And another reason for caution about the current/coming rebound in our economy:  worker pay may fall.  Why? The huge, continuing numbers of unemployed press wages down — businesses just don’t need to compete in wages.

At least that is the risk seen by the LA Time’s business columnist in this “Market Beat” column.

,,,the magnitude of job losses here and abroad in this devastating recession poses a huge risk to the future compensation of the still-employed: What if, for years to come, there are masses of qualified people willing to do what you do — but for much less pay?

The U.S. economy has lost more than 7 million private-sector jobs since December 2007, dwarfing the 3.3 million lost in the 2001 recession and its aftermath.

“Never has business shed so many workers so fast, so many people failed to find work who are looking for work, and so many dropped out of the labor force as in the current circumstance,” said Allen Sinai, head of Decision Economics Inc.

Petruno connects the dots: “downward pressure” on wages means a) working families earning less (and generating less revenue) possibly leading b) to deflation and our economy stuck in the bottom of a recession.,

So far, energy costs have not been central either to the analysis of our current Great Recession or of the recovery now struggling to announce itself.

This article in London’s Guardian pushes the cost of oil back to center stage.  The news: the US government during the Bush administration (should we call it the Cheney-Bush administration?) apparently lobbied the International Energy Agency to underplay peak oil.  Result: IEA estimates show unlikely growth in oil production.  Note how much the forecast production relies on sources not yet known.

We’re not going to have to wait long.  As energy demand grows with economic recovery oil prices will climb, maybe into the stratosphere.

One more reason to expect an “L” of a recovery, one more reason for very cautious government budgets.

Update: study that chart for a minute.  Imagine what happens to us if the ‘not yets’ are not found.  We’re in for hard times soon.

Mark Zandy of Moody’s has this chart. And remember that hours worked per week is at a historic low — about 33, as I recall, down from 44 or so.

In our interconnected world everything is connected to everything — that goes double for health care.

So a win in health care reform — more people covered, costs going down — is tied tightly to economic recovery.  That means a jobs recovery.

And that means we’re in trouble.  See this analysis by the Christian Science Monitor — “What will it take to bring back 7 million jobs?”

Here’s a back-of-the-envelope calculation: If jobs could grow at a mid-1990s pace of 3 million a year, it would take about five years. If jobs grow at a mid-2000s pace of 2 million a year, it would take a lot longer.

In the past, steep job losses have often been followed by strong rebounds in jobs. What’s different today is a historic erosion of household wealth: households amassed record levels of debt in the past decade, and then saw the value of homes and stock portfolios tank.

Against this backdrop, economists say the number of jobs needed is more than the government can afford to engineer.

A constant drive to create jobs will be part of the “new normal.”  How can health care reform help — and vice versa?

can I afford this?

Noted on the Truthout site, this McClatchey story reports a Consumers Union study of how people are cutting back on their health care costs.

The Consumers Union survey of 1,002 adults from Sept. 17 to 20 found that among the ways people have tried to cut back on health care costs:

• 28 percent put off doctors’ visits.
• 25 percent have been unable to afford medical bills or medication.
• 22 percent put off medical procedures.
• 20 percent declined medical tests.
• 20 percent skipped filling prescriptions.
• 15 percent took expired medication.
• 15 percent skipped scheduled dosages of prescriptions.

The problems were more prevalent among households with incomes of less than $50,000, in which about two-thirds said they’d cut back on health care because of costs. Even where income topped $100,000, however, about one-third made similar decisions.

Notice how the cutbacks are made by people way up the income scale.

And consider the implications: lowered overall public health, rising taxpayer costs in social safety net services when thoise cutbacks translate into increased sickness and job losses, lower productivity, etc.

The estimable Robert Fisk reports in the London Independent that a group of nations — the Arab oil-exporting states joined by China, France, Russia, Brazil and others — have been secretly talking about replacing the dollar with a basket of currencies for global oil trading.  OMG to the max for the US.

Fisk notes the ramifications of this self-protective move away from the volatility and declining value of the dollar not only are a blow to the already-reeling US economy but possibly portend increased US-China conflict.

The independent editorializes “the end of the dollar spells the rise of a new order.”

But the significance of this development goes much further. Since the end of the Second World War the dollar has been the bedrock of world trade. The pre-eminence of the American currency flowed naturally from the economic dominance of the US. Virtually everyone traded with America so it made sense to use their currency.

But the US is not the dominant power that it once was. The financial crisis has left it hobbled with significant government and household debts and sharply reduced prospects for growth. Developing nations such as China, Brazil and India, on the other hand, have weathered the economic storm significantly better. So while this latest proposal is born of financial calculation, it is also a reflection of a new economic world order.

Mark this day on your calendar.  If these folks succeed we’re in for another huge blow to our economy — a fundamental reset.  One more reason to get our financial house in order — most especially including health care reform — faster than asap.

Update: Here is the Washington Post following with a useful survey of the pressures on the dollar. This underscores how precarious is our situation.

Steven Pearstein of the Washington Post writes one of the good economics columns. In this one, “a new bubble of the Fed’s creation” he offers some insights and cautions that make a lot of sense to me.   Highlights:

• Yes, the financial crisis has passed and the economy is growing again, but there’s a good chance that growth will be temporary …  a sustained recovery in 2010 isn’t looking very likely.
• To its credit, the Obama administration has never lost its focus on the goal of creating the conditions for sustained growth.
• Less encouraging is what’s happening on Wall Street. It turns out that all those bold and necessary steps by the Federal Reserve to prevent the financial system from collapsing wound up creating so much liquidity that it has now spawned another financial bubble.
• But the lesson I prefer to focus on is the one from this decade, which is that central bankers ignore financial bubbles at their peril. … As Alan Greenspan discovered, it is also a mistake for central bankers to assume that they can quickly sop up excess liquidity whenever they decide the moment is right.

Translation: a) the 2010 growth we’ve been counting on may not be there, b) the risks of the next bubble crash are already growing.  And c) banks and central bankers still don’t have this right.

For those of you wishing to hear from some experts, here is an excellent, 20 minute discussion online among three experienced researchers in health care economics. Note this is moderated by the now-famous Dr. Atul Gawande, Harvard surgeon and New Yorker author.

Click here.  Note that the discussion is sub-divided into 7 topical parts if you wish to skip around.

Definitely worth your time.

Go here for an excellent, interactive graphic showing year by year the many, many pieces of legislation since Teddy Roosevelt.

At a glance:

An article in the prestigious New England Journal of Medicine reports a survey of physicians and surgeons across the country found very strong support for the inclusion of a public option in the health care reform package.  Their bottom line:

…it seems clear that the majority of U.S. physicians support using both public and private insurance options to expand coverage. A majority of physicians also support the expansion of Medicare [to include the near-elderly]. Support for the public option is consistent across physician specialties, practice settings, and regions of the country, and therefore should be carefully considered by lawmakers as they finalize legislation to reform health care and provide coverage for 47 million uninsured Americans.

Click the ‘read the rest….’ tab below to see a chart showing just how strong the doctors’ support is.

And for a very interesting summary of the last century of health care legislation go to this interactive NEJM graphic — fascinating; will make a good PowerPoint add-on.

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