12/20/2010 –

US Follows Japan: The Rise of Freeters, aka Temps –  Yves Smith – One of the post-bubble era trends in Japan that has caused consternation within the island nation is the rise of an employed underclass. The old economic model was lifetime employment, even though that was a reality observed more at large companies than in the economy overall. Nevertheless, college graduates could expect to find a job without much difficulty and look forward to a stable career if they performed reasonably well.  In the new economic paradigm, wages are compressed among full-time salaried workers. And even worse from a societal standpoint is the rise of “freeters” or workers hired into temporary jobs. Some of them can work for the same company for a very long time, but they are not only paid less, but are also not in the hierarchy of permanent worker. Many become freeters right out of college, and are never able to get back on track with their peers, since companies in Japan, as in the US, prefer to hire new college or professional school graduates into their entry level positions. Many freeters can’t afford to live by themselves, and therefore become “parasite singles” staying with their parents. The delay in or inability to support oneself further suppresses Japan’s birthrate, worsening its demographic crisis. A recent article by Charles Hugh Smith depicts the rise of freeters as directly related to growing income disparity:

 Serious Mental Health Needs Seen Growing at Colleges – Rushing a student to a psychiatric emergency room is never routine, but when Stony Brook University logged three trips in three days, it did not surprise Jenny Hwang, the director of counseling. It was deep into the fall semester, a time of mounting stress with finals looming and the holiday break not far off, an anxiety all its own.  On a Thursday afternoon, a freshman who had been scraping bottom academically posted thoughts about suicide on Facebook. If I were gone, he wrote, would anybody notice? An alarmed student told staff members in the dorm, who called Dr. Hwang after hours, who contacted the campus police. Officers escorted the student to the county psychiatric hospital.  Stony Brook is typical of American colleges and universities these days, where national surveys show that nearly half of the students who visit counseling centers are coping with serious mental illness, more than double the rate a decade ago. More students take psychiatric medication, and there are more emergencies requiring immediate action.

Lloyds writes off half of Irish loans – Lloyds Banking Group and Royal Bank of Scotland shares tumbled on Friday after Lloyds said it had effectively written-off more than half of its outstanding loans to Irish borrowers. In a statement, Lloyds said it had seen a "further significant deterioration in market conditions" in Ireland and that a further 10pc of its £26.7bn portfolio of Irish loans would be impaired by the end of the year.  "We are concerned that any economic recovery in the Republic of Ireland may take longer to achieve, and that asset prices will remain depressed for longer than previously anticipated," said Lloyds.

    http://twitter.com/wonkmonk_

http://www.ritholtz.com/blog/2010/12/fun-with-google-ngram-viewer/

Self-righteous Germany must accept a euro-debt union or leave EMU – If Germany and its hard-money allies genuinely wish to save the euro – which is open to doubt – they should stop posturing, face up to the grim imperative of a Transferunion, and desist immediately from imposing their ruinous and reactionary policies of debt deflation on southern Europe and Ireland.  One can sympathise with the German people. Their leaders in the 1990s told them "famine in Bavaria" was more likely than the preposterous suggestion that Germany might have to bail out countries as a result of EMU.  But events have moved on and, rather than striking tones of Calvinist righteousness, the Teutonic bloc might do well to acknowledge equal responsibility for the capital flows, trade imbalances, and cumulative errors that caused the EMU debacle, and therefore accept that the honourable course is to meet the struggling south halfway.  Readers may have a better menu, but here is my own rough sheet: a debt union, funded by Eurobonds; a calibrated jubilee on traditional IMF lines for Ireland, Greece, Portugal, and if necessary Spain, to occur in parallel with austerity cuts; and a monetary blitz by the European Central Bank to prevent the victims tipping into core deflation, even this stokes inflation of 4pc or 5pc in northern Europe.

Max Blumenthal, The Great Fear – Moments of imperial and economic decline — according to a recent poll, 65% of Americans now believe this country to be “in a state of decline” — can also be periods of cultishness, even of madness incarnate.  Such a mood now seems to be spreading through the United States.  It’s not so surprising, really.  Since the attacks of September 11, 2001, fear has been injected into this “homeland” like a drug and a penumbra of official secrecy has settled over the land in a way that makes the secrecy of the Cold War years (when this country faced a superpower, not a ragtag set of jihadis, guerrillas, and terrorists) seem like an era of sunshine.  In an atmosphere of swirling fears and hysteria amid declining living conditions, “explanations” that at other times might have remained confined to tiny crews of conspiracy-mongers can suddenly gain a patina of plausibility and so traction.  No wonder then that, as hard times hit, as the financial system seemed on the verge of collapse, as unemployment soared and a massive wave of home foreclosures swept into view, increasing numbers of Americans became prey to any wacky explanation for our troubles, none more so than the idea that Islam was somehow responsible, that mosques and Islamic centers meant for a sliver of a minority here were capable of imposing anything, no less a way of life on this country, or that Sharia law (of all things) might somehow worm its way into state legal systems, or that YouTube was a hotbed of terrorism worthy of suppression, or… well, you name it

51 million, mostly lower-income, will do worse under new tax law – Consumer Reports –  The federal tax bill passed by Congress yesterday includes some extras for the middle class and lots of goodies for the wealthy. But individuals making less than $20,000 and households making less than $40,000 a year will actually get less tax relief in 2011 than they got in 2010 and 2009. That’s because the Making Work Pay credit, a temporary tax credit that’s been in effect for the past two years, is going away as of January 1. That credit provides up to $400 per individual, $800 per household, for all eligible workers. And it adds more to the pockets of households making between $20,000 and $40,000 than the new, 2-percent drop in the Social Security payroll tax. Why is the payroll-tax cut not as beneficial to those workers? Because at lower income levels, a 2-percent decline doesn’t add up to much. The Tax Policy Center, a non-profit, non-partisan research organization, estimates that 51 million households, including many making $40,000 or less, would do worse under the new law.

My new year’s resolution is to live indoors -Readers, I need to raise money for rent or I will be on the street for real. This blog was one of the first to question Michelle Rhee’s alledged brilliance. We have also supported local groups like Empower DC. Both here and at Corrente, this blog took the lead on advocating Medicare for All. There is an opportunity cost to all this blogging. Now I really need the support from my readers. I hate to write this when so many other bloggers are in trouble and when our readers are coming under hard times. But I am facing the worst financial crisis of my life.If you liked my past work on health care, net neutrality, and Versailles, please throw some change. Every little bit helps.My new year’s resolution is to live indoors. Please click here to support this blogger.

Room at the inn for bloggers in need –  A lot of us are in need, but I asked around, and it looks like these are some people that immediate assistance would really help.  Please do what you can. Marginal is not insignificant. It’s cold out there! Go read.

 

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