Eurozone unemployment dips; US jobless rate lowest since 2008; Why economics failed; New York is a giant, still on the rise

1 Eurozone unemployment dips (BBC) Eurozone unemployment numbers have fallen slightly to 19.81 million, according to EU figures for March. Unemployment for the area is down from 19.84 million in February. The unemployment rate has remained at a steady 11.8% since December 2013, but numbers of unemployed in the area have gradually fallen since January. The figures bolster European Central Bank (ECB) projections of steady economic growth in the currency area, economists said.

The March unemployment figures are an average for the 18 countries in the eurozone. There are large differences in employment between countries. Austria had the lowest rate of unemployment, at 4.9%, while the country with the highest unemployment rate for March was Spain, at 25.3% unemployment. However, the most recently available figures for Greece put unemployment at 26.7% for January.

2 US jobless rate lowest since 2008 (Straits Times) US job growth increased at its fastest pace in more than two years in April and the unemployment rate dived to a five and a half year low of 6.3 per cent, suggesting a sharp rebound in economic activity early in the second quarter. Non-farm payrolls surged 288,000 last month, the Labour Department said. That was the largest gain since January 2012 and beat Wall Street’s expectations for only a 210,000 increase.

The unemployment rate tumbled 0.4 percentage point, touching its lowest level since September 2008. The Labour Department attributed the decline to a drop in the number of unemployed people re-entering the labour market as well as a fall in new entrants into the labour force. The economy stalled in the first quarter, weighed down by an unusually cold and disruptive winter. A slow pace of stock accumulation by businesses, while they work through a glut of goods amassed in the second half of 2013, also undercut growth.

3 Why economics failed (Paul Krugman in The New York Times) While teaching the course, “The Great Recession: Causes and Consequences.”I found myself turning at the end to an agonizing question: Why, at the moment it was most needed and could have done the most good, did economics fail? Economics has had a lot to offer policy makers. While it’s true that few economists saw the crisis coming the clean little secret of recent years is that, since the fall of Lehman Brothers, basic textbook macroeconomics has performed very well.

It’s not that economics failed. It’s that the cult of Mammon succeeded. But policy makers and politicians have ignored both the textbooks and the lessons of history. And the result has been a vast economic and human catastrophe. In what sense did economics work well? Economists who took their own textbooks seriously quickly diagnosed the nature of our economic malaise: We were suffering from inadequate demand. The financial crisis and the housing bust created an environment in which everyone was trying to spend less, but my spending is your income and your spending is my income, so when everyone tries to cut spending at the same time the result is an overall decline in incomes and a depressed economy.

And the diagnosis of our troubles as stemming from inadequate demand had clear policy implications: as long as lack of demand was the problem, we would be living in a world in which the usual rules didn’t apply. In particular, this was no time to worry about budget deficits and cut spending, which would only deepen the depression.

Even supposedly well-informed people balk at the notion that simple lack of demand can wreak so much havoc. Surely, they insist, we must have deep structural problems, like a work force that lacks the right skills; that sounds serious and wise, even though all the evidence says that it’s completely untrue. Meanwhile, powerful political factions find that bad economic analysis serves their objectives.

Whatever the reasons basic economics got tossed aside, the result has been tragic. Most of the waste and suffering that have afflicted Western economies these past five years was unnecessary. We have, all along, had the knowledge and the tools to restore full employment. But policy makers just keep finding reasons not to do the right thing.

4 New York is a giant still on the rise (David Shapiro in Johannesburg Times) More than 50million people, mainly from other states, visit New York every year, spending close to $40-billion Each month, 8million passengers fly in and out of the city’s airports, 130million commuters ride on the subways, trains and buses and a million theatre-goers attend Broadway shows. Of the 10million foreign tourists most originate from the UK, Canada, Brazil, France, Germany, Australia, Italy, China, Spain, Mexico and Japan.

What’s astonishing is that unlike other global tourist traps, New York has no pompous palaces, ancient ruins or notable historic sites. Yet it is a metropolis with magnetic appeal. It is more than just a shrine to capitalism; it is a tribute to the millions of people who, over the past 150 years, have arrived from all parts of the world – usually fleeing political and economic hardship and toiling industriously in a system that rewards hard work and enterprise – and built the US into the world’s most powerful nation.

Big cities such as New York, London and Sydney are also attracting the world’s super-rich, who aspire to live in the ultimate of luxury, eat in a selection of top-rated restaurants and shop unconstrained in stylish boulevards. To cater for the needs of this growing class of resident, for whom money is no object, up to seven new, pencil-thin, multi-billion-dollar skyscrapers, some taller than the Empire State Building, will shortly alter the skyline in Midtown Manhattan.

None of this could have happened without the intervention of New York’s two previous mayors, Rudolph Giuliani and Michael Bloomberg. Today Harlem has been gentrified, Times Square is traffic-free and appropriate for children, important thoroughfares have been converted into bike- and pedestrian-friendly zones, graffiti doesn’t exist and the streets are safe to walk in at any time of the day or night.

Yes, it’s a city that requires major infrastructural development. Its airports are 30 years out of date; its roads need resurfacing and its underground a good paint job. Regardless, New York works well. The quality of its public schools is high, its hospitals are efficient and its parks spotlessly clean. And believe it or not, despite its arctic snowstorms, the city traffic lights remain perfectly synchronised and in faultless operating order.


About joesnewspicks

This blog captures interesting news items from around the world for those strained by information overload and yet need to stay updated on global events of significance. The news items displayed are not in order of merit. (The blog takes a weekly off — normally on Sundays — and does not appear when I am on vacation or busy.) I am a journalist for nearly three decades.
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