depression, just as the business upturn that began in 1933 wasn’t the end of the Great Depression. After all, unemployment — especially long-term unemployment — remains at levels that would have been considered catastrophic not long ago, and shows no sign of coming down rapidly. And both the United States and Europe are well on their way toward Japan-style deflationary traps.

In the face of this grim picture, you might have expected policy makers to realize that they haven’t yet done enough to promote recovery. But no: over the last few months there has been a stunning resurgence of hard-money and balanced-budget orthodoxy.

As far as rhetoric is concerned, the revival of the old-time religion is most evident in Europe, where officials seem to be getting their talking points from the collected speeches of Herbert Hoover, up to and including the claim that raising taxes and cutting spending will actually expand the economy, by improving business confidence. As a practical matter, however, America isn’t doing much better. The Fed seems aware of the deflationary risks — but what it proposes to do about these risks is, well, nothing. The Obama administration understands the dangers of premature fiscal austerity — but because Republicans and conservative Democrats in Congress won’t authorize additional aid to state governments, that austerity is coming anyway, in the form of budget cuts at the state and local levels.

Why the wrong turn in policy? The hard-liners often invoke the troubles facing Greece and other nations around the edges of Europe to justify their actions. And it’s true that bond investors have turned on governments with intractable deficits. But there is no evidence that short-run fiscal austerity in the face of a depressed economy reassures investors. On the contrary: Greece has agreed to harsh austerity, only to find its risk spreads growing ever wider; Ireland has imposed savage cuts in public spending, only to be treated by the markets as a worse risk than Spain, which has been far more reluctant to take the hard-liners’ medicine.

It’s almost as if the financial markets understand what policy makers seemingly don’t: that while long-term fiscal responsibility is important, slashing spending in the midst of a depression, which deepens that depression and paves the way for deflation, is actually self-defeating.

So I don’t think this is really about Greece, or indeed about any realistic appreciation of the tradeoffs between deficits and jobs. It is, instead, the victory of an orthodoxy that has little to do with rational analysis, whose main tenet is that imposing suffering on other people is how you show leadership in tough times.

And who will pay the price for this triumph of orthodoxy? The answer is, tens of millions of unemployed workers, many of whom will go jobless for years, and some of whom will never work again.

The Third Depression, NYT, 27.6.2010, http://www.nytimes.com/2010/06/28/opinion/28krugman.html

U.S. Economy Lost Only 11,000 Jobs in November

December 5, 2009
The New York Times
By JAVIER C. HERNANDEZ

In the strongest jobs report since the recession began, the government reported Friday that the nation’s employers had all but stopped shedding jobs in November, taking some of the pressure off of President Obama to come up with a jobs creation program.

The Labor Department reported Friday that the United States economy shed 11,000 jobs in November, and the unemployment rate fell to 10 percent, down from 10.2 percent in October.

The government also significantly revised September and October numbers. September was adjusted to show a loss of 139,000 jobs instead of 219,000, and October 111,000 instead of 190,000.

Though the pace has been declining since a peak in January, the November number was surprising. Economists have been expecting a turning point to come in the late spring or summer, with employers finally adding workers as a recovery takes hold. The last time the number was this good was December 2007, when the economy added 120,000 jobs.

“We’re moving toward stability in the labor market and the end of the tremendous firing that has plagued America,” said Allen L. Sinai, the founder of Decision Economics, a research firm. “But it’s going to be bleak for years. While it is going to be better than what we’ve seen, it’s still going to be terrible.”

A large number of employees are working fewer hours than they would like because many companies are operating below capacity and have resisted adding staff until orders turn up and the incipient recovery seems likely to endure. Indeed, a broader measure of unemployment fell in November to 17.2 percent, from 17.5 percent in October. This broader measure covers not only those seeking work but those whose hours have been cut and those too discouraged to look for work.

The number of Americans facing long-term unemployment, which includes people who cannot find work for 27 weeks or more, has been at record highs in recent months, reaching 5.6 million in October. It was more than 5.9 million people in November, or 38.3 of percent of those unemployed. Once hiring resumes, those workers are likely to be among the last to land jobs.

“You create this class of people who essentially become permanently unemployed and can’t get back in,” said Nigel Gault, chief domestic economist at IHS Global Insight. “You have people who have lost contact with the labor market, whose skills are not relevant for jobs for the future, who employers regard with skepticism because they have been out of work for so long.”

In recent months, the economy has shown modest signs of stability in manufacturing and construction — each a big source of job loss in the nearly two years since the recession began. But consumer spending remains tepid even as holiday shopping gets under way.

On Thursday, President Obama convened a jobs summit and said he would announce proposals next week to strengthen employment. “We cannot hang back and hope for the best,” the president said, though he added “our resources are limited.”

Economists generally say that the worst of the recession has passed, and most forecast mild growth into next year. But that does not change the economic reality for millions of Americans, who must deal with piles of unpaid bills, worries about unexpected medical expenses and concerns about losing their homes.

Kathy M. Henry, 39, who lives in a subsidized apartment on the South Side of Chicago, was laid off from her job as an administrative assistant at an advertising agency two years ago. Since then, she says, she has applied for more than 500 jobs. She has received a $1,200 monthly unemployment check since August of last year, which she describes as not enough to support herself and two of her children who live with her.

“It’s a constant cycle,” she said. “I’ve applied everywhere, from big corporations to minute corporations, and I don’t even get an e-mail back. I’m worried people see me as old and out of touch and decrepit.”

Earlier this week, Ms. Henry’s son, a high school senior, came home with a packet of class photographs. The $40 cost was beyond her means, she said, so she decided against purchasing a memento of her son’s senior year.

In Canada on Friday, the government reported that the country’s economy added more jobs than expected in November, erasing the losses in October. Statistics Canada reported a net employment gain of 79,000 in November, topping expectations of a 15,000 gain. The unemployment rate fell to 8.5 percent from 8.6 percent in October.

U.S. Economy Lost Only 11,000 Jobs in November, 5.12.2009, http://www.nytimes.com/2009/12/05/business/economy/05jobs.html

Running in the Shadows

Recession Drives Surge in Youth Runaways

October 26, 2009
The New York Times
By IAN URBINA

MEDFORD, Ore. — Dressed in soaked green pajamas, Betty Snyder, 14, huddled under a cold drizzle at the city park as several older boys decided what to do with her.

Betty said she had run away from home a week earlier after a violent argument with her mother. Shivering and sullen-faced, she vowed that she was not going to sleep by herself again behind the hedges downtown, where older homeless men and methamphetamine addicts might find her.

The boys were also runaways. But unlike them, Betty said, she had been reported missing to the police. That meant that if the boys let her stay overnight in their hidden tent encampment by the freeway, they risked being arrested for harboring a fugitive.

“We keep running into this,” said one of the boys, Clinton Anchors, 18. Over the past year, he said, he and five other teenagers living together on the streets had taken under their wings no fewer than 20 children — some as young as 12 — and taught them how to avoid predators and the police, survive the cold and find food.

“We always first try to send them home,” said Clinton, who himself ran away from home at 12. “But a lot of times they won’t go, because things are really bad there. We basically become their new family.”

Over the past two years, government officials and experts have seen an increasing number of children leave home for life on the streets, including many under 13. Foreclosures, layoffs, rising food and fuel prices and inadequate supplies of low-cost housing have stretched families to the extreme, and those pressures have trickled down to teenagers and preteens.

Federal studies and experts in the field have estimated that at least 1.6 million juveniles run away or are thrown out of their homes annually. But most of those return home within a week, and the government does not conduct a comprehensive or current count.

The best measure of the problem may be the number of contacts with runaways that federally-financed outreach programs make, which rose to 761,000 in 2008 from 550,000 in 2002, when current methods of counting began. (The number fell in 2007, but rose sharply again last year, and the number of federal outreach programs has been fairly steady throughout the period.)

Too young to get a hotel room, sign a lease or in many cases hold a job, young runaways are increasingly surviving by selling drugs, panhandling or engaging in prostitution, according to the National Runaway Switchboard, the federally-financed national hot line created in 1974. Legitimate employment was hard to find in the summer of 2009; the Labor Department said fewer than 30 percent of teenagers had jobs.

In more than 50 interviews over 11 months, teenagers living on their own in eight states told of a harrowing existence that in many cases involved sleeping in abandoned buildings, couch-surfing among friends and relatives or camping on riverbanks and in parks after fleeing or being kicked out by families in financial crisis.

The runaways spend much of their time avoiding the authorities because they assume the officials are trying to send them home. But most often the police are not looking for them as missing-person cases at all, just responding to complaints about loitering or menacing. In fact, federal data indicate that usually no one is looking for the runaways, either because parents have not reported them missing or the police have mishandled the reports.

In Adrian, Mich., near Detroit, a 16-year-old boy was secretly living alone in his mother’s apartment, though all the utilities had been turned off after she was arrested and jailed for violating her parole by bouncing a check at a grocery store.

In Huntington, W.Va., Steven White, 15, said that after casing a 24-hour Wal-Mart to see what time each night the cleaning crew finished its rounds, he began sleeping in a store restroom.

“You’re basically on the lam,” said Steven, who said he had left home because of physical abuse that increased after his father lost his job this year. “But you’re a kid, so it’s pretty hard to hide.”

Between Legal and Illegal

Survival on the streets of Medford, a city of 76,000 in southwest Oregon, requires runaways to walk a fine line between legal and illegal activity, as a few days with a group of them showed. Even as they sought help from social service organizations, they guarded their freedom jealously.

Petulant and street savvy, they were children nonetheless. One girl said she used a butter knife and a library card to break into vacant houses. But after she began living in one of them, she ate dry cereal for dinner for weeks because she did not realize that she could use the microwave to boil water for Ramen noodles. Another girl was childlike enough to suck her thumb, but dangerous enough to carry a switchblade.

They camped in restricted areas, occasionally shoplifted and regularly smoked marijuana. But they stayed away from harder drugs or drug dealing, and the older teenagers fiercely protected the younger runaways from sexual or other physical threats.

In waking hours, members of the group split their time among a park, a pool hall and a video-game arcade, sharing cigarettes. When in need, they sometimes barter: a sleeveless jacket for a blanket, peanut butter for extra lighter fluid to start campfires on soggy nights.

Betty Snyder, the newcomer in the park, said she had bitten her mother in a recent fight. She said she often refused to do household chores, which prompted heated arguments.

“I’m just tired of it all, and I don’t want to be in my house anymore,” she said, explaining why she had run away. “One month there is money, and the next month there is none. One day, she is taking it out on me and hitting me, and the next day she is ignoring me. It’s more stable out here.”

Members of the group said they sometimes made money by picking parking meters or sitting in front of parking lots, pretending to be the attendant after the real one leaves. When things get really desperate, they said, they climb into public fountains to fish out coins late at night. On cold nights, they hide in public libraries or schools after closing time to sleep.

Many of the runaways said they had fled family conflicts or the strain of their parents’ alcohol or drug abuse. Others said they left simply because they did not want to go to school or live by their parents’ rules.

“I can survive fine out here,” Betty said as she brandished a switchblade she pulled from her dirty sweatshirt pocket. At a nearby picnic table was part of the world she and the others were trying to avoid: a man with swastikas tattooed on his neck and an older homeless woman with rotted teeth, holding a pit bull named Diablo.

But Betty and another 14-year-old, seeming not to notice, went off to play on a park swing.

Around the country, outreach workers and city officials say they have been overwhelmed with requests for help from young people in desperate straits.

In Berks County, Pa., the shortage of beds for runaways has led county officials to consider paying stipends to families willing to offer their couches. At drop-in centers across the country, social workers describe how runaways regularly line up when they know the food pantry is being restocked.

In Chicago, city transit workers will soon be trained to help the runaways and other young people they have been finding in increasing numbers, trying to escape the cold or heat by riding endlessly on buses and trains.

“Several times a month we’re seeing kids being left by parents who say they can’t afford them anymore,” said Mary Ferrell, director of the Maslow Project, a resource center for homeless children and families in Medford. With fewer jobs available, teenagers are less able to help their families financially. Relatives and family friends are less likely to take them in.

While federal officials say homelessness over all is expected to rise 10 percent to 20 percent this year, a federal survey of schools showed a 40 percent increase in the number of juveniles living on their own last year, more than double the number in 2003.

At the same time, however, many financially troubled states began sharply cutting social services last year. Though President Obama’s $787 billion economic stimulus package includes $1.5 billion to address the problem of homelessness, state officials and youth advocates say that almost all of that money will go toward homeless families, not unaccompanied youths.

“As a society, we can pay a dollar to deal with these kids when they first run away, or 20 times that in a matter of years when they become the adult homeless or incarcerated population,” said Barbara Duffield, policy director for the National Association for the Education of Homeless Children and Youth.

‘You Traveling Alone?’

Maureen Blaha, executive director of the National Runaway Switchboard, said that while most runaways, like those in Medford, opt to stay in their hometowns, some venture farther away and face greater dangers. The farther they get from home and the longer they stay out, the less money they have and the more likely they are to take risks with people they have just met, Ms. Blaha said.

“A lot of small-town kids figure they can go to Chicago, San Francisco or New York because they can disappear there,” she said.

Martin Jaycard, a Port Authority police officer in New York, sees himself as a last line of defense in preventing that from happening.

Dressed in scraggly blue jeans and an untucked open-collar shirt, Officer Jaycard, a seven-year police veteran, is part of the Port Authority’s Youth Services Unit. His job is to catch runaways as they pass through the Port Authority Bus Terminal, the nation’s busiest.

“You’re the last person these kids want to see,” he said, estimating that his three-officer unit stops at least one runaway a day at the terminal.

Pausing to look at a girl waiting for a bus to Salt Lake City, Officer Jaycard noticed a nervous look on her face and the overstuffed suitcases that hinted more at a life change than a brief stay.

“Hey, how’s it going?” he said to the girl, gently, as he pulled a badge hanging around his neck from under his shirt. “You traveling alone?”

“Yes,” she replied, without a glimmer of nervousness. “I’m 18,” she quickly added before being asked.

But the girl carried no identification. The only phone number she could produce for someone who could verify her age was disconnected. And after noticing that the last name she gave was different from the one on her bags, the officer took her upstairs to the police station.

When she arrived, she burst into tears.

“Please, I’m begging you not to send me home,” she pleaded as she sobbed into her hands. While listening, Officer Jaycard and the social worker on duty began contacting city officials to investigate her situation, and found her a place at a city shelter. “You have no idea what my father will do to me for having tried to run away,” she said, describing severe beatings at home and threats to kill her if she ever tried to leave.

The girl turned out to be 14 years old, from Queens. Shaking her head in frustration, she added, “I should have just waited outside the terminal and no one would have known I was missing.”

In all likelihood, she was right.

Invisible Names

Lacking the training or the expertise to spot runaways, most police officers would not have stopped the girl waiting for the bus. Even if they had, her name probably would not have been listed in the federal database called the National Crime Information Center, or N.C.I.C., which among other things tracks missing people.

Federal statistics indicate that in more than three-quarters of runaway cases, parents or caretakers have not reported the child missing, often because they are angry about a fight or would simply prefer to see a problem child leave the house. Experts say some parents fear that involving the police will get them or their children into trouble or put their custody at risk.

And in 16 percent of cases, the local police failed to enter the information into the federal database, as required under federal law, according to a review of federal data by The New York Times.

Among the 61,452 names that were reported to the National Center for Missing and Exploited Children from January 2004 to January 2009, there were about 9,625 instances involving children whose missing-persons reports were not entered into the N.C.I.C., according to the review by The Times. If the names are not in the national database, then only local police agencies know whom to look for.

Police officials give various reasons for not entering the data. The software is old and cumbersome, they say, or they have limited resources and need to prioritize their time. In many cases, the police said, they do not take runaway reports as seriously as abductions, in part because runaways are often fleeing family problems. The police also say that entering every report into the federal database could make a city’s situation appear to be more of a problem than it is.

But in 267 of the cases around the nation for which the police did not enter a report into the database, the children remain missing. In 58, they were found dead.

“If no one knows they’re gone, who is going to look for them?” said Tray Williams, a spokesman for the Louisiana Office of Child Services, whose job it was to take care of 17-year-old Cleveland Randall.

On Feb. 6, Cleveland ran away from his foster care center in New Orleans and took a bus to Mississippi. His social workers reported him missing, but the New Orleans police failed to enter the report into the N.C.I.C. Ten days later, Cleveland was found shot to death in Avondale, La.

“These kids might as well be invisible if they aren’t in N.C.I.C.,” said Ernie Allen, the director of the National Center for Missing and Exploited Children.

Paradise by Interstate 5

Invisibility, many of the runaways in Medford say, is just what they want.

By midnight, the group decided it was late enough for them to leave the pool hall and to move around the city discreetly. So they went their separate ways.

Alex Molnar, 18, took the back alleys to a 24-hour laundry to sleep under the folding tables. If people were still using the machines, he planned on locking himself in the restroom, placing a sign on the front saying “Out of Service.”

On the other side of the city, Alex Hughes, 16, took side streets to a secret clearing along Interstate 5.

On colder nights, he and Clinton Anchors have built a fire in a long shallow trench, eventually covering it with dirt to create a heated mound where they could put their blankets.

Building a lean-to with a tarp and sticks, Clinton lifted his voice above the roar of the tractor-trailers barreling by just feet away. He said they called the spot “paradise” because the police rarely checked for them there.

“Even if they do, Betty is not with us, so that’s good,” he added, explaining that she had found a friend willing to lend her couch for the night. “One less thing to worry about.”

Recession Drives Surge in Youth Runaways, NYT, 26.10.2009, http://www.nytimes.com/2009/10/26/us/26runaway.html

Picturing the Depression

October 25, 2009
The New York Times
By DAVID OSHINSKY

DOROTHEA LANGE

A Life Beyond Limits

By Linda Gordon

Illustrated. 536 pp. W. W. Norton & Company. $35

Any list of the most enduring American photographs of the past century is likely to include Joe Rosenthal’s “Flag Raising on Iwo Jima”; John Filo’s image of a young woman at Kent State kneeling in anguish over the body of a mortally wounded college protester; and Richard Drew’s “Falling Man,” showing the fatal descent of a solitary figure from a high floor of the World Trade Center on 9/11. But perhaps the most iconic image — gracing textbooks, hanging from dormitory walls, affixed to political posters, even adorning a postage stamp — is Dorothea Lange’s “Migrant Mother,” taken at a California farmworkers camp in 1936. The photo shows a woman nurturing three young children, one in her arms, the others leaning on her for support. Her manner is strong and protective, yet her face shows the worry of someone overpowered by events beyond her control. She has trekked west from the ravaged Dust Bowl of Oklahoma, finding fieldwork where she can. Gazing into space, she represents the spirit of America itself in the midst of history’s worst economic disaster — the mix of courage and compassion that will lead a proud, invincible nation to endure.

“Migrant Mother” has a serendipitous history, as Linda Gordon makes clear in “Dorothea Lange,” an absorbing, exhaustively researched and highly political biography of a transformative figure in the rise of modern photojournalism. Lange had been hired by the Farm Security Administration, one of the New Deal’s more progressive agencies, to document the plight of farmworkers in the Great Depression, a mandate that covered everyone from Southern black sharecroppers to Dust Bowl refugees to Mexican-American migrants in the fields stretching from Texas to California. Led by Roy Stryker, a phenomenal talent spotter, the F.S.A. photography project schooled the likes of Walker Evans, Gordon Parks, Arthur Rothstein and Ben Shahn. Most came from urban backgrounds. “I didn’t know a mule from a tractor,” Lange admitted. What bound them together was their devotion to the principles of social justice represented by the New Deal.

Lange’s territory included all of California, which she covered by automobile. Driving north on Route 101 on a miserable winter’s day, she passed a hand-lettered sign reading “Pea-Pickers Camp” near the town of Nipomo. Lange drove on for 20 miles before something pulled her back. On the job for almost a year, she had come to understand the rhythms of migrant life, the periods of physically exhausting labor followed by even longer (unpaid) periods of emotionally draining inactivity. In the Nipomo camp, Lange met Florence Thompson, 32, the mother of 11 children, five born out of wedlock. The family was in desperate straits, living off stolen vegetables from the fields. Lange took a half-dozen photos, putting Thompson and her children in different poses. She took the photos from just outside their tent, even moving a pile of soiled laundry aside, so as not to embarrass the subjects by noting their squalid living conditions. (Though Gordon doesn’t mention it, Lange may have decided to use only three of the children to avoid the public perception of “Okies” as irresponsible “white trash.”) For the key photo, she “made the unusual decision to ask the two youngsters leaning on their mother to turn their faces away from the camera,” Gordon writes. “She was building the drama and impact of the photograph by forcing the viewer to focus entirely on Florence Thompson’s beauty and anxiety, and by letting the children’s bodies, rather than their faces, express their dependence on their mother.”

Gordon, who teaches history at New York University, is a leading scholar of gender and family in modern American life. (I teach part of the year at N.Y.U. but have rarely crossed paths with her.) Not surprisingly, she spends a fair amount of space on Lange’s personal life and role as a female photographer in a male-dominated profession. Born in Hoboken, N.J., in 1895 to middle-class German-American parents, Lange faced two handicaps as a child: a severe bout with polio that left her with a permanently weakened leg and an absentee father who abandoned the family and never returned. As Gordon sees it, Lange overcame the physical handicap a lot more easily than the emotional one, though each increased her empathy for people on the margins of society. Showing little interest in school, Lange apprenticed herself to a string of portrait photographers in New York, where she learned the mechanics of the trade and the art of bonding seamlessly with her subject. “Photography was a new profession and therefore not defined as a uniquely male skill or tradition,” Gordon says. In San Francisco, where Lange moved in 1918, she created a portrait studio “successful beyond her dreams.”

She was married twice: first to the artist Maynard Dixon, who introduced her to the wonders of nature; next to Paul Schuster Taylor, an economics professor, who kindled her interest in progressive reform. Gordon expertly analyzes the political culture of Depression-era California, where the enormous power of big agriculture kept tens of thousands of landless workers in peonage and despair. She portrays Lange as an ambivalent radical, deeply sympathetic to the plight of the migrants yet uncomfortable with the chaos that social conflict inevitably produced. Early in the Depression, Lange had tried but failed to photograph the labor protests that shook San Francisco. “Much of the action was so fast-moving and so violent that slow-moving Lange could not or would not get close,” Gordon writes. “This was the territory of the new breed of adventurous photojournalists.” Lange’s talent lay elsewhere.

Gordon is more in tune with the politics of Paul Taylor, who believed in organized protest to redress economic grievances, than she is with Lange’s more passive approach. A portrait photographer at heart, Lange stressed the inner emotions of those facing injustice and deprivation. “Her documentary photography was portrait photography,” Gordon says. “What made it different was its subjects, and thereby its politics.” An individualist at heart, Lange provided an alternative to the photography of wretchedness, which centered on the misery of beaten-down victims, as well as to the Popular Front mythology, which showed earnest, well-muscled men and women laboring together in fields and factories to produce a Soviet-style paradise on earth. Lange saw America as a worthy work in progress, incomplete and capable of better. By portraying her subjects as nobler than their current conditions, she emphasized the strength and optimism of our national character. She became, in Gordon’s words, “America’s pre-eminent photographer of democracy.”

But not for long. Though Lange would go on to photograph the dehumanizing process of Japanese-American internment during World War II and produce a number of elegant spreads for Life magazine, her unique brand of photojournalism — dignified, personal, contemplative — was overwhelmed by the action of wartime photography and the more abstract avant-garde imagery to come. In some ways, Lange, who died in 1965, remains frozen in the ’30s — a relic of the Depression and the enormous creative energy it unleashed. But even a glance at “Migrant Mother” reminds us of the timelessness of her best work. “A camera is a tool for learning how to see without a camera,” she liked to say. Gordon’s elegant biography is testament to Lange’s gift for challenging her country to open its eyes.

David Oshinsky is the Jack S. Blanton professor of history at the University of Texas and a distinguished scholar in residence at New York University.

Picturing the Depression, NYT, 25.10.2009, http://www.nytimes.com/2009/10/25/books/review/Oshinsky-t.html

In Wisconsin, Hopeful Signs for Factories

September 13, 2009
The New York Times
By PETER S. GOODMAN

MEQUON, Wis. — At the Rockwell Automation factory here, something encouraging happened recently that might be a portent of national economic recovery: managers reinstated a shift, hiring a dozen workers.

After months of layoffs, diminished production and anxiety about the depths of the Great Recession, the company — a bellwether because most of its customers are manufacturers themselves — saw enough new orders to justify adding people.

Given the panicked retreat that has characterized life on the American factory floor for many months, any expansion registers as a hopeful sign for the economy. Last week, the Federal Reserve found signs of “modest improvement” in manufacturing. That reinforced the direction of a widely watched manufacturing index tracked by the Institute for Supply Management, which surged into positive territory last month for the first time in a year and a half.

Yet these indications, while welcome, promise no vigorous expansion: For now, factory overseers remain uncertain that a lasting resurgence is at hand, making them reluctant to hire workers aggressively and invest in new equipment.

“We’re starting to see stabilization,” said Keith D. Nosbusch, chairman and chief executive of Rockwell, which makes machinery used in manufacturing. “The deceleration is slowing, but we haven’t seen the bottom yet. We have yet to see a turnaround.”

The tentative signs of factory improvement largely reflect a replenishing of inventories after months of weak sales, rather than an increase in demand for goods. For manufacturing to return to strength and help power a broader economic recovery, consumers would have to start buying more products, experts say.

Still, the mere process of expanding inventories could be enough to sustain several months of increased production, say economists. That could eventually generate more factory jobs, giving workers money to spend at other businesses. And that might instill enough momentum for a broader economic expansion.

“After one of the most incredible cutbacks and slicing away ever, just replenishing inventories is sufficient to maintain increased output,” said Allen Sinai, chief global economist at Decision Economics. “It’s part of the process of recovery in the United States, which is imminent.”

On Wall Street and in academic circles, where economists pick through often contradictory indicators for evidence of revival, the situation inside American factories is of crucial interest. Though manufacturing has diminished as a share of the economy, it still employs 11.7 million people, and it tends to trace the ups and downs of broader business prospects, making it a useful indicator of overall economic vigor.

The recent manufacturing data has been seized on by many economists as a signal that the recession is, technically speaking, already over or nearing an end.

“Those are genuine signs that this economy has turned the corner and begun to recover,” said Bernard Baumohl, chief global economist at the Economic Outlook Group.

However, for now, growth in manufacturing jobs is mostly just a hope. Though improved business prospects appear to have tempered layoffs, manufacturing lost 65,000 net jobs in August, according to the Labor Department, adding to more than 2 million jobs in the sector that have disappeared since the recession began.

“None of these factories are yet convinced that this is a sustainable recovery, so they’re very cautious about hiring,” said Mr. Baumohl.

Wisconsin is an ideal laboratory in which to assess manufacturing. No other state has a larger share of its jobs in manufacturing — more than 17 percent, according to the Labor Department. Today, that translates into a palpable lack of security.

At the original Miller brewery in downtown Milwaukee — now a tiny piece of a mammoth operation that produces more than 100 million cases of beer annually — roughly 25 of the 550 workers who labor for hourly wages typically leave the company in the course of a year. This year, the number is zero.

“It used to be you might leave here and go over there for a higher-paying job,” said Andrew K. Moschea, a brewing vice president for Miller Coors. “ ‘Over there’ isn’t there anymore, or it’s laying off.”

The Miller plant is a bright spot in the local economy. Though production of kegs of beer is down a little, reflecting business at restaurants and bars, lower-priced cans are up, making for expanded volume.

When Miller recently hired 30 part-time workers to round out its weekend shifts, paying more than $20 an hour, thousands applied, many from skilled trades that once paid twice as much.

Rockwell Automation’s machinery, computer software and know-how form the guts of assembly lines in a wide array of industries.

“The products they produce through the whole range are critical for doing manufacturing,” said John S. Heywood, an economist at the University of Wisconsin, Milwaukee.

In recent months, Rockwell has suffered along with much of American industry. As car sales plummeted, automakers canceled new orders for Rockwell’s machinery. As the price of oil plunged this year, energy companies scrapped expansion plans, eliminating demand for Rockwell’s machinery.

In recent years, Rockwell has established a presence in more than 80 countries, deriving roughly half its revenue overseas. But as the slowdown spread to Asia, Europe and Latin America, the comforts of being global evaporated.

As Rockwell’s customers grew fearful of losing access to credit, they eliminated plans for new factories, idled existing plants and put off replacing and servicing older gear. “It came quick,” Mr. Nosbusch said. “It was steep.”

Rockwell began large-scale layoffs in October 2008 — three percent of its 20,000-plus workers worldwide, including 300 in the United States. Scattered layoffs continued in the months after. The company also cut working hours, trimmed wages and eliminated its own contributions to employee retirement accounts.

Here in Mequon, about 20 miles north of Milwaukee, management trimmed its production work force from about 240 to 220. It scrapped a shift in its board shop, where workers in lab coats use sophisticated machinery to attach capacitors, transistors and other electronics to custom-sized circuit boards.

The circuit boards are the brains of Rockwell’s power-regulating machines. Production declined by one-fifth this year. But in recent weeks, as Rockwell has rebuilt its inventory, production has nudged up 5 percent, prompting the resurrection of the third shift.

Still, worry remains, making future hiring unlikely. Rockwell’s customers have resumed replacing older gear, but have not begun full-scale expansions, which would generate much more business.

Factory managers doubt whether American consumers — still reeling from lost jobs and savings — can snap back vigorously enough to restore manufacturing.

“I’ve got 22 years of experience and I’ve never seen anything like this,” said Mike Laszkiewicz, 48, vice president and general manager of Rockwell’s power control business. “This is a tough one. I’m a little uncertain which way this is going to go.”

In Wisconsin, Hopeful Signs for Factories, NYT, 13.9.2009, http://www.nytimes.com/2009/09/13/business/economy/13manufacture.html

A Reluctance to Spend May Be a Legacy of the Recession

August 29, 2009
The New York Times
By PETER S. GOODMAN

AUSTIN, Tex. — Even as evidence mounts that the Great Recession has finally released its chokehold on the American economy, experts worry that the recovery may be weak, stymied by consumers’ reluctance to spend.

Given that consumer spending has in recent years accounted for 70 percent of the nation’s economic activity, a marginal shrinking could significantly depress demand for goods and services, discouraging businesses from hiring more workers.

Millions of Americans spent years tapping credit cards, stock portfolios and once-rising home values to spend in excess of their incomes and now lack the wherewithal to carry on. Those who still have the means feel pressure to conserve, fearful about layoffs, the stock market and real estate prices.

“We’re at an inflection point with respect to the American consumer,” said Mark Zandi, chief economist at Moody’s Economy .com, who correctly forecast a dip in spending heading into the recession, and who provided data supporting sustained weakness.

“Lower-income households can’t borrow, and higher-income households no longer feel wealthy,” Mr. Zandi added. “There’s still a lot of debt out there. It throws a pall over the potential for a strong recovery. The economy is going to struggle.”

In recent weeks, spending has risen slightly because of exuberant car buying, fueled by the cash-for-clunkers program. On Friday, the Commerce Department said spending rose 0.2 percent in July from the previous month. But most economists see this activity as short-lived, pointing out that incomes did not rise. Some suggest the recession has endured so long and spread pain so broadly that it has seeped into the culture, downgrading expectations, clouding assumptions about the future and eroding the impulse to buy.

The Great Depression imbued American life with an enduring spirit of thrift. The current recession has perhaps proven wrenching enough to alter consumer tastes, putting value in vogue.

“It’s simply less fun pulling up to the stoplight in a Hummer than it used to be,” said Robert Barbera, chief economist at the research and trading firm ITG. “It’s a change in norms.”

Here in Austin, a laid-back city on the banks of the Colorado River, change is palpable.

A decade ago, Heather Nelson gained a lucrative job in telecommunications and celebrated by buying a new Ford sport utility vehicle with leather seats and an expensive stereo system. Today, Ms. Nelson, 38, again has designs on a new vehicle, but this time she plans to buy a Toyota Prius, the fuel-efficient hybrid.

In December, Ms. Nelson was laid off from her six-figure job as a patent attorney at a local software firm. Self-assured, she exudes confidence she will land another high-paying position.

But even if her spending power is restored, Ms. Nelson says her inclination to buy has been permanently diminished. Through nine months of joblessness, she has learned to forgo the impulse buys that used to provide momentary pleasure — $4 lattes at Starbucks, lip gloss, mints. She has found she can survive without the pedicures and chocolate martinis that once filled regular evenings at the spa. Before punishing heat and drought turned much of central Texas brown, she subsisted primarily on vegetables harvested from her plot at a community garden, where only one oasis of flowers remains.

Once intent on buying a home, Ms. Nelson now feels security in remaining a renter, steering clear of the shark-infested waters of the mortgage industry.

“I’m having to shift my dreams to accommodate the new realities,” she said. “Now, I have more of a bunker mentality. If you get hit hard enough, it lasts. This impact is going to last.”

For years, Americans have tapped stock portfolios and borrowed against homes to fill wardrobes with clothes, garages with cars and living rooms with furniture and electronics. But stock markets have proven volatile. Home values are sharply lower. Banks remain reluctant to lend in the aftermath of a global financial crisis.

Households must increasingly depend upon paychecks to finance spending, a reality that seems likely to curb consumption: Unemployment stands at 9.4 percent and is expected to climb higher. Working hours have been slashed even for those with jobs.

Economists subscribe to a so-called wealth effect: as households amass wealth, they tend to expand their spending over the following year, typically by 3 to 5 percent of the increase.

Between 2003 and 2007 — prime years of the housing boom — the net worth of an American household expanded to about $540,000, from about $400,000, according to an analysis of federal data by Moody’s Economy.com.

Now, the wealth effect is working in reverse: by the first three months of this year, household net worth had dropped to $421,000.

“Not only have people lost money, but they don’t expect as much appreciation in the money they have, and that should affect consumption,” said Andrew Tilton, an economist at Goldman Sachs. “This is a cultural shift going on. People will save more.”

As recently as the middle of 2007, Americans saved less than 2 percent of their income, according to the Bureau of Economic Analysis. In recent months, the rate has exceeded 4 percent.

Austin has fared better than most cities during the recession. Increased government payrolls enabled by the state’s energy wealth have largely compensated for layoffs in construction and technology. Local unemployment reached 7.1 percent in June — well below the national average. Housing prices have mostly held. Yet even people with high incomes appear reluctant to spend.

“The only time you do a lot of business is when you throw a sale,” said Pat Bennett, a salesman at a Macy’s in north Austin. “You see very little impulse buying. They come in saying, ‘I need a pair of underwear,’ and they get it and leave. You don’t really see them saying, ‘Oh, I love the way that shirt looks, and I’m just going to get it.’ ”

Mr. Bennett attributes frugality to a general uneasiness about the future.

“Our parents had the Depression,” Mr. Bennett said. “This is like a mini-shock for the baby boomers after the go-go years.”

At a mall devoted to home furnishings, many storefronts were vacant, and survivors were draped in the banners of desperation: “Inventory Clearance,” “50% Off,” “It’s All On Sale.”

But at the Natural Gardener — a lush assemblage of demonstration plots that sells seeds, plants and tools for organic gardening — business has never been better.

Sales of vegetable plants swelled fivefold in March over past years. The company added a public address system and bleachers to accommodate hordes showing up for vegetable-growing classes.

Part of the embrace of gardening stems from concerns about the environment and food safety, says the company’s president, John Dromgoole. Momentum also reflects desire to save on food costs.

“People are very interested in shoring up against losing their jobs,” he said.

A Reluctance to Spend May Be a Legacy of the Recession, NYT, 29.8.2009,http://www.nytimes.com/2009/08/29/business/economy/29consumer.html

Recession Eases; GDP Dip Smaller Than Expected

July 31, 2009
Filed at 9:30 a.m. ET
The New York Times
By THE ASSOCIATED PRESS

WASHINGTON (AP) -- The economy sank at a pace of just 1 percent in the second quarter of the year, a new government report shows. It was a better-than-expected showing that provided the strongest signal yet that the longest recession since World War II is finally winding down.

The dip in gross domestic product for the April-to-June period, reported by the Commerce Department on Friday, comes after the economy was in a free fall, tumbling at 6.4 percent pace in the first three months of this year. That was the sharpest downhill slide in nearly three decades.

The economy has now contracted for a record four straight quarters for the first time on records dating to 1947. That underscores the grim toll of the recession on consumers and companies.

Many economists were predicting a slightly bigger 1.5 percent annualized contraction in second-quarter GDP. It's the total value of all goods and services -- such as cars and clothes and makeup and machinery -- produced within the United States and is the best barometer of the country's economic health.

''The recession looks to have largely bottomed in the spring,'' said Joel Naroff, president of Naroff Economic Advisors. ''Businesses have made most of the adjustments they needed to make, and that will set up the economy to resume growing in the summer,'' he predicted.

Less drastic spending cuts by businesses, a resumption of spending by federal and local governments and an improved trade picture were key forces behind the better performance. Consumers, though, pulled back a bit. Rising unemployment, shrunken nest eggs and lower home values have weighed down their spending.

A key area where businesses ended up cutting more deeply in the spring was inventories. They slashed spending at a record pace of $141.1 billion. There was a silver lining to that, though: With inventories at rock-bottom, businesses may need to ramp up production to satisfy customer demand. That would give a boost to the economy in the current quarter.

The Commerce Department also reported Friday that the recession inflicted even more damage on the economy last year than the government had previously thought. In revisions that date back to the Great Depression, it now estimates that the economy grew just 0.4 percent in 2008. That's much weaker than the 1.1 percent growth the government had earlier calculated.

Also Friday, the government reported that employment compensation for U.S. workers has grown over the past 12 months by the lowest amount on record, reflecting the severe recession that has gripped the country.

Federal Reserve Chairman Ben Bernanke has said he thinks the recession will end later this year. And many analysts think the economy will start to grow again -- perhaps at around a 1.5 percent pace -- in the July-to-September quarter. That would be anemic growth by historical measures, but it would signal that the downturn has ended.

Naroff said he now thinks growth in the third quarter could turn out to be much stronger because companies will need to replenish bare-bone stockpiles of goods.

''You could get a huge swing in inventories that could create a much bigger growth rate than anybody expects,'' he said.

If that were to happen, it's possible the economy's growth could clock in around 4 percent in the current quarter, he said.

Obama's stimulus package of tax cuts and increased government spending provided some support to second-quarter economic activity. But it will have more impact through the second half of this year and will carry a bigger punch in 2010, economists said.

Even if the recession ends later this year, the job market will remain weak. Companies are expected to keep cutting payroll through the rest of this year, but analysts say monthly job losses likely will continue to narrow.

Still, unemployment -- now at a 26-year high of 9.5 percent -- will keep rising. The Fed says it will top 10 percent at the end of this year. Businesses will be unlikely to boost hiring until they're certain the recovery has staying power.

In the second quarter, businesses continued to cut all kinds of spending, but not nearly as much as they had been, one of the reasons the economy didn't contract as much.

For instance, they trimmed spending on equipment and software at a 9 percent pace in the second quarter, compared with an annualized drop of 36.4 percent in the first quarter. Similarly, they cut spending on plants, office buildings and other commercial construction at a rate of 8.9 percent, an improvement from the annualized drop of 43.6 percent in the first quarter.

Housing -- which led the country into recession -- continued to be a drag on the economy. Builders cut spending at a rate of 29.3 percent, also an improvement from the 38.2 percent annualized drop reported in the first quarter.

Consumers, meanwhile, did a slight retreat in the spring.

They sliced spending at a rate of 1.2 percent in the second quarter, after nudging up purchases at a 0.6 percent pace in the first quarter. It turns out that consumers didn't nearly have the appetite to spend in the first quarter as the government previously thought, according to revisions released Friday.

With consumers spending less on everything from cars to clothes, Americans' savings rate rose sharply -- to 5.2 percent in the second quarter, the highest since 1998.

A return to spending by governments helped economic activity in the spring. The federal government boosted spending at pace of 10.9 percent, the most since the third quarter of 2008. And state and local governments increased spending at a pace of 2.4 percent, the most since the second quarter of 2007.

An improved trade picture also added to economic activity in the spring. Although exports fell, imports fell more, narrowing the trade gap. That added 1.38 percentage points to second-quarter GDP.

The convergence of a collapse in the housing market, a near shutdown of credit and a financial crisis created what Bernanke and others have called a perfect storm for the economy. Those negative forces -- the scale of which hasn't been seen since the 1930s -- plunged the country into a recession in December 2007. It is the longest since World War II.

Recession Eases; GDP Dip Smaller Than Expected, NYT, 31.7.2009, http://www.nytimes.com/aponline/2009/07/31/business/AP-US-Economy.html

UK slowdown sharper than feared

By Norma Cohen
The Financial Times
Published: April 24 2009 10:02
Last updated: April 24 2009 10:31

The UK economy contracted much more sharply in the first quarter of this year than economists expected, with output reduced in both services and manufacturing.

It is the fastest quarterly decline in national income since the third quarter of 1979, according to Richard McGuire, fixed income strategist at RBC Capital Markets.

Martin Wolf: Why Britain’s predicament is so bad - Apr-23UK business confidence stabilises - Apr-23GDP in the first three months of 2009 contracted by 1.9 per cent from the level seen in the fourth quarter of 2008, according to the Office for National Statistics. Economists polled by Reuters had expected an average decline of 1.5 per cent.

“The provisional UK GDP figures for Q1 suggest that the recession has so far been even deeper than previously thought.,” said Vicki Redwood, economist at Capital Economics.

“It also deals an instant blow to the chancellor’s forecast of a 3.5 per cent drop in GDP this year. For that to be achieved, GDP would have to be broadly flat from the second quarter onwards – yet the surveys are already pointing to another fall of 1 per cent or so in the second quarter,” she added.

Alistair Darling, the chancellor, predicted the biggest fall in output since the Second World War in this week’s budget but maintained the UK would return to growth of 1.5 per cent next year. His forecast was more optimistic than the consensus of private sector forecasts.

Overall, the sharpest decline was seen in the manufacturing sector, where output fell by 6.2 per cent from the previous quarter.

Separately, the Society of Motor Manufacturers and Traders underlined the depth of the downturn in the car industry. It said that UK car production more than halved in March to bring first-quarter volumes down 56.6 per cent from the year before. Commercial vehicle production fell by 63 per cent in the quarter, after a further steep fall in March.

Capital Economics noted that the biggest surprise in the GDP data was the 1.2 per cent contraction seen in the output of the services sector. In particular, the decline was sharp in business and financial services.

Mr McGuire noted that quarterly contraction in business and financial services was the sharpest since the series began in 1983.

Colin Ellis, economist at Daiwa Securities, said: “Today’s data were a sharp reminder that the UK is still a long way away from any recovery.” He noted that the weakness that shows in up the initial estimate of GDP explains the Bank of England’s monetary policy committee’s decision to pump £75bn into the economy through the banking system.

“The resulting gap between demand and potential supply is only likely to widen further over the rest of this year – which is why the MPC has opted to pump £75bn into the economy to boost demand. But we are increasingly nervous that the new money may have only a limited impact on real output,” Mr Ellis said..

However, he said there may be a silver lining in the latest data because, having contracted by 3.5 per cent in the last six months alone, there may be less of a reduction in output in the months ahead.

UK slowdown sharper than feared, FT, 24.4.2009, http://www.ft.com/cms/s/0/b97c5ca0-30ad-11de-bc38-00144feabdc0.html

Conspicuous Consumption, a Casualty of Recession

March 10, 2009
The New York Times
By SHAILA DEWAN

ATLANTA — It is a sign of the times when Sacha Taylor, a fixture on the charity circuit in this gala-happy city, digs out a 10-year-old dress to wear to a recent society party.

Or when Jennifer Riley, a corporate lawyer, starts patronizing restaurants that take coupons.

Or when Ethel Knox, the wife of a pediatrician, cleans out her home and her storage unit, gives away an old car to a needy friend and cancels the family Christmas. “I just feel so decadent with all the stuff I’ve got,” she explained.

In just the seven months since the stock market began to plummet, the recession has aimed its death ray not just at the credit market, the Dow and Detroit, but at the very ethos of conspicuous consumption. Even those with a regular income are reassessing their spending habits, perhaps for the long term. They are shopping their closets, downscaling their vacations and holding off on trading in their cars. If the race to have the latest fashions and gadgets was like an endless, ever-faster video game, then someone has pushed the reset button.

“I think this economy was a good way to cure my compulsive shopping habit,” Maxine Frankel, 59, a high school teacher from Skokie, Ill., said as she longingly stroked a diaphanous black shawl at a shop in the nearby Chicago suburb of Glenview. “It’s kind of funny, but I feel much more satisfied with the things money can’t buy, like the well-being of my family. I’m just not seeking happiness from material things anymore.”

To many, the adjustment feels less like a temporary, emergency response than a permanent recalibration, one they view in terms of ethics rather than expediency.

“It’s kind of like we all went overboard,” said Ms. Taylor, 33. “And we’re trying to get back to where we should have been.”

Not everyone thinks the new restraint will last. Ms. Riley, 37, who lives in Atlanta, said she doubted it would extend beyond the recession.

“I do think that maybe now it’s a little bit chic or something to save money, or to be pinching pennies,” she said.

Just as she stopped carpooling when gas prices went down, Ms. Riley said, she predicted that people would start buying again when the economy rebounded. “That’s just my own, maybe, cynical belief,” she said.

Still, economists point out that the Great Depression created a generation of cautious savers. The longer the downturn this time, they say, the more likely it is to change financial habits permanently.

Holly Moreno, 30, a part-time Web site manager in the Dallas suburb of Rowlett, Tex., whose husband is a business analyst, said she had been taking their 2-year-old son to indoor playgrounds at the mall and free story-times at the library instead of paying to get into the children’s museum, their favorite wintertime haunt.

“Even though we’re secure with our jobs, you’ve still got to plan for just-in-case,” Ms. Moreno said, “especially because we have a kid.”

As many economists have noted, cutting spending is the worst thing people with means can do for the economy right now. But that argument seems to have little traction, especially because even those with steady paychecks and no fear of losing their job have seen their net worth decline and their retirement savings evaporate.

“I don’t think there’s been any other period in modern history where appeals to people to spend the economy back into health have worked,” said Ethan S. Harris, a co-chief of United States economics research at Barclays Capital. “The only time I’ve ever seen where that kind of urging people to spend worked was after 9/11, and I did think at the time that there was some patriotic buying going on.”

After the attacks of Sept. 11, though, President George W. Bush urged Americans to go shopping. President Obama has taken a different tack, issuing a budget whose very title, “A New Era of Responsibility,” strives for an austere tone. On Inauguration Day, the first daughters, Sasha and Malia, dressed not in designer labels but clothing from J. Crew. On television, the insurance giant Allstate is running a sepia-toned “back to basics” advertising campaign, and in Target’s “new day” commercials, the “new pedicure” is administered by a spouse and the “new vacation glow” comes from a spray bottle.

“Though the recession was always talked about in economic terms, we felt really strongly that, in fact, it was a crisis of culture,” said Tracy Johnson, research director for the Context-Based Research Group, a market research firm in Baltimore that views the recession as a rite-of-passage that will reorder consumer priorities.

Ms. Johnson has advised clients to focus on quality rather than quantity. Malls redecorated in screaming red “sale” signs are not the way to go, she said, because “if you just give people the opportunity to buy more, you’re not matching up to where their minds are.”

Carol Morgan, who teaches law at the University of Georgia and whose husband has a private law practice, said she felt a responsibility to cut needless spending. “That is probably something that is a prudent thing to do in any event, but particularly now I see it as the right thing, as the moral thing to do,” she said, adding that she also hoped to increase her charitable giving. “Before, extravagance and opulence was the aspiration, and if we can replace that with a desire to live more simply — replace that with time with family, or time for spirituality — what a positive outcome to a very negative situation.”

Kim Gatlin, a novelist who lives in Park Cities, in the Dallas area, said some of her friends had urged their husbands not to give them jewelry over the holidays. “They were like, you know, ‘There’s nothing I’m dying for right now — let’s just wait,’ ” she said. “It makes them feel like they’re participating, although they don’t contribute to the income stream.”

Even some of the very affluent said they were reluctant to be conspicuous in their spending.

“It’s disrespectful to the people who don’t have much to flaunt your wealth,” said Monica Dioda Hagedorn, 40, a lawyer in Atlanta who is married to an heir of the Scotts Miracle-Gro fortune. “I have plenty of dresses to last me 10 years.”

Ms. Hagedorn said she did not hold herself apart from the rest of society because of her money. “Everyone’s going to pull through together, or everyone’s going to sink together,” she said.

Fear and uncertainty have paralyzed even the most insulated clients, said Jack Sawyer Jr., who manages money for some of Atlanta’s wealthiest families. “I have clients who have $20 million, young grandparents, and they’re concerned about whether they can continue to pay tuition for their grandchildren. It’s not a rational process.”

Any sharp decline in consumer spending will feed on itself, said Juliet B. Schor, an economist at Boston College and the author of “The Overspent American: Upscaling, Downshifting and the New Consumer” (Basic Books, 1998). Typically, people spend when those around them are spending, but in a downturn, the need to compete evaporates. “You can stay right where you are without falling behind,” Ms. Schor said.

Consumers’ focus may have shifted, she said, from striving to catch up to those above them to contemplating the fates of those below them.

Craig Robinson, 34, a manager at a real estate investment firm in Atlanta, agreed, saying that he was not tempted to join those who were scooping up deals at department stores. “There’s one guy to the right of me showing me this great deal he got on his tie,” he said, “and there’s four guys to the left of me who got laid off and can’t find a job.”

Karen Ann Cullotta contributed reporting from Chicago, Gretel C. Kovach from Dallas, and Rebecca Cathcart from Los Angeles.

Conspicuous Consumption, a Casualty of Recession, NYT, 10.3.2009, http://www.nytimes.com/2009/03/10/us/10reset.html?hp

Economic Scene

Job Losses Show Breadth of Recession

March 4, 2009
The New York Times
By DAVID LEONHARDT

What does the worst recession in a generation look like?

It is both deep and broad. Every state in the country, with the exception of a band stretching from the Dakotas down to Texas, is now shedding jobs at a rapid pace. And even that band has recently begun to suffer, because of the sharp fall in both oil and crop prices.

Unlike the last two recessions — earlier this decade and in the early 1990s — this one is causing much more job loss among the less educated than among college graduates. Those earlier recessions introduced the country to the concept of mass white-collar layoffs. The brunt of the layoffs in this recession is falling on construction workers, hotel workers, retail workers and others without a four-year degree.

The Great Recession of 2008 (and beyond) is hurting men more than women. It is hurting homeowners and investors more than renters or retirees who rely on Social Security checks. It is hurting Latinos more than any other ethnic group. A year ago, a greater share of Latinos held jobs than whites. Today, the two have switched places.

If the Great Recession, as some have called it, has a capital city, it is El Centro, Calif., due east of San Diego, in the desert of California’s Inland Valley. El Centro has the highest unemployment rate in the nation, a depressionlike 22.6 percent.

It’s an agricultural area — because of water pumped in from the Colorado River, which allows lettuce, broccoli and the like to grow — and unemployment is in double digits even in good times. But El Centro has lately been hit by the brutal combination of a drought, a housing bust and a falling peso, which cuts into the buying power of Mexicans who cross the border to shop.

Until recently, El Centro was one of those relatively cheap inland California areas where construction and home sales were booming. Today, it is pockmarked with “bank-owned” for sale signs. A wallboard factory in nearby Plaster City — its actual name — has laid off workers once kept busy by the housing boom. Even Wal-Mart has cut jobs, Sam Couchman, who runs the county’s work force development office, told me.

You often hear that recessions exact the biggest price on the most vulnerable workers. And that’s true about this recession, at least for the moment. But it isn’t the whole story. Just look at Wall Street, where a generation-long bubble seems to lose a bit more air every day.

In the long run, this Great Recession may end up afflicting the comfortable more than the afflicted.

•

The main reason that recessions tend to increase inequality is that lower-income workers are concentrated in boom-and-bust industries. Agriculture is the classic example. In recent years, construction has become the most important one.

By the start of this decade, the construction sector employed more men without a college education than the manufacturing sector did, Lawrence Katz, the Harvard labor economist, points out. (As recently as 1980, three times as many such men worked in manufacturing as construction.) The housing boom was like a giant jobs program for many workers who otherwise would have struggled to find decent paying work.

The housing bust has forced many of them into precisely that struggle and helps explain the recession’s outsize toll on Latinos and men. In the summer of 2005, just as the real estate market was peaking, I spent a day visiting home construction sites in Frederick, Md., something of a Washington exurb, interviewing the workers. They were almost exclusively Latino.

At the time, the national unemployment rate for Latino men was 3.6 percent. Today, when there aren’t many homes being built in Frederick or anywhere else, that unemployment rate is 11 percent. And this number understates the damage, since it excludes a considerable number of immigrants who have returned home.

Frederick was typical of the boom in another way, too. It wasn’t nearly as affluent as some closer suburbs. Now the bust is widening that gap.

If you look at the interactive map with this column, you will see the places that already had high unemployment before the recession have also had some of the largest increases. Some are victims of the housing bust, like inland California. Others are manufacturing centers, as in Michigan and North Carolina, whose long-term decline is accelerating. Rhode Island, home to both factories and Boston exurbs, has one of the highest jobless rates in the nation.

All of these trends will serve to increase inequality. Yet I still think the Great Recession will eventually end up compressing the rungs on the nation’s economic ladder. Why? For the same three fundamental reasons that the Great Depression did.

The first is the stock market crash. Clearly, it has hurt wealthy and upper middle-class families, who own the bulk of stock, more than others. In addition, thousands of high-paying Wall Street jobs — jobs that have helped the share of income flowing to the top 1 percent of earners soar in recent decades — will disappear.

Hard as it may be to believe, the crash will also help a lot of young families. The stocks that they buy in coming years are likely to appreciate far more than they would have if the Dow were still above 14,000. The same is true of future house purchases for the one in three families still renting a home.

The second reason is government policy. The Obama administration plans to raise taxes on the affluent, cut them for everyone else (so long as the government can afford it, that is) and take other steps to reduce inequality. Franklin D. Roosevelt did something similar and it had a huge effect.

Of course, these two factors both boil down to redistribution. One group is benefiting at the expense of another. Yes, many of the people on the losing end of that shift have done quite well in recent years, far better than most Americans. Still, the shift isn’t making the economic pie any bigger. It is simply being divided differently.

Which is why the third factor — education — is the most important of all. It can make the pie larger and divide it more evenly.

That was the legacy of the great surge in school enrollment during the Great Depression. Teenagers who once would have dropped out to do factory work instead stayed in high school, notes Claudia Goldin, an economist who recently wrote a history of education with Mr. Katz.

In the manufacturing-heavy mid-Atlantic states, the high school graduation rate was just above 20 percent in the late 1920s. By 1940, it was almost 60 percent. These graduates then became the skilled workers and teachers who helped build the great post-World War II American economy.

Nothing would benefit tomorrow’s economy more than a similar surge. And there is some evidence that it’s starting to happen. In El Centro, enrollment at Imperial Valley Community College jumped 11 percent this semester. Ed Gould, the college president, said he expected applications to keep rising next year.

Unfortunately, California — one of the states hit hardest by the Great Recession — is in the midst of a fiscal crisis. So Imperial Valley’s budget is being capped. Next year, Mr. Gould expects he will have to tell some students that they can’t take a full load of classes, just when they most need help.

Job Losses Show Breadth of Recession, NYT, 4.3.3009, http://www.nytimes.com/2009/03/04/business/04leonhardt.html

Britain Is Officially in a Recession

January 24, 2009
The New York Times
By MATTHEW SALTMARSH

Britain officially entered a recession in the fourth quarter, data released Friday indicated, while other reports from Europe demonstrated the still feeble economy across region.

British gross domestic product fell 1.5 percent from the third quarter and was down 1.8 percent on a year earlier, the Office for National Statistics said in a preliminary estimate. Economists had predicted a 1.2 percent drop for the quarter.

The numbers confirmed what economists and consumers have known for some time: that the economy is in a recession.

The conventional definition of a recession is for two consecutive quarterly declines in the growth rate. The rate fell by 0.6 percent in the third quarter.

For all of 2008, growth domestic product rose 0.7 percent, the lowest rate since 1992, when it rose 0.1 percent. The increased rate of decline in output was the result of weaker services and industrial output; all sectors except agriculture contracted in the quarter.

The release is likely to add to the case for the central bank to enact unconventional measures to restore inter-bank lending and bolster consumer confidence, analysts said.

The report “adds some extra weight to the already compelling case for the Bank of England bringing rates down to near zero and shifting to unconventional policy measures with some considerable degree of alacrity,” a strategist at RBC Capital Markets in London, Richard McGuire, said.

Alistair Darling, the chancellor of the Exchequer, told Sky News after the release that the figure was “undoubtedly sharper than many people believed, partly because you’ve seen industrial production go down because the export markets have been badly affected.”

European shares fell after the report from Britain and other data from the Continent, as investors continued to worry about the heath of the financial sector. the FTSE in London was down 1.3 percent in early afternoon trading.

Prime Minister Gordon Brown of Britain announced a new bailout for the British financial system earlier in the week that increases the government’s control over lenders, saying it would offer banks insurance on troubled assets and take other measures to restore credit and support the foundering economy. The government also revised the terms of its bailout of Royal Bank of Scotland, raising its stake in the bank to 70 percent from 58 percent.

Governments in Belgium, France, Germany, Spain and the Netherlands have also announced new steps recently to bolster the capital of their lenders.

In Madrid, the government released gloomy economy data Friday. The National Statistics Institute said the jobless rate there increased to 13.9 percent from 11.3 percent in the third quarter. The number of unemployed workers in Spain rose by over 1.2 million in 2008 to end the year at 3.2 million, the highest number since the first quarter of 1998.

There was, however, a slightly more positive note from a survey of purchasing managers on euro-zone services and manufacturing activity. A composite index of both industries was at 38.5 in January from 38.2 in December, which was the lowest reading since the survey began in 1998.

Economists had forecast a decline to 37.4, according to a Bloomberg survey.

The index is based on a survey of purchasing managers by Markit Economics and a reading below 50 indicates contraction.

“It’s important not to get carried away,” the Italian bank Unicredit said of the data in a research note. It added the data suggested merely that the first quarter “will probably be a bit less negative” than the fourth quarter.

It added that the recession is “bound to last at least through mid-year,” and with the headline inflation rate heading toward zero, the case for further interest rate cuts by the European Central Bank, probably in March and again in June, remains strong.

There was also a more positive note from the British retail sector on Friday. The statistics office said sales volumes between December 2007 and December 2008 grew by 1.8 percent, based on non-seasonally adjusted data.

The office noted, however, that difficulties relating to a cut value-added tax, aggressive discounting and a longer than usual trading period challenge a meaningful interpretation of the data on a seasonally adjusted basis.

Final G.D.P. figures in Britain will be released in late February.

Britain Is Officially in a Recession, NYT, 24.1.2009, http://www.nytimes.com/2009/01/24/business/24euecon.html?hp

In Season of Recession, New Ways to Celebrate

December 26, 2008
The New York Times
By JENNIFER MEDINA and KEN BELSON

No lamb this year; ham, at 89 cents a pound, was a better deal. There were gifts, yes, but fewer than usual, and only for the children. Maybe clothes this time around instead of a bag of toys. Somehow, the Long Island chill would have to be made as alluring a holiday destination as the isles of the Caribbean.

It is unsurprising, perhaps, that this is the Christmas of cutbacks, what with neighbors facing foreclosures, relatives being laid off and the endless chatter of a recession like no other. Nearly everyone in New York City, it seemed — from shoppers in central Brooklyn to churchgoers in the Bronx, people eating (and volunteering) at a Harlem soup kitchen and those heading out of town from Penn Station — had something they were doing without.

“It doesn’t feel like Christmas,” said Christine Enniss, who planned to pare her holiday spread to the essentials: green salad, roast chicken and, maybe, potato salad.

But as each family tried to make merry amid the misery, what stayed and went was revealing. Sharon Parker, whose husband recently lost his job as a mechanic, held Christmas dinner for her immediate family of five, rather than playing host to the more than a dozen cousins and friends she usually has over. Susan Strande, an art teacher who lives in the East Village, did her own baking rather than buying fancy tarts and pies. O’Neil Hutchinson, an engineering consultant, visited family in England several weeks ago to avoid the more expensive holiday fares.

Many tried to avoid sacrificing quantity by scaling back on quality. At Sherry-Lehmann Wine and Spirits on Park Avenue near 59th Street, sales of Nicolas Feuillatte Brut Champagne, at $27.95 a bottle, more than doubled, to 160 cases this month, from last December. But “all the higher-end stuff is more likely to stay on the shelves,” said Chris Adams, a partner in the store.

Mr. Adams, for his part, went to Saks Fifth Avenue on Christmas Eve to shop for a last-minute gift for his wife, as he always does. But he stayed away from the pricey perfumes, veering instead to the makeup counter to buy creams she might need and would normally pick up for herself.

Of course, this cutback Christmas can also be seen as the season of the sales. Some took advantage of bargain trips to Las Vegas resorts; others filled shopping bags with merchandise at half price. “Everything was really cheap,” said one woman, a bit defensively, as she boarded a train to see family in New Jersey, laden with Bloomingdale’s bags that were teeming with red-wrapped gifts.

For the Lombardo family, Christmas Eve has always been about the Feast of the Seven Fishes, a traditional Italian banquet.

But with business at the family’s pizzeria in Harrison, N.Y., pinched, the Lombardos scaled back. Each of the 18 adults and seven grandchildren was served the seven courses, but the grownups survived on one lobster tail instead of two. The crowd shared a few dozen clams on the half shell instead of 10 dozen or more, the shrimp cocktails were more modest, the linguini had fewer blue crabs, and there was a bit less scungilli. There were fewer Alaskan king crab legs, too.

“We’re not getting a lot of businessmen taking their clients to lunch,” Sofia Lombardo, a daughter of one of the founders, said of her family’s restaurant, Sofia’s Pizzeria. “They just have slices instead of chicken parmesan.”

The tug of tough times also led the Lombardos to trim their gift-giving. Last year, the adults traded “secret Santa” gifts worth about $75 each. This year, they decided to limit each gift to $30.

Ms. Lombardo’s parents and one of her brothers did away with swapping gifts entirely. “My family always went to the nines,” she said. “Is it weird not opening gifts on Christmas Day? Yes. But the catering business is not where it’s been in the last few years.”

Even with less, there were countless attempts to make Christmas as happy as it has always been. Parents, in particular, took pains to give their children an abundance of gifts, even while watching the price tag.

Last year, Veronica Tyms bought 30 presents for cousins, in-laws, friends and their children. This year, she chopped her list in half and fully expected the would-be recipients to do the same. “We didn’t have to talk about it,” said Ms. Tyms’s friend Margaret Gregory, who joined her this week on a bargain-hunting trip to the Target store in the Atlantic Terminal Mall in Brooklyn. “People just understood.”

Both women, however, still showered their children with presents. Ms. Gregory ticked off the list for her 18-year-old daughter: “clothes, movies, perfume, makeup.” Ms. Tyms bought gifts for her 8-year-old son and more than a dozen other children of friends and relatives.

“My son still believes in Santa Claus,” she said. “I’m not ready to change that yet.”

Ed Chin of Greenwich, Conn., who landed at job at China Merchants Bank in September after being out of work for six months, skipped the usual trip to North Carolina to visit his in-laws and to golf, and he canceled his family’s traditional Champagne brunch. Rather than expensive gifts for each of their four children, ages 9 to 14, Mr. Chin and his wife, Julie, bought an Xbox video game console for them to share.

“Even people in Greenwich have to tighten up,” Ms. Chin said of her wealthy hometown. “This is not the time to spend money on this kind of stuff.”

Dominic Giangrasso, who runs the computer systems at ConEdison Solutions, hooked up a Web camera to his flat-panel television so that his pregnant daughter, who lives in Massachusetts, could watch Christmas dinner at his home in Westchester County rather than spend money on traveling there.

The Rev. Jos Kandathikudy, the priest at St. Thomas Syro Malabar Catholic Church in the Bronx, said that last year he walked from the rectory through the neighborhood to admire the fanciful decorations. This year, he said, the streets were mostly dark.

“Businesses and residences both; I think people just want to and need to save money — everything is reduced,” he said. “But this is not the meaning of Christmas. It is not about lights and presents.”

Father Kandathikudy was one of many ministers to preach about how the tough economic times could help people focus on the religious meaning of Christmas.

One parishioner at the Church of the Ascension on West 107th Street simply handed over $500 to the Rev. John Duffell last week, saying only that someone needed it more than he did.

And at the Church of Saint Raymond on Castle Hill Avenue in the Bronx, one altar girl had trimmed her wish list.

“My daughter understood that things were difficult this year,” said Maria Gonzalez, 40, as she walked into the noon Mass at the church, beaming as her daughter, Jessica Garcia, led the processional. “She loves music and has worked so hard to practice, so all she wanted was a keyboard. She wants to play music to serve God, and I want to help her in that.”

Ralph Blumenthal and Kareem Fahim contributed reporting.

In Season of Recession, New Ways to Celebrate, NYT, 26.12.2008, http://www.nytimes.com/2008/12/26/nyregion/26xmas.html?hp

Officials Vow to Act Amid Signs of Long Recession

December 2, 2008
The New York Times
By EDMUND L. ANDREWS

WASHINGTON — The United States economy officially sank into a recession last December, which means that the downturn is already longer than the average for all recessions since World War II, according to the committee of economists responsible for dating the nation’s business cycles.

In declaring that the economy has been in a downturn for almost 12 months, the National Bureau of Economic Research confirmed what many Americans had already been feeling in their bones.

But private forecasters warned that this downturn was likely to set a new postwar record for length and likely to be more painful than any recession since 1980 and 1981.

“We will rewrite the record book on length for this recession,” said Allen Sinai, president of Decision Economics in Lexington, Mass. “It’s still arguable whether it will set a new record on depth. I hope not, but we don’t know.”

As if adding a grim punctuation mark to what could become the worst holiday shopping season in decades, the Dow Jones industrial average plunged nearly 680 points, or 7.7 percent, to 8,149.09.

Part of the drop may have reflected profit-taking after last week’s surge in stock prices, but it also came in response to new data showing that manufacturing activity dropped to its lowest point in 26 years.

Both the chairman of the Federal Reserve, Ben S. Bernanke, and the Treasury secretary, Henry M. Paulson Jr., vowed to use all the tools at their disposal to restore a measure of normalcy to the economy.

Mr. Bernanke, speaking to business leaders in Austin, Tex., said it was “certainly feasible” to reduce the Fed’s benchmark overnight lending rate below its current target of 1 percent, signaling that the central bank would lower the rate at its next policy meeting in two weeks.

And in an unusually explicit follow-up, Mr. Bernanke said the central bank was also prepared to use the “second arrow in our quiver” if policy makers have already reduced that rate, called the federal funds rate, to nearly zero.

Among the options, he said, the Fed can start aggressively buying up longer-term Treasury securities. That would have the effect of driving down longer-term interest rates. The Fed is already doing something of that sort, by buying up commercial debt from private companies as well as mortgage-backed securities guaranteed by Fannie Mae and Freddie Mac.

Investors reacted to Mr. Bernanke’s remarks by pouring money into longer-term Treasury bonds, which briefly pushed already-low yields on 10-year and 30-year Treasuries to new record lows. Investors appeared to be reacting mainly to the clear signal from Mr. Bernanke that the Fed was preparing to pump money into the economy by buying up longer-term bonds.

The yield on 30-year Treasuries declined 0.23 percentage points, to 3.21 percent, and briefly touched a record low of 3.18 percent. The yield on 10-year Treasuries fell 0.19 percentage points, to 2.73 percent.

In normal times, those kinds of yields would automatically mean lower interest rates on mortgages, automobile loans and other forms of consumer debt. But the credit markets have been stalled by continued fears among financial institutions about who can be trusted for even short-term transactions, so the effects on home loans and other purposes could remain modest.

Mr. Paulson, in a speech in Washington on Monday, vowed to look at new ways to use the $700 billion bailout fund that Congress approved in October.

In Congress, Democratic leaders are drawing up a huge new fiscal stimulus plan that could total more than $500 billion. Democrats said they planned to have the measure ready as soon as Congress convened with a strengthened Democratic majority in January. Meanwhile, Democrats could take up legislation next week that would provide financial assistance to the automobile industry.

President Bush, increasingly the odd man out in the last weeks of his term, said his administration would do whatever was necessary to safeguard the system.

“I’m sorry it’s happening, of course,” Mr. Bush said in an interview with ABC’s “World News” on Monday. “Obviously, I don’t like the idea of Americans losing their jobs or being worried about their 401(k)s. On the other hand, the American people got to know that we will safeguard the system.”

But many analysts said they saw no signs yet that the economy was nearing a bottom. American consumers, who for decades have been the country’s tireless source of growth when all else failed, have cut back on their spending more sharply than at any time since the early 1980s.

Consumer spending plunged in the third quarter of this year, and the evidence so far suggests they may pull back even more in the fourth quarter. Consumers account for about 71 percent of American economic activity, and their most recent retreat is occurring even though gasoline prices have dropped by almost half in the last month and left people with more money in their pockets.

In officially declaring that the current recession began in December 2007, the National Bureau of Economic Research paid little heed to the fact that the nation’s gross domestic product actually expanded slightly in the first and second quarters of 2008.

In explaining its decision, the bureau noted that a wide variety of other indicators, including payroll employment and personal income, peaked in December 2007. Payroll employment has dropped every month since then. Personal income declined and then zigzagged until June, and has declined steadily since then.

The gross domestic product often fluctuates widely from quarter to quarter, but it also received a somewhat artificial boost from the tax rebate checks that the government mailed out last spring and early summer as a temporary stimulus.

Ed McKelvey, an economist at Goldman Sachs, said the bureau’s starting point of last December for the recession was close to Goldman’s own estimates.

The announcement means that the downturn is already one year old. That is longer than the average length of 10.5 months for recessions since World War II. The current record for the longest recession over the last half-century is 16 months, which was reached in both the downturns of 1973-74 and 1980-81.

Mr. Sinai of Decision Economics said it was hard to imagine that this downturn would have hit bottom within the next four months, which would make it all but certain to set a new record.

Mr. Paulson, who teamed up with the Fed last week to begin a new $200 billion program to buy up consumer debt and small-business loans, said he had committed all but about $20 billion of the first $350 billion Congress authorized for the bailout fund.

“We are actively engaged in developing additional programs to strengthen our financial system so that lending flows to our economy,” Mr. Paulson said in his speech. “We are continuing to examine potential foreclosure mitigation ideas that may be an appropriate” use of the funds.

Democratic lawmakers have sharply criticized Mr. Paulson for refusing to use any of the money yet for reducing foreclosures. Sheila C. Bair, chairwoman of the Federal Deposit Insurance Corporation, warned last month that as many as 4.5 million people were likely to lose their homes through foreclosure. Ms. Bair proposed a plan that she said could prevent about one-third of those foreclosures.

Officials Vow to Act Amid Signs of Long Recession, NYT, 2.12.2008, http://www.nytimes.com/2008/12/02/business/economy/02econ.html

Recession is official, economists say

1 December 2008
USA Today
By Barbara Hagenbaugh

WASHINGTON — It's official: The USA is in a recession that started in December 2007.

The committee of economists responsible for determining the dates of business cycles said Monday that they met by conference call on Friday, Nov. 28 and "the committee determined that a peak in economic activity occurred in the U.S. economy in December 2007.

" The peak marks the end of the expansion that began in November 2001 and the beginning of a recession."

December 2007 is the last month in which U.S. employers added jobs. Since then, businesses have shed workers.

The responsibility for defining U.S. recessions falls to economists who are members of the Business Cycle Dating Committee at the private, non-profit National Bureay of Economic Ressearch in Cambridge, Mass. The organization has been dating business cycles since 1929 and first formed the all-volunteer committee 30 years ago.

While recessions are often described as two consecutive quarters of decline in economic output, that's not the official definition.

Instead, the panel looks at a multitude of economic data, including gross domestic product, income, employment, industrial production and retail sales. The economy contracted in the July-September quarter at the fastest pace in seven years.

Panel members include Robert Hall of Stanford University, Martin Feldstein and Jeffrey Frankel of Harvard University, Robert Gordon of Northwestern University, James Poterba of MIT, David Romer of the University of California, Berkeley, and Victor Zarnowitz of the Conference Board.

Private economists months ago shifted their focus from whether the economy was in a recession to how long the downturn will last and how deep the slump will be.

As bad news on the economy continues to pour in, those forecasts become more dire.

Monday, the Institute for Supply Management said its gauge of manufacturing activity fell in November to the lowest level in 26 years as measures of orders, production and jobs all fell.

The private group said its index fell to 36.2 last month, from 38.9 in October and 50 a year earlier. November's number was the lowest since May 1982, when the economy was in one of the longest post-World War II recessions.

A reading below 50 indicates contraction in the manufacturing sector; readings above 50 indicatge expansion. The gauge has been below 50 for four months.

"It's going to take a few months for most of these things to find a bottom," says Norbert Ore, who chairs the ISM manufacturing committee.

President Bush, expressing remorse that the global financial crisis has cost jobs and damaged retirement accounts, told ABC's "World News" in an interview that he will support additional federal intervention, if necessary, to ease the recession. The interview will air Monday night.

Contributing: Associated Press

Recession is official, economists say, UT, 1.12.2008, http://www.usatoday.com/money/economy/2008-12-01-recession-official_N.htm

economy > banks > Bank of England

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