Keeping the Hype in Check (Collected)

A decade ago I produced a number of posts about much talked about "highlights" of the modernization of the Chinese armed forces, the principal theme of which was putting the hype about them in perspective. They seem to me to still have sufficient relevance that I have collected them together here in this one post.

The Chengdu J-20
The unveiling of the Chengdu J-20 has certainly provoked alarmist rhetoric is all the expected quarters. Lieutenant General Thomas McInerney, for instance, writes of "shades of 1939" (predictably, in a piece for FOX News).

For the moment, though, set aside the dubiousness of Tom Clancy fantasies about high-tech, big power war (which I must admit I regard as extremely unlikely for now), without which the plane would not get so much attention. Set aside the questions about the J-20's real purpose, whether the rather large plane (the design of which appears to emphasize fuel capacity and payload) is not intended as a strike aircraft instead of a fighter--a replacement for the JH-7, for instance, rather than a match for the latest American fighters--or even, as, Lewis Page suggests in what is by far the most well-grounded assessment I have seen so far, a "demonstration/propaganda/industrial-subsidy project."1 Set aside also the fact that the plane's first test flight simply puts it where the U.S. was in 1990 with the F-22 program (twenty years ago), the unavoidable uncertainty about if and when the aircraft will actually go into production, and in what quantity (defense hawks being all too quick to forget that it's not just the Pentagon which has to cope with delays, cost overruns and underperforming, buggy hardware in its procurement programs).2

Instead consider the realities involved in building and operating a functioning air force, which involve much more than producing a prototype of a fighter aircraft, or even a couple of hundred of them. The makeup of China's overall air force is at issue, and the gap in capability between the U.S. and China remains wide today. The U.S. Air Force, Navy and Marines collectively possess some 3,000 fighter planes today, compared with roughly 1,800 for the China's People's Liberation Army Air Force and Navy Air Force. Additionally, the U.S. fighter inventory consists entirely of fourth-generation or later aircraft (principally late-model F-15s, F-16s and F-18s, plus nearly 200 F-22s), whereas only 500 or so of China's inventory (very late-model J-8s, J-10s and J-11s) are comparable in capability, so that a 1.6-to-1 advantage in overall numbers becomes a 6-to-1 advantage in this key area. The U.S. armed forces also have a massive advantage in support assets, from tankers to command and control aircraft, greatly enhancing their other numerical and qualitative advantages.

It will be a long time before China can close that broader gap, with or without the J-20, especially as the U.S.'s fighter forces are themselves being modernized, with Super Hornets and F-35s replacing the earlier F-16s, F-18s and AV-8 Harriers.3 Indeed, it may be that the gap in numbers will increase in the U.S.'s favor as China continues to slough off vast quantities of older aircraft in favor of a smaller number of up-to-date models.

It is also simplistic to imagine such a war as a series of fighter duels. As David Axe notes in the Wired Danger Room,

in a major shooting war, the Navy and Air Force wouldn’t wait for J-20s or other Chinese fighters to even take off. Cruise-missile-armed submarines and bombers would pound Chinese airfields; the Air Forces would take down Chinese satellites and thus blind PLAAF planners; American cyberattackers could disable Beijing’s command networks.

In the air, the planes would also be vulnerable to surface-to-air defenses on land, or aboard U.S. warships.

Finally, Chinese capabilities of all kinds are that much less overwhelming when the regional distribution of power is considered. Russia and India (with their own fifth-generation aircraft undergoing flight testing), as well as South Korea, and Taiwan and Japan offshore, all have their own, quite substantial air forces (and armies and navies as well). No matter how aggressive one is in their projections, no serious conflict scenario can overlook this fact, and taken with the others it is a reminder that while China is modernizing its armed forces, and developing new capabilities commensurate with its greater wealth, and its perceived requirements, a revolution in the military balance of power in the region is not at hand today, or even likely to be in the next decade--even if one takes the most alarmist claims made for the J-20 at face value.

NOTES
1. Making the opposite argument, Dr. Carlo Koop and Peter Goon of the Air Power Australia think tank, in acknowledging the plane's size and configuration, suggest in their analysis that it is a

a long range interceptor for anti-access operations in the Second Island Chain geography . . . with the capability to penetrate an opposing IADS to destroy assets like E-3 AWACS, RC-135V/W Rivet Joint, other ISR systems, and importantly, Air Force and Navy tankers,

crippling U.S. Air Force or Navy operations within this area, and insist that the idea

that an F-35 Joint Strike Fighter or F/A-18E/F Super Hornet will be capable of competing against this Chengdu design in air combat, let alone penetrate airspace defended by this fighter . . . [is] simply absurd.

It might be noted, however, that the two functions are not mutually exclusive. The F-111 program was originally intended to produce both the well-known strike aircraft for the U.S. Air Force, the F-111A, and a long-range carrier-based interceptor, the F-111B, for the U.S. Navy (which is comparable in its weight and its internal storage of weapons to the J-20). Of course, the F-111B eventually proved unsatisfactory and its niche was filled by the lighter F-14 Tomcat, a reminder of the difficulties involved in reconciling such missions in a single airframe. (More success has been attained by building an effective air-superiority fighter, which is then used as the base for a strike fighter, as with the F-15E Strike Eagle.)
2. It is worth noting, among other points, that China appears dependent on imported Russian engines to power the large, high-performance aircraft. Lewis Page has also raised questions (quite well-grounded in the available evidence) about the plane's stealthiness, maneuverability (due to its size, probable weight and lack of thrust-vectoring nozzles) and avionics (specifically the chances of the plane getting a Low Probability of Intercept radar) in comparison with the fifth-generation F-22.
3. The F-35 program is troubled, suffering from cost overruns and delays, but not dead. Additionally, while it is plausible that the U.S.'s economic woes and budgetary difficulties will undermine the acquisitions process such as to diminish its lead, it is far from clear that this would go far enough to make a fundamental difference in the picture described above (especially given the relationship between American consumption, investment and solvency, and Chinese prosperity).

The ASBM
Besides the J-20, the story which has attracted the most attention in the last couple of years has been the country's program to develop Anti-Ship Ballistic Missiles, which have reportedly attained operational status.

As Andrew S. Erickson and David D. Yang note in their excellent article in the Naval War College Review, the paucity of actual detail about the system, and the vagueness of the literature, have resulted in an avalanche of conflicting speculations, but little real clarity. Still, there are grounds for reasonable guesses about some things. First and foremost, China's ASBM would appear to be a relatively cheap way of achieving sea denial, compared with the country's building the kind of navy it (and just about everyone else excepting the United States) cannot and will not build any time soon. This would be consistent with China's apparent focus on the acquisition of systems for neutralizing capabilities the country may deem threatening rather than on the acquisition of the muscle for long-range actions of its own (a capability China is clearly developing at a much more careful rate).

As might be guessed, technical feasibility's a much grayer area. Still, it's clear that building a working system of the kind described is a tall order. Implicit in such claims is China's possession of surveillance and communications capabilities advanced and robust enough to, under combat conditions, reliably locate a warship and call in timely, accurate fire on it. (This kind of thing goes off without a hitch in Tom Clancy novels, but the reality is much different, though China has reportedly made great strides in this area during the last decade.) That, in turn, would be meaningless without Chinese industry's resolving the problems in making the missile capable of tracking and maneuvering in response to a moving target in the course of its flight--the larger challenge, as it would involve a new technology nothing short of revolutionary. Ballistic missiles historically have been used to hit stationary targets, not moving ones, and an aircraft carrier can move a distance measurable in miles inside the missile's likely flight time. The intrinsic difficulty of developing an effective system of this kind aside, the fact remains that new weapons systems tend to have long teething processes, as the history of combat aircraft makes clear, and it is worth noting that the system has yet to actually be "test-fired over water at maneuvering targets."

Assuming China has succeeded in overcoming all this, actual use of the ASBM entails an additional, political problem, the same one facing American plans to use conventionally-armed ballistic missiles for quick strikes--the launches may be susceptible to misinterpretation as a different kind of strike, with potentially strategic consequences. (It is worth remembering that the 1995 Black Brant scare was started by the launch of a comparatively innocent weather rocket.) That by itself may inhibit their use in a crisis situation, as might the fact that the use of ballistic missiles by one great power against another (something that has not happened since Germany's V-2 attacks against Britain in World War II, a situation not at all comparable) would be worrisomely unprecedented. At the very least, the threat to use such missiles would increase the possibility of strikes against launch sites inside the Chinese mainland, escalating any crisis situation.

These technical and political complications do not make the existence of such a system impossible, and it should be conceded that even a system that's only partly functional would be a factor in any U.S. calculations (for instance, regarding the placement of its carrier groups in a repeat of the 1996 crisis over Taiwan). Still, they also suggest a strong likelihood the weapon is too problematic for China to get much use out of it, and perhaps simply a stopgap solution to the acquisition of a more robust conventional capability. Despite the highly publicized appearance of the J-20 fighter this month, and new talk about a carrier program, it remains to be seen that this will materialize anytime soon.

China as Global Military Power
Alongside its economic profile, China's military profile has also risen in recent years. Besides the modernization of the country's large armed forces (highlighted by the ASBM and J-20 programs, and renewed talk about a Chinese carrier), the country has engaged in strategic sales of arms (for instance, to Iran and Sudan), and even sent troops abroad on unprecedented missions, as in the Shanghai Cooperation Organization's Peace Mission 2007 exercise (which saw Chinese troops training in the Urals in 2007), and more recently, the dispatch of warships to East Africa to fight pirates.

Some may take this as indicating China will be a global military power before long. Yet, it is not enough to have a large, modern army, navy and air force, or even to be capable of supplying arms and expertise to distant friends and send small forces briefly abroad on occasion. Rather a portfolio of very diverse, specific assets is required, namely:

* A blue-water navy (including sufficient auxiliary ships to sustain long-range operations, and aircraft carriers and amphibious assault vessels capable of projecting force landward from the sea).
* A long-range air force (including long-range bombers, and aerial refueling tankers, in quantities adequate to support major operations).
* Access to bases around the world capable of accommodating substantial air, land and sea forces engaged in actual combat operations for extended periods of time. Ideally some of these would host "forward-deployed" combat and support forces capable of not just providing a presence, but enabling a rapid response to crises.
* Sealift and airlift assets capable of swiftly moving large ground and air forces (think divisions rather than brigades, wings rather than squadrons) outside its region, and sustaining them in place for an extended period (years rather than months).
* The command, control, communications and intelligence infrastructure to manage large ground, air and sea forces engaged in operations anywhere in the world.

China is today in only the earliest phases of developing such assets. The Chinese navy's first carrier is still years away, and as the situation stands, the auxiliary ships simply aren't there. Its air force has only a small fleet of strategic airlifters--its planned fleet of fifty or so Ilyushin-76 transports perhaps half complete now--and its bomber and tanker fleets (the latter quite small, a mere ten aircraft) consist solely of H-6s--China's version of the '50s-era Tupolev-16.1 Despite much speculation about China's presence in Myanmar from the 1990s on, and more recently mention of a possible Chinese base in the Gulf of Aden, the country lacks even a single overseas base. And so on and so forth.

Relatively little attention is paid to most of these items, which tend to be dull and unglamorous and of little interest to superficial observers. (Lumbering transport planes are less exciting than sleek new fighters, auxilliary ships not as cool as destroyers bristling with weaponry.) Nonetheless, acquiring them will not be cheap or quick, the same reason that the European Union (which collectively possesses far vaster resources and more modern and diverse capabilities, by any measure) remains a long way from being in such a position.2

There is the fact of China's geopolitical position to think of as well. While the U.S. is in a relatively secure position in its hemisphere, with virtually no direct threat to its territory from neighboring conventional forces, China is a large power surrounded by many other large powers (e.g. Russia, India, Japan). Along with the issue of Taiwan (so long as relations between the two governments entail military confrontation), this is unavoidably a factor in its military posture, and its freedom to both invest in long-range capabilities, and send large forces far from home. Combined with its economic position (large in the aggregate, but far less impressive when considered in per-capita terms), the likelihood of a shift in its economic strategy bound to have some impact on its expansion, and the prioritization of growth over military acquisition, serious observers are far more likely to think 2050 than 2015 when thinking of a date at which China might be a world-class power in these key respects.

NOTES
1. The U.S. Air Force, by contrast, has nearly three hundred C-5s and C-17s for long-range transport, over 200 B-1s, B-2s and B-52 serving in the long-range bomber role, and over 500 KC-10s and KC-135s in its tanker fleet--a significant difference in not only the quantity of the aircraft assigned to each mission, but the quality of the aircraft as well.
2. It is noteworthy, for instance, that EU members Britain and France both possess numerous bases around the world capable of facilitating global operations, while Britain, France, Italy and Spain all operate aircraft carriers.

China's Sub Fleet
Five years ago, one forecast had China amassing a submarine force of as many as 180 boats by the mid-2020s – enabling it to outnumber the U.S. Pacific Fleet's submarine force by five to one according to a widely cited estimate published by John Tkacik. Developing such a force in this time frame required China to add six subs a year to their fleet, above replacement level – and virtually the whole current fleet would have to be replaced, given that the bulk of it is comprised by obsolete, aged Romeo, Ming and Han-class boats sure to be past their useful life by then.

In short, China would have had to launch eight boats every year for almost two decades to reach a force size of 180 subs. Such a rate of peacetime production seemed very unlikely to me. On the contrary, China's modernization of its modern forces has tended to produce smaller (though more up-to-date) forces.

A new analysis by David Axe in The Diplomat indicates that this is exactly what has happened. In the 2007-2010 period, China added a mere six subs to its fleet, a small fraction of the frantic rate of production needed to realize the higher estimates. As a result, China has some sixty submarines in 2011, its size remaining well below the aggressive estimates offered by analysts hyping the "China" threat (though modern Song and Kilo-class boats have replaced many of the older vessels in that time). It also seems likely that this force will shrink in the coming years, with Russia less willing to sell additional submarines (projections based on the Chinese Kilo purchase, in fact, seems to have contributed significantly to the overestimates of China's sub force increases).

Moreover, it is worth noting that boat-counting has its limits. There are significant differences between the relative handful of nuclear boats China seems likely to possess, and the diesel boats that seem likely to continue to comprise much of the country's fleet. The most important are submerged range and speed. The Kilo-class sub can sail six thousand miles while snorkeling at a speed of seven knots, while fully submerged, it can only do four hundred miles while crawling along at three knots (in comparison with a nuclear-powered Los Angeles-class submarine, which can sustain twenty knots while submerged, over a range limited only by the endurance of the crew).The upshot is that in today's threat environment, conventional submarines can be very effective in a coastal defense role, but are rather less suited to the kind of long-range operations undertaken by "blue-water" naval powers than the nuclear-powered vessels that make up the whole of the U.S. Navy's force. Additionally, as Axe notes, a straight comparison between the U.S. and China is simplistic given – as so many continually forget – China is itself surrounded by other countries with considerable naval establishments, and submarine forces, of their own, including Russia, Japan, India and South Korea.

The result, as Axe notes, is that "China isn’t building a world-class, globally-deploying submarine force. It’s building a mostly defensive, regional undersea force – and a smaller one than once predicted."

New and Noteworthy (Collected)

Back in the '00s, with social media rather less developed and utilized, it was not uncommon for bloggers to post little announcements or referrals to other material such as we would now convey to the world through a service like Twitter instead. I certainly did this with various items that caught my eye under the headings "New and Noteworthy," "In the News," "Items of Interest" and other such headings.

Many of these items have since lost their interest simply because they became dated, while in cases th items in question have disappeared altogether, such that it makes little sense to keep them here. Still, it seemed to me that a few were worth preserving and this post fulfills that purpose, providing a round-up of the lot in one place for anyone who might be interested in them, organized in chronological order, and under the dates of their publication.

December 10, 2008
* A new report about the risk of a WMD attack has cropped up in the headlines, The World At Risk: The Report of the Commission on the Prevention of WMD Proliferation and Terrorism the actual text of which you can find here.

The aspect of the report that has attracted the most attention is, predictably, the estimate in the Executive Summary that

The Commission believes that unless the world community acts decisively and with great urgency, it is more likely than not that a weapon of mass destruction will be used in a terrorist attack somewhere in the world by the end of 2013 (xv).

There is no explanation in the report as to why 2013 should be thought of as some significant benchmark, and while most of the press seems to have uncritically swallowed the claim, experts Donald Henderson and Michael Krepon have appropriately criticized the report for what looks like an attempt to hype up its findings.

It is also noteworthy that the report seems to totally ignore chemical weapons, the authors saying in the preface that they focused on nuclear and biological weapons because "they pose the greatest peril" (x), and leaving it at that. There is no mention of the sarin gas attacks by the Aum Shinrkyo cult in Matsumoto in 1994, which killed seven and sickened six hundred, and in Tokyo in 1995, which resulted in over six thousand casualties. (Instead the only mentions of Aum's activity, despite its lengthy record of activity in this area are in relation to a single botched anthrax attack on Tokyo (on pages 10 and 11).) Partly because of this, the report tends to give the impression that WMD use by terrorists, certainly in a mass-casualty attack, is unprecedented, though clearly it is not (this report itself citing the Rajneeshee cult's 1984 bioterror attack, which sickened over 700 people, with the anthrax attacks of 2001, and the full range of Aum's bioweapon activities, worthy of mention).

These are serious deficiencies which have attracted too little attention in the press, too accustomed to simply reporting what the People In Suits Say, instead of scrutinizing it.

* Speaking of lousy journalistic coverage, consider the treatment of the crisis in Greece, into which a general strike has just factored. The spark for this was the shooting of a youth by police, but the larger background to the situation seems to be long-running clashes between police and "anarchists" (I never know exactly what to make of that label here, given its vulnerability to abuse), and wide discontent with the corruption, incompetence (the mishandling of the wild fires of 2007, the fiscal mismanagement), and economic reforms (read: IMF-recommended neo-liberal measures, like privatizing the state telecommunications company and taking a hard line with labor), of the unpopular conservative government of Kostas Karmanlis.

One should note that Greece is not a Third World country. It is a member of the euro zone, with a $30,000 per capita GDP, putting it right between Taiwan and Italy for 2007. Its Gini score is 33, and its ranking in the Human Development Index is 24th in the world. It has problems with unemployment, debt, inflation, somewhat worse than Western Europe as a whole, but on the whole they do not seem to be very much so (the sizable current account deficit aside, partly due to the high energy prices now on the wane), and the country's growth has actually been comparatively robust (frequently clocking 4 percent a year these last several years, despite worries about slipping competitiveness).

In short, it is not the sort of place where things like this are "expected" to happen (like Latin America, for instance). Nonetheless, the numbers discussed above seem to miss some of the facts on the ground. These include youth unemployment, generally higher and in this case over 26 percent in 2006 according to Eurostat. Nor do they seem to reflect the actual poverty level, a recent study putting one in five households below that line (when the line is drawn at 470 euros a month, or about $7,300 a year), and attributing it to a relatively well-funded but exceptionally ineffective (mismanaged?) welfare system. Official inflation figures tend to understate the actual hardship for consumers of price shocks everywhere, but this is perhaps especially the case in countries which made the transition to the euro, with Greece in particular known to have "faked reported values of inflation in the run-up to accession of the monetary union in order to meet Maastricht criteria" according to this study by Milan Vyskrabka.

Simply put, this means things are worse than they look, and in some critical ways. The slowdown of growth, the promises of still more neoliberalism (keep in mind the country has a large public sector, so that the proportion of the citizenry directly affected will be comparatively large), and skimpy poor relief-justified on the grounds of a lack of money right after the Greek government provided the banking system with a generous and highly controversial financial bail-out (relative to the size of the Greek economy, equivalent to a $1.5 trillion package from the U.S.)-could not possibly be helping the political situation.

Looking at all this data, rarely touched on in the coverage of the riots, my guess would be that the causes of the current crisis are in large part economic, with the anomalousness of Greek politics perhaps playing a role as well. Following World War II the country went through a civil war, and in 1967-74, the country was ruled by a military dictatorship. The radicalization that resulted from it does not seem to have fully disappeared today-one expression of which is the size of the Communist Party (number three in parliament, with an eight percent share), and an opposition to U.S. foreign policy strong even by European standards (though those who see the world through Sam Huntington's "clash of civilizations" lens may also point to the country's Greek Orthodox religious identity). Immigration does not seem to be the "wedge" issue it has been in West European countries, helping to bouy conservative policies in spite of their rarely popular economic components. And the centrality of Athens as a center of Greek life (literally half the country's population lives there) adds to the government's vulnerability.

Nonetheless, with the world struggling through a financial crisis and economic slowdown so sharp as to evoke the "D" word from commentators who would ordinarily never dare let it slip past their lips, and energy prices on the wane now but perhaps poised to rebound even higher (Kevin Phillips speculating on C-SPAN2 yesterday about their going back to over $200 in just a few quarters), and the daily news offering one blast from the pre-neoliberal past after another, the way things are playing out in Greece may hint at the dangers to security and stability that other nations could face in the coming years. When even a eurozone member has this kind of trouble, other, poorer countries are unquestionably vulnerable, and it stands to reason that other affluent countries, many of which are in the same boat with regard to the problems discussed above, may not be totally exempt.

January 19, 2009
* The protests continue in Greece--as have other incidents, including domestic terror attacks staged against the police. (Those only newly following the issue can check out my earlier coverage of the matter, in this blog post, and my subsequent follow-up to it.)

Readers should note that Greece is far from being alone in facing such discontent, Bulgaria and the three post-Soviet Baltic republics (Estonia, Latvia and Lithuania) all having unrest of their own related to government corruption, economic contraction and yet another round of painful reforms imposed on them by international financial institutions, which you can read about in this Guardian article here.

May 17, 2009
* Accelerando author Charles Stross's extrapolation of the future of computer technology (with a focus on gaming) from what he terms a "laughable conservative" set of assumptions in a keynote address at the 2009 LOGIN conference in Seattle (the text of which is available on his site).

* A recent piece in The Economist on the state of ocean mining, another of those ideas that seemed likely to go much further back in the 1970s (indeed, such expectations played a role in the development of international maritime law in that period).

* The latest Reading Radar Weekly Round-Up from the folks over at The New Security Beat.

May 21, 2009
* Gyre.org has identified plenty of interest in recent days, including a piece from Scientific American on the rush on the world's seabed (recently highlighted by Russia's claiming of the North Pole, though this is far from the only instance); work on instilling "ethics" in robots; the ecological impact of space debris (extending to ozone depletion); an article discussing a recent GAO report on the prospect-and implications-of GPS service deterioration; and the capabilities of next-gen telescopes with regard to the spotting of "biosignatures" (like atmospheric water vapor) on exoplanets.

* Dwayne Day has produced another excellent article on the space colony concept as it was once presented, and their fading from the popular consciousness, in "The God That Failed" (a topic I've touched on in pieces like "Revisiting Island One", where I considered the finances and logistics of trying to realize Gerard K. O'Neill's plans with the space shuttle as we know it).

* Science fiction writer Charles Stross recently weighed in on his own blog on the subject of his own recent experience riding American rail, and how it stacks up against service in Europe and Japan (a topic timely again with new attention being drawn to American infrastructural deficiencies, and Keynesian policies which may help to correct them).

* In part due to the concern over swine flu (and in the U.S., optimism about the housing sector which strikes me as rather exaggerated), the global economic outlook remains pretty lousy, most of the major players logging scary drops in GDP during the first quarter of the year. Forbes recently presented us with a round-up of developments worldwide, but here's the Washington Post on Japan, where the 14.4 percent "annualized" decline in GDP over October to December was followed by a 15.2 percent drop in the first three months of this year, though the observers quoted believe the situation is bottoming out.

* RTTNews and Xinhuanet on trouble in the Eurozone, where all the major economies are still contracting, not as badly as is the case in export-driven Japan, but apparently harder hit than the U.S., their GDPs ending up about 4.6 percent smaller in the first quarter of 2009 than they were in the same quarter in 2008. And there is also some prognostication about the prospects for Europe as a whole from the New Europe newsweekly, positing more shrinkage this year and contraction all the way through 2010 before recovery begins, and also

* Fistful of Euros' briefing on Russia, where the first quarter had the country's GDP 23 percent smaller than a year before, not only because of fallen oil prices, but a very sharp drop in industrial output, and while some are claiming mixed signals, the Russian government is speculating about the possibility of an 8 percent contraction over the year as a whole.

Are we through the worst, with things likely to go back on track (such as it was) later this year, or the next, or at worst the year after that? Perhaps, but then again perhaps not, and this piece from FinFacts on the state of the Irish economy (booming, and until recently, widely held up as a model for others) caught my eye. According to the accounting firm of Ernst & Young, Ireland is looking at a full-blown depression (by virtue of a shrinkage of its GDP by 10 percent), with an employment picture that may not quite return to pre-crisis levels until 2021. (Read the Executive Summary of the report here.)

Interestingly, much of what Ireland supposedly did right (here termed "the one-dimensional economy") seems to be part of what is going so wrong (a point the report's summary notes on page 22), and it is worth noting that a few years ago Finfacts reported on a a study by the International Integration Institute at Dublin's Trinity College in 2006 which discussed the country's vulnerability in the event of a downturn in the high-tech or financial services sectors.

These disproportionate impacts, the questions they raise, and the bleaker possibilities they point to ought not to be overlooked.

June 22, 2009
* Economic historians' Barry Eichengreen and Kevin H. O'Rourke update of their April 6 column regarding the present economic situation (apparently part of their work toward a full paper to run in Economic Policy). What they conclude is that "world industrial production continues to track closely the 1930s fall," with German, Britain and the U.S. and Canada tracking the fall of the '30s closely, and France, Italy and Japan actually doing worse. Additionally, despite the rebound of world stock market since March and the stabilization of world trade these were "still following paths far below the ones they followed in the Great Depression."

In short, the situation is not just as bad as it was in 1929-1930, but in some important ways worse. However, they are hopeful the worst can be averted, in part because of the more aggressive response in the form of monetary growth and stimulus.

Martin Wolf, commenting on their column in the Financial Times notes that "the combination of strong monetary growth with deep recession raises doubts about the monetarist explanation for the Great Depression," and accordingly he focuses on stimulus. He raises the concern, however, that governments might not be able to sustain the necessary levels of stimulus.

I think Wolf is right on both counts, and find myself turning to the U.S. economy's performance during the years of the New Deal. Following the sharp contraction of 1929-1932, the massive expansion of U.S. government spending restored the 1929 level of America's GDP by 1936, and by 1940 produced a figure 20 percent higher than that. The price, however, was the quadrupling of the once small federal debt in the space of those years. (Those curious about the numbers can check out my stats and calculations here.) And they still did not effect a long-term revival, however, the rapid global growth of the 1940s, 1950s, 1960s and early 1970s being driven by much more than that (World War II and the rebuilding that followed, the Cold War, "the welfare state"-things that might be said to have built stimulus into the system on a routinized, sustainable basis) in a situation that may not repeatable.

Indeed, we seem set to go in the opposite direction, given the talk of austerity in Europe and elsewhere, likely only to deepen the hole-as Nicolas Sarkozy himself has said, pointing out that "an austerity policy . . . has always failed in the past" in one of his rare moments of lucidity. (Whether the actions of the man who has so often struck onlookers as a "French Thatcher" will reflect this rather sound thinking remains to be seen.)

And we can expect the resulting troubles to extend far beyond the merely economic. As Greece demonstrated (those who don't remember the troubles there can refresh their memory here), even Western Europe is not immune to the kind of unrest we tend to associate with Latin America, and as this round-up from Reuters shows, the talk already has people in the streets. As the results of the EU elections earlier this month show, a radicalization of public opinion (so far, trending far-right) may already be underway.

June 24, 2009
* On the heels of Monday's sourer-than-expected news from the World Bank (in the Global Finance Development 2009 report) came a slightly better-than-expected prediction from the OECD.

As the opening of the preliminary edition of the latest Economic Outlook says, "For the first time since June 2007, the projections in this Economic Outlook have been revised up for the OECD area as a whole compared with the previous issue." The authors give the credit for this to "massive policy stimulus and progress in stabilising financial institutions and markets."

Still, one should not make too much of the difference between this piece of news and what we got on Monday, the Paris-based organization simply forecasting a milder contraction this year (a 2.2 percent rather 2.9 percent reduction in GWP), with a return to growth next year (somewhat more robust than in the WB's guess), and virtually every page of the document reiterates the point that even if 2009Q2 may see the end to the sharp (Depression-level, as Eichengreen and O'Rourke point out) contraction of the preceding six months, we are not out of the figurative woods.

And strings are attached to such optimism as they can offer, particularly at the policy level continued loose monetary policy and supportive financial policy-read government propping up of the banks-are necessary, while governments should not be too hasty about tightening their belts, and "reemployment measures" need to be strengthened to prevent cyclical unemployment from turning structural. (The last two are not a trivial conditionalities, given the talk of austerity that already has some economists very worried.)

On top of this the authors of the Outlook warn that

the financial system may be more vulnerable to weaknesses in the real economy than assumed in the projection which in turn would have negative repercussions on growth. This risk of a negative spiral would be amplified if households and businesses were to expect that a sustained period of deflation was imminent, in contrast with assumptions behind the Secretariat‟s medium-term reference scenario . . . Other downside risks include a faster increase in bond yields due to sharply deteriorating public finances and a stronger response of household spending to higher unemployment.

Additionally, unemployment levels will remain high-10 percent in the U.S. (official number; the real one's bigger, as those who've been following this blog well know) for some time to come, those hoping to find it not getting the reassurance that the U.S. is not, after all, the "new" France.

* Those at least willing to consider the possibility that officialdom may be a little too quick to say the fall's bottomed out should check out this article by Joshua Holland over at Media Channel which, unlike far too much of the coverage, is attentive to the structural, long-term weaknesses of the U.S. economy, and the toll it is taking on American householders, as well as the hard facts regarding real estate, energy and other elements of the situation which might not necessarily cooperate in the promised recovery.

* Over at MSNBC.com, Tim Hanson also considers another underappreciated aspect of the situation: what the crisis may mean for the unbalanced economic relationship between the U.S. and China.

October 8, 2010
* By way of Gyre.org, a piece in New Scientist discussing the prospect of harnessing the solar wind to meet the Earth's energy needs.

* An article in LiveScience discussing China's blocking a shipment of rare-earth minerals to Japan, which the author links to the dispute over Japan's arrest of a Chinese fishing crew. (Indeed, Leonard David at Space.com references the possibility in his discussion of the question of whether resource politics on Earth make moon mining a national security imperative for the U.S..)

* A report from National Public Radio on popular reaction to the country's economic troubles. Ireland's case is all the more noteworthy given that the "Celtic tiger" had not only appeared to perform so well in the years prior to the 2008 crisis, but had been widely held up as a success story of neoliberal globalization; and afterward, suffered particularly deeply (as noted in the report firm Ernst & May, the GDP decline rated the D-word--"depression")--arguably, because of how closely it hewed to the same fashionable prescriptions for which it was so highly praised.

* By way of Futurismic, a piece by "Lay Scientist" Martin Robbins in the Guardian satirizing bad science journalism, which is, of course, far and away the predominant kind. (Case in point: Time magazine's annual list of "50 Best Inventions," which I discussed on this blog a couple of years ago.) Since then, Robbins has offered a follow-up in which he offers his more straightforward critique of the field.

December 22, 2010
* As a practical matter the transition to a post-fossil fuel economy is for the time being far more likely to entail a shift to a reliance on other kinds of resources rather than freedom from the limitations of the planet's resource base all but promised by those Thomas Homer-Dixon refers to as "economic optimists." This has raised questions about "post-fossil fuel energy security," reflected in discussions in recent months about rare earth metals. This month the U.S. Department of Energy released the Critical Materials Strategy report examining the role of rare earth metals (getting much more attention in recent months) and other materials (lithium, cobalt, indium, tellurium, gallium, etc.) in the "clean energy" economy.

The report (which is comprehensive, even if the vast area it covers means a great deal can only be touched on briefly) examines the use of particular materials in particular products (like batteries for electric vehicles, wind turbines, photovoltaic solar cells with thin-film conductors and fluorescent lighting systems) (chapter 2), historical supply and demand for the materials in question (chapter 3), current programs relating to those materials in the U.S. (chapters 4 and 5) and abroad (chapter 6), and projections about supply and demand (chapter 7). These are followed by an assessment of the criticality of supply in the short- and medium-term for each type of material (chapter 8). In its final chapter (chapter 9) the report outlines a strategy for securing supplies by diversifying the list of suppliers; identifying appropriate substitutes; and more efficient use, recycling and reuse of the necessary materials; with R & D, the encouragement of domestic production, and stockpiling and diplomacy all playing roles in the plan.

* A story in The New Scientist discussing yet another dark side to the "emissions trading" component of the Kyoto Treaty (on top of the way in which it encourages a redistribution of emissions allowances rather than emissions reduction)-specifically the incentivizing of enlarged production of a certain type of greenhouse gas, HFC-23. This is a useless but extremely climate-unfriendly byproduct of HFC-22), a refrigerant used in developing nations. The concern follows a demand by Chinese chemical companies that they receive a subsidy for destroying their HFC-23 stocks rather than releasing them into the air (vastly disproportionate to the cost of safe disposal, perhaps by a factor of 100), raising the specter of an overproduction of HFC-22 (and its byproduct HFC-23) to milk the system.

* By way of The New Security Beat, the Stimson Center article "Wither the Demographic Arc of Instability?" which offers a global overview of projected changes in the age structure of the world's countries (with a focus on the date at which the median age moves past 25)-significant because the zone of "youth bulge" countries largely overlaps with what has been variously termed the "Global Balkans," the "Non-Integrating Gap," or "The Arc of Instability" (from which the article's title is derived), encompassing those areas where armed conflict has been most frequent and bloody in recent decades. While Mexico, Central America, the Andean countries, much of the Caribbean, the whole African continent, southwestern, southern and southeastern Asia are presently inside this category (with Brazil only recently leaving it), the projection has the situation largely confined to sub-Saharan Africa by 2030 (with only a handful of exceptions, like Yemen, Afghanistan, the West Bank and Gaza). The item also offers a brief but useful history of the development of "political demography" as a field. Also at the Beat: a video featuring Joel E. Cohen (the author of 1995's classic How Many People Can the Earth Support?), and a repost of Robert Engelman's analysis of the role of demographics on climate change at the Worldwatch Institute's Transforming Cultures blog.

February 4, 2011
* An in-depth analysis by Daniel Indiviglio of The Atlantic parsing the BLS's unemployment data for January--and showing that the improvement in the numbers (particularly a drop in the U-3 rate from 9.4 to 9 percent, in the U-6 from 16.7 to 16.1 percent during that month) is not due to job creation, which remains paltry. (The month saw a net gain of a mere 36,000 jobs, accounting for less than a tenth of the change.) There is of course disagreement about where the rest of the change comes from, with some observers (Indiviglio included) suggesting it is mainly a matter of discouraged workers finally giving up, though Emily Kaiser at Reuters offers a somewhat more optimistic view. One possible bright spot is that, where in previous months most of the gains have tended to be in services, manufacturing has led the way this time, though Jeff Harding at Seeking Alpha offers a reminder as to why a sustained recovery is unlikely--the softness of demand, which seems unlikely to change anytime soon. In short, it's still a long way back to where the U.S. economy was in 2007--which really wasn't all that great to begin with.

* Two articles in The New Scientist, discussing a pair of reports released this week about how the nine billion people likely to inhabit the world by 2050 might plausibly be housed and fed. The reports are, respectively, One Planet, Too Many People? (which actually considers food, water and energy alongside urban shelter), published by the British Institution of Mechanical Engineers' and freely available online; and Agrimonde: Scenarios and Challenges for Feeding the World, published jointly by France's National Institute for Agricultural Research (INRA), and the Centre for International Cooperation in Agronomic Research for Development (CIRAD).

Both argue for the manageability of the problem, the One Planet report noting in the overview of its recommendations in the executive summary that "there are likely to be no insurmountable technical issues in meeting the basic needs of nine billion people and improving their world through engineering" (p. 9). They have been received as good news because of this, but the optimism is not unconditional: as the same report goes on to say,

there is much urgent work to be done in preparing to meet this mid-century peak in a sustainable way. It is evident that many of the potential barriers to developing these solutions and ensuring a successful outcome are not technological, but lie in the areas of politics, social ethics, funding mechanisms, regulation and international relations (p. 9).

Of course, these barriers are far from trivial (indeed, the "social ingenuity" needed to tackle a problem is often tougher to come by than the technical kind), but the fact of feasibility is meaningful in itself.

April 19, 2011
* Oliver Wyman's scenario for the next financial crisis. (The Atlantic offers a summary here.)

* The Washington Post on the spark that started the wave of revolutions across the Middle East--fruit vendor Mohamed Bouazizi's protest against Tunis's corrupt and abusive cops.

* A story in the Daily Mail on an improved version of the "artificial leaf" that may make a contribution to the expansion of renewable electricity production.

May 1, 2011
* In Slate, Nouriel Roubini asks whether China's infrastructure-heavy macroeconomic policy, which helped it to blunt the effect of the global economic crisis, is not running out of steam. The article has its share of conventionalities, but the question is a valid one, and Roubini raises some very good points. (It is also a reminder that the reality of China's policies--far more reliant on government stimulus than the U.S.'s--makes the ridiculous, xenophobic commercial from "Citizens Against Government Waste" all the more ironic.)

* New York Federal Reserve Bank President William Dudley was recently booed when he told an audience in Queens that there was no inflation. Economists have long been whining about deflation when it's been the "I" word (and plenty of it) that ordinary people have confronted on a daily basis (not least at the grocery store, as the New York Times noted in a recent article on the concealment of rising food prices in shrinking package sizes), this happening, incidentally, as paychecks trend in the opposite direction, a connection too few seem to be making. Of course, rising prices for energy and food--already a source of crisis in significant parts of the world--as well as a weaker U.S. dollar--especially given the inflationary monetarism that has been the Fed's standard operating procedure and the persistent U.S. trade deficit--are trends that can only be expected to sharpen for the foreseeable future.

May 12, 2011
* After six and a half years Jason Sigger has written the last post for his blog, The Armchair Generalist due to a job change. By offering a blog devoted to a progressive view of military affairs, Sigger's blog filled an important niche, and I am sorry to see it go. However, it seems his earlier posts will remain available online, so those unfamiliar with his site can still check out his previous commentary.

* At the Washington Post, Ezra Klein recently assessed President Obama's policies--and found that, far from being the "socialist" he has so often been accused of being, his policies are those of an early '90s moderate Republican. At the New York Times' blog Five Thirty-Eight, Nate Silver offers a rebuttal to this analysis, but doesn't--indeed, can't--dispute the significant rightward shift of American politics overall since the '90s, by no means the start point of the trend.

On a related note, two pieces from the Huffington Post. In the first, Dan Froomkin at reports on a study by public watchdog group Public Citizen of Democrats' increasing fear of the power of moneyed interests to mount attack campaigns in the wake of the 2010 Supreme Court decision in Citizens United vs. Federal Election Commission. In the second, British columnist Johann Hari considers what Donald Trump's apparent bid to become America's answer to Italy's Silvio Berlusconi says about the Republican Party.

* Two new studies regarding energy consumption. The first (discussed in an article by Jeff Tollefson in Nature) is Energy Emergence: Rebound & Backfire as Emergent Phenomena, a review of the academic literature on the "rebound effect" in energy use by researchers at the Breakthrough Institute. To quote the summary's findings,

Rebound effects are real and significant, and combine to drive a total, economy-wide rebound in energy demand with the potential to erode much (and in some cases all) of the reductions in energy consumption expected to arise from below-cost efficiency improvements . . . [and] render the relationship between efficiency improvements and energy consumption interrelated and non-linear, challenging the assumptions of commonly utilized energy and emissions forecasting studies.

Nonetheless, the study does not dismiss energy conservation, rather offering a "new framework for envisioning the role of below-cost efficiency improvements in driving energy modernization and decarbonization efforts." (Summed up briefly, the authors suggest the benefits of "below-cost energy-efficiency improvements" are worthwhile, mainly because of their contribution to economic growth, which will better enable a more plausible source of decarbonization--a shift to "decarbonized" energy production that will be easier for a more affluent society.)

The second (which Christina Larson reports on for Scientific American), is an assessment by the China Energy Group at the Lawrence Berkeley National Lab, China's Energy and Carbon Emissions Outlook to 2050. China's Energy suggests that China can meet its government-set goals in the area of energy efficiency and carbon intensity, and anticipates a

saturation in ownership of appliances, construction of residential and commercial floor area, roadways, railways, fertilizer use, and urbanization . . . [and] slowing population growth

by 2030. The result is still a massive increase in energy consumption and carbon emissions, but perhaps a more useful (and hopeful) basis for action than other scenarios of more explosive growth (this study including an "alternative" as well as a "baseline" scenario).

May 25, 2012
* Author Chris Hedges on what he calls "The Globalization of Hollow Politics." Reporting from France prior to the recent presidential election in that country, he offers a reminder that the phenomenon he described in his book Death of the Liberal Class (recently reviewed here) is not at all a uniquely American phenomenon.

* Over at Alternet, an interview with Morris Berman, author of the recent Why America Failed (the concluding book in his "trilogy" about American decline, The Twilight of American Culture, and Dark Ages America). Among other things, the interview provides a good overview of the case he makes in his latest book. Rather idiosyncratic in some respects (Berman's argument draws on, among other things, an unconventional take on the antebellum South), it is certainly thought-provoking.

* From The Diplomat, a report on a recent poll carried out jointly by the Center for Public Integrity, the Program for Public Consultation and the Stimson Center regarding defense spending – which found broad support, in virtually every demographic, for significant cuts in a host of areas (including withdrawal from the Afghan War), and "modest majorities" favoring "dumping some major individual weapons programs, including the costly F-35 jet fighter, a new long-range strategic bomber, and construction of a new aircraft carrier."

* An opinion piece from Walt Gardner (of Education Week's "Reality Check" blog) on the fate of public schoolteachers in the face of two trends: teaching scripts and the proliferation of computers with educational software. It's an old question all the more pressing with budget troubles at all levels of government and public-sector unions an increasingly easy target as American politics continues its rightward shift.

July 26, 2011
* Glenn Greenwald in Salon on the New York Times' shabby and shameful coverage of the neo-Nazi terrorist attacks in Norway, and the (frankly, bigoted) misuse and abuse of the word terrorism that has become standard in the mass media.

For a bit of additional perspective, check out Dan Gardner's analysis of the European Union's Terrorism Situation and Trends Report 2010 (which incidentally makes clear that perhaps 80 percent of the terrorist attacks attempted in 2009 in the EU are the work of separatists, operating mostly in France, Spain and Ireland).

* Reported by way of Energy Bulletin, here's Kris De Decker's excellent article for Low Tech Magazine on an aspect of the solar energy issue that gets little consideration - the use of solar thermal power for industrial production. Decker argues that this is a practical and useful supplement to electricity generated by photovoltaics, which has the potential to get us that much closer to a renewable energy base.

* And finally, from the Huffington Post, a report on the discovery of a rich deposit of rare earth minerals off Japan - only part of the possibly 100 billion tons of them that may lie below the world's oceans (some 1,000 times the size of the deposits found on land to date). Given the important role of such elements in renewable energy technologies (and worries about China's present near-monopoly on the production of these minerals), there is cause for optimism here - though it is also worth remembering that ocean mining has frequently been overhyped in the past.

Revolution and Rebellion in the Postmodern World

Jack A. Goldstone offered a consideration of the causes of political instability that seems timely now in his classic Revolution and Rebellion in the Early Modern World (1991), a useful book despite the biases (and distractibility) of its author.1 Goldstone observed there that a combination of youthful population, urbanization, and economic stress extending as far as falling real wages and rising "elite competition" (too many qualified applicants for too few "good" jobs, the accompanying credentialing crisis, etc.) sets the stage for revolution; and moreover, that this combination of circumstances is apt to be demographically driven.

All of these have certainly been evident in the Middle East and North Africa. Additionally, recent events have exacerbated these circumstances. While it's the spread of social networking technologies like Facebook and Twitter that have got all the attention in discussions of the ongoing revolts in the Middle East, food prices--which hit record levels in January, exceeding even those seen in the "food and fuel crisis of 2006-8"--are likely to have been the bigger factor.2 That crisis saw developing nations (where poverty makes the populations more sensitive to price shocks) hit especially hard, many of them (including Egypt) seeing riots as a result, events which seem like a prelude to the economic shocks that followed (the Great Recession of 2008, the renewed rise of food prices) and the greater instability evident now.3

Goldstone also offered an insight into why revolutions (to which he is hostile) do not deliver what they promise; simply put, they take over from a previous regime that had already found itself pushed to the wall, its options and resources exhausted.4 (Put another way, by the time the revolutionaries take the palace, the treasury's empty and creditors are pounding on the gates.) A successor government can hardly deliver rapid, positive transformation in such circumstances.

This is all too likely to be the case again, especially given that, in Egypt at any rate, the change of regime seems to fit a pattern Parag Khanna described in his book The Second World:

Small countries . . . which have less economic weight than many large companies, often act as such corporations do, firing a bad CEO first and worrying about who should replace him later.5

Moreover, the deeper causes of the problem (climate change-fueled extreme weather, population stress, scarcities of energy and other resources, the vulnerabilities attendant on greater integration into a global economy and fuller exposure to the vicissitudes of international finance, the pattern of falling investment and budgetary pressures during four decades of slow economic growth) suggest that the current unrest is just a local, present manifestation of issues which are far wider, bigger and likely to get more disruptive in the coming years.

NOTES
1. Unfortunately, Goldstone goes beyond the useful thesis he advances to not just offering this pattern as a complete and universally applicable theory, but devoting much effort and space to arguing for that theory as an outright replacement for the Marxist approach to history he seems desperate to replace (not least, in his "straw man" treatment of Marxist historiography). Of course, conservatives have been playing the game of using Malthus to answer capitalism's critics for two centuries, Malthus himself writing his Essay on the Principle of Population (1798) to refute the social engineering schemes of William Godwin and the Marquis de Condorcet--clearly, without accomplishing their objective. After all, the two explanations are not mutually exclusive.
2. As Malcolm Gladwell noted in a lucid piece in The New Yorker in October 2010, the technologies that have got so much press support

a form of organizing which favors the weak-tie connections that give us access to information over the strong-tie connections that help us persevere in the face of danger. It shifts our energies from organizations that promote strategic and disciplined activity and toward those which promote resilience and adaptability. It makes it easier for activists to express themselves, and harder for that expression to have any impact. The instruments of social media are well suited to making the existing social order more efficient. They are not a natural enemy of the status quo.

3. The last time, rising petroleum prices (which hit $150 a barrel that year) were the component in the mix of factors (which also included bad weather and "soaring" futures markets) that got the most attention. This time, extreme weather and crop failures have received comparable attention, though oil prices are trending upward again, recently hitting $100 a barrel for the first time since prices crested and dropped in 2008. (Events in the Middle East seem to be cause rather than effect, however.)
4. Gabriel Kolko, who approaches some of the same issues from a leftist (albeit non-Marxist perspective) goes further, arguing in Century of War (1994) that revolutions do not so much topple the previous regime as step into the vaccum left by its collapse (though they achieve their successes by being better able to "articulate the desires of the masses," as well as "making fewer tactical and strategic mistakes than their rivals").
5. Parag Khanna, The Second World: Empires and Influence in the New Global Order (New York: Random House, 2008), p. 29.

Piracy in 2010

The International Maritime Bureau's Piracy Reporting Centre has just released its report on piracy during the year 2010. As anyone who's followed the issue might guess, it was another record for maritime violence, continuing the trend toward more attacks (up 10% over 2009, and the fourth straight year of increase), and especially more ships (53) and hostages taken (1,188), with the locus of activity still the waters off the Horn of Africa, particularly where the more serious attacks are concerned.

Until the spike in activity off Somalia, hijackings were a very rare occurrence, even as piracy increased through the 1990s and early 2000s (developments in which Somalia was also prominent). Now they occur almost weekly, and involve unprecedently large prizes (like supertankers, where '90s-era hijackings involved freighters displacing just a few thousand tons), events which far exceeded the most dramatic projections I remember encountering when I first looked at the issue a decade ago.

This all goes on in spite of widespread awareness of the problem and precautions taken to avoid it, as well as the presence of a massive, active international naval force in the area. It is the position of the Centre's Director, Captain Pottengal Mukundan, that the force has deterred a still larger number of attacks, and it is worth noting that incidents in the Gulf of Aden fell off by half in 2010 (down to 53 from 117 the year before)--as well as the fact that the pirates are venturing further out to continue their business:

In December 2010, they reached as far south as the Mozambique Channel and as far east as 72° East longitude in the Indian Ocean, an operating range IMB says is unprecedented.

Put another way, they are capable of operating (to some extent) all over the whole western half of the Indian Ocean, and the intensity of their operations is something not seen since the nineteenth century.

A significant factor, of course, is something about which naval patrols do very little--namely, the situation onshore. Pirates operating on any scale (let alone the formidable scale that permits attacks on ships 1,000 miles away from home, and the holding of dozens of ships and hundreds of sailors for ransom at once, as has become routine) simply can't function without bases onshore. In recent years, pirates have generally found bases where states situated along strategic sea lanes have collapsed. Just as the turmoil Indonesia went through in the late 1990s had much to do with a spike in piracy in its region, the collapse of Somalia (a country with a nearly 1,900 mile-long coastline at the southern end of the Red Sea) at the Cold War's end made the country a locus of piratical activity. Unfortunately, a stable, functional Somalia still seems quite a ways off--while the pressures that drive states to failure seem likely to get worse in the years to come as demographic, resource and climatic pressures weigh all the more heavily on the international system.

The Real Unemployment Rate (Collected)

Back in 2009-2010 I published a number of posts about the monthly unemployment report, rounding up what seemed to me the relevant commentary and getting in my own two cents (not least, in looking beyond the usually cited U-3 figure to the other, more expansive measures of unemployment). For whatever interest they may still have (if only as a time capsule) I have decided to gather the more substantive of them together below.

June 5, 2009
Regular readers of this blog know the drill. Another month, another unemployment stat when the BEA puts out its report for May 2009, which it usually does the first Friday of the month.

According to the release, May saw the official ("U-3") unemployment rate rise from 8.9 to 9.4 percent-a full half percent increase, for the second month in a row.

The "U-6 measure," the fullest calculation of "labor underutilization" regularly reported in the BEA stats (counting not just "total unemployed" but also marginally attached workers, discouraged workers and involuntary part-timers) went up from 15.8 percent of the work force in April to 16.4 percent in May.

Once again, this bad news is being packaged as a "good news, bad news" deal.

The good news is that the job loss rate is slowing. What this means when you look at the actual numbers is that 345,000 jobs were lost in May-a lousy number, but still less than the half million-plus seen in recent months.

Yet, the overall 9.4 percent number that resulted from this slower pace of loss is worse than what was expected (apparently, a 9.2 percent unemployment rate).

This implies a contradiction which has not been commented on (how can fewer job losses than expected track with more unemployment than expected?), and so one has to look below the surface of that number.

As it happens, the category that saw the main increase is people coping with long-term (15 weeks+) unemployment, which went up from 4 to 4.5 percent of the work force, this happening without depleting the other categories covered, there being "more where they came from."

One explanation for this is that more people are participating in the labor force. There is a tendency to think of this as an unusual, temporary aberration, but it may plausibly be taken to mean that the hard times have driven a certain percentage of people who earlier didn't feel that they had to work to look for employment (retirees who have watched their investments vanish; members of households coping with the loss of income, etc.)-skewing the figures perhaps, but in a way that reflects the current difficulties.

Additionally, it is worth noting that the "official" (9.4 percent) figure does not include those working on an involuntary part-time basis, a category which did see a slight increase during May, and may also be reflected in the cutbacks in hours worked. The work week is down to 33.1 hours, the shortest it's been "since recordkeeping began in 1964." As Liz Wolgemuth of U.S. News & World Report notes,

cost-cutting employers may have slowed their job shedding but continued to slash their employees' hours. Indeed, more than half of employers surveyed last month by outplacement firm Challenger, Gray & Christmas reported using cost-containment strategies such as cutting salaries and wages, while a smaller percentage were cutting staff.

This must be recognized as a different strategy, distributing the economic pain differently, rather than clear-cut proof things are getting better.

While not related to the problem at hand, it is also worth noting that the steepest losses were in the sectors concerned with actually making things (particularly manufacturing, where 156,000 places were lost), whereas the sectors adding jobs were in services (health and government, particularly-with in the latter cases, federal employment seeing job losses, while education systems have done some hiring). Of course, this would seem to be a commonplace, manufacturing being more susceptible to such shocks, and quicker to let workers go, but given the long-term trend of U.S. deindustrialization this would seem to support Richard Moody's claim that the recession is creating a great deal of structural, rather than cyclical, unemployment.

Not inconsistent with such an outlook, James Galbraith recently predicted that not only will the official figure hit 10 percent, but that it will stay there for "a long time"-perhaps years (an assessment that brings to my mind the bleak picture projected for Ireland in the report by Ernst & Young I discussed last month).

Even the comparative optimists banking on a recovery in the third quarter of the year (July-September) expect the employment picture not to recover this year, improvements in the employment generally lagging recoveries (perhaps by up to a year in this case, according to one prediction).

My guess-looking at the collapse of business investment reported in last month's GDP data, and the data from earlier this week testifying to the weakness of consumption, is that while we may see some ups as well as downs in the months to come, the foundations of a really solid recovery have yet to be laid-and things could yet get worse than even Galbraith has speculated.

July 5, 2009
The BLS reported on Thursday, July 2, that the official (U-3) rate's 9.5 percent, while the more inclusive U-6 rate hit 16.5 percent. (In each case, the figure is up 0.1 percent from what it was in May.)

This report is apparently "not as bad" as what was expected (a 9.6 percent U-3 rate), even though the number of job losses was higher than forecast: 467,000 workers got pink slips, many more than the figure predicted (over 100,000 more actually, and close to 50 percent more than in May).

This lower-than-expected unemployment rate, despite higher-than-expected job losses, is all the more surprising given that the percentage of the labor force which is suffering long-term (15 weeks+) unemployment (the U-1 category) saw a big jump-from 4.5 percent in May to 5.1 percent in June (a full 0.6 percent).

At least part of the explanation would seem to lie in the shrinkage of the work force. While some economists last month were quick to point to the labor force's expansion as a factor in the high unemployment rate (it rose by over a million between January and May, which as I noted last month could be read as a sign of distress) the number dipped by over 150,000 from May to June (about 0.1 percent of the work force) as people drop out of the game, an issue rarely acknowledged in the press (Liz Wolgemuth of U.S. News & World Report, whom I also cited in my discussion of this issue last month, being the one exception I've come across).

In any case, simply counting up the number of unemployed understates the problem, because those who do have jobs are still seeing their hours drop. The average work week is now down to "33 hours . . . the lowest level on record," which combined with weak earnings growth (hourly earnings were flat), means falling income (even prior to adjustment for inflation).

As to the longer term picture: this recession has effectively erased the growth in employment of the last business cycle in its entirety, so that as far as the number of jobs available countrywide goes, we're back where we were in 2000, when the country's population was about 10 percent smaller. (And it is well worth noting that manufacturing has been especially hard hit, again accounting disproportionately for the lost jobs-136,000 of them, or almost 30 percent-speeding us further and faster along the road to deindustrialization.)

Of course, there is still plenty of optimism among the talking heads, still promising a turnaround in the "second half of the year" (which we have just entered). One reason is that announcements of layoffs to come seem to have fallen to their lowest levels in 15 months.

Still, the general expectation is that unemployment will hit 10 percent later this year, and just as the talk of "growth" has meant increasingly less to those who actually have to work for money, so will "recovery" (likely to take years where job creation is concerned, in even the optimitsic forecasts-even some mainstream ones being much worse) mean little as this "indicator" (if you actually need a job to live, it's far more than that to you) continues to lag.

November 16, 2009
As was widely reported in the press, we hit (and passed) the much talked-about milestone: 10 percent of the American work force "officially" unemployed.

The actual number is, of course, 10.2 percent.

The figure denoting long-term job losers (15+ weeks out of work) is likewise up, to 5.7 percent (compared with 2.7 percent of the work force exactly one year ago, when the panic was at its height).

And of course, the broader, U-6 category, now stands at 17.5 percent-more than one in six members of the work force presently lacking the full-time work they wish they had.

For a better than average assessment of the news, check out this post from Seeking Alpha.

Also worthwhile from the standpoint of perspective, this article from Tom Raum of the Associated Press confirms the increasingly mainstream character of the view that this unemployment is structural than cyclical. (Remember Richard Moody's comment from a few months back, or the story from the Christian Science Monitor asking if the U.S. is "the New France"?)

Raum specifically points to, among other things, the vicious cycle at the root of the situation, the weakness of the job market (along with the credit crunch) suppressing the consumption that would be key to the new investments that would drive job growth (in fact, it may be that Americans are already "settling into spending less"). The situation is all the worse for "the carnage among Detroit's automakers and the surplus of new and foreclosed homes and empty commercial properties," the auto- and construction industries, two keys to the renewal of employment expansion in the past, having been left in an especially poor position to play the role of economic locomotive anytime soon. (Indeed, both manufacturing and construction suffered 60,000+ net job losses each last month, a particularly dark spot in this 22nd straight month of job losses.)

So much for the ebullient talk of green shoots; the hope of anything more than a shallow, short-term fix leading to still more long term mess from the methods tried; and in the sweeping of harsher economic realities under the rug as the Dow Jones average rebounds, the hope that governments would move beyond "business as usual" after the cold shock of reality afforded by the Great Recession of 2007-2009 (as noted by Mike Whitney of the Centre for Research on Globalization in his sweeping overview of the economic policy of the Obama administration, one year in).

December 4, 2009
The official, U-3, unemployment rate has edged down from 10.2 percent in October, to 10 percent in November, according to today's report from the Bureau of Labor Statistics.

Additionally, the U-6 rate went down by an even larger margin, from 17.5 percent in the last report, to 17.2 percent in this one.

However, a quick check shows that the number of long-term unemployed actually climbed, from 5.7 percent in October to 5.9 percent in November. The improvement, as Kurt Brouwers of Marketwatch suggests, may simply be "a statistical change rather than a real improvement" due to a number of frustrated job-seekers giving up the hunt.

In other words, the fact that people give up looking for work because the situation is so awful ends up, perversely, looking like a sign of improvement.

It also seems that, as Briefing.com suggests, the "drop in payrolls was entirely driven by goods-producing firms shedding jobs. Goods-producing companies lost 69,000 jobs in November." Read: manufacturing and construction. This is also bad news rarely commented upon, fashionable as it may be to slight actual goods production as trivial.

As always, the details count.

The U-3 unemployment rate held steady until last month, remaining officially at 9.7 percent-a point which is of course being spun in the usual ways-like "Wasn't that a close one? We thought it'd be worse!" or "We've stabilized, which means we can only go up from here!"

Less noted was the fact that the broader U-6 rate, after seasonal adjustment, actually saw a slight uptick-from 16.5 to 16.8 percent.

It may be that the Census (which will see the hiring of a half million workers) will trim the numbers slightly in the next few months, but this is a short-lived blip, while observers continue to wait for signs of real strength in critical sectors. Construction suffered last month, still shedding plenty of jobs-64,000 is the figure I'm seeing-but economists chalk that up to the unusually rough winter weather. (Given the trend over the last year, however, I'm not sure how much difference it made.) Manufacturing has seen some hiring, but the car industry clearly saw job losses-10,000 in February after the uptick of the previous month, and John Schmid of the Milwaukee-Wisconsin Journal-Sentinel is right to refer to the sector's "erratic fluctuations," of which this may simply be one.

Even the relatively upbeat report from Business Week does not question the widespread expectation of a slow labor market recovery-a pessimism that affects not only the officially unemployed, but the underemployed as well, according to Gallup tracking polls from January. Notably, the pessimism is far stronger among those with postgraduate degrees than those who just have "some college or vocational school," with sixty-five percent in the former category giving the "not optimistic" answer, compared to forty-two percent in the latter. (Those looking for broader coverage of those confronting such downward mobility can check out Peter S. Goodman's four-pager in the New York Times last month.)

That the matter of employment is still being discussed as something apart and different from the broader issue of an economic recovery, the "conventional wisdom" from before "the Great Recession" still going strong.

February 5, 2010
The (seasonally adjusted) figures for January have the U-3 unemployment rate at 9.7 percent-a small drop from the previous month's figure of 10 percent, and down further still from the recent peak of 10.2 percent reported late last year (since revised down to 10.1 percent).

The U-6 figure also fell back to 16.5 percent.

In short, the numbers seem slightly better. However, they remain essentially lousy, and a detailed examination of the picture hardly improves its appearance.

For one thing, as Steve Schaefer reports in a market brief at Forbes.com reports, there has been no actual job growth-with the economy overall suffering job losses (20,000, with gains in retail and temp hiring overcome by declines in employment in transport and warehousing).

This is notable, especially in light of a bit of buzz last month regarding reports of a 5.7 percent GDP growth rate in the fourth quarter of 2009-which, as Schaefer notes, was due mainly to the restocking of inventories (3.4 percent of that 5.7 percent increase in output) rather than some revival of consumer demand (where would it come from, with unemployment, anxiety and credit as they are?) or really new investment. In short, it's not likely to last, and a really substantive recovery from "The Great Recession"-even to the mediocre state of things antecedent to 2007 (so easily forgotten given the past-quarter, this-quarter, next-quarter perspective of too much business journalism)-far from realized.

March 6, 2010
The U-3 unemployment rate held steady until last month, remaining officially at 9.7 percent-a point which is of course being spun in the usual ways-like "Wasn't that a close one? We thought it'd be worse!" or "We've stabilized, which means we can only go up from here!"

Less noted was the fact that the broader U-6 rate, after seasonal adjustment, actually saw a slight uptick-from 16.5 to 16.8 percent.

It may be that the Census (which will see the hiring of a half million workers) will trim the numbers slightly in the next few months, but this is a short-lived blip, while observers continue to wait for signs of real strength in critical sectors. Construction suffered last month, still shedding plenty of jobs-64,000 is the figure I'm seeing-but economists chalk that up to the unusually rough winter weather. (Given the trend over the last year, however, I'm not sure how much difference it made.) Manufacturing has seen some hiring, but the car industry clearly saw job losses-10,000 in February after the uptick of the previous month, and John Schmid of the Milwaukee-Wisconsin Journal-Sentinel is right to refer to the sector's "erratic fluctuations," of which this may simply be one.

Even the relatively upbeat report from Business Week does not question the widespread expectation of a slow labor market recovery-a pessimism that affects not only the officially unemployed, but the underemployed as well, according to Gallup tracking polls from January. Notably, the pessimism is far stronger among those with postgraduate degrees than those who just have "some college or vocational school," with sixty-five percent in the former category giving the "not optimistic" answer, compared to forty-two percent in the latter. (Those looking for broader coverage of those confronting such downward mobility can check out Peter S. Goodman's four-pager in the New York Times last month.)

That the matter of employment is still being discussed as something apart and different from the broader issue of an economic recovery, the "conventional wisdom" from before "the Great Recession" still going strong.

April 2, 2010
The Bureau of Labor Statistics' latest figures on unemployment have the U-3 rate holding steady at 9.7 percent, while the U-6 rate has ticked upward to 16.9 percent (from 16.8 the previous month).

Hiring is supposed to be a bit stronger, with employers adding 162,000 jobs in March (touted as the largest addition in three years).

This is not bad news, but unspectacular news. Given that the recession added another 8 million jobless, simply to return to where the economy was in 2007-never mind alleviating the situation of those who had already been unemployed or underemployed, or accommodating new entrants to the job market-will take fifty months of progress at that rate, over four years without setbacks.

Of course, trends are rarely so constant-and deceleration or reversal seem more plausible than acceleration. One positive sign is that manufacturing payrolls increased, but only by about 17,000 (10% of the total). Meanwhile, as the Los Angeles Times notes, "about 30% of the payroll increases over the last month, or 48,000 jobs, were created by the Census Bureau"-helpful, but temporary, and far from being proof of robust long-term job growth in the private sector.

John Canally of LPL Financial is quoted in the Christian Science Monitor as saying that the natural job growth rate (which this data would support) is more along the lines of 100,000 jobs a month-at which rate it would be some eighty months, or almost seven years, to return to pre-recession employment levels-2017, before the market recovers to where it was in 2007.

Even those numbers, however, merit some extra scrutiny. On top of the Census jobs, there were another 40,000 private sector temp jobs in that payroll increase-better than nothing (and a sign of improvement), but not an unambiguously positive sign for those concerned with the underemployment the U-3 figures overlook. After all, it seems only too plausible that this recession will mean a long-term increase in the percentage of the work force working as temps who wish they were full-timers.

And of course, there is the continued tightness of credit and the implausibility of much increase in consumer spending so long as people remain jobless, or insecure in their jobs.

In short, even if things do start to brighten, the effects of this decade's financial disaster will almost certainly be felt for years to come.

October 8, 2010
Last month the National Bureau of Economic Research declared the "Great Recession" officially over as of June 2009.

Still, you wouldn't know it to look at the unemployment data that came out today. "Labor underutilization"'s at 9.6 percent according to the U-3 measure, 17.1 percent according to the U-6--which not only represents a 0.4 percent rise over August, but is actually slightly higher than last September's figure (a flat 17 percent).

As Steve Schaefer of Forbes notes, the slight increase in the number of unemployed that resulted in this figure was due mainly to government layoffs, "split almost evenly between the end of temporary census jobs and cuts at the state and local levels." This overwhelmed the slight rise in private sector hiring, mostly in the service sector, health care and food services in particular (the two, adding some 24,000 and 34,000 jobs respectively, almost equal to the total increase of 64,000 by themselves). Construction and manufacturing are still shedding jobs (those sectors down by 21,000 and 6,000 respectively last month, the improvement in manufacturing earlier this year really just about restocking inventory after all).

The fact that government is still cutting so many jobs--with jobs in education "declining substantially due to budget woes" (as Joshua Shapiro of MFR Inc. has noted)--is a worrisome sign, and Jay Feldman of Credit Suisse would seem all too right when he notes that "The state and local fiscal crisis is clearly leaving a deeper imprint on aggregate economic activity." The decline in construction and manufacturing, those two crucial engines of employment and growth, is likewise telling, as is the predictable obverse of the fact, namely that the increase in private-sector employment has been mainly "in bar and restaurant jobs . . . not exactly known for the good pay and benefits," as Paul Ashworth of Capital Economics notes.

Taken together they all indicate the frailty of the job market, and reminders not only of the continued weakness of demand, but the likelihood that demand will remain weak for some time to come.

It's all getting awfully monotonous (which is one reason why this is no longer a monthly feature of this blog).

Meanwhile, in other (related) economic news:

* Banks have failed even faster in 2010 than they did in 2009 (bringing the total since Washington Mutual's collapse in September 2008 up to 279 this past month) and there is little sign of the rate falling off, as Randall Smith and Robin Sidel of the Wall Street Journal note in their "anniversary" piece from two weeks ago.

* The issue of income inequality inside the United States has got more than the usual amount of attention in the press in recent weeks, due primarily to two events. One is the U.S. Census Bureau's annual publication of its data on income distribution. (The country's Gini index, as it happens, is now 0.468, which would make the U.S. equal to Rwanda, according to the CIA World Factbook.) The other is the release in September (just two days before the Census report came out) of Paul Pierson and Jacob S. Hacker's book Winner-Take-All-Politics: How Washington Made the Rich Richer and Turned its Back on the Middle Class, described in a piece in the Atlantic Wire sampling response to it as "a synthesis of recent studies" of the subject. (Ezra Klein, blogging at the Washington Post, also takes a look at the book, presenting Pierson and Hacker's data regarding what the current picture would have looked like "if growth had been equal" in graph form.)

Review: The Organization Man, by William H. Whyte

New York: Simon & Schuster, 1956, pp. 429.

When I picked up William H. Whyte's The Organization Man I expected to find a musty curiosity. Back when Whyte was writing the country was undergoing sustained, rapid economic expansion such as America has not approached since (averaging 5 percent GDP growth a year for twenty years); the New Deal State was going strong and expected to go on doing so forever, the conservatives fulminating against it apparently hopeless yearners for a past that was never coming back; and a new hire of the kind he was writing about expected to be able to stay not just in their field, but at the same company, for life.1 Indeed, Whyte worried that the great danger of the organization to the individual was that being an "organization man" was too comfortable, the company environment too "beneficent" (to use his favored term) for the good of the organization men, or their organizations. By contrast the post-1973 period has been characterized by mediocre growth through decade after recession-filled decade; by a shift in the character of government's role in economic life that in Whyte's day had been widely thought an inconceivable regression; by the stagnant salaries and generalized insecurity that have left working people caught up in a revolution of falling expectations. The result of all this is that the pressures of the workplace would today seem to be something quite different.

Yet, while much has changed, much has also remained constant, and much of the analysis of this book, sophisticated yet accessible in a way that makes so much of our current pop social science seem embarrassingly dumbed down, could have been written today. Barbara Ehrenreich's writing in books like Bait and Switch (2005) and Bright-Sided (2009), its description of the pressure to be "optimistic" and agreeable while on the job, and the submergence of individuality beneath sociability in the workplace; the self-help tradition and its special place in the culture of salesmanship; the use, misuse and abuse of personality tests by employers; is a reminder that much of what was problematic about the world of work Whyte described remains with us. Similarly relevant is his description of how the middle class handled its finances in his day, the portrait he paints one of people with little knack for managing their own money generally living beyond their means to maintain their social status (a reminder that this hasn't solely been a feature of the slow economic growth we have taken for granted since the '70s). Likewise, there is the rightward political shift among those leaving the city for suburbia, the similarly motivated "ex-urbanites" today repeating the process.

An even bigger surprise for me was Whyte's characterization of education. Reading his comments on the conservatism and non-intellectualism or anti-intellectualism of college students; the decline of the humanities and liberal arts (and even the short shrift given the fundamental sciences) not only as majors but as components of the average student's education as training became more narrowly vocational; the weaknesses of teacher recruitment and teacher training, with its low stress on subject area knowledge; the hysteria that some challenge by another nation requires us to produce more engineers, to lament that more students don't study the necessary subjects, and to (disingenuously) blame "softer" majors for that lack; the concern that business's grant-giving is having undue influence on education, and that academics are only too inclined to cater to what they think businessmen want; it certainly seemed to me that there had been very little change on campus, for all the celebration and condemnation of the 1960s as some watershed. I think, too, of what Whyte said of business's bias against liberal-arts majors at hiring time, even as business leaders call for more broadly educated employees, the author observing that

At the rate things are going, it would seem liberal arts is well on its way toward being made into a specialty--a preprofessional training considered useful only for those who intend to lead the gentle life (105).

And of course, there is the issue at the bottom of it all, summed up in the words beneath the title on the cover: "The clash between the individualistic beliefs he is supposed to follow and the collective life he actually lives--and his search for a faith to bridge the gap. Of course, that clash was not a new issue in Whyte's time. Arguably, Frederick Jackson Turner writing a half century and more earlier wrestled with the same issue in the wake of the frontier's close, anticipating the replacement of earlier, more libertarian economic thinking by a world of big business and big labor and big government, the older resource profligacy by something like sustainable growth--and an America looking more like Europe. The failure to reconcile the contradiction between reality and ideology, which may be starker now than ever before, makes Whyte's take on the problem even more relevant now than when it was first written. A century after the great merger movement and the trusts, during which time the trends such writers saw have only advanced, our rhetoric on issues from space development to the welfare state still recalls frontier-style individualism. Simply put, we haven't really dealt with the contradiction, and I wonder if we ever will.

NOTES
1. This is my own calculation using data from the Bureau of Economic Analysis, adjusted for inflation.