Bank Nationalization in Two Countries; Economic Newsbits

The Ultimate Cadillac-Driving Welfare Queens

Your Demon observes that the UK has recently nationalized Northern Rock Bank due to the worldwide subprime mortgage debacle; but here at home in the US we call it by a different name ~ corporate welfare. Both amount to use of taxpayer funds to bail out private entities. So whose method gives greater control and better returns to the "investors?"

Just askin' because I don't know. Does the US retain any say in how/where the taxpayers' bailout funds go, or is it just, in effect, a giveaway with very little required from the beneficiary in terms of "behavior adjustment" and/or invasion of privacy?

A welfare queen is a welfare queen, hey ~ ?

"Banks in the United States have been quietly borrowing 'massive amounts' from the U.S. Federal Reserve in recent weeks, using a new measure the Fed introduced two months ago to help ease the credit crunch, according to a report on the web site of The Financial Times.

"The newspaper said the use of the Fed's Term Auction Facility (TAF), which allows banks to borrow at relatively attractive rates against a wide range of their assets, saw borrowing of nearly $50 billion of one-month funds from the Fed by mid-February.

"The Financial Times said the move has sparked unease among some analysts about the stress developing in opaque corners of the U.S. banking system and the banks' growing reliance on indirect forms of government support."

US: Banks Quietly Borrow $50 Billion from the Fed: http://www.reuters.com/article/newsOne/idUSN1821384420080219

UK nationalization: http://news.bbc.co.uk/2/hi/uk_news/magazine/7250668.stm

Unemployment figures:

In other recent financial news, a report by McClatchy News questions Bushco's silly bromide that unemployment isn't really as bad as all that.

No, it's worse, because the long-term unemployed, the underemployed, and people holding more than one job aren't counted appropriately.

"The Bush administration acknowledged the contraction, but pointed to the national unemployment rate of 4.9 percent to say that the labor market wasn't a harbinger of recession.

"A closer look at unemployment data by McClatchy, however, found that jobless Americans are spending more time looking for work and that those who can't find work now make up a greater share of the unemployed.

"Several measures of unemployment, in fact, show that the workforce is under the kind of stress not seen since March 2001, when the U.S. economy entered a nine-month recession, followed by a so-called jobless recovery.[...]

[W]hen Americans unemployed for 27 weeks or longer are measured as a share of the total number of unemployed, the story is very different.

"The long-term unemployed amounted to 18.3 percent of all the unemployed in January. That means that while overall unemployment is low, almost one in five unemployed workers has been jobless for six months or more."

A spokesman for the Conservative Heritage Foundation poo-poos the notion that Bushco is jiggering figures to make things look better than they really are, saying that including lost manufacturing jobs is unfairly skewering the picture. "It's kind of hard to point at that to say that this is a tremendously serious problem here," he said, suggesting that the long-term unemployment picture is skewed by unemployment in troubled states that have lost manufacturing jobs."

However, "If there's disagreement over what measure of chronic unemployment tells the real story, other gauges developed by the Labor Department's Bureau of Labor Statistics show a strain on the quality of employment.

"The gauges came into use in 1994 to measure things such as part-time workers who are unable to get full-time jobs, and Americans who aren't employed or aren't looking but said they'd take jobs if they became available.

"Those groups of workers together accounted for 9 percent of the labor force in January. In March 2001, at the start of the last recession, they were 7.6 percent of the workforce.
In addition, in January, 4.7 million people were working part time in the United States, up sharply from about 3.3 million in March 2001.

"During the last slowdown, the number passed 4 million in the final months of that recession and fell below that only once since, in April 2006.

"'If you did a survey of people just walking up the street (they'd say they could find work) ... it may not be what they want, but they probably could get a job,' said Sharon Morgan, an area director of a state workforce center in Liberty, S.C., a region hit hard by the closure of textile mills.

"The number of multiple jobholders nationwide exceeded 7.6 million in 2007, the highest number since 1999. As a percentage of the employed, they made up 5.2 percent of workforce, down from 5.8 percent in 1999."

http://www.mcclatchydc.com/244/story/28014.html

Health Insurers Rigging the Game? For those of you fortunate enough to have a job with somewhat decent health insurance benefits, this news is for you:

New York State is investigating the possibility that health insurance "consumers" have been getting systematically ripped off when it comes to compensation for services outside "preferred provider networks," and that at least one company responsible for collecting data by which those determinations are made has a conflict of self-interest. http://www.nytimes.com/2008/02/18/opinion/18mon1.html

For those of you who don't, this won't tell you anything you don't already know ~ the stress hormones generated by poverty are poisonous to developing minds (I'd argue that they don't have any salutary effects on adult ones, either).

Your Demon invites you to read it anyway. There's an election on. Vote your conscience. And your outrage. http://www.nytimes.com/2008/02/18/opinion/18krugman.html