At 2 p.m on Thursday, the final day of the annual wage negotiations that were going nowhere, Bruno Ferrec, the man in charge of the nine Fnac stores in Paris, was “retained” by 120 of his employees at a conference room at the Hotel Ibis in Paris. “For now, we do not know when we will let him go,” said the representative of the CGT, one of the unions involved in the negotiations. And the police did nothing.
One of the hardest things to get in this world is a truthful, or at least a somewhat realistic, or at the very least a not totally fabricated unemployment number. Every country has its own bureaucratic madness in pursuing obfuscation. And Germany is no exception. Official unemployment dropped to a two-decade low in January, but a recreational dive into the Federal Labor Agency’s monthly report reveals another story.
Hullabaloo broke out after the Bureau of Labor Statistics reported that a surprisingly robust 243,000 jobs were created in January, and that the unemployment rate was 8.3%. Cynics, academics, BLS heretics, hype mongers, and politicians waged a media battle over these numbers that President Obama serenely trotted out as validation of his policies. Even Rush Limbaugh jumped into the fray. Alas, suddenly, there is a sharp deterioration.
Supercar enthusiasts went into a tizzy when Honda announced that it would bring its Acura NSX back to life. Design and manufacturing would be shifted from Japan to Ohio. And much of the production would be exported. It won’t add much volume to Honda’s production, but it will be a technology showcase. And a precursor that the math of manufacturing in America is changing.
Consumer optimism has been rising from the morose multi-year low in August and has reached levels not seen since, well, May. It whipped hope into a froth. Rising confidence would pump up consumer spending, which would pump up everything else. But the inexplicable American consumer, the toughest creature out there that no one has been able to subdue yet, had other plans.
For medium distances, high-speed rail is faster than flying. It’s hassle-free and comfortable. And it benefits the economy. But not the way California is doing it. The hullabaloo about funding the skyrocketing costs of linking LA and the Bay Area ignores a huge economic problem: once again, taxpayers are asked to create jobs overseas. Contenders: Germany, Japan, France, and China.
The US trade deficit with China will hit a record $300 billion for the year, a big hit to the economy. It’s politically convenient to blame China, particularly its yuan policy. But the driver is a broad strategy by US corporations to shift an increasing range of economic activities to China. And now a trade war has broken out. Politicians, have a word with your corporate sponsors!
An ominous trend picks up speed: the middle class is shriveling. In 1980, 60% of Californians lived in middle-income families. By 2010, only 47.9% did, according to a study by the Public Policy Institute of California. Main culprits: declining incomes and disappearing jobs. And where the heck is the recovery?
Consumer confidence indices have collapsed to levels not seen in years or even decades. Yet the toughest creature out there that no one has yet been able to beat down struck again. Consumer spending increased at an annual rate of 2.4% during the third quarter, though the mood has become outright morose since.
At $46 billion in August and a hair-raising $376 billion year to date, the trade deficit is a powerful descriptor of what’s wrong with the U.S. economy. By year end, it will amount to half a trillion. Economic activity gone overseas. The cause: an ancient and valid business principle that is now harming the overall economy.