No wonder Christina Romer confessed bewilderment at the scope of American job losses in her valedictory speech as head of the president's Council of Economic Advisers last week. American employers have responded to recession with far more layoffs than their counterparts in comparable or even worse situations in other nations.

One reason for this anomaly is that productivity has surged in the United States, enabling employers to maintain output with far fewer workers. For those workers still on the job, though, this story seemingly should have a happy ending: Sustained production with fewer workers should equal higher wages, should it not?

It should, but it hasn't. As Andrew Sum and Joseph McLaughlin of Northeastern University's Center for Labor Market Studies have documented, pretax corporate profits increased $388 billion from the low point of the current recession, the second quarter of 2009, to the third quarter thereafter, while wages increased just $68 billion. At a comparable point in the 1981-82 recession, corporate profits came to just 10 percent of the combined uptick in profits and wages. This time around, they amount to 85 percent.

If you've wondered how big banks' profits have rebounded to pre-crisis levels and how American corporations have come to be sitting on $1.8 trillion in cash -- even as unemployment remains well above 9 percent -- wonder no more. They have pocketed their revenue, neither resuming lending (if they're banks), nor rehiring laid-off workers nor giving raises to those who have continued to work for them.

A similar tale can be told about employers and health insurance, the costs of which have continued to rise. It's not the employers, however, who have borne those increases. A survey, released Thursday by the Kaiser Family Foundation and the Health Research & Educational Trust, shows that employee premiums rose 13.7 percent over last year, while the amount that employers contributed dropped -- dropped! -- 0.9 percent.

Only a purblind ideologue could miss the pattern here. American employers -- more than employers in other nations and more than American employers in earlier downturns -- have imposed the costs of the recession and, increasingly, the costs of doing business, on their workers, and kept for themselves damn near all the proceeds from doing business.

What gives? Are American employers meaner than their European counterparts and American forebears? I doubt it. The difference is that American workers have markedly less power than their European counterparts and their American forebears.

That's partly because unemployment remains so high here. More fundamentally, though, the U.S. private sector is almost entirely -- 93 percent -- nonunion. Unlike European workers, unlike their own parents and grandparents who lived in a much more heavily unionized America, U.S. workers are now powerless to stop their employers from pocketing all the change.

The source of this problem is outlined in two reports scheduled for release Monday from two very different organizations, the liberal Human Rights Watch, and Freedom House, an organization with a staunch Lane-Kirkland-esque antipathy toward authoritarian regimes left and right: Through the weakness of our labor laws, the reports say, private-sector American workers can no longer form unions. Human Rights Watch documents how corporations that are model (and highly profitable) employers in Europe and frequently collaborate with unions there descend to American employer norms -- denying workers the right to join unions -- when they come over here. Freedom House, citing the near-impossibility of forming unions in this country, laments that the United States cannot be classed among the 41 nations that afford their workers full freedoms.

A union-free America. Growth down a little, employment down a lot. Profits and productivity up, wages flat. Health-care costs up for workers, down for employers. The return of a thriving middle class? Dream on.

And a happy Labor Day, one and all.

meyersonh@washpost.com

Americans are less forgiving. In recent polls, 60 percent of those surveyed thought the war in Iraq was a mistake, 70 percent thought it wasn’t worth American lives, and only a quarter believed it made us safer from terrorism. This sour judgment is entirely reality-based. The war failed in all its stated missions except the toppling of Saddam Hussein.

While we were distracted searching for Iraq’s nonexistent weapons of mass destruction, Iran began revving up its actual nuclear program and Osama bin Laden and his fanatics ran free to regroup in Afghanistan and Pakistan. We handed Al Qaeda a propaganda coup by sacrificing America’s signature values on the waterboard. We disseminated untold billions of taxpayers’ dollars from Baghdad’s Green Zone, much of it cycled corruptly through well-connected American companies on no-bid contracts, yet Iraq still doesn’t have reliable electricity or trustworthy security. Iraq’s “example of freedom,” as President Bush referred to his project in nation building and democracy promotion, did not inspire other states in the Middle East to emulate it. It only perpetuated the Israeli-Palestinian logjam it was supposed to help relieve.

For this sad record, more than 4,400 Americans and some 100,000 Iraqis (a conservative estimate) paid with their lives. Some 32,000 Americans were wounded, and at least two million Iraqis, representing much of the nation’s most valuable human capital, went into exile. The war’s official cost to U.S. taxpayers is now at $750 billion.

Of all the commentators on the debacle, few speak with more eloquence or credibility than Andrew Bacevich, a professor of history and international relations at Boston University who as a West Point-trained officer served in Vietnam and the first gulf war and whose son, also an Army officer, was killed in Iraq in 2007. Writing in The New Republic after Obama’s speech, he decimated many of the war’s lingering myths, starting with the fallacy, reignited by the hawks taking a preposterous victory lap last week, that “the surge” did anything other than stanch the bleeding from the catastrophic American blundering that preceded it. As Bacevich concluded: “The surge, now remembered as an epic feat of arms, functions chiefly as a smokescreen, obscuring a vast panorama of recklessness, miscalculation and waste that politicians, generals, and sundry warmongers are keen to forget.”

Bacevich also wrote that “common decency demands that we reflect on all that has occurred in bringing us to this moment.” Americans’ common future demands it too. The war’s corrosive effect on the home front is no less egregious than its undermining of our image and national security interests abroad. As the Pentagon rebrands Operation Iraqi Freedom as Operation New Dawn — a “name suggesting a skin cream or dishwashing liquid,” Bacevich aptly writes — the whitewashing of our recent history is well under way. The price will be to keep repeating it.

In the punditry business, it's considered bad form to question the essential wisdom of the American people. But at this point, it's impossible to ignore the obvious: The American people are acting like a bunch of spoiled brats.

This is not, I repeat not, a partisan argument. My own political leanings are well-known, but the refusal of Americans to look seriously at the nation's situation -- and its prospects -- is an equal-opportunity scourge. Republicans got the back of the electorate's hand in 2006 and 2008; Democrats will feel the sting this November. By 2012, it will probably be the GOP's turn to get slapped around again.

The nation demands the impossible: quick, painless solutions to long-term, structural problems. While they're running for office, politicians of both parties encourage this kind of magical thinking. When they get into office, they're forced to try to explain that things aren't quite so simple -- that restructuring our economy, renewing the nation's increasingly rickety infrastructure, reforming an unsustainable system of entitlements, redefining America's position in the world and all the other massive challenges that face the country are going to require years of effort. But the American people don't want to hear any of this. They want somebody to make it all better. Now.

President Obama can point to any number of occasions on which he has told Americans that getting our nation back on track is a long-range project. But his campaign stump speech ended with the exhortation, "Let's go change the world" -- not, "Let's go change the world slowly and incrementally, waiting years before we see the fruits of our labor."

And one thing he really hasn't done is frame the hard work that lies ahead as a national crusade that will require a degree of sacrifice from every one of us. It's obvious, for example, that the solution to our economic woes is not just to reinflate the housing bubble. New foundations have to be laid for a 21st-century economy, starting with weaning the nation off of its dependence on fossil fuels, which means there will have to be an increase in the price of oil. I don't want to pay more to fill my gas tank, but I know that it would be good for the nation if I did.

The richest Americans need to pay higher taxes -- not because they're bad people who deserve to be punished but because they earn a much bigger share of the nation's income and hold a bigger share of its overall wealth. If they don't pay more, there won't be enough revenue to maintain, much less improve, the kind of infrastructure that fosters economic growth. Think of what the interstate highway system has meant to this country. Now imagine trying to build it today.

Eugene Robinson

Washington Post   9-3-2010

An Oval Office speech is supposed to be an important event. This was only Obama’s second, after all, and if he asks us all to interrupt our schedules and listen to what he has to say, then he at least ought to say something. In this, he dismally failed. We knew that American has ended its combat role in Iraq. We knew that Iraq had been turned over to the Iraqis. We knew our troops are brave, that they have sacrificed much and that over 4,000 of them had died. This is all worth saying -- but not saying and saying and saying.

Obama did have his moment. He extended a hand to his predecessor, George W. Bush, and he said it was “time to turn the page.” This was Obama at his most generous, and it was a theme of his that deserves praise. As a nation, we suffer a kind of slow arsenic poisoning from toxic partisanship. But the best he could say about Bush is that he, too, loved the troops and his country. This I, for one, never doubted. But these are also the qualities of a Boy Scout -- nice, but not quite presidential. Bush was a dismal president.

The love of troops has become the mindless trope of our times. It squelches both thought and criticism. And while the troops do deserve support, surely the best way to support them is to make sure that they are used wisely. This was not the case in Iraq, and Tuesday the president did not convince that it is in the case in Afghanistan. This was a bad speech, lacking both content and emotional wallop. The best that can be said for it is that it suited the Iraq war itself. Like the war, it should not have been undertaken.

By Richard Cohen  |  August 31, 2010; 9:18 PM ET

Bill Pearlman

Editorial | Appreciations

Frank Kermode

 

By VERLYN KLINKENBORG

 

Published: August 19, 2010

I met Frank Kermode, who died Tuesday at age 90, more than 20 years ago over coffee at Columbia University, where he was teaching. I had come to propose writing a profile about him, a project that went nowhere mainly because the magazine I had hoped to write for didn’t write about literary critics in those days. Kermode didn’t dismiss the idea, and so I heard, that afternoon, about the Isle of Man, where he was born in “a herringless winter,” as he later wrote.

 

I wanted to write about Kermode because I admired him. In my years in academia, I had watched the study of literature go down any number of rabbit holes — chasing after theory and ideology and system. The very point of reading and talking about what we read seemed to have been lost in a kind of strangulating self-seriousness and alienation. That’s where Kermode came in.

He was drawn to the entanglements of the text and its rational mysteries rather than some scaffold of theory. In his many books and essays, he protected the reader’s freedom to be interested in whatever was interesting. That meant writing a prose that was never wholly academic and over the years became more and more open to the intersection of literature and the lives we’re actually living.

Kermode will be remembered for many books, including “The Sense of an Ending” (1967), “The Classic” (1975), and “Shakespeare’s Language” (2000). He’ll also be remembered for the engaging literary essays, disguised as reviews, he wrote for the London Review of Books in his later years. He was the most agile of readers, and he reminded us constantly that readers, like poems and novels, hate to be pinned down.

In a review published in 2001, Kermode — a lifelong Shakespearean — sums up one of the reasons he loved Shakespeare: “To be able to devote one’s life to art without forgetting that art is frivolous is a tremendous achievement of personal character.” That was Kermode’s achievement, too.

Social Security’s attackers claim that they’re concerned about the program’s financial future. But their math doesn’t add up, and their hostility isn’t really about dollars and cents. Instead, it’s about ideology and posturing. And underneath it all is ignorance of or indifference to the realities of life for many Americans.

About that math: Legally, Social Security has its own, dedicated funding, via the payroll tax (“FICA” on your pay statement). But it’s also part of the broader federal budget. This dual accounting means that there are two ways Social Security could face financial problems. First, that dedicated funding could prove inadequate, forcing the program either to cut benefits or to turn to Congress for aid. Second, Social Security costs could prove unsupportable for the federal budget as a whole.

But neither of these potential problems is a clear and present danger. Social Security has been running surpluses for the last quarter-century, banking those surpluses in a special account, the so-called trust fund. The program won’t have to turn to Congress for help or cut benefits until or unless the trust fund is exhausted, which the program’s actuaries don’t expect to happen until 2037 — and there’s a significant chance, according to their estimates, that that day will never come.

Meanwhile, an aging population will eventually (over the course of the next 20 years) cause the cost of paying Social Security benefits to rise from its current 4.8 percent of G.D.P. to about 6 percent of G.D.P. To give you some perspective, that’s a significantly smaller increase than the rise in defense spending since 2001, which Washington certainly didn’t consider a crisis, or even a reason to rethink some of the Bush tax cuts.

So where do claims of crisis come from? To a large extent they rely on bad-faith accounting. In particular, they rely on an exercise in three-card monte in which the surpluses Social Security has been running for a quarter-century don’t count — because hey, the program doesn’t have any independent existence; it’s just part of the general federal budget — while future Social Security deficits are unacceptable — because hey, the program has to stand on its own.

It would be easy to dismiss this bait-and-switch as obvious nonsense, except for one thing: many influential people — including Alan Simpson, co-chairman of the president’s deficit commission — are peddling this nonsense.

And having invented a crisis, what do Social Security’s attackers want to do? They don’t propose cutting benefits to current retirees; invariably the plan is, instead, to cut benefits many years in the future. So think about it this way: In order to avoid the possibility of future benefit cuts, we must cut future benefits. O.K.

What’s really going on here? Conservatives hate Social Security for ideological reasons: its success undermines their claim that government is always the problem, never the solution. But they receive crucial support from Washington insiders, for whom a declared willingness to cut Social Security has long served as a badge of fiscal seriousness, never mind the arithmetic.

And neither wing of the anti-Social-Security coalition seems to know or care about the hardship its favorite proposals would cause.

The currently fashionable idea of raising the retirement age even more than it will rise under existing law — it has already gone from 65 to 66, it’s scheduled to rise to 67, but now some are proposing that it go to 70 — is usually justified with assertions that life expectancy has risen, so people can easily work later into life. But that’s only true for affluent, white-collar workers — the people who need Social Security least.

I’m not just talking about the fact that it’s a lot easier to imagine working until you’re 70 if you have a comfortable office job than if you’re engaged in manual labor. America is becoming an increasingly unequal society — and the growing disparities extend to matters of life and death. Life expectancy at age 65 has risen a lot at the top of the income distribution, but much less for lower-income workers. And remember, the retirement age is already scheduled to rise under current law.

So let’s beat back this unnecessary, unfair and — let’s not mince words — cruel attack on working Americans. Big cuts in Social Security should not be on the table.

Paul Krugman

NY Times , 8-16-10