G.M. Reports Its Largest Annual Profit »

As GM goes, so does America? Maybe.

General Motors reported the largest annual profit in its history on Thursday, even as losses in Europe dragged down fourth-quarter earnings.

G.M. said it earned a quarterly profit of $472 million, or 28 cents a share, down from $510 million, or 31 cents a share, a year ago. It was the eighth-consecutive quarterly profit for the carmaker, but also the smallest during that stretch.

For all of 2011, G.M. earned $7.6 billion, nearly all of it from North America. That was more than G.M.’s previous record of $6.7 billion in 1997.

City Unions in Detroit Agree to Concessions »


Facing the threat of a state takeover of the city, Detroit’s mayor and leaders of most of its municipal unions reached a tentative agreement on new labor concessions aimed at preventing the city from running out of money this spring.

In statement released Thursday through Twitter, Mayor Dave Bing, a Democrat, described the agreement as a first meaningful step to resolve the city’s financial crisis. But city negotiators are still locked in contentious talks with unions that represent the city’s police officers and firefighters, who already took significant hits to their pensions last year and haven’t agreed to any new concessions.

“Apple’s an example of why it’s so hard to create middle-class jobs in the U.S. now,” said Jared Bernstein, who until last year was an economic adviser to the White House. “If it’s the pinnacle of capitalism, we should be worried.”

In this NYT piece about Apple and why, as much as we love tech companies, they are not the economic drivers in the United States that their industrial brethren are/were. A telling paragraph from the same article:

Apple employs 43,000 people in the United States and 20,000 overseas, a small fraction of the over 400,000 American workers at General Motors in the 1950s, or the hundreds of thousands at General Electric in the 1980s. Many more people work for Apple’s contractors: an additional 700,000 people engineer, build and assemble iPads, iPhones and Apple’s other products. But almost none of them work in the United States. Instead, they work for foreign companies in Asia, Europe and elsewhere, at factories that almost every electronics designer relies upon to build their wares.

...many researchers have reached a conclusion that turns conventional wisdom on its head: Americans enjoy less economic mobility than their peers in Canada and much of Western Europe. The mobility gap has been widely discussed in academic circles, but a sour season of mass unemployment and street protests has moved the discussion toward center stage. »

Interesting NYT piece; though I vaguely remember a former colleague in the sociology department at one of the schools I taught at explaining how the ‘rags to riches’ story was just that: a story, a myth that really never existed in our society. 

After doing a quick search, I found this NYT editorial from 2000 about “America’s rags to riches” and more importantly, this Education Week article from 2006 highlighting research about this myth (subscription required):

Among Americans’ most cherished beliefs is the idea that the United States is a land of opportunity, a place where all children have an equal shot at success regardless of the circumstances of their birth. A growing body of research suggests, however, that idea may be a myth.

Going from rags to riches in this country, some studies conducted over the past 10 to 15 years say, may be harder than it used to be. In fact, newer international studies suggest that children born into poor families in the United States have a smaller chance of rising out of poverty than their counterparts in many other industrialized nations.

As Wars End, Young Veterans Return to Scant Jobs »

This is going to be a big problem: one million veterans with no jobs in an era where it’s next to impossible to get one.

Corporal Rhoden, who is 25, gawky and polite with a passion for soldiering, is one of the legions of veterans who served in combat yet have a harder time finding work than other people their age, a situation that officials say will grow worse as the United States completes its pullout of Iraq and as, by a White House estimate, a million new veterans join the work force over the next five years.

Since 2007, the percent of the population that either has a job or is actively looking for one has fallen from 62.7 percent to 58.5 percent. That's millions of workers leaving the workforce, and it's not because they've become sick or old or infirm. It's because they can't find a job, and so they've stopped trying. That's where Luce's calculation comes from. If 62.7 percent of the country was still counted as in the workforce, unemployment would be 11 percent. In that sense, the real unemployment rate - the apples-to-apples unemployment rate -- is probably 11 percent. And the real un- and underemployed rate - the so-called "U6" - is near 20 percent. »

I’m in the 11%…so close to the 1%.  

“The German government has made it clear that the European crisis will not be solved in one fell swoop,” Merkel said. “It’s a process, and this process will take years.”

German Chancellor Angela Merkel speaking to Parliament about the financial crisis.

From the AP:

Speaking to lawmakers in Parliament ahead of a crucial European summit next week, the German leader emphasized that tougher rules against running up debt were the only path forward — a process could take years.

It’s not like we haven’t heard this before. On Dec. 6, 2008, President-elect Obama said on Meet The Press the economy will get worse before it gets better.

“We are inheriting an enormous budget deficit. Some estimates over a trillion dollars. That’s before we do anything,” Obama said. “And so we understand we’ve got to provide a blood infusion to the patient right now to make sure the patient is stabilized.  That means we can’t worry short term about the deficit. We’ve got to make sure the economic stimulus plan is large enough to get the economy moving.”

Interesting to look at articles from Dec ‘08/Jan ‘09 and the phrase “it will get worse before it gets better.” At the time, unemployment was at 7.2% and we had no idea that $7.7 trillion was funneled into banks - sad to think of those as the good old days. The President-elect also was working on a public works plan, which, I guess, hasn’t really taken off.