A Solyndra solar rooftoop installation.
In a great column titled "Here Comes the Sun," the New York Times' Paul Krugman argues that we are on the brink of a solar transformation of our energy economy. Maybe he's right. During the course of proving his point, however, he has this to say about the controversial solar startup Solyndra, which recently went bankrupt and whose funding has brought the Obama Administration under fire:
These days, mention solar power and you’ll probably hear cries of “Solyndra!” Republicans have tried to make the failed solar panel company both a symbol of government waste — although claims of a major scandal are nonsense — and a stick with which to beat renewable energy.
But Solyndra’s failure was actually caused by technological success: the price of solar panels is dropping fast, and Solyndra couldn’t keep up with the competition. In fact, progress in solar panels has been so dramatic and sustained that, as a blog post at Scientific American put it, “there’s now frequent talk of a ‘Moore’s law’ in solar energy,” with prices adjusted for inflation falling around 7 percent a year.
Sometimes, it's just so simple. What is the Occupy Movement protesting? That income and wealth gains have gone disproportionately to the top 1 percent. And how did this come about? Well, according to this recent paper from the San Francisco Fed, you can blame the "Great Divergence," which took place after the Great Convergence of the war years. And what caused the divergence? A failure of education:
Economists Lawrence Katz and Claudia Goldin argue that the educational system has failed to produce an adequate supply of skilled labor to keep up with the pace of technological change over the past 30 years. In contrast, remember that the Great Compression that took place in the early 1940s was essentially a reversal of this situation, where skilled labor was plentiful at a time when unskilled labor was in demand, flattening wages across the labor market. Today, employers are competing to hire highly skilled workers from a limited pool, creating a wage premium for those with better training and education; the result is the widening income gap across education groups. In addition, consider the impact of educational attainment on employability; in September 2011, the unemployment rate for those without a high school degree was 13 percent, but for those with a bachelor’s degree, the unemployment rate was 4.2 percent.
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CANNES, FRANCE - NOVEMBER 03: US President Barack Obama is welcomed by the French President Nicolas Sarkozy to the G20 Summit on November 3, 2011 in Cannes, France. World's top economic leaders are attending the G20 summit in Cannes on November 3rd and 4th, and are expected to debate current issues surrounding the global financial system in the hope of fending off a global recession and finding an answer to the Eurozone crisis. (Photo by Dan Kitwood/Getty Images)
Aren't you glad we don't have Greece to worry about anymore? After two years of crisis, the Greek economy is in full meltdown mode and the country's political system is falling apart. It has no hope of paying back its debt. The only question now is whether it will remain the Euro currency union, or whether default and bankruptcy will mean a return to drachma.
We now turn our attention to Italy, number three in economic size, behind German and France. There's enough money sloshing around the euro currency union to deal with Greece and similar small economies, but if Italy can't refinance its 1.9 trillion euros of debt, a bailout isn't currently a realistic option.
Unless maybe the Chinese pitch in. China has more than $3 trillion in foreign currency reserves, which it could pump into Europe. The question is what this would ultimately cost Europe, in terms of various trade-offs (pun intended), not to mention what it would cost China itself. This is Yu Yongding, former member of China’s central bank monetary policy committee, writing recently in the Financial Times:
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LOS ANGELES, CA - NOVEMBER 5: Molly Hawkey, who moved her money from a bank to a credit union this week, carries her sign in the downtown financial district during during the the Move Your Money March on what is being called Bank Transfer Day on November 5, 2011 in Los Angeles, California. Occupy movement members are calling for people to move their money from banks to credit unions today in support of the 99% movement. (Photo by David McNew/Getty Images)
I went on American Now with Andy Dean on Friday to discuss Bank Transfer Day, which of course took place on Saturday. Andy's a sharp and entertaining guy who's no fan of the Occupy Wall Street movement, nor really of the bank transfer idea, but he certainly wasn't afraid to engage in some lively back-and-forth on the topic. Good radio!
You can listen to the segment here. It's the second hour of the show, from Nov. 4. We also wound up discussing my idea that the Post Office could enter the banking business, as a way of saving its skin. And we wrapped it all up with the meltdown of MF Global and the fate of its CEO, former New Jersey Gov. Jon Corzine, who may or may not wind up in jail.
In terms of the postgame analysis for Bank Transfer Day, there does seem to be a sense that the lead-up to the protest effort saw a fair number of people move their accounts from big banks to credit unions. Firedoglake has a small amount of snap feedback.
Unemployment in America grinds on as job seekers confront a weak recovery.
The BLS released October employment numbers this morning, and the numbers were disappointing. We were looking for around 100,000 new jobs, but we got only 80,000. The pattern for the past few months has been for a low number to be revised up. August, for example, came in at zero (yes, zero) but was later revised up, as was September.
So that's the silver lining. Taking revised data into account, we added about 100,000 more jobs than the BLS originally thought at the end of the summer and into the early fall.
Altogether, this was enough to shave 0.1 percent off the unemployment level: we went from 9.1 to 9.0 (Hooray, U.S. economy!). Obviously, this is a dismal pace of improvement, unlikely to do much at all to bring the economy back to "full" employment of around 4 percent anytime soon.