Chart of the day

According to Eurostat, the statistical office of the European Union,

The euro area (EA17) seasonally-adjusted unemployment rate was 12.0% in February 2013, stable compared with January. The EU271 unemployment rate was 10.9%, up from 10.8% in the previous month. In both zones, rates have risen markedly compared with February 2012, when they were 10.9% and 10.2% respectively.

In February 2013, 5.694 million young persons (under 25) were unemployed in the EU27, of whom 3.581 million were in the euro area. Compared with February 2012, youth unemployment rose by 196 000 in the EU27 and by 188 000 in the euro area. In February 2013, the youth unemployment rate was 23.5% in the EU27 and 23.9% in the euro area, compared with 22.5% and 22.3% respectively in February 2012. In February 2013, the lowest rates were observed in Germany (7.7%), Austria (8.9%) and the Netherlands (10.4%), and the highest in Greece (58.4% in December 2012), Spain (55.7%), Portugal (38.2%) and Italy (37.8%).

Public art of the day

Octavi Serra, Mateu Targa, Daniel Llugany and Pau Garcia, HANDS (January 2013)

Generational theft meme

How did the Tea Party meme of “generational theft” go mainstream?

Last August, Robert Samuelson used the notion in his critique of government entitlement programs.

More recently, Geoffrey Canada, Stanley Druckenmiller, and Kevin Warsh joined forces to announce what they consider to be “several hard truths”:

Government spending levels are unsustainable. Higher taxes, however advisable or not, fail to come close to solving the problem. Discretionary spending must be reduced but without harming the safety net for our most vulnerable, or sacrificing future growth (e.g., research and education). Defense and homeland security spending should not be immune to reductions. Most consequentially, the growth in spending on entitlement programs—Social Security, Medicaid and Medicare—must be curbed.

And, if politicians don’t listen to them, “the greatest casualties will be young Americans of all stripes who want—and need—an opportunity to succeed.”

No, government spending levels are not unsustainable. And there’s no need to reduce discretionary spending or to cut entitlement programs. Not if we decide to get serious about taxing some of the enormous surplus captured by wealthy individuals and large corporations.

But that would mean recognizing the existence of class theft. So, to deflect attention from the hard truth of class injustice, the Samuelsons, Canadas, Druckenmillers, and Warshes of the world have decided to borrow the Tea Party slogan and attempt to focus our attention instead on the supposed struggle between generations.

Chart of the day

source [pdf]

The grim, austerity-induced plight of workers in Europe continues to worsen. The euro area seasonally adjusted unemployment rate was 11.8 percent in November 2012, up from 11.7 percent in October. The European Union unemployment rate was 10.7 percent in November 2012, stable compared with October. In both zones, rates have risen markedly compared with November 2011, when they were 10.6 percent and 10.0 percent respectively.

The situation is particularly stark for young people. In November 2012, 5.799 million young persons (under 25) were unemployed in the Eur0pean Union, of whom 3.733 million were in the euro area. Compared with November 2011, youth unemployment rose by 329 000 in the union and by 420 000 in the euro area. In November 2012, the youth unemployment rate was 23.7 percent in the union and 24.4 percent in the euro area, compared with 22.2 percent and 21.6 percent respectively in November 2011. In November 2012 the lowest rates were observed in Germany (8.1 percent), Austria (9.0 percent) and the Netherlands (9.7 percent), and the highest in Greece (57.6 percent in September 2012) and Spain (56.5 percent).

Fractured Europe

I was asked by the organizers of the upcoming conference on the current crises in Europe to contribute a short response to their draft manifesto.

Here’s what I wrote:

Chart of the day

Unemployment in Europe continues to be an economic and social disaster.

According to Eurostat (pdf), while joblessness in the 17-country euro bloc was 11.4 percent of the working population in August, and thus stable compared to July on a statistical basis, another 34,000 people found themselves out of work. That was the sixteenth straight monthly rise in the number of unemployed workers, leaving 18.2 million people unemployed in the euro zone. Meanwhile, 25.5 million men and women remained unemployed in the entire European Union.

The unemployment rates ranged from a low of 4.5 percent in Austria to a high of 25.1 percent in Spain.

The youth (under 25) unemployment rate was even higher: 22.7 percent in Europe and 22.8 percent in the euro area—meaning, in August, 5.5 million young persons were suffering joblessness in Europe, of whom 3.4 million were in the euro area.

And, according to Reuters, the problem is probably going to get even worse:

Joblessness could go beyond 19 million by early 2014, or about 12 percent of the euro zone’s workforce, according to a new study by consultancy Ernst & Young, predicting that rate to rise to 27 percent in indebted Greece. That compares with 24.4 percent in the country in June, the latest data available.

Chart of the day

As the authors of the report explain,

many households with no tax liability are young or old, meaning that they are likely to be led by students who subsequently will pay taxes or retirees who paid taxes over their lifetimes. The figure [above] illustrates the relationship between age and the odds of paying payroll and income taxes. The graph makes clear that younger individuals—those in their late teens and early 20s—pay taxes at relatively low rates, but that is largely because they are in school and not working. But as they get older and find jobs, the evidence suggests that they will pay taxes. Similarly, after age 60, when more and more Americans are retiring and leaving the labor force, the fraction paying taxes falls rapidly. These retirees have certainly contributed to America’s revenue stream over their lifetimes.

Just when I thought I was out. . .

 

Just when I thought I was out, they pull me back in. . .

• John Cochrane gets all excited by another study in which the authors attempt to show that inequality is not as bad as it seems—because, of course, “I reject the idea that we are a class-based society.”

• Robert Samuelson, in contrast, is quite willing to invoke classes, but only with reference to “those 65 and over” who have been made “into a politically protected class, of which nothing is expected and everything is given.”

• Daren Acemoglu and James Robinson can only see the absences of markets and the role of central planning among the Incas—and who can’t see either collective appropriation of the surplus within Incan-era ayllus or extensive planning by multinational corporations within contemporary markets.

• Steven Hill tries to argue that youth unemployment in Europe is really not as bad as it seems.

And on and on it goes. But I just don’t have the time right now to do more than point out the inanities that mainstream economists are allowed to produce and disseminate.

Generational struggle?!

Marxists are often accused of focusing on class and class struggle and, when things don’t go their way, of invoking false (class) consciousness.

Right-wing economists and politicians, for their part, will do anything they can to avoid talking about class. Instead, they’ve invented a new idea: generational struggle.

Take Robert Samuelson. In his view of the world, young people are being squeezed by the demands of an aging population and they can’t be counted on to vote in their own generational interests.

It’s often said that today’s young will ultimately benefit from this lopsided tax-and-transfer system. Old themselves, they will be similarly subsidized by their young. Doubtful. Sooner or later, the system’s oppressive costs will become so obvious that future benefits will be curbed. Chances are the young will still pay for today’s elderly without themselves receiving comparable support. . .

Younger voters seem clueless about advancing their economic interests. In 2008, 18-to-29-year-olds supported Barack Obama by 34 percentage points. They love his pseudo-youthfulness. Or his positions on other issues (immigration, gay rights) trump economics.

So, what is to be done?

If the young won’t help themselves, their parents and grandparents might. They might champion revising retirement programs. Dream on. Parents and grandparents may be worried about their offspring’s prospects, but they’re not so worried as to sacrifice their own. There are real conflicts between the young and old; so far, the young are losing.

The parallel couldn’t be more complete: for the Samuelsons of the world, the problem isn’t class but generations. There’s a generational conflict, which older people are winning. Young people, for their part, suffer from false (generational) consciousness and end up voting against their (generational) interests.

That creates the space for right-wing economists and politicians to step in and make the appropriate changes in the name of young people: raise the retirement age and cut social security and medicare benefits for working people, while keeping taxes low for wealthy individuals and large corporations.

In the end, generational struggle is just class struggle by another name.

¡Joder!

Spanish unemployment hit its highest level in the second quarter since the Franco dictatorship ended in the mid-1970s.

The jobless rate rose to 24.6 percent from 24.4 percent in the three months to March, the National Statistics Institute said on Friday.

The number of unemployed Spaniards hit 5.7 million, giving the country the highest proportion of people out of work in the European Union. . .

The latest slump, which began in the first quarter, is expected to last into next year while the government said last week it does not expect unemployment to fall much below 22 percent until 2015 at least.

Almost a third of all the euro zone’s jobless are in Spain, with young people the worst hit. According to figures from EU statistics agency Eurostat, half of the country’s people aged under 26 and available for work are unemployed. . .

According to the statistics institute, the number of Spanish homes where all the members are out of work rose by 9,300 in the second quarter to 1.7 million.

How else to put it? Workers in Spain are fucked!