(1) The so-called booming U.S. economy (not so for older people in the United States). In mid-life, some are enduring broken career trajectories, unemployment/underemployment, age discrimination, and ruined finances (and a weak “safety net”).
See the ProPublica article by Peter Gosselin “If You’re over 50, Chances Are the Decision to Leave a Job Won’t Be Yours.”
Key quote: “Through 2016, our analysis found that between the time older workers enter the study and when they leave paid employment, 56 percent are laid off at least once or leave jobs under such financially damaging circumstances that it’s likely they were pushed out rather than choosing to go voluntarily.”
(2) Private equity firms use Bankruptcy Code to get rid of workers, pension plans. See a Washington Post article by Peter Whoriskey “As a Grocery Chain is Dismantled, Investors Recover Their Money. Worker Pensions are Short Millions.”
Key quote: ” ‘These private-equity firms buy a company, plunder it of any assets, and then send it into bankruptcy without paying employees,” said Eileen Appelbaum, an economist at the Center for Economic and Policy Research who studies private-equity transactions. “To anyone but a bankruptcy court, this looks like a swindle.'”
(3) The Federal Reserve posted a research note on unemployment dynamics. The reason why some people long-term unemployed cannot find work is their skills are not “in demand.” Writers conclude that there is no policy that can help these suffering people.
The writers, Hie Joo Ahn and James Hamilton, explain the implications for policy. (Emphasis in bold, mine)
What are the implications for policy? When product demand falls, firms may first choose to shed the least productive workers and those whose skills are not currently in demand. Expansionary fiscal or monetary policy that boosts aggregate demand might help those individuals return to work. On the other hand, strong labor demand or an expansionary policy cannot really change an individual’s characteristics, and do not reverse skill-biased technological change. Thus, employment recoveries will be slower, for a given amount of labor demand, if the share of type L unemployment is higher. As a result, increases in the share of type L unemployment can be thought of as adverse shocks to the functioning of the labor market.
Comment: The follow-up question is what is to be done to address this situation of people being placed out of work? I do not like the implied assertion that these human beings are used up and fit to be thrown away. It is a disgusting and unacceptable assertion. Why do these economists refuse to speak to the unemployed directly through the One-Stop Career Centers?
Citation for paper: Ahn, Hie Joo, and James Hamilton (2018). “Factors in Unemployment Dynamics,” FEDS Notes. Washington: Board of Governors of the Federal Reserve System, December 21, 2018, https://doi.org/10.17016/2380-7172.2274.
The Federal Reserve Board (Board) publishes a weekly digest of its activities on its website. The digest is called the H.2 Release and is published every Thursday. The release for the week ending December 22, 2018, is below.
H.2 Release–Actions of the Board, Its Staff, and the Federal Reserve Banks; Applications and Reports Received
||Federal Reserve Notes — currency operating budget for 2019 and multi-cycle capital budget.
-Approved, December 12, 2018
||Forms — initial Board review to extend with revision the Complex Institution Liquidity Monitoring Report (FR 2052A).
-Proposed, December 20, 2018
||Division of Research and Statistics — appointment of Gianni Amisano, Charles Fleischman, Li Geng, Paul Lengermann, Byron Lutz, Raven Molloy, Matthias Paustian, Gustavo Suarez, and Clara Vega as assistant directors and chiefs; and appointment of Norman Morin as assistant director.
-Announced, December 17, 2018
|Regulations and Policies
||Current Expected Credit Loss (CECL) Methodology — publication of an interagency final rule to address CECL, including an option to phase in the day-one regulatory capital effects over three years, and make conforming changes to other regulations.
-Approved, December 20, 2018
Depository Institution Management Interlocks Rules — publication with request for comment of an interagency notice of proposed rulemaking to raise the asset thresholds below which depository organizations may have management interlocks without prior approval.
-Approved, December 13, 2018
Expanded Examination Cycle — publication of an interagency final rule to expand the number of insured depository institutions and U.S. branches and agencies of foreign banks eligible for an 18-month on-site examination cycle, rather than a 12-month cycle, in accordance with the Economic Growth, Regulatory Relief, and Consumer Protection Act.
-Approved, December 20, 2018
Volcker Rule Regulations — publication with request for comment of an interagency notice of proposed rulemaking to amend the agencies’ respective regulations implementing the proprietary trading, hedge fund, and private equity fund restrictions of the Volcker rule, in accordance with the Economic Growth, Regulatory Relief, and Consumer Protection Act.
-Approved, December 14, 2018
|Supervision and Regulation
||Current Expected Credit Loss (CECL) Methodology and Stress Testing — statement that the Board will maintain the current modeling framework for loan allowances in its supervisory stress test through 2021.
-Announced, December 21, 2018
Resolution Plans — (1) determinations by the Board and Federal Deposit Insurance Corporation (FDIC) on the resolution plans submitted by four foreign-based banking organizations, Barclays Bank PLC, Credit Suisse Group A.G., Deutsche Bank AG, and UBS Group AG, under the Dodd-Frank Act and (2) publication of final guidance by the Board and FDIC for the 2019 and subsequent resolution plans to be submitted by the eight largest, most complex U.S. banking organizations.
-Approved, December 19, 2018
||First Community Bank, Beemer, Nebraska — issuance of a consent order of prohibition against Diane Ludwig, a former institution-affiliated party of First Community Bank.
-Announced, December 20, 2018
Federal Reserve Board: Balance Sheet (H.4.1 Release)
The Board publishes data of factors affecting reserve balances. The digest is called the H.4.1 Release, and they are published every Thursday (or the next business day if the publication date falls on a federal holiday). The release for December 27, 2018, is below.
[Note: The blog will cover the line titled “Total Factors Supplying Reserve Funds.”]
H.4.1 Release–Factors Affecting Reserve Balances
Total factors supplying reserve funds (as of December 26, 2018): $4,123,322 (in millions of dollars). (On September 26, 2007, this amount was $900,473 (in millions of dollars)).
(See the release for further information.)