IMF labour market prescriptions condemn workers to worse jobs and more inequality

New report shatters economic myths behind labour reforms.

 ITUC OnLine

s  (April17) IMF labour market advice, as part of the Troika, undermines democracy and risks economic dictatorship across Europe and beyond warned the International Trade Union Confederation (ITUC), and will create more divisions and social unrest, without producing any economic benefits.

The ITUC Frontlines 2013 report, “ Ideology without economic evidence: IMF attacks on collective bargaining” is  released on the eve of the IMF Spring meetings as extreme levels of unemployment and rising inequality continue to dominate the global economy.

Sharan Burrow, ITUC General  Secretary  said the new report provides empirical evidence demonstrating there is no sound economic case for attacking workers’ rights, with its devastating impact on families, communities and economies.

How Congress Could Fix Its Budget Woes, Revisited: The Financial Transactions Tax Alternative

byJack Rasmus

Jack Rasmus

In a February 13 article at Truthout, economist Ellen Brown wrote “How Congress Could Fix Its Budget Woes, Permanently.” The essence of her piece was a suggestion to engage in a quantitative easing (or “QE”) policy for households and consumers. To date, the Federal Reserve, the US central bank, has pumped more than $3 trillion directly into banks, speculators and other investors via its three-plus QE programs since 2009. The result has been minimal economic stimulus and growth, as banks have either sat on the cash, invested it offshore, or loaned it to hedge funds and other speculators, who have pumped up the stock and junk bond markets to near-bubble levels. Brown argues for a populist form of QE for Main Street which would jump start the real economy. Her point is, of course, true. Central banks can pump all the supply of money they want into the economy, but if the demand to hold cash (hoarding) exceeds that supply injection, and if the velocity of money (how fast it circulates) slows dramatically (which it has), then the negative effects of both the demand for money and velocity of money more than negate the injection of money by the central bank. So, Brown argues, why not bypass the banks and investors hoarding or diverting the cash they’re given by QE and the Fed to date and inject money into the economy directly?

Brown’s argument is economically sound but politically difficult to realize. One reason is that monetary policy is perceived as so arcane that it is too easy for bankers and their media talking heads to oppose a given proposal and confuse the issue with the public. Another problem is that monetary solutions typically have long lag times before they have an effect, and the money doesn’t always get to where it was intended to end up.

So, here’s another approach that achieves the same results as the path Brown proposes and is more comprehensible to the layperson and, therefore, likely to gain broad public support and be more difficult for the banksters and their friends to oppose.

I’m referring to a more direct fiscal action – the financial transaction tax.

350 Economists Warn President and Congress: Bad “Grand Bargain” on Deficits Could Kill Recovery.

Economy Needs Growth and Jobs, Not Austerity

 Washington, DC – 350 prominent economists issued a statement on Wednesday warning that “the fragile recovery is threatened by obsessive concern with cutting deficits that has infected both parties.”  The economists from universities and research groups across the U.S. and the world reminded politicians that the U.S. economy in the post-election period is still “marked by mass unemployment, rising poverty, and declining wages.”  And they warned that big spending cuts aimed at reducing deficits could throw the economy back into recession.

Their statement, called Jobs and Growth, Not Austerity, was written by Robert Borosage and Roger Hickey, co-directors of the Institute for America’s Future and by Robert Kuttner, founder of The American Prospect.

The statement and signers can be found at jobsnotausterity.org.

European Trade Unions Mobilise on 14 November

ITUC OnLin

International Trade Union Confederation

The ITUC has pledged its full support to the European trade union movement’s November 14 Day of Action and Solidarity.  Strike actions in Greece, Italy, Spain and Portugal are planned, along with demonstrations and solidarity activities in 23 countries across the continent.  The ETUC-organised mobilisation has been called to strengthen opposition to the destructive austerity policies being pushed by the “Troika” (European Commission, European Central Bank and IMF), and build momentum for “a social compact for Europe with a proper social dialogue, an economic policy that fosters quality jobs, and economic solidarity among the countries of Europe.”

“Unions from around the world were shocked at the briefings from our European affiliates given at the ITUC General Council meeting this month in Jordan.  The Council decided to give full backing to the 14 November actions, recognising that attacks on workers’ rights and the austerity business model in Europe threaten prosperity and social cohesion everywhere,” said ITUC General Secretary Sharan Burrow.

ITUC tells IMF not to let troika dictate destructive austerity policies

International Trade Union Confederation

International Trade Union Confederation

(14 October 2012) Sharan Burrow, General Secretary of the ITUC stated today: “The annual meetings of the IMF and World Bank confirmed what the ITUC and trade unions around the world have been saying for more than two years: The idea that you can create ‘growth through austerity’ is an illusion that has destroyed million of people’s livelihoods. [Statement by Global Unions to the 2012 Annual Meetings of the IMF and World Bank]

The IMF should use the important findings it made public this week and support a jobs- and income-led growth strategy, not let a few countries or its partners in the European ‘troika’ dictate a continuation of austerity policies.”

U.S. Jobs, GDP, and the Eurozone

by Jack Rasmus

Jack Rasmus

Friday, June 1, is a date that marks a shift in the public consciousness of the state of the US and global economy. What was touted for months over the past winter as a rebound taking hold in the US economy and the assertions that the US economy was ‘exceptional’ and would not suffer the slowdowns underway in Europe, China and the rest of the world – were all swept away on June 1 by the May US jobs report, a downward revised U.S. GDP numbers for the first quarter 2012, as well as by the rapidly deteriorating banking and general economic situation in the Eurozone.

Why Economists’ Jobs Forecasts Consistently Miss Their Mark

On the jobs front, Friday’s labor department data showed a growth of only 69,000 jobs, while the preceding month’s jobs numbers were revised downward for April from 115,000 to only 77,000. Both months were originally officially forecast by mainstream economists to show jobs growth of 150,000 and 180,000 respectively. A day earlier, the first quarter GDP numbers were also adjusted downward from 2.2% growth to only 1.9%, a decline that was totally unexpected by most economists, who had been forecasting that the current quarter, April-June, GDP would come in around the 2.5% to 3% range. But now will almost certainly end up in the 1.5% or even lower range, given a likely more rapid slowing in June.

One cannot miss jobs and GDP forecasts that badly without something being fundamentally wrong with forecast methodologies employed by most mainstream economists today, a point this writer has been making publicly repeatedly since last December.