Brief Summary

Irrational belief in the infallibility of the "free market" and "free trade" has led to devastating offshoring of good-paying manufacturing & IT jobs and resulted in enormous "trade" deficits. This has undermined the US economy and is the root cause of the economic crisis.

This page documents the losses & deficits. Of course, there are additional reasons why the U.S. economy is collapsing, but this is the most fundamental and quite sufficient. Also see The 9/22/08 Economic Crisis.

Colorado Springs Jobs: As of Jun 2010 Colorado Springs has lost over 54% of its Mfg & IT jobs since Jan01; that's 14,300 Mfg & 7,800 IT jobs lost. Computer & Electronic Products Mfg jobs are down 69% since Apr01. Overall there are 19,500 fewer non-farm jobs than in Nov 07 ... about the same number of jobs as in July 1999.
Colorado Jobs: CO has lost 155,800 jobs since May08. The number of CO jobs now is less than the number of jobs in May 2000.
National Jobs: There are 7.4M fewer jobs than in Nov07. That's 1.3M better than the Dec09 loss of 8.7M jobs. "Official" (U-3) unemployment was 9.5%, with the more realistic expanded measure of U-6 at 16.5%. But 'real' unemployment is now ~24%. Jun10 U-2, job losers, was at a yearly rate of 5.9% of the civilian labor force (1.17M lost their jobs in June), compared to 6.7% in Oct09.
Trade Deficit: A major drag on GDP and employment is the continuing offshoring of jobs as evidenced by the again increasing trade deficit. From 2000 through May 2010 the cumulative trade deficit (trade debt) has been $5.8 trillion; that's how much GDP has been reduced by this insane policy. Since 1980 it's $7.7 trillion of debt to other nations. There's no possible amount of stimulus that can make up for this drain on GDP.
ATP Trade: The Advanced Technology Products trade deficit is $56.6B/yr projected based on the Jan - May data. In 1991, the U.S. had a $38.4B ATP surplus. The loss of high-tech jobs and intellectual capital has been enormous and continues despite the economic downturn.

Economic Overview

Here's a link to Economic history and bubbles

Manufacturing jobs disappear as the U.S. makes less & less because multinational corporations increase corporate profits by offshoring jobs. IT jobs disappear also because much IT has been associated with manufacturing and because those IT jobs follow manufacturing. Many other IT jobs can also be offshored to India.

As jobs disappear, there's an even greater excess supply of labor compared to demand depresses wages. I say "even greater" because excess labor supply/demand has been managed at the national level for decades.

This serves the offshoring agenda quite nicely as it can be argued consumers need those imported products that cost less than if they were made here. So this benefits the everyday consumer, don't you know? Never mind that wages would also be higher if products were be made here; with higher wages we wouldn't need those cheap imported products. In fact, they would have been 68% higher in 2004 (see the 2nd chart at The Death of the Middle Class).

The other argument made by the economic geniuses who promote offshoring is that, with those cheaper prices, the money not spent on them can be invested more productively elsewhere. Yes, but to the extent that's true, that "elsewhere" isn't in the U.S.; it's been in Mexico, China, and other asian countries.

As noted below at "Trade Deficit", there's been enormous and increasing trade debt, meaning imports greatly exceed exports. Here's a hint based on the advanced mathematical tool called arithmetic: When more money is going out of an economy than is coming in ... it FAILS. This fundamental truth is explained at Economic Development: What to do locally?

This is so obvious that it should not even need to be explained. Economists should really understand that what cannot go on forever will stop. When it does, the U.S. economy is in for a shock of staggering proportions.

So why is this insanity (offshoring, deregulation resulting in monopolies, economic bubbles that burst, financial fraud with government bailouts), insane policies inevitably leading to economic collapse, happening? The best overview that I've ever read is What the Tea Party has in common with the rest of us by Nikki Alexander, 7/30/10. Please read the whole thing, but here is an excerpt.

The federal government is a financial engine that facilitates the extraction of labor and wealth from the productive economy and exploits the workers and natural resources of foreign countries to enrich unproductive parasites known as Wall Street, or more precisely, organized crime.

... It's the combination, the marriage of both, that Mussolini defined as fascism - which is the political/economic system we have in the US. The “revolving door” and “regulatory capture” are phrases that acknowledge this relationship. The federal government is structured to benefit the wealthy with contracts, subsidies, tax breaks, franchises, cartels and monopolies.

Damn!

For those concerned about U.S. sovereignty, we don't have the U.N. to fear; it's the WTO, GATT and NAFTA, working on behalf of multinational corporations, that have overrun U.S. sovereignty and undermined the Constitution.

For example, NAFTA Chapter 11 allows multinational corporations to overturn U.S. laws and jury verdicts using secret arbitration tribunals. When a corporation wins, the taxpayers of the "losing" NAFTA nation must foot the bill. The secret tribunals have powers to award unlimited amounts of taxpayer dollars to corporations whose NAFTA investor privileges and rights they judge to have been impacted.

Economic history and bubbles

So, as the U.S. is making less & less, the economy has turned to financial, insurance, and real estate (FIRE) activity to make money. Why invest in manufacturing things here when the returns from finance and speculation can be so lucrative? To make this possible individuals and the nation have turned to debt.

The dot-com bubble of the 90s was fed somewhat by low interest rates, but mainly by baby-boom demographics putting many in their peak-earning years and wanting maximum return on their money. Internet stocks were hyped as a sure thing -- it's a "new economy", don't you know -- so people speculated. That didn't work out so well as is the case for most people during all speculative bubbles.

Following the dot-com bubble, interest rates were lowered again in late 2001. The abnormally-low rates led to the housing bubble with escalating home prices and using home mortgage refinancing for borrowing. This set the stage for the housing price bust as interest rates were raised in late 2004 & 2005 resulting in many mortgages being under water as home prices collapsed. As the economy has collapsed and people have lost their jobs, there have been an increasing number of mortgage defaults.

To make up for the undermining of wages causing a collapse of demand, "conservative" economic policies replaced the real economy with an imaginary economy built on speculative bubbles: dot-com, housing, "trade", and deregulation-based financial fraud. As the bubbles have burst, the U.S. economy has collapsed -- as it had to because the arithmetic of "more money going out than coming in" rules.

Here's an overview of the data in this article.

Colorado Springs Jobs: As of Jun 2010 Colorado Springs has lost over 54% of its Mfg & IT jobs since Jan01; that's 14,300 Mfg & 7,800 IT jobs lost. Computer & Electronic Products Mfg jobs are down 69% since Apr01. Overall there are 19,500 fewer non-farm jobs than in Nov 07 ... about the same number of jobs as in July 1999.

Colorado Jobs: CO has lost 155,800 jobs since May08. The number of CO jobs now is less than the number of jobs in May 2000.

National Jobs: There are 7.4M fewer jobs than in Nov07. While that's 1.3M better than the Dec09 loss of 8.7M jobs, it's a major problem, especially considering population growth.

"Official" (U-3) unemployment was 9.5%, with the more realistic expanded U-6 measure at 16.5%. But 'real' unemployment is now ~24%. Jun10 U-2, job losers, was at a yearly rate of 5.9% of the civilian labor force (1.17M lost their jobs in June), compared to 6.7% in Oct09.

Trade Deficit: A major drag on GDP and employment is the continuing offshoring of jobs as evidenced by the again increasing trade deficit. From 2000 through May 2010 the cumulative trade deficit (trade debt) has been $5.8 trillion; that's how much GDP has been reduced by this insane policy. Since 1980 it's $7.7 trillion of debt to other nations. There's no possible amount of stimulus that can make up for this drain on GDP.

ATP Trade: The Advanced Technology Products trade deficit is $56.6B/yr projected based on the Jan - May data. In 1991, the U.S. had a $38.4B ATP surplus. The loss of high-tech jobs and intellectual capital has been enormous and continues despite the economic downturn.

Unless the U.S. begins to make things again and at least has balanced trade, there will be no economic recovery.

Looking at the data & graphs in this article, is there any wonder that the U.S. economy is in shambles thanks to "free trade" offshoring?

Examples of what "trade" policy has produced:
Tent Cities in LA 3/16/09,
Cities Deal With a Surge in Shantytowns 3/25/09,
Tent city becomes home in tough times, CNN on Seattle 4/13/09,
Tent Cities: An American Tradition 3/19/09,
Economic casualties pile into tent cities - USATODAY.com, 5/6/09.

Go below to find links to sections of the June 09 Jobs & Trade update on

• Causes of growing fiscal deficits? Note: New chart added showing that, together with the economic downturn, the Bush tax cuts and the wars in Afghanistan and Iraq explain virtually the entire deficit over the next ten years.
• On stimulus, "trade" anti-stimulus, and the GDP equation
• What to do about the 'trade deficit'?
• Trade Deficit & Trade Agreement History
• Data Sources ... see where I get my data.

Links to sections in this article:
Job Loss Data Tables: National, Colorado, Colorado Springs since their peaks
National Manufacturing & IT jobs lost
Colorado Jobs
Colorado Springs Jobs
Jobs and "Trade" Details
Trade Deficit Trend
Advanced Technology Products & Green "Trade" Deficits
US Unemployment Rate - Official vs. Actual
US Unemployment Level - Official vs. Actual
Recent Relevant Articles Here's the list ... excerpts at the link.

• U.S. Employed Foreign Guest Workers Outnumber Unemployed Techies 5/28/09
• Bipartisan task force calls for an end to strict quotas on work-based immigrant visas 7/8/09
• The demise of the dollar By Robert Fisk, 10/6/09
• Dollar tumbles on report of its demise By Stephen Foley, 10/7/09
• Dollar Hysteria: Is the Sky Really Falling? by Mike Whitney, 10/6/09

Job Loss Data Summary: National, Colorado, Colorado Springs since their peaks

Job Loss Summary: Nat'l, CO, Cos for Mfg & IT

Yea! Colorado Springs has now lost ~ 54% of its Mfg & IT jobs!!! It was 50% as of Sep 09.

Comparison of Percentage of Manufacturing Jobs Lost

Mfg Job Loss Comparison by Region

Comparison of Percentage of IT Jobs Lost

IT Job Loss Comparison by Region

Woe is Colorado Springs ... see also the graphs and table below showing job losses.

Financial profits soar as manufacturing & IT collapse

The graph at right from Business Week, Can the Future Be Built in America? 9/10/08, shows a contrast. While manufacturing and information technology have collapsed, bank consolidation, deregulation, and speculation have allowed financial industry profits to quadruple since 1980 when Reagan began the "conservative" revolution. See Manufacturing Jobs & Trade Agreement History for how the growth of manufacturing jobs stopped about the same time. Along with "trade" policies undermining wages, what are called "conservative" tax policies did the same (see Data on Income & Tax Distributions).

These "conservative" economic policies replaced the real economy with an imaginary economy built on bubbles: dot-com, housing, "trade", deregulation, financial fraud, and speculation. As the bubbles have burst, the economy has collapsed.

Jobs and "Trade" Details

US Job Growth has nowhere near kept up with Population Growth ... especially as jobs have been lost. The gap is 14.8 million jobs. There are now 7.4 million fewer jobs than in Nov 07.

Currently, there were about 7M persons who are Multiple Jobholders, over 5.0% of employment.

The number of part-time jobs decreased by about 1 million since its peak. There was relative stability from 1995 through 2000. Since then the numer of part-time jobs has increased by about 4 million.

The Rise in Part-time jobs, falling now as even those jobs are scarce

Population increasing has left a huge jobs gap, now 14.8M jobs even though the number of jobs has increased slightly.

US Job "Growth" and the Gap between Jobs Needed and Official Employment

National Manufacturing Job Trend ... yes, there's a slight recovery, but overall, it's a bloodbath.

National Mfg Jobs Trend ... onward & downward ... even as other jobs recover slightly

National IT Job Trend. Bummer, people who lost their manufacturing jobs retrained for these jobs. But somehow the US needs 65,000 H-1B visas to import workers because there's a shortage?

Many of those who lost their jobs in manufacturing retrained in IT, but those jobs are going, too. For what jobs will we retrain for now? The truth: get a job at WalMart. Note that Advanced Technology Products jobs are being lost, too? (... see below ...)

National IT Jobs Trend ... not recovering either

Below see two articles related to IT employment

Colorado Jobs

Colorado Manufacturing Job Trend ... leveled off now for a few months, but overall going down and worse than Nationally.

Colorado Mfg Jobs Trend

Colorado IT Job Trend ... stabilized for a while but declining again ... ~10% greater losses than nationally .

Colorado IT Jobs Trend

Colorado Non-Farm Jobs Trend. In Jun10, Colorado would need almost another 468,617 jobs to have kept up with population growth. Colorado has lost 155,800 jobs since May08.

Colorado Non-Farm Jobs Trend .. Gap increasing

Colorado Springs Jobs

Colorado Springs Manufacturing Job Trend ... devastating losses. Down 54%. Holy Cow!

Colorado Springs Mfg Jobs Trend

Colorado Springs IT Job Trend. OMG, same for IT.

Colorado Springs IT Jobs Trend

Think about this: Over ~54% of both Mfg & IT jobs -- that a total of 22,100 of these jobs -- have been lost from Colorado Springs. since Jan01. Will you read about this in the corporate media that promotes "free trade"? NO.

While other jobs have come into Colorado Springs, there have not been enough to offset the losses. The chart below shows that as of Oct, Colorado Springs has lost 14,600 jobs since Nov07.

Can there be any wonder Colorado Springs is in so much financial trouble? Also responsible for Cos fiscal woes are "conservative" growth policies; see Taxes: 2C or Not 2C?, 10/27/09. For an analysis of what to do about this, see Economic Development: What to do locally?

Colorado Springs Nonfarm Job Trend

Jobs in what areas have been gained and lost? You can do your own research on the BLS site. Here are some examples of what's happened. Note this local data is not seasonally adjusted, so some of the sectors show considerable seasonal variation. Below is a bar chart showing the percentage losses Jun10(prelim) - Mar07.

Colorado Springs Job Gains & Losses ... mostly losses!

Look at the drastic decline in Computer jobs in Colorado Springs since the Apr 01 peak ... 68.9%! Just Amazing.

Colorado Springs Computer & Electronics Products Jobs Trend

Look at the even faster decline of Semiconductor jobs in Colorado Springs ... 72.0% lost!!! Note: "Semiconductor and Other Electronic Component Mfg" is a subcategory of (included in) the category above.

Colorado Springs Semiconductor Jobs Trend (a subset of Comp & Elect Prod Mfg)

Trade Deficit Trend

The "trade" deficit trend through 2009 was a classic case of overshoot & collapse as the U.S. economy collapsed thanks to "free trade" undermining wages thereby collapsing consumer demand. Of course, the illogic goes, we have to have even more "free trade", cheap products because wages have been stagnant and people can't afford higher prices.

As the economy has recovered somewhat -- even though jobs have only slightly recovered -- the "trade" deficit, based on the first 5 months of 2010, has shot up again. This is very bad for our long-term economic prospects.

US Trade Deficit ... the upward move in 2010 is not good news for deficits or GDP growth

Advanced Technology Products & Green "Trade" Deficits

This to me is one of the most frightening trends of all. The U.S. is so proud of its technological prowess. However, most people are unaware of the rate at which we're losing it.

The U.S. had a $38.4B surplus in 1991. The ATP "trade" balance in 2008 was -$55.6B, a deficit much larger than the surplus in 1991. Even with our collapsing economy, the 2010 number, based on rate for the first 5 quarters, will be about -$58B. This downward ATP trend continued unabated even as the overall "trade" deficit is halved and increased again.

This is the economic "progress" the U.S. has made thanks to the "free traders" that have undermined the U.S. economy?

We've been told that the US is going to let others (e.g., China) do the low-tech manufacturing and the US is going to retain high-tech manufacturing. So much for that; it's not true. It should be no surprise that students aren't attracted to high-tech education. It's difficult subject matter ... and high-tech jobs are disappearing as shown (just above) by what's happened to Computer & Electronic Product Manufacturing in Colorado Springs.

Advanced Technology Products "Trade" Balance Trend - Annual ... a downhill slide losing HIGH-TECH as well as low-tech

Here's the monthly ATP trade balance trend since 2004 with a linear least-square fit showing the overall downward trend. April & May 2010 were very close to the long-term trend line. The link on the chart is no longer current; go here for up-to-date data: Trade in Goods with Advance Technology Products. As of 2015, the ATP trade is -$91.856B.

Advanced Technology Products "Trade" Balance Trend - Monthly ... onward & downward

There's not just an advanced technology problem; it's a green technology problem, too! With a "green" trade balance of -$8.9 billion in 2008, it's "green" technology, too. "Green jobs" won't develop if we continue to offshore the work.

Renewable energy money still going abroad, despite criticism from Congress by Russ Choma, 2/8/10

Money from the 2009 stimulus bill to help support the renewable energy industry continues to flow overseas ... according to a new analysis of the program by the Investigative Reporting Workshop. The Workshop [reported that] the total given out [is] ... $2.1 billion and the total that went to companies based overseas [is] ... more than 79 percent.

Green Trade Balance By Samuel Sherraden, New America Foundation, 6/22/09

... the United States ran an overall green trade deficit of -$8.9 billion in 2008, including a deficit of -$6.4 billion in the critical category of renewable energy, one of the main targets of the Obama administration's green agenda.  The U.S. economy also suffered a significant deficit in the pollution management category. ...

If current trends continue, the green trade deficit can be expected to widen further as the administration's agenda increases domestic demand but without sufficient measures to increase domestic production.  If the deficit continues to grow, the United States will forego the creation of millions of high-wage, high-skill green manufacturing jobs and lose its potential to be a global producer as well as a consumer of green technologies.

It's really important to read What to do about the 'trade deficit'? Cutting taxes and increasing incentives for companies, as recommended in an article in Business Week, Can the Future Be Built in America? 9/10/08, will not do it. There are just too many issues to take into account.

Here's a list taken from How the U.S. Subsidizes Offshoring of Jobs where you'll find more detailed explanations. Companies

• locate in countries that engage in currency manipulation (China)
• locate in countries that provide capital subsidies
• can indefinitely defer paying taxes on income from foreign subsidiaries
• use tax loopholes moving headquarters to a tax haven
• bear the cost of health insurance here, but are in competition with companies that don't in nations with national health insurance
• get R&D and investment tax credits even when moving manufacturing off shore ... the U.S. doesn't fully benefit
• employ flawed transfer pricing schemes to avoid U.S. taxes
• compete with subsidiaries in dictatorial nations without labor & environmental standards ... the costs of environmental degradation and injuries to workers are externalized
  (Note: democracy is undermined: individuals don't value and "purchase" clean environment & workplace safety, governments do; if a government isn't a democracy, it doesn't represent the interests of its citizens)
• write-off the cost of shutting down a factory in the U.S. when it transfers the work to a factory in a foreign country.
• write-off the cost of bringing new foreign employees to the U.S. and requiring its U.S. employees, as their last duties before being fired, to train the foreign employees to do their jobs.

Business Week's traditional business thinking is a prescription for failure.

US Unemployment Rate - Official vs. Actual

While there's concern that the Official Unemployment Rate (U-3) remains high, 9.5% in Jun, there should be even more concern. Government's more comprehensive measure, U-6, is at 16.5%. What I call the "Real Unemployment Rate" is ~24%.

Official unemployment has always been a vast underestimate. In 2003 when U-3 was about 6%, U-6 was over 10%, but that didn't make the news then. But the U-6 number does make the news now. Why is that?

It would be a mistake to dismiss my higher estimate as absurd. John Williams (Shadow Government Statistics) has his SGS-Alternate Unemployment Rate for Oct09 at 22.1% ... my estimate isn't all that much different. Here's an excerpt from his 11/6/09 Commentary.

During the Clinton Administration, "discouraged workers" — those who had given up looking for a job because there were no jobs to be had — were redefined so as to be counted only if they had been "discouraged" for less than a year. This time qualification defined away the long-term discouraged workers. The remaining short-term discouraged workers (less than one year) are included in U.6.

Adding the excluded long-term discouraged workers back into the total unemployed, unemployment more in line with common experience — as estimated by the SGS-Alternate Unemployment Measure — rose to about 22.1% in October

Williams' Employment and Unemployment Reporting primer is educational, as is his 12/02/09 Hyperinflation Special Report 2010. Excerpt:

... The U.S. government and Federal Reserve already have committed the system to this course through the easy politics of a bottomless pocketbook, the servicing of big-moneyed special interests, gross mismanagement, and a deliberate and ongoing effort to debase the U.S. currency. ...

The U.S. economy is in a deepening structural change that has resulted from U.S. trade, social and regulatory policies driving a goodly portion of the U.S. manufacturing and technology base offshore. As a result, a large number of related, high paying jobs have disappeared for U.S. workers. Accordingly, U.S. consumers have found increasingly that their household incomes fail to keep up with inflation. Without real growth in income, there cannot be sustained economic growth. Growth driven by debt expansion, as encouraged by the Fed in recent years, ultimately is not sustainable, as has become painfully obvious to many in the current systemic solvency crisis. ...

As shown in the .. graph, the U.S. trade deficit has narrowed in the current downturn, with lowered U.S. consumption and with a brief collapse in oil prices. There has been, however, no fundamental shift in circumstances to suggest a healthy move in U.S. economic activity towards a fundamentally improved trade balance or a shift towards reinvigorating the U.S. manufacturing base.

From John Williams' 12/02/09 Hyperinflation Special Report 2010. The official CPI significantly understates inflation.

The deterioration in median household income has resulted in greater variance in income, as shown in the [next] graph, which has negative longer term economic implications. A person earning $100,000,000 per year is not going to buy that many more automobiles that someone earning $100,000 per year. The stronger the middle class is, generally the stronger will be the economy. Historically, extremes in income variance usually are followed by financial panics and economic depressions. Income variance today is higher than it was coming into 1929 and 1987, and it is nearly double that of any other "advanced" economy.

... Real wages never have recovered their pre-1973 to 1975 recession peak. As wages dropped over the decades, the number of people in an average household that had to work, in order to make ends meet, increased. ...

The effect of the structural income problems on the economy has been that most consumers have been unable to sustain adequate income growth beyond the rate of inflation, unable to maintain their standard of living.  The only way that personal consumption — the dominant component of GDP — can grow in such a circumstance is for the consumer to take on new debt or to liquidate savings.  Both those factors are short-lived and have reached unsustainable extremes. Debt expansion and savings liquidation both were encouraged by the investment bubbles created by Alan Greenspan; he knew that economic growth could not be had otherwise. Part of what is happening today is payback for those policies.

As I've observed, the problem is not that people are taxed too much, they're paid too little thanks to policies effectively designed to drive the great majority of people into poverty.

Related:

Part-Time Workers Mask Unemployment Woes By DAVID LEONHARDT 7/14/09

The national unemployment rate has risen to 9.5 percent, the highest level in more than a quarter-century. Yet it still excludes all those who have given up looking for a job and those part-time workers who want to be working full time.

Include them — as the Labor Department does when calculating its broadest measure of the job market — and the rate reached 23.5 percent in Oregon this spring, according to a New York Times analysis of state-by-state data. It was 21.5 percent in both Michigan and Rhode Island and 20.3 percent in California. In Tennessee, Nevada and several other states that have relied heavily on manufacturing or housing, the rate was just under 20 percent this spring and may have since surpassed it.

Almost nobody believes that unemployment has finished rising, either. ...

Though the rise in unemployment has abated, it's likely unemployment will either remain at an abnormally high level for years or, I believe, begin to rise again.

Another report noting the major understatement of unemployment is Not Out of the Woods: A Report on the Jobless Recovery Underway by Niko Karvounis 6/8/09. Excerpt:

Because of the incompleteness of official measures, Leo Hindery, Chairman of New America’s Smart Globalization Initiative, in cooperation with New America’s Economic Growth Program, has constructed a broader measurement of unemployment called effective unemployment. Effective unemployment incorporates the BLS’ more inclusive U6 measurement along with the 4.4 million-strong “labor force reserve” to give a more accurate accounting of the number of Americans lacking full-time, productive work. Currently, the effective unemployment total is 30.2 million people, more than twice the official BLS unemployment estimate. This number—when compared against a labor force measure that includes the 6.6 million Americans who report wanting work, who the BLS does not officially include in its calculations—represents an alarming 18.68 percent effective unemployment rate (Figure 1).

I maintain this latter is also an understatement. What I call the "Real Unemployment Rate" is more like 24% and 44M persons. My number includes adding to the government's U-6 statistic those extra in the Orwellian classification, "Not in labor force, but Persons who currently want a job". It also adds those needed to keep up with population growth ... see the gap at the 6th figure from the top ... that's 14.8M persons.

For how I arrive at these numbers see Unemployment: Official, Effective, Real. For the real-life impact see There's no 'free market' for Labor.

It's no coincidence that the official poverty rate in America "in 2008 was 13.2 percent, up from 12.5 percent in 2007 ... In 2008, 39.8 million people were in poverty, up from 37.3 million in 2007".

Different Measures of the Unemployment Rate

Below is the Bureau of Labor Statistics data on Job Losers: U-2 Job losers and persons who completed temporary jobs, as a percent of the civilian labor force (yearly rate). That's 1.17M persons losing their jobs in June. [Note: This is a yearly rate, not a monthly rate as I mistakenly wrote last month.]

This measure decreased to 5.9% from 6.9% in Oct09. While this is better, so many people losing jobs at this high rate shows this is a very weak recovery at best.

Job Losers - the BLS U-2 rate: Job losers and persons who completed temporary jobs, as a percent of the civilian labor force

US Unemployment Level - Official vs. Actual

There are now more like 43.9M persons unemployed in compared to the official U-3 number of 14.6M and U-6 number of 25.8M. None of this counts those "Not in labor force, but Persons who currently want a job" or the underemployed. As noted above, in 2008 there were 39.8M people in poverty. No wonder!

Why is this? We have a failed economic system thanks to "conservative" economic policies of "free trade", deregulation, financial fraud, and speculation with the systematic undermining of U.S. wages. Tax cuts of recent years, ostensibly to stimulate the economy by increasing investment and supply, don't work when demand is collapsing because lost jobs & stagnant wages.

Different Measures of the Unemployment Level

Concerned yet?

Links to sections of the June 09 Jobs & Trade update

The links below take you to sections of the June 2009 update that are unchanged and need not be repeated here. Here's a summary of the points made ... more at the links:

The Bush tax cuts and the wars in Afghanistan and Iraq explain virtually the entire deficit over the next ten years.

Causes of growing fiscal deficits?

Added 8/5/10: The figure at right shows another examination of what's happening with the deficit. Together with the economic downturn, the Bush tax cuts and the wars in Afghanistan and Iraq explain virtually the entire deficit over the next ten years. From the article, Critics Still Wrong on What’s Driving Deficits in Coming Years Economic Downturn, Financial Rescues, and Bush-Era Policies Drive the Numbers By Kathy Ruffing and James R. Horney, 6/28/10

This section of the Jun09 update contains an analysis based on CBO data of fiscal deficit origins. Summary:

37% of the deficit was caused by what the CBO calls the "economic cycle." [Note: that's actually not from a "cycle", but from "long-term structural changes" that have destroyed the economy thanks to "free trade" & deregulation.]
33% is from new legislation signed by Bush.
20% is from Obama’s extension of several Bush policies [those who supported Bush shouldn't complain about the above ... they supported them].
7% "About 7% comes from the stimulus bill that Mr. Obama signed in February.
3% And only 3% comes from Mr. Obama’s agenda on health care, education, energy and other areas. If the analysis is extended further into the future, well beyond 2012, the Obama agenda accounts for only a slightly higher share of the projected deficits. ..."

Related: Think Again: “History” Isn’t a Dirty Word By Eric Alterman 11/19/09

Mike Allen and Jim Vandehei at Politico reported that ... “Obama has spent more money on new programs in nine months than Bill Clinton did in eight years, pushing the annual deficit to $1.4 trillion. This leaves little room for big spending initiatives.” This fact is taken completely out of the context of the recession. The title of the article refers to the White House's “spending binge.”

The deficits, tax cuts, and spending of the previous administration are ignored entirely. ... The Bush tax cuts: When the Bush tax cuts sunset at the end of 2010, the previous administration will have left the government holding the bag for well over $2 trillion in lost revenue. The extraordinary debt and deficits accrued during Bush’s tenure have been compounded by the implosion of the financial system. In addition, the estimated eventual costs of the costly, unnecessary, and counterproductive Iraq war are now in the trillions to say nothing of the costs of more than six years of failure in Afghanistan.

On stimulus, "trade" anti-stimulus, and the GDP equation

I explain why both stimulus and trade policy reform are necessary. The "trade" deficits produced by "free trade" policies are enormous "trade deficit" anti-stimulus that wipes out just about any stimulus that could possibly be applied. This is why Obama's stimulus will fail, not because his spending has been reckless; it has not been (... as described just above).

The undermining of US wages is largely responsible for The 9/22/08 Economic Crisis ... collapsing demand has inevitably led to a collapsing economy. Yes, deregulation, financial fraud, and speculation precipitated the debacle, but the economy has become more and more unstable as U.S. wages have been systematically undermined. The tax cuts of recent years, ostensibly to stimulate the economy by increasing investment and supply, don't work when demand is collapsing because wages have been undermined.

Added 1/10/10 regarding financial fraud fallout:

Hollywood’s Brilliant Coda to America’s Dark Year By FRANK RICH 12/12/09. Excerpt (full article included below):

... The private-equity deal makers who bought and sold once-solid companies like trading cards, saddling them with debt, never saw the workers whose jobs were shredded by their cunning games of financial looting. The geniuses in Washington and on Wall Street who invented junk mortgages and then bundled and sold them as securities didn’t live in the same neighborhoods as the mortgagees, small investors and retirees left holding the bag once the housing bubble burst.

Those at the top are separated from the consequences of their actions. They are exemplified by Robert Rubin, formerly of Citigroup and a mentor to both Obama’s Treasury secretary and chief economic adviser. He looked the other way when his bank made ruinous high-risk bets, and then cashed out and split, leaving taxpayers to pay for the wreckage while he escaped any accountability. Such economic wise men peer down at the country from a hermetically sealed bubble of privilege and self-interest ... [a]nd they tend to think, as Lloyd Blankfein of Goldman Sachs notoriously put it, that they are doing “God’s work” to sustain our free-market system. ...

"God's work" indeed.

The Other Plot to Wreck America By FRANK RICH 1/9/10. Excerpt (full article included below):

... in the 16 months since that other calamity in downtown New York -- the crash precipitated by the 9/15 failure of Lehman Brothers -- most of us are still ignorant about what Warren Buffett called the “financial weapons of mass destruction” that wrecked our economy. Fluent as we are in Al Qaeda and body scanners, when it comes to synthetic C.D.O.’s and credit-default swaps, not so much.

What we don’t know will hurt us, and quite possibly on a more devastating scale than any Qaeda attack. Americans must be told the full story of how Wall Street gamed and inflated the housing bubble, made out like bandits, and then left millions of households in ruin. Without that reckoning, there will be no public clamor for serious reform of a financial system that was as cunningly breached as airline security at the Amsterdam airport. And without reform, another massive attack on our economic security is guaranteed. Now that it can count on government bailouts, Wall Street has more incentive than ever to pump up its risks -- secure that it can keep the bonanzas while we get stuck with the losses. ...

Last week, a Republican congressman, Darrell Issa of California, released e-mail showing that officials at the New York Fed, then led by Timothy Geithner, pressured A.I.G. to delay disclosing to the S.E.C. and the public the details on the billions of bailout dollars it was funneling to its trading partners. In this backdoor rescue, taxpayers unknowingly awarded banks like Goldman 100 cents on the dollar for their bets on mortgage-backed securities.

Why was our money used to make these high-flying gamblers whole while ordinary Americans received no such beneficence? ...

This is outright criminal behavior. Geithner (and Summers, too) must go if Obama is to retain a shred of credibility on financial reform.

What to do about the 'trade deficit'?

In short, what's necessary is to create balance. Balance. What a radical concept! Those who say doing that is "protectionism" are unbalanced because what's going on now is "reverse protectionism" ... subsidizing offshoring. If we were to be protectionist, we'd have a "trade" surplus, not an enormous deficit!

Manufacturing Jobs & Trade Agreement History

Shows that the leveling off, and later decline, of manufacturing jobs began in the 80s with the onslaught of "conservative" economic policies.

Trade Deficit & Trade Agreement History

Shows that the build up of "trade" debt also began in the 80s with the onslaught of "conservative" economic policies.

Data Sources ... see where I get my data.

Recent Relevant Articles

Bring more high-tech workers in legally? [The first two articles are no longer at the links.]

U.S. Employed Foreign Guest Workers Outnumber Unemployed Techies 5/28/09

It is no secret that the H-1B visa program is rife with fraud and abuse. The program allows American companies to exploit foreign IT workers at the expense of Americans, drives down the wages of all those in the field and costs the U.S. countless tax dollars.

... “in January of 2009, the total number of workers employed in the information technology occupation under the H-1B program substantially exceeded the 241,000 unemployed U.S. citizen workers within the same occupation."

... a recent study conducted jointly by researchers at New York University's and the University of Pennsylvania's business schools ... found that the use of H-1B visa workers by U.S. companies drives down the wages of American IT workers by as much as six percent.

"We simply sought to dispel the myth that globalization generates no losers," the researchers wrote.

Seriously now, this would be laughable if it weren't so sick and despicable. Why is it U.S. policy to systematically undermine the educational investment of its citizens by causing them to lose their jobs and depressing the pay of those who still manage to have a job? Answer: to depress wages and increase profits ... to increase return-to-capital and reduce return-to-labor.

Despite the mfg & IT job losses, they want even more imported high-tech workers. Incredible!

Task Force to Recommend Overhaul of U.S. Immigration System By Spencer S. Hsu, Washington Post Staff Writer, July 8, 2009.

A bipartisan task force will recommend today that the United States overhaul its immigration system in response to national security concerns, saying that the country should end strict quotas on work-based immigrant visas to maintain its scientific, technological and military edge.

"The continued failure to devise and implement a sound and sustainable immigration policy threatens to weaken America's economy, to jeopardize its diplomacy, and to imperil its national security," concluded an independent Council on Foreign Relations panel, co-chaired by former Florida governor Jeb Bush (R) and former Clinton White House chief of staff Thomas V. "Mack" McLarty III.

The report comes as President Obama and Congressional Democrats say they expect to begin debate on a comprehensive immigration plan within a year. But key Republicans -- including  Sen. John McCain (R-Ariz.), the 2008 Republican presidential nominee and co-sponsor of previous overhaul legislation -- have said a plan must include expanding temporary-worker programs. ...

Edward Alden, the task force's director and a CFR fellow, said the involvement of Bush, a prominent national Republican and the brother of former president George W. Bush, and McLarty, a Democrat and senior international fellow at the U.S. Chamber of Commerce, was intended to create political space for centrists in both parties.

The Council on Foreign Relations, Republicans, DLC Democrats, the U.S. Chamber of Commerce ... the usual suspects ... supporters of "free trade" and undermining wages. Excellent!

Robert Fisk asserts that the dollar will decline as foreign governments abandon the dollar.

The demise of the dollar By Robert Fisk, 10/6/09

In a graphic illustration of the new world order, Arab states have launched secret moves with China, Russia and France to stop using the US currency for oil trading ]

Fisk's article had a dramatic effect:

Dollar tumbles on report of its demise By Stephen Foley, 10/7/09
Gold price at record high as Independent story sends global markets into a frenzy

... Economists noted that the US resisted pressure to include a promise to protect the stability of world currencies in last weekend's communiqué from the International Monetary Fund (IMF), sparking growing concern that the Obama administration could be content to see the currency fall. That would make US exports more competitive and could spark a manufacturing jobs revival.

Overseas governments are in a bind because they hold trillions of dollars as reserves to protect them against a financial crisis. They are seeing the value of those reserves decline, but starting to swap them for gold or other currencies could deluge world markets with unwanted dollars and send the value of the greenback even lower. The situation is particularly sensitive for oil-producing nations, who are paid in dollars for their exports and therefore hold high dollar reserves. ...

Mike Whitney says it's private industry, not governments, that will lead the way to dollar collapse.

Dollar Hysteria: Is the Sky Really Falling? by Mike Whitney, 10/6/09

Yes, the dollar will fall, (eventually) but not for the reasons that most people think. It's true that the surge in deficit spending has foreign dollar-holders worried. ... The real reason the dollar will lose its role as the world's reserve currency is because US markets, which until recently provided up to 25 percent of global demand, are in sharp decline. ...  US consumers are buried under a mountain of debt, which means that their spending-spree won't resume anytime soon.  On top of that, unemployment is soaring, personal wealth is falling, savings are rising, and Washington's anti-labor bias assures that wages will continue to stagnate for the foreseeable future. Thus, the American middle class will no longer be the driving force behind global consumption/demand that it was before the crisis.  Once consumers are less able to buy new Toyota Prius's or load up on the latest China-made widgets at Walmart, there will be less incentive for foreign governments and central banks to stockpile greenbacks or trade exclusively in dollars. ... As private industry veers away from the dollar, governments, investors and central banks will follow. ]

I don't know which will lead the way, but the dollar will fall.

On the "banking crisis": Conservative historian and proponent of a McCain presidency, Niall Ferguson, had this view, 4/26/09:

Ferguson also agreed with advice offered by Paul Krugman (an "unprecedented" event, by Ferguson's own admission) that the "only way to deal with these big insolvent institutions is to take them into temporary conservatorship, let's use that lovely euphemism not nationalization, as happened with Fannie Mae and Freddie Mac, institutions that they quite closely resemble anyway. It's going to happen; we're going to end up doing this. And you restructure them."

Unfortunately, Obama is not doing this even though he's being charged with taking over the banks and being a "socialist." As done by Bush's Treasury Secretary Henry Paulson, Obama's Tim Geithner, former head of the New York Fed, is bailing out the banks with few, if any, strings attached. That's the banks controlling government, not the government controlling the banks. That's a lot like fascism, not socialism.

__________________

Hollywood’s Brilliant Coda to America’s Dark Year By FRANK RICH

Hollywood’s Brilliant Coda to America’s Dark Year By FRANK RICH 12/12/09

ON Christmas Day, Hollywood will blanket America with a most unlikely holiday entertainment. That’s when “Up in the Air,” the acclaimed new movie starring George Clooney, will spread from its big-city engagements to more than 2,000 screens. Clooney plays Ryan Bingham, a corporate road warrior for a small, Omaha-based contractor hired to lay off employees for companies that prefer to outsource that unpleasant task. Ryan has fired so many people in so many cities that he is approaching a frequent-flier status unknown to all but a few Americans.

How could a film with that premise be a Christmas hit in a country reeling from the highest unemployment rate in decades? By using the power of pop culture to salve national wounds that continue to fester in the real world.

“Up in the Air” is not a political movie. It won’t be mistaken for either a Michael Moore or Ayn Rand polemic on capitalism. What makes it tick is Ryan’s struggle to reclaim his own humanity, a story that will not be described or spoiled here. But the film’s backdrop is just as primal — and these days perhaps more universal — than the personal drama so movingly atomized by Clooney in the foreground.

Here is an America whose battered inhabitants realize that the economic deck is stacked against them, gamed by distant, powerful figures they can’t see or know. “Up in the Air” may be a glossy production sprinkled with laughter and sex, but it captures the distinctive topography of our Great Recession as vividly as a far more dour Hollywood product of 70 years ago, “The Grapes of Wrath,” did the vastly different landscape of the Great Depression.

While “Up in the Air” opens with a remix of Woody Guthrie’s Depression-spawned “This Land Is Your Land,” its dispossessed Americans don’t resemble those in a black-and-white Dorothea Lange photograph. They’re not the familiar contemporary blue-collar factory workers in our devastated manufacturing economy. They are instead mostly middle-class refugees from the suburban good life depicted in credit card ads. Their correlative to the Dust Bowl is a coast-to-coast wasteland of foreclosed office spaces where desk chairs and knots of dead phones lie abandoned in a fluorescent half-light. “Up in the Air” taps into the desperation, fear and anger that both the populist left and right are trying to articulate right now, and that leaders of both parties have failed to address.

“Retailers are down 20 percent,” Ryan’s boss tells his troops in a conference room. “Auto industry is in the dump. Housing market doesn’t have a heartbeat. It is one of the worst times on record for America. This is our moment.” And so it is. In constant flight from hub to hub, his staff parachutes into troubled companies to lay off dozens of workers with impressive assembly-line efficiency. The genial Ryan and his fellow “transition specialists” never use the word “fired,” of course. They tell employees they are being “let go” and not to “take it personally.” They hand their prey slick-looking severance packets and, with a doctor’s bedside manner, intone that “we’re here to talk about the future.” Soon it’s time to send the discarded employee to collect his personal effects on the way to the exit.

A new colleague of Ryan’s, a “dynamite young woman” from Cornell, comes up with an innovative strategy for downsizing the downsizers. To eliminate travel costs, she proposes that in-person firings instead be executed long-distance by teleconference, with ranks of “termination engineers” at computer screens reciting from a script titled “Employee Termination Workflow.” In a dry run, the guinea pig is a burly 57-year-old office worker who refuses to stay in the camera frame and staggers off in a paroxysm of anger and sobs. It’s like watching a man being assassinated by a predator drone. But this is Detroit, not Waziristan.

The fictional doings in “Up in the Air,” adapted from a 2001 novel by Walter Kirn, are bookended by brief montages culled from interviews that the director, Jason Reitman, conducted with real-life laid-off workers while shooting in Detroit and St. Louis. He asked the interviewees what they had told — or wished they had told — the H.R. bureaucrats who let them go. “On the stress level, I’ve heard that losing your job is like a death in the family,” says one man. “But personally I feel more like the people I worked with were my family, and I died.”

In rolling out his latest jobs initiative last week, President Obama said, “Sometimes it’s hard to break out of the bubble here in Washington and remind ourselves that behind these statistics are people’s lives, their capacity to do right by their families.” True enough, and in this movie you see a few of the lives behind the statistics, however fleetingly. But the point of “Up in the Air” is not to deliver the message that mass unemployment is a terrible tragedy. We hardly need a movie — or a politician — to deliver that news at this late date.

What gives our Great Recession its particular darkness — and gives this film its haunting afterlife — is the disconnect between the corporate culture that is dictating the firing and the rest of us. In the shorthand of the day, it’s the dichotomy between Wall Street and Main Street, though that oversimplifies the divide. This disconnect isn’t just about the huge gap in income between the financial sector and the rest of America. Nor is it just about the inequities of a government bailout that rescued the irresponsible bankers who helped crash the economy while shortchanging the innocent victims of their reckless gambles. What “Up in the Air” captures is less didactic. It makes palpable the cultural and even physical chasm that opened up between the two Americas for years before the financial collapse.

The private-equity deal makers who bought and sold once-solid companies like trading cards, saddling them with debt, never saw the workers whose jobs were shredded by their cunning games of financial looting. The geniuses in Washington and on Wall Street who invented junk mortgages and then bundled and sold them as securities didn’t live in the same neighborhoods as the mortgagees, small investors and retirees left holding the bag once the housing bubble burst.

Those at the top are separated from the consequences of their actions. They are exemplified by Robert Rubin, formerly of Citigroup and a mentor to both Obama’s Treasury secretary and chief economic adviser. He looked the other way when his bank made ruinous high-risk bets, and then cashed out and split, leaving taxpayers to pay for the wreckage while he escaped any accountability. Such economic wise men peer down at the country from a hermetically sealed bubble of privilege and self-interest, much as Ryan does from the plane flying him to his next mass firing. And they tend to think, as Lloyd Blankfein of Goldman Sachs notoriously put it, that they are doing “God’s work” to sustain our free-market system.

“Mad Men” literally whacked one such executive this season. Its fans loved watching a drunken office-party accident maim a visiting overseer from the British corporation that had swallowed and downsized Sterling Cooper, the show’s fictional Madison Avenue ad agency. The episode was set in 1963, but “Mad Men” resonates in part because it prefigures today’s corporate culture. One recent plot line dealt with the mercurial machinations of the hotel tycoon Conrad Hilton, a potential client of Sterling Cooper. As coincidental thematic synergy would have it, “Up in the Air” portrays Ryan as an elite cardholder in a “Hilton Honors” program that defines brand “loyalty” with a mercenary zeal the Connie Hilton of “Mad Men” would relish.

Last week Goldman Sachs announced it would grant some of this year’s bonuses in stock, not cash, to try to stanch the public backlash to the record profits it piled up thanks to government largess. But Washington remains strangely oblivious to the mood out there. Financial reform has been embattled on Capitol Hill, where the financial industry has spent $344 million on lobbying in the first three quarters of 2009. The big ratings agencies that gave triple-A stamps of approval to Wall Street’s junk are back to business as usual. Bank of America and Citi are racing to return TARP money to Washington not because they have necessarily recovered but because they want to shower rewards on their executives with impunity.

The rage engendered by this status quo is across the political map. As unlikely as it sounds, Ron Paul and Jim DeMint, political heroes of the tea party right, and Bernie Sanders and Alan Grayson, similarly revered on the left, have found a common cause in vilifying the Federal Reserve Bank and its chairman, Ben Bernanke. The Fed is hardly the root of all evil, but you can see why it is a handy scapegoat. Like the institutions it failed to police during the boom, it wields its power from on high with little transparency to those below.

Meanwhile, at the company where I work, as at many others, the latest round of layoffs will be completed by Christmas. Even for the survivors it feels a little like serial deaths in the family. And who believes we’re near the end of this story? For all of Wall Street’s and Washington’s rumors of a recovery, the fate of Americans on the ground remains very much up in the air.

___________

The Other Plot to Wreck America By FRANK RICH

The Other Plot to Wreck America By FRANK RICH 1/9/10

THERE may not be a person in America without a strong opinion about what coulda, shoulda been done to prevent the underwear bomber from boarding that Christmas flight to Detroit. In the years since 9/11, we’ve all become counterterrorists. But in the 16 months since that other calamity in downtown New York — the crash precipitated by the 9/15 failure of Lehman Brothers — most of us are still ignorant about what Warren Buffett called the “financial weapons of mass destruction” that wrecked our economy. Fluent as we are in Al Qaeda and body scanners, when it comes to synthetic C.D.O.’s and credit-default swaps, not so much.

What we don’t know will hurt us, and quite possibly on a more devastating scale than any Qaeda attack. Americans must be told the full story of how Wall Street gamed and inflated the housing bubble, made out like bandits, and then left millions of households in ruin. Without that reckoning, there will be no public clamor for serious reform of a financial system that was as cunningly breached as airline security at the Amsterdam airport. And without reform, another massive attack on our economic security is guaranteed. Now that it can count on government bailouts, Wall Street has more incentive than ever to pump up its risks — secure that it can keep the bonanzas while we get stuck with the losses.

The window for change is rapidly closing. Health care, Afghanistan and the terrorism panic may have exhausted Washington’s already limited capacity for heavy lifting, especially in an election year. The White House’s chief economic hand, Lawrence Summers, has repeatedly announced that “everybody agrees that the recession is over” — which is technically true from an economist’s perspective and certainly true on Wall Street, where bailed-out banks are reporting record profits and bonuses. The contrary voices of Americans who have lost pay, jobs, homes and savings are either patronized or drowned out entirely by a political system where the banking lobby rules in both parties and the revolving door between finance and government never stops spinning.

It’s against this backdrop that this week’s long-awaited initial public hearings of the Financial Crisis Inquiry Commission are so critical. This is the bipartisan panel that Congress mandated last spring to investigate the still murky story of what happened in the meltdown. Phil Angelides, the former California treasurer who is the inquiry’s chairman, told me in interviews late last year that he has been busy deploying a tough investigative staff and will not allow the proceedings to devolve into a typical blue-ribbon Beltway exercise in toothless bloviation.

He wants to examine the financial sector’s “greed, stupidity, hubris and outright corruption” — from traders on the ground to the board room. “It’s important that we deliver new information,” he said. “We can’t just rehash what we’ve known to date.” He understands that if he fails to make news or to tell the story in a way that is comprehensible and compelling enough to arouse Americans to demand action, Wall Street and Washington will both keep moving on, unchallenged and unchastened.

Angelides gets it. But he has a tough act to follow: Ferdinand Pecora, the legendary prosecutor who served as chief counsel to the Senate committee that investigated the 1929 crash as F.D.R. took office. Pecora was a master of detail and drama. He riveted America even without the aid of television. His investigation led to indictments, jail sentences and, ultimately, key New Deal reforms — the creation of the Securities and Exchange Commission and the Glass-Steagall Act, designed to prevent the formation of banks too big to fail.

As it happened, a major Pecora target was the chief executive of National City Bank, the institution that would grow up to be Citigroup. Among other transgressions, National City had repackaged bad Latin American debt as new securities that it then sold to easily suckered investors during the frenzied 1920s boom. Once disaster struck, the bank’s executives helped themselves to millions of dollars in interest-free loans. Yet their own employees had to keep ponying up salary deductions for decimated National City stock purchased at a heady precrash price.

Trade bad Latin American debt for bad mortgage debt, and you have a partial portrait of Citigroup at the height of the housing bubble. The reckless Citi executives of our day may not have given themselves interest-free loans, but they often walked away with the short-term, illusionary profits while their employees were left with shredded jobs and 401(k)’s. Among those Citi executives was Robert Rubin, who, as the Clinton Treasury secretary, helped repeal the last vestiges of Glass-Steagall after years of Wall Street assault. Somewhere Pecora is turning in his grave

Rubin has never apologized, let alone been held accountable. But he’s hardly alone. Even after all the country has gone through, the titans who fueled the bubble are heedless. In last Sunday’s Times, Sandy Weill, the former chief executive who built Citigroup (and recruited Rubin to its ranks), gave a remarkable interview to Katrina Brooker blaming his own hand-picked successor, Charles Prince, for his bank’s implosion. Weill said he preferred to be remembered for his philanthropy. Good luck with that.

Among his causes is Carnegie Hall, where he is chairman of the board. To see how far American capitalism has fallen, contrast Weill with the giant who built Carnegie Hall. Not only is Andrew Carnegie remembered for far more epic and generous philanthropy than Weill’s — some 1,600 public libraries, just for starters — but also for creating a steel empire that actually helped build America’s industrial infrastructure in the late 19th century. At Citi, Weill built little more than a bloated gambling casino. As Paul Volcker, the regrettably powerless chairman of Obama’s Economic Recovery Advisory Board, said recently, there is not “one shred of neutral evidence” that any financial innovation of the past 20 years has led to economic growth. Citi, that “innovative” banking supermarket, destroyed far more wealth than Weill can or will ever give away.

Even now — despite its near-death experience, despite the departures of Weill, Prince and Rubin — Citi remains as imperious as it was before 9/15. Its current chairman, Richard Parsons, was one of three executives (along with Lloyd Blankfein of Goldman Sachs and John Mack of Morgan Stanley) who failed to show up at the mid-December White House meeting where President Obama implored bankers to increase lending. (The trio blamed fog for forcing them to participate by speakerphone, but the weather hadn’t grounded their peers or Amtrak.) Last week, ABC World News was also stiffed by Citi, which refused to answer questions about its latest round of outrageous credit card rate increases and instead e-mailed a statement blaming its customers for “not paying back their loans.” This from a bank that still owes taxpayers $25 billion of its $45 billion handout!

If Citi, among the most egregious of Wall Street reprobates, feels it can get away with business as usual, it’s because it fears no retribution. And it got more good news last week. Now that Chris Dodd is vacating the Senate, his chairmanship of the Banking Committee may fall next year to Tim Johnson of South Dakota, home to Citi’s credit card operation. Johnson was the only Senate Democrat to vote against Congress’s recent bill policing credit card abuses.

Though bad history shows every sign of repeating itself on Wall Street, it will take a near-miracle for Angelides to repeat Pecora’s triumph. Our zoo of financial skullduggery is far more complex, with many more moving pieces, than that of the 1920s. The new inquiry does have subpoena power, but its entire budget, a mere $8 million, doesn’t even match the lobbying expenditures for just three banks (Citi, Morgan Stanley, Bank of America) in the first nine months of 2009. The firms under scrutiny can pay for as many lawyers as they need to stall between now and Dec. 15, deadline day for the commission’s report.

More daunting still is the inquiry’s duty to reach into high places in the public sector as well as the private. The mystery of exactly what happened as TARP fell into place in the fateful fall of 2008 thickens by the day — especially the behind-closed-door machinations surrounding the government rescue of A.I.G. and its counterparties. Last week, a Republican congressman, Darrell Issa of California, released e-mail showing that officials at the New York Fed, then led by Timothy Geithner, pressured A.I.G. to delay disclosing to the S.E.C. and the public the details on the billions of bailout dollars it was funneling to its trading partners. In this backdoor rescue, taxpayers unknowingly awarded banks like Goldman 100 cents on the dollar for their bets on mortgage-backed securities.

Why was our money used to make these high-flying gamblers whole while ordinary Americans received no such beneficence? Nothing less than complete transparency will connect the dots. Among the big-name witnesses that the Angelides commission has called for next week is Goldman’s Blankfein. Geithner, Henry Paulson and Ben Bernanke should be next.

If they all skate away yet again by deflecting blame or mouthing pro forma mea culpas, it will be a sign that this inquiry, like so many other promises of reform since 9/15, is likely to leave Wall Street’s status quo largely intact. That’s the ticking-bomb scenario that truly imperils us all.