More Scenes from a V-Shaped Recovery

In "Scenes from a V-Shaped Recovery," I highlighted several articles that should have put paid to the ridiculous notion that the U.S. economy is rebounding sharply. However, despite all the evidence to the contrary, the "experts" persist in promoting their bullish delusions. Under the circumstances, I thought it might be time for another round of reports that describe what is really going on outside the bubbles surrounding Washington and Wall Street:

"In Families Squeezed by Recession, Kids Show Effects" (New American Media)

Last summer, Silvana Casalegno started noticing that an increasing number of children in her preschool were engaging in aggressive behaviors or isolating themselves. She is program director at the Mothers’ Club Family Learning Center, an early childhood learning facility and family resources center in Pasadena. Most of children who are enrolled are from low-income Latino immigrant families.

Four-year-old Camila is one of the children who worried Casalegno. She was showing signs of moodiness and preferred being alone.

“This was not her pattern before. She was very social. She was willing to engage with other children,” said Casalegno. She noticed Camila would sometimes refuse to have breakfast with the other kids, preferring to play by herself during activity time, and when a child joined, she would get upset.

Casalegno and her staff decided to intervene immediately by reaching out to Camila’s mother, Dolores Cisneros. Casalegno soon discovered that Dolores’ younger sister, Carmen, and her daughter, Rachelle, 3, moved into Dolores’ home about two years ago after Carmen was laid off from her job.

Cisneros, along with her husband and five children, live in a small two-bedroom house in Altadena, Calif. With the addition of Carmen and Rachelle, nine people are now living crowded together, with two of Cisneros’ sons sleeping on the sofas, and Carmen and Rachelle staying in the garage.

Since then, tensions and conflicts began to build between the two families under the same roof, especially between the young children. Rachelle has not only become Camila’s closest playmate, she is also her greatest competitor for Cisneros' attention.

“Camila is being jealous. She would cry and say ‘I don’t want you, you don’t love me,’” said Cisneros, who now takes care of Rachelle whenever Carmen goes to work. Carmen works a 12-hour shift at a local gas station three nights a week, from 8 p.m. to 8 a.m. During those nights, Camila shows more uneasiness because Cisneros needs to spend more time with Rachelle than with her.

Cisneros also received frequent complaints from her other children, but her home condition is unlikely to change anytime soon. They are paying $1,000 rent every month. Cisneros is a newspaper deliverer and her husband is a party supplies deliverer. Together, they earn only $600 per week because their hours were cut in half because of the recession. She said, without Carmen’s $400 monthly contribution, neither family would be able to make ends meet.

Overcrowded living conditions, with relatives doubled up and sharing housing in cramped conditions, is one effect of the current economic recession that has raised unemployment and housing loss, just as happened with Cisneros' sister and her family. In Los Angeles County, the official unemployment rate has jumped to 12.3 percent from 10.5 percent the same time last year. Cisneros knows many Latino families who are living under similar condition, with some of them crammed into smaller homes than theirs.

“There is about a 50 percent increase on our waiting list in the past year,” said John Horn, director of the Valley Shelter, a transitional living shelter in Los Angeles. He said there are currently 300 families on the shelter waiting list and many of them are currently living with another family. According to the Los Angeles Family Housing, a nonprofit service provider, there are approximately 372,000 overcrowded units in Los Angeles (more than one person per room), with 102,000 units defined as severely overcrowded (more than 1.5 persons per room).

"Thousands Line Up For 300 Hotel Job Openings" (Gothamist)

Over 2,500 people waited on line yesterday for a shot at 300 jobs open in the new Intercontinental Hotel in Times Square, which will open in July. The line started on East 48th Street at Lexington Avenue, went up to 49th Street and over to Park Avenue, then back toward Lexington on the other side of the street. One single mom told the Post, "I'm so desperate; it's never been so hard."

Hotel officials were hopefully about the applicants. General manager Drew Schlesinger said, "It's been a wonderful crowd, a lot of well-dressed and well-mannered people. When the economy is booming, you don't get this kind of crowd." He said about 90% of the applicants were currently out of work. Melissa Lucia, a native of Italy with a political science degree, echoed her father's sentiments about opportunity in America. "My father would talk to me about America; he said here you become what you want. I thought this was a richer nation, a better nation, but it has the same problems."

"Survey: Frugality Among Consumers Is Outliving Recession" (Associated Press)

Even as the economic recovery plods ahead, many American consumers are refusing to come along.

They're not spending freely - and they have no plans to.

Many of them have steady income. They aren't saddled by high debts. They don't fear losing their jobs. Yet despite recent gains, they've lost so much household wealth that they're far more cautious about spending than before the recession.

Their behavior suggests that the Great Recession may have bred a new frugality that will endure well into the recovery. And because consumers fuel about 70 percent of the economy, their tightfisted habits means the rebound could stay unusually sluggish.

That's the picture that emerges from an Associated Press survey of leading economists and interviews with more than two dozen ordinary Americans. The new AP Economy Survey asked 44 leading economists whether the recession created a "new frugality" among consumers that will outlive the recession. Two-th irds said yes.

They had in mind people like Marjorie Feldman of suburban St. Louis, who retired three years ago as a systems analyst for a utility company. The stock investments in her retirement account have sunk 15 percent from 2007. The value of her home is down 20 percent.

"I had retired assuming I'd make money" off the investments, said Feldman, who's in her early 60's. "I just don't feel as confident in the economy, and I never will again. I won't spend money the way I used to."

"College Graduates Still Facing a Tough Job Market" (WDBJ7)

Thousands of students each year don the caps and gowns, wait to hear that classic graduation song, and finally hold in their hand that one piece of paper they've worked years for.

Diplomas take thousands of dollars, and an endless amount of academic work, but in this economy it does not provide promises.

The college graduation season has begun and in Southwest Virginia, Roanoke College was the first school to walk.

Hundreds received their diplomas from administration, and hugs from family on Saturday.

Those graduates will be joined by thousands of other graduates, as they begin their next life chapter.

As they look to plant their feet into the working world that is recovering from what experts named the worst recession in decades.

Most employers in the country will flat-out say that 2010 is still not an ideal time to enter the job market. That won't stop the next crop of graduates, many who are asking themselves: "How valuable is my 2010 diploma?"

Radford University seniors are days away from their graduation, but by June, many of them will be looking for jobs.

"You're on your own," said Melissa Saville, a Radford senior hoping to be an elementary school teacher. "I have friends here that I've met that are in the same boat as I am."

That boat is swiftly paddling toward graduation without a job.

"For Baby Boomers, The Job Market's Even Worse" (NPR)

For many baby boomers, the labor market remains especially tough. In this recession, the unemployment rate for people 55 and older hit 7.2 percent, the highest level ever recorded in the post-World War II era for workers in this age group.

Although the jobless rate is lower for older workers than the overall population, the duration of unemployment is much longer. Among unemployed people over age 55, the average length of time out of work exceeds 35 weeks. For unemployed workers who are 25 to 54 years old, the time out of work averages just over 30 weeks.

A recent study by the Pew Economic Policy Group showed that nearly 1 out of every 3 unemployed older workers has not seen a paycheck in more than a year. The report found that "once older workers become unemployed, they are more likely than younger workers to stay unemployed for a long period of time."

Because of the difficulty of finding new jobs, many baby boomers are giving up and declaring themselves retired. Government data show that nearly 3 million people started drawing Social Security retirement benefits last year, a significantly higher number than the agency had been expecting.

"More Than a Million in U.S. May Lose Jobless Benefits" (BusinessWeek)

Since the U.S. recession began in December 2007, Congress has extended the length of unemployment benefits for the jobless three times. Now, the lawmakers may have reached their limit.

They are quietly drawing the line at 99 weeks of aid, a mark that hundreds of thousands of Americans have already reached. In coming months, the number of those who will receive their final government check is projected to top 1 million.

It’s a deadline that has rarely been mentioned in recent debates over jobless benefits, in which Republicans have delayed aid because of cost concerns. The deadline hasn’t been lost on Teauna Stephney, a 39-year-old single mother from Bothell, Washington, who said she could become homeless once her $407 weekly checks stop in June.

“What are people like me supposed to do?” said Stephney, who said almost two years of benefits haven’t proved long enough for her to find work after she lost her last job in August 2008. Referring to lawmakers, she said, “I would like them to come and talk to me and spend a day in my shoes.”

Comments

[Blurtman]

Dow 14,000 and beyond!

[Tyrone]

General manager Drew Schlesinger said, "It's been a wonderful crowd, a lot of well-dressed and well-mannered people. When the economy is booming, you don't get this kind of crowd."

Oh, Drew, isn't this just great! It's such a great time to be hiring with 100's of thousands of desperate people looking for jobs to survive on. And they're SO well mannered, which is GREAT; you won't have to worry about any of them smashing your face in.

[Elf]

"The Republicans held up aid"...Bunning asked how are we gonna pay for another paltry 10 Billion, in the spirit of the mythical PAYGO.

That same extension contained 200$ million for free cable TV. Apparently an essential Human Right for the unemployed. You could start a few small businesses or a good sized medium one for 200 mil, that's 3,333 annual incomes of the average 60K in compensation.

99 weeks is 5 weeks short of 2 years. Nothing in all that time, huh?

And tell Teauna to go and find the kid(s) father(s). Hit them up for a few bucks. I know her not.

[ForWhat]

If your planning to go to college. Hold off for 5 years. If you do go, you better darn well know what your doing.

[ForWhat]

I wonder whats going to happen when we cant buy the rich man's stuff anymore. Do they think of this or more likely they dont care.

[DavosSherman]

I'm sure Satan has a special thanks to all those professing to be doing "Doing God's work" when in fact they were the architects of this.

[Betty]

Watch for the soapshaker. My great-aunt, who lived through the 30's, had one she used till she died. It is a little mesh container on a stick in wich you put those left-over little pieces of handsoap that are too small to wash your hands with. Then you shake the thing in hot water to make a froth for washing dishes.
When they start selling these again depression mentality is here to stay.

[Bob Crane]

Anyone who thinks the economy is improving, should hit the road.
We were in Carlsbad, CA last week. Affluent area, normally lots of tourists.
Many of the small stores are closed, and several more are closing.
We went to a locally owned restaurant, about 50 tables. At 7:30, we were the ONLY patrons there, for about an hour, until 2 more couples showed up.

[Marion Shaw]

What I still don't get is why food, household and other
once required items for a decent life (such as toilet
paper), prices, keep going up and up and up. Strawberries are the only exception. I go to two stores
nearby at least three times a week in this little town,
mostly to pick up the discounted fruits and vegetables
on the throw away cart.
I almost never see anybody with a full shopping cart of
stuff anymore. I always thought when money was scarce
and unemployment high, that prices began to fall, fall,
fall. What is holding them so high at the grocery
store? I wish one of the economic gurus who read this
blog would explain that.

[robert]

Marion I'm no guru but I guess it depends where you live and how you shop. I do not buy anything that is not on sale (at one of at least four grocery stores where I shop) unless I have run clean out and have no choice but to pay full price. In which case I usually buy the smallest, nominally least expensive size to get me through to the next sale. If it isn't on sale we don't eat it! Our family tends to eat a lot of fresh root vegetables, canned or dried beans, rice, pasta and tomatoes etc. with occasional, small portion meat meals (eg. stir fry where one chicken breast or a couple of bucks worth of marinating steak plus asst'd veggies feeds four). The specter of unemployment has been an unwelcome house guest for over a year now so I have plenty of time to shop for food bargains (and believe me they are out there if you have time to look). Don't disagree however about the rising prices of a lot of convenience (prepared) foods which I eschew both for health and economic reasons. Also consumers are getting shafted when package sizes are reduced but price isn't so paying attention to cost per unit is very important when buying so-called "sale" items.

[roger]

Monopoly the curse of the 21sf. century
Labor: double whammy, automation and off shoring, the us worker is now obsolete
Finance 3rd. whammy,political power shifted to the
financial speculators,the riches people in the US are
in the financial sector and own just about every politician,
Retail 4th, whammy,big box retailers are kings in this sector,
small family retail shops are completely priced out.
5th. whammy, China and India are now the world suppliers for manufactured goods.
"ALL" the foundations of this economy have been destroyed those who talk of rebound belong in a nut house.

[ForWhat]

@Marion As gas prices go up. The price to ship everything goes up. That's why everything is up.

[Rocky]

I am another person that tries to limit purchases to stuff that is on sale, whenever possible. But I will pay up for some items, like organic kale. Yesterday I had the checkout clerk remove an item from my basket. The price was not $2 but $2 a pound. The store prints its pound symbol (LB) in very tiny lettering next to the price which is in much larger lettering. The offending store? Whole Foods! Not all shady business people are on Wall St. or in the mortgage business. I guess the store is counting on customers not complaining when they find out that the cauliflower they purchased was not $2 but close to $5. Be careful.

[Matt Morin]

Prices up? Unaffected by this are teachers and other government workers. They get a cost of living raise, ON TOP OF a regualar raise, every year, for the past 15 years. On my street, we have 3 teachers with long term tenure(protected from layoffs), a government attorney (protected form layoff), and a city gardener(3 years from retirement.) They all drive new SUV's or pickups, and take overseas vacations. No recession here.

[anon-y-k-w]

on aggressive isolation, the counter-balance ...

The Balance / Trade-Off Between Effectiveness & Efficiency : Direction vs. Speed

Democracy is the expectation, which requires liberty to steer. Liberty requires responsibility, and responsibility requires decision. The human mind is specifically built to make such decisions, by altering frequency and amplitude to match environmental conditions with the control circuit, and deliver current to the proper loads.

An efficient command and control social system bypasses individual decision, evolution, and demands individuals to operate as subject specialists, with specific frequency and amplitude, to deliver the required social result (what do you do / what’s your job?). Like specialized cells, individuals rapidly become obsolete, as evolution moves forward, with or without them.

The human mind “carves” circuits; it pulls resources to constantly employed circuits, and these circuits become “rigid” with increasing efficiency, eliminating access to more effective alternative circuit pathways, in a feedback loop that constantly decreases stimulus recognition. People see what they are paid to see, and ignore the externalities, over which they feel no control, for as long as possible; knowledge so acts as a filter to learning.

Expert systems are invalid, because they eliminate the opportunity to adapt over time. Diversity and interoperability must be balanced to trigger growth, and so the latter does not short/crowd out the former, unless a source of gravity is desirable, for slingshot development. You are looking at the largest supply of human gravity ever developed, as it implodes. It’s a two-stage rocket.

Yes; the US Navy is the market-maker function. It made Microsoft and the entire reorg-in-a-box establishment, by creating artificial demand, at the direction of the efficient oil imperative. How’d that work out?

You’ll have that when the global HR function picks admirals, to please the clicks above and below them. Running with the big dogs my ---. On what planet does it make sense to have swingers deciding who will and will not be an admiral, who will and will not have kids; who will and will not have a job?

Corruption is neither good, nor bad; it is a function of maladaptation. Their best hope is that the universe triggers an EMP, so they don’t have to, and, yes, they have been practicing. They’re just critters.

They built a bomb that they cannot disarm – bred behavior cannot change in real time, thinking that they could walk away, after shorting out the economy and driving off all the kids.

Tick-tock.

Oil is stupid – stubbornly ignorant. An addiction is a crutch. Throw away the crutches and the strollers. Centralized control will not work on a saturated planet. Stability is a function of adaptive skill, not resistance to change.

If we get rid of the insane transfer mechanism of closely controlled pyramids, all the middlemen between producers and consumers charging gate fees, farming could easily provide a good living again, and we would not need to exploit illegal immigrants, or anyone else.

[jillgreen]

and the oil keeps on spilling

[Mar`]

To Matt Morin:

I don't know about that government worker thing. It is true for federal workers and for teachers, but I know a lot of state employees in Maryland who have had to take 10 or 16 furlough days in the past year and will be required to take at least another 10 in the next fiscal year starting in July. They still have the government paid pensions, but that's a lot of salary to lose in one year and they are definitely impacted.