9 States That Are Slashing Unemployment Benefits

Around 14 million people in the U.S. are jobless today.

Yet, several states, even some that are experiencing economic recoveries, have begun to cut jobless benefits, according to recent data obtained by 24/7 Wall St. This is another example that the unemployment problem has become more insidious.

Federal and state governments use two milestones—26 weeks and 99 weeks—to determine unemployment insurance payments and when they are terminated. The number of people out of work for each of these time periods, or longer, grows.

States with the highest unemployment also tend to have the most financial trouble themselves. This is due to low tax receipts caused in large part by the high unemployment level. People out of work pay little or no taxes. But financial desperation is only one reason for states to decrease jobless benefits.

A second group of states, some of which have begun strong recoveries, has also begun cutbacks. Governors and legislators of these states want to decrease budget deficits both by taking advantages of improved economic positions and through austerity programs for state costs.

24/7 Wall St. examined how the relationship between employment insurance and state finances has begun to change from the ways they operated in the early part of the recession until 2011. We reviewed the just released report on state unemployment law by the National Employment Law Project. The report identifies the states that are reducing their unemployment insurance coverage. The nine that are reducing benefits this year did so by either cutting the number of eligibility weeks or by reducing the payment amount.

Our analysis shows that local governments are choosing to make these reductions for a variety of reasons. Some, like Michigan and Arkansas, are seemingly forced to cut benefits because of ballooning unemployment rates along with struggling local economies. Others, like Illinois and Wisconsin, which are seeing their economies recover and the unemployment rates improve, are cutting also benefits.

All states that have altered their unemployment payment rules, either because of economic weakness or a desire to couple improved tax receipts with austerity, have one thing in common. They are part of a breakdown in a system to support a huge pool of Americans who have not found jobs for months, and may not find them at any time in the foreseeable future.

This is especially true if there is another recession. The decisions by the states affect the extent to which the federal government has to bear the economic burden of the jobless. Recent battles in Washington make it less and less likely that there are nearly limitless funds to support the jobless once they have exhausted their state benefits. In addition to the other weight the jobless carry, they also may no longer be financially supported by governments in a similar manner to the recent past.

This post originally appeared at 24/7 Wall St.

Read more: http://247wallst.com/2011/08/04/the-nine-states-slashing-unemployment-benefits/3/#ixzz1UHMT0qyZ

European Leaders Confer on U.S. Downgrade

By AINSLEY THOMSON, WILLIAM HOROBIN and CHRISTOPHER EMSDEN

LONDON—European officials offered support for the U.S. after the first downgrade in its credit rating, but also launched into a round of telephone conferencing to discuss implications for Europe's own credit crisis.

The Italian government said Saturday it backs proposals under discussion to call a special meeting of finance ministers from the Group of Seven major world economies.

"Italy is in favor of a proposal like that," said Paolo Bonaiuti, spokesman for Prime Minister Silvio Berlusconi. A proposal is "circulating" among G-7 countries, but no decision has been taken, he said.

Global financial tensions escalated late Friday with the decision by the Standard & Poor's credit-ratings agency to cut the U.S. government debt rating to AA+ from AAA with a negative outlook, the first time in modern history.

The shockwave holds implications for Europe's own government debt crisis, which so far has crippled Greece, Ireland and Portugal after their borrowing costs became unsustainable.

Without a strong U.S. economy and finances, odds are against Europe generating enough economic growth to cut deficits and debt. Recent worries about Italy and Spain falling into the same debt trap have sparked calls for more international coordination at the European and G-7 level.

U.K. Chancellor of the Exchequer George Osborne Saturday was planning a phone conversation with Polish Finance Minister Jacek Rostowski, who currently chairs the European Union finance ministers' meetings, to discuss threats to global financial stability.

A U.K. Treasury spokesman said the U.S. downgrade illustrates why Britain cannot abandon its deficit-reduction plan.

In May 2009, S&P put the previous Labour government on the defensive by placing the U.K.'s AAA credit rating on negative outlook for the first time in history. However, in October last year the rating agency reversed that call.

French Finance Minister Francois Baroin, speaking on French radio station RTL, said he has been in contact with all other G-7 members in recent days and also Saturday morning. He didn't give details of the talks or suggest that a meeting was imminent.

The G-7 is made up of the U.S., Japan, Germany, France, Italy, Canada and the U.K.

Mr. Baroin offered moral support for his U.S. counterpart, Treasury Secretary Timothy Geithner and the U.S. administration's contention that the S&P's findings were flawed.

"We can ask ourselves why Standard & Poor's has taken this decision on the basis of nonconsensual figures that I'm sure the American treasury will comment on," Mr. Baroin said.

"We have a total confidence in the solidity of the American economy and its fundamentals," Mr. Baroin said, noting last week's new U.S. debt agreement. "This confidence is in no way interrupted by the move from this rating agency."

German Chancellor Angela Merkel has been telephoning with President Barack Obama and French President Nicolas Sarkozy, but so far has resisted calls from political opponents in Berlin to return and take charge.

Dutch Finance Minister Jan Kees de Jager in a statement Saturday also expressed confidence in the U.S. economy and praised U.S. efforts to cut spending.

"But a quick and thorough implementation of the proposed fiscal reforms is essential," he said.

—Maarten van Tartwijk contributed to this article

Source
http://online.wsj.com/article/SB10001424053111903366504576492071419335908.html?mod=europe_home

If You Believe In The Recovery, Then You Haven't Seen This Jobs Chart

If You Believe In The Recovery, Then You Haven't Seen This Jobs Chart

Gregor MacDonald, Gregor.us | Aug. 6, 2011, 7:14 AM

Total employment in the United States fell in July by 38,000 people, from 139.334 to 139.296 million. This was a much smaller loss than the previous month.

However, once again the average number of total employed for the current year is in decline.

My forecast is that by next year, after revisions and the complete data, 2011′s average—currently at 139.55 million–will fall below 2010′s average of 139.07 million.

See: United States Total Employment in Millions (seasonally adjusted) 2001-2011.

Read more: http://www.businessinsider.com/total-employment-in-the-us-falls-again-2011-8#ixzz1UFNmQ019

Italy and the euro : Rabbit in headlights

Italy and the euro

Rabbit in headlights

Silvio Berlusconi appears to have no response to Italy’s deepening economic crisis

Aug 6th 2011 | ROME | from the print edition

HOWEVER bad the economic crisis in southern Europe may be for investors, it is proving lethal for the area’s political leaders. In March José Sócrates, Portugal’s beleaguered prime minister, resigned. Soon afterwards his Spanish counterpart, José Luis Rodríguez Zapatero, announced his intention to step down. In June George Papandreou, Greece’s prime minister, came close to ejection during a fierce debate over an austerity package.

So as he stood up to make the first of two eagerly awaited speeches to parliament on August 3rd, Italy’s prime minister, Silvio Berlusconi, may have had an uneasy feeling he was one in a line of dominoes. If so, there was nothing in the style or content of his address to suggest it. Nor was there much to indicate that he appreciated the magnitude of the crisis facing the euro or the case for drastic action to tackle it.

Many analysts argue that the euro’s difficulties are beyond resolution by any one member. But Italy is crucial. It is the biggest country on the euro zone’s troubled southern flank, and its €1.8 trillion ($2.6 trillion) borrowings dwarf those of any other country in the single currency. Mr Berlusconi’s lacklustre, almost blithe speech looked like a missed opportunity to influence the course of events.

He was speaking after the Milan bourse had fallen for four straight days and Italy’s borrowing costs had reached euro-era records. Hours before Mr Berlusconi’s address, the yield on Italy’s benchmark ten-year treasury bonds hit 6.25%, before slipping back fractionally. Giulio Tremonti, the finance minister, was summoned to Luxembourg for an emergency meeting with Jean-Claude Juncker, head of the euro group of finance ministers.

Not that Italy was alone. The day before, Spain’s borrowing rates too had hit record highs (see article). Both Italy and Spain face the threat of a self-fulfilling fear in the markets that they are fated to suffer a Greek-style financial emergency.

A special euro-zone summit last month briefly calmed investors’ nerves after Italy had been first contaminated by the spreading crisis. But doubts have persisted as to the effectiveness of a €48 billion package of budget-reduction measures rushed through the Italian parliament in mid-July. A renewed bout of concern over the two biggest southern euro-states began gathering momentum on July 29th, when Moody’s, a ratings agency, warned that it might downgrade Spanish debt. The yield on Spain’s bonds started to climb, tracked closely by the return on Italian debt.

Both countries’ borrowing costs have edged close to the 7% mark that heralded bail-outs for Greece, Ireland and Portugal. But even if Spain could—just—be handled, Italy is almost certainly too big to be rescued, and its presence on the international debt markets is daunting. Even though an unusually high proportion of Italy’s treasury bonds and bills are in the hands of Italians, foreigners still hold around €700 billion-worth of the things.

With alarm rising, José Manuel Barroso, head of the European Commission, issued a statement urging national leaders to get a grip. But Italy’s billionaire prime minister was content to tell his fellow deputies: “You are listening to an entrepreneur who has three companies on the stock exchange and who is therefore on the financial battlefield, aware every day of what happens in the markets.” Investors were making a big mistake, he hinted: Italy’s economic fundamentals were healthy; its banks were sound (and their shares undervalued, he added).

Mr Berlusconi neither promised to stiffen the austerity package approved last month, nor to bring forward unpopular measures that will otherwise be left to the next government to apply. His most radical proposal was for an overhaul of labour law (if the unions and employers can be persuaded to agree).

Although investors clearly fear the spreading of market contagion, they also have concerns over political stability. During his address to parliament Mr Berlusconi again vowed to remain in office until 2013. Yet there is ample evidence that he is part of the problem.

The same can now be said of Mr Tremonti, whose emphasis on fiscal rigour was until recently seen by investors as crucial to any solution. The finance minister remains vulnerable to a scandal involving a former adviser accused of influence-trafficking. Marco Milanese, who is also a deputy, made available to his boss a flat in one of the most fashionable parts of central Rome. Mr Tremonti claims to have paid him rent, but in cash—an awkward explanation for the man charged with ensuring that Italians pay their taxes.

More important is Mr Berlusconi’s own vulnerability, which is increasing as supporters begin to fret over his waning popularity. His credibility is shrinking: the July austerity package was long on tax increases he had often promised to eschew. And he seems apathetic: before his appearance in parliament this week he had said next to nothing about Italy’s financial crisis in nearly a month.

Mr Berlusconi’s main ally, Umberto Bossi of the Northern League, whose votes keep the prime minister in power, was noticeably absent from the chamber during his speech. One of Mr Bossi’s most senior lieutenants, Roberto Maroni, the interior minister, was there. But, intriguingly, he chose to sit among his party colleagues, and not with the rest of the cabinet.

Source
http://www.economist.com/node/21525454?fsrc=scn/tw/te/rfd/pe

America's recovery : Good news, but is it good enough?

America's recovery

Good news, but is it good enough?

Aug 5th 2011, 15:11 by G.I. | WASHINGTON

AMERICAN employment put in a respectable performance in July. Non-farm payrolls rose 117,000, or 0.1%, and the unemployment rate edged lower to 9.1% from 9.2%, both better, but not dramatically so, than Wall Street had expected. Any other time this would have been cause for mild satisfaction. In these grim times, it constitutes a massive relief bordering on joy. Economic data in recent months, including a stunningly weak job performance in June, had suggested the odds America could fall back into recession were rising, and were perhaps as high as 50%.

The jobs report is consistent not with renewed recession but the orthodox view that the American economy hit a bump in the spring thanks to several unexpected blows, most importantly a rise in petrol prices and the Japanese earthquake and tsunami, which interrupted global manufacturing supply chains. As those restraints have lifted, activity has improved slightly.

The guts of the report support this story. Manufacturing employment rose 24,000 in July, the best in three months, and retail employment gained 26,000. Private payrolls grew a decent 154,000. Government continued to be a drag with total payrolls down 37,000. Even that, however, overstates the bad news. The Bureau of Labour Statistics reports that state employment fell 23,000 almost entirely because of a state-government shutdown in Minnesota which has since been resolved. Other good news: May and June, it turns out, weren’t as bad as previously reported. Job gains in both were revised up, by a total of 56,000. Hourly earnings also jumped 0.4%, lifting the 12-month increase to 2.3%, the best since 2009. This suggests solid gains in personal income which should support consumer spending in coming months.

Given that positive glow, the market reaction is, to say the least, anticlimactic. After a brief rally, American stocks are now once again hovering around negative territory, and bond yields have risen only slightly from the fear-induced lows hit during Thursday’s global equity rout. Why? Well, the employment report is hardly a sign of an economy in ruddy health. Neither average weekly hours or the number of temporary employees rose; both are indicators of future labour demand. The decline in unemployment was due to a contraction in the total number of people looking for work. The number of employed actually fell. Indeed, the share of the working-age population that is now employed fell to 58.1%, the lowest level since 1983. (These figures are drawn from the smaller household survey that is separate from the payroll survey.) The economy may not be falling back into recession but neither does is appear to be growing at the 3% economists hoped to see in the second half of the year.

More important, perhaps, is that there is much more on the markets’ minds than just the latest data. There is a global flight from risk underway, fueled in great part by perceptions that the risks to the world economy have grown and policymakers are either unable or unwilling to respond adequately. The European Central Bank’s apparent resumption of purchases of Portuguese and Irish bonds seems woefully inadequate when the much larger and more important debts of Spain and Italy are under attack. The fact that German Bundesbank president Jens Weidmann apparently opposes even this modest step militates against the ECB using its balance sheet more aggressively in order to contain the contagion.

In America, all eyes are now on the Federal Reserve’s meeting next Tuesday, August 9th. After June’s meeting Ben Bernanke, the chairman, appeared to set the bar quite high for a third round of quantitative easing (QE)—the buying of bonds with newly created money. Mr Bernanke cited the still firm level of overall inflation and the Fed’s forecast that the slowdown in the economy was temporary. Today’s report was positive enough to spare the Fed the need to act, or even conspicuously signal action, next Tuesday. But given the other crummy data and the meltdown in markets it will have to tone down its confidence in a second-half rebound and implicitly raise the odds of action. The most astute Fed watchers I know now expect QE3; just not yet.

As for fiscal policy, the best thing that can be said is this: just as a similar rout following Congress’ initial rejection of TARP in 2008 paved the way for a more activist political response, one can hope that this week’s market plunge will embolden adults in Congress to stare down their more extreme colleagues and get something positive done. Agreements to move on three stalled free-trade agreements in September and reopen the Federal Aviation Authority, at least for a few more months, are ever so faint positive signs in this regard.

Economic cycles are, above all, psychological things. The economy is growing, but slowly enough that a few more pieces of bad news could push it into negative territory. As our cover leader this week warns, the self-reinforcing loss of confidence produced by this week’s action in politics and markets could still do just that.

(Picture credit: AFP)

source

http://www.economist.com/blogs/freeexchange/2011/08/americas-recovery-1?fsrc=scn/tw/te/bl/goodnewsbutisitgoodenough

Schools in Pakistan training Afghan youths to act as suicide bombers

By ARASH KABULI

The Institute for War & Peace Reporting

Afghan parents who have sent their sons to schools in Pakistan say they're becoming increasing alarmed about the type of education their children are receiving.

Rather than serve as centers of learning, many fear that these schools and madrassas are designed primarily to turn out a never-ending supply of suicide bombers.

One father in Kapisa province, who asked that his name not be used because he was concerned about security, described the dramatic change his 18-year-old son had undergone after one year at a school in Pakistan.

"My son is vehemently opposed to the government. He says suicide attacks are considered a superior form of martyrdom and courage in Islam, and that Muslims must wage a jihad against the Jews and their friends," he said.

Students, his son told him, were shown footage of Americans and Britons being beheaded.

"I'm not going to allow my son to go back to study in Pakistan again, because I know I will lose him," the father said.

Many other families in the province are making the same decision.

Public awareness of the issue has grown since Afghan television stations began broadcasting programs of students describing how their teachers in Pakistan groomed them to put on vests packed with explosives and detonate them once they approached vehicles belonging to international or Afghan troops.

The children said they were assured that they could escape unscathed from such attacks.

Afghans have long sent their children to Pakistan for religious education.

When Soviet troops invaded Afghanistan in 1979, many of these schools help galvanize opposition to the occupation.

In subsequent years, however, they also became a breeding ground for the Taliban, and of late have encouraged their students to wage jihad against the Afghan government and its western allies.

Many Afghan families now fear their children will be caught up in an insurgent strategy of recruiting young people for suicide attacks.

One 17-year-old in Laghman province, home on vacation from a madrassa in Peshawar, described the school's curriculum.

"We were always being told that the Jews and Christians had attacked Muslim countries. They destroy the dignity and faith of Muslims. We were shown footage of the Americans searching people's homes and killing them... or killing civilians in bombardments," he said. "They showed us Israeli massacres in Palestine. Young people, even children, were therefore prepared to wage jihad against the United States." The 17-year-old's parents said he would not be returning to Peshawar.

A representative of the Taliban in Kapisa province, who spoke on condition that his name not be used, justified the course of instruction at madrassas in Pakistan.

"Those who say these people are being deceived are puppets of the United States. During their studies in Pakistani madrassas, people learn the path of virtue and jihad," he said. "They come to understand the reality that human beings are guests in this world for just a few days, and that they must do something for their religion and the next life. They learn the Islamic precepts in which jihad has high status, and thus they arrive at practical action they fight for the interests of Islam, they satisfy their God, and they bring illumination to the next life." Afghan officials say they are responding to the threat posed by these schools by building more madarassas in the country.

A spokesman for Afghanistan's education ministry, Abdul Sabur Ghofrani, said, "We have 650 madrassas and other religious schools across the country, and this number will rise to 1,000 in the next three years." But such developments come too late for Taj Mohammad, who described what happened when he attempted to withdraw his 14-year-old son from a school in Pakistan.

"When I got to Pakistan, I stayed in the madrassa for two or three nights. My son's classmates told me that he'd gone off to another madrassa for some kind of competition and that he'd be back," the father said, tears rolling down his face. "On the third day, the head of the madrassa told me that my son had been martyred in the jihad, and that I had God's blessing." Since that day, the father concluded, "I have been lost to the world."

ABOUT THE WRITER

Arash Kabuli is a reporter in Afghanistan who writes for The Institute for War & Peace Reporting, a nonprofit organization that trains journalists in areas of conflict. Readers may write to the author at the Institute for War & Peace Reporting, 48 Grays Inn Road, London WC1X 8LT, U.K.; Web site: www.iwpr.net. For information about IWPR's funding, please go to http://www.iwpr.net/index.pl?top-supporters.html.

This essay is available to McClatchy-Tribune News Service subscribers. McClatchy-Tribune did not subsidize the writing of this column; the opinions are those of the writer and do not necessarily represent the views of McClatchy-Tribune or its editors.

Posted on Mon, Aug. 01, 2011 07:18 AM

Read more: http://www.kansascity.com/2011/08/01/3049499/schools-in-pakistan-training-afghan.html#ixzz1UFGbiUVN