One More Time..................

O.K., here is our problem, step by step.
1) 15 million Americans are unemployed.
2) 70% of all new jobs are created by small businesses.
3) Small businesses have been going out of business for a lack of customers.
4) Our infrastructure is deteriorating rapidly and that has a major cost.
5) This paragraph from last week's Economist sums up those costs about as well as you can do it.

"FOR decades America has underinvested in infrastructure—even though poor roads, delayed flights, crumbling bridges and inefficient buildings are an expensive burden. Deficiencies in roads, bridges and transport systems alone cost households and businesses nearly $130 billion in 2010, mostly because of higher running costs and travel delays. The calculated underinvestment in transport infrastructure alone runs to about $94 billion a year. This filters through to all parts of the economy and increases costs at the point of use of many raw materials, and thereby reduces the productivity and competitiveness of American firms and their goods. Overall the American Society of Civil Engineers reckons that this underinvestment will end up costing each family in the country about $10,600 between 2010 and 2020.
Yet though investment in infrastructure would bring clear gains in efficiency, there is little money around, and all levels of government are reluctant or unable to pile up more debt. Traditional sources of funding, such as the (flat) tax on petrol, have delivered a dwindling amount of revenue as soaring prices at the pump have persuaded people to drive less. The federal government has been unable to get Congress to agree on other ways to generate new sources of funding for transport, to the point where money for new highways has almost dried up."

6) Interest rates are as low as they can possibly go.
7) Every day we continue to neglect our infrastructure problems, they get more and more expensive to fix.
8) Those costs cannot be avoided forever.  They must be faced sooner or later.

So if we borrowed some money and put unemployed people back to work, it would have these advantages:

1) Reduce unemployment checks.
2) Increase income tax revenues.
3) Put money in small businesses so they could hire even more people and pay more income taxes.
4) Reduce the cost of doing business in the U.S. so there would be even more money available to create new jobs.
5) The Great Recession Ends!!!

What's to not like about that deal?  Nothing!!

So why can't the clowns in Washington see that simple fact????? 

Are You Really Feeling Good About Things Just Now??

Well, let me spoil that for you.  Rent a documentary from Netflix or somewhere called "Waiting For Superman".  It was made in 2010.  As you watch it, remember that at this moment, there are 600,000 jobs in the U.S. that cannot be filled because there are no qualified applicants.

The fact that this film should even be made should make you furious.

Then hope that a bus runs over Randi Weingarten and Diane Ravitch. 

Now This Is Really Interesting!!!

The New York Times is reporting on a new take on obesity in the U.S.  Remember that chronic disease is the second major factor contributing to our out of control health care costs, and obesity and diabetes are the primary chronic diseases.
Read on.......................

A Mathematical Challenge to Obesity

By CLAUDIA DREIFUS

Carson C. Chow deploys mathematics to solve the everyday problems of real life. As an investigator at the National Institute of Diabetes and Digestive and Kidney Diseases, he tries to figure out why 1 in 3 Americans are obese. 

We spoke at the recent annual meeting of the American Association for the Advancement of Science, where Dr. Chow, 49, gave a presentation on “Illuminating the Obesity Epidemic With Mathematics,” and then later by telephone; a condensed and edited version of the interviews follows. 

You are an M.I.T.-trained mathematician and physicist. How did you come to work on obesity?

In 2004, while on the faculty of the math department at the University of Pittsburgh, I married. My wife is a Johns Hopkins ophthalmologist, and she would not move. So I began looking for work in the Beltway area. Through the grapevine, I heard that the N.I.D.D.K., a branch of the National Institutes of Health, was building up its mathematics laboratory to study obesity. At the time, I knew almost nothing of obesity.

I didn’t even know what a calorie was. I quickly read every scientific paper I could get my hands on.

I could see the facts on the epidemic were quite astounding. Between 1975 and 2005, the average weight of Americans had increased by about 20 pounds. Since the 1970s, the national obesity rate had jumped from around 20 percent to over 30 percent. 

The interesting question posed to me when I was hired was, “Why is this happening?” 

Why would mathematics have the answer?

 

Because to do this experimentally would take years. You could find out much more quickly if you did the math. 

Now, prior to my coming on staff, the institute had hired a mathematical physiologist, Kevin Hall. Kevin developed a model that could predict how your body composition changed in response to what you ate. He created a math model of a human being and then plugged in all the variables — height, weight, food intake, exercise. The model could predict what a person will weigh, given their body size and what they take in.

However, the model was complicated: hundreds of equations. Kevin and I began working together to boil it down to one simple equation. That’s what applied mathematicians do. We make things simple. Once we had it, the slimmed-down equation proved to be a useful platform for answering a host of questions.

What new information did your equation render?

 

That the conventional wisdom of 3,500 calories less is what it takes to lose a pound of weight is wrong. The body changes as you lose. Interestingly, we also found that the fatter you get, the easier it is to gain weight. An extra 10 calories a day puts more weight onto an obese person than on a thinner one.

Also, there’s a time constant that’s an important factor in weight loss. That’s because if you reduce your caloric intake, after a while, your body reaches equilibrium. It actually takes about three years for a dieter to reach their new “steady state.” Our model predicts that if you eat 100 calories fewer a day, in three years you will, on average, lose 10 pounds — if you don’t cheat. 

Another finding: Huge variations in your daily food intake will not cause variations in weight, as long as your average food intake over a year is about the same. This is because a person’s body will respond slowly to the food intake. 

Did you ever solve the question posed to you when you were first hired — what caused the obesity epidemic?

 

We think so. And it’s something very simple, very obvious, something that few want to hear: The epidemic was caused by the overproduction of food in the United States

.

Beginning in the 1970s, there was a change in national agricultural policy. Instead of the government paying farmers not to engage in full production, as was the practice, they were encouraged to grow as much food as they could. At the same time, technological changes and the “green revolution” made our farms much more productive. The price of food plummeted, while the number of calories available to the average American grew by about 1,000 a day.

Well, what do people do when there is extra food around? They eat it! This, of course, is a tremendously controversial idea. However, the model shows that increase in food more than explains the increase in weight. 

In the 1950s, when I was growing up, people rarely ate out. Today, Americans dine out — with these large restaurant portions and oil-saturated foods — about five times a week.

 

Right. Society has changed a lot. With such a huge food supply, food marketing got better and restaurants got cheaper. The low cost of food fueled the growth of the fast-food industry. If food were expensive, you couldn’t have fast food. 

People think that the epidemic has to be caused by genetics or that physical activity has gone down. Yet levels of physical activity have not really changed in the past 30 years. As for the genetic argument, yes, there are people who are genetically disposed to obesity, but if they live in societies where there isn’t a lot of food, they don’t get obese. For them, and for us, it’s supply that’s the issue. 

Interestingly, we saw that Americans are wasting food at a progressively increasing rate. If Americans were to eat all the food that’s available, we’d be even more obese. 

Any practical advice from your number crunching?

 

One of the things the numbers have shown us is that weight change, up or down, takes a very, very long time. All diets work. But the reaction time is really slow: on the order of a year. 

People don’t wait long enough to see what they are going to stabilize at. So if you drop weight and return to your old eating habits, the time it takes to crawl back to your old weight is something like three years. To help people understand this better, we’ve posted an interactive version of our model at bwsimulator.niddk.nih.gov. People can plug in their information and learn how much they’ll need to reduce their intake and increase their activity to lose. It will also give them a rough sense of how much time it will take to reach the goal. Applied mathematics in action!

What can Americans do to stem the obesity epidemic?

 

One thing I have concluded, and this is just a personal view, is that we should stop marketing food to children. I think childhood obesity is a major problem. And when you’re obese, it’s not like we can suddenly cut your food off and you’ll go back to not being obese. You’ve been programmed to eat more. It’s a hardship to eat less. Michelle Obama’s initiative is helpful. And childhood obesity rates seem to be stabilizing in the developed world, at least. The obesity epidemic may have peaked because of the recession. It’s made food more expensive.

You said earlier that nobody wants to hear your message. Why?

 

I think the food industry doesn’t want to know it. And ordinary people don’t particularly want to hear this, either. It’s so easy for someone to go out and eat 6,000 calories a day. There’s no magic bullet on this. You simply have to cut calories and be vigilant for the rest of your life. 

This article has been revised to reflect the following correction:
Correction: May 16, 2012

The “Conversation With” article on Tuesday, about Carson Chow, a mathematician who studies obesity, misstated a statistic around which his work revolves. One in 3 Americans are obese — not merely overweight, a description that applies to 2 in 3 Americans.

Today's Washington Post Has A Graph Worth Studying!

 

Now This Is Really Interesting!!

Given my rant yesterday about student debt and how universities are run, this article in today's New York Times is fascinating!!
 To give you some context about how universities spend money, here is a little story.  When I first started at the California State University, the Dean of the Business School has a secretary and a part time student assistant to run the school.  

When I left, twenty-five years later, enrollment had doubled and the office of the Dean had thirty-four vice-presidents, senior advisers, specialists, miscellaneous personnel.

 Read on (and remember this guy is paid over $2 Million to be the President at Ohio State.)

Slowly, as Student Debt Rises, Colleges Confront Costs

By ANDREW MARTIN

COLUMBUS, Ohio — In a wood-paneled office lined with books, sports memorabilia and framed posters (including John Belushi in “Animal House”), E. Gordon Gee, the president of The Ohio State University, keeps a framed quotation that reads, “If you don’t like change, you’re going to like irrelevance even less.”

Mr. Gee, who is often identified with a big salary and spendthrift ways, says he has taken the quotation to heart, and he is now trying to persuade Ohio State’s vast bureaucracy, and the broader world of academia, to do the same. 

At a time of diminished state funding for higher education and uncertain federal dollars, Mr. Gee says that public colleges and universities need to devise a new business model to pay for the costs of education, beyond sticking students with higher tuition and greater debt. 

“The notion that universities can do business the very same way has to stop,” said Mr. Gee, who is also the chairman of a commission studying college attainment, including the impact of student debt. 

College presidents across the country are confronting the same realization, trying to manage their institutions with fewer state dollars without sacrificing quality or all-important academic rankings. Tuition increases had been a relatively easy fix but now — with the balance of student debt topping $1 trillion and an increasing number of borrowers struggling to pay — some administrators acknowledge that they cannot keep putting the financial onus on students and their families.

Increasingly, they are looking for other ways to pay for education, stepping up private fund-raising, privatizing services, cutting staff, eliminating departments — even saving millions of dollars by standardizing things like expense forms.

And Wall Street is watching. 

Moody’s Investors Service, in a report earlier this year, said it had a favorable outlook for the nation’s most elite private colleges and large state institutions, those with the “strongest market positions” that had multiple ways to generate revenue. Ohio State, for instance, received a stable outlook from Moody’s last fall, though the report cautioned about the school’s debt and reliance on its medical center for revenue.

But Moody’s issued a negative outlook for a majority of colleges and universities heavily dependent on tuition and state revenue. 

“Tuition levels are at a tipping point,” Moody’s wrote, adding later, “We anticipate an ongoing bifurcation of student demand favoring the highest quality and most affordable higher education options.”

Many colleges are top-heavy with administrators and woefully inefficient, having not undertaken the kind of paring public companies did years ago — until now.

“Schools are very good at adding new things, new programs,” said Sherideen S. Stoll, vice president for finance and administration at Bowling Green State University in Ohio. “We are not so good at looking at things we have been doing for 20 or 30 years and saying, ‘Should we be offering those academic programs?’ ” 

At Bowling Green, 62 percent of graduates have debt that averages $31,515, the highest of public universities in Ohio. In addition to raising tuition, which has been limited by state-mandated caps, the university has laid off employees, encouraged early retirements, required unpaid furloughs and limited pay increases, Ms. Stoll said. The belt-tightening hasn’t yet reached the point that academic quality has suffered, she said, but Bowling Green may not be able to offer as much in the future.

“We’ve done everything and anything to try to operate much more efficiently,” she said. 

The problems aren’t confined to public colleges. Administrators at some nonprofit private institutions said they too had come to realize they could not keep raising tuition and fees. Families have become more price-sensitive since the economic collapse and are seeking deeper discounts on the sticker price. 

“We know the model is not sustainable,” said Lawrence T. Lesick, vice president for enrollment management at Ohio Northern University. “Schools are going to have to show the value proposition. Those that don’t aren’t going to be around.” 

Before the economic crisis, both public and private colleges participated in a costly “arms race” to provide better amenities to lure the best students and faculty: new dormitories with one student to a room, frequent sabbaticals for professors, upscale cafeteria food, expanded counseling services and gymnasiums that rival the fanciest health clubs in Manhattan. 

And other costs have grown, too. Health care costs have taken a toll, since colleges are labor-intensive, and so has the expense of keeping up with technology, like wireless Internet and new computers. Here at Ohio State, where tuition has increased by nearly 60 percent since 2002, there is a gleaming new student union, climbing walls that can accommodate 50 students at a time and $2 billion in construction projects under way.

Mr. Gee’s compensation package this year, moreover, is worth about $2 million, and The Chronicle of Higher Education has called him the highest-paid public university president. The Dayton Daily News recently reported that Mr. Gee had billed Ohio State for $550,000 in travel in the last two years. 

The travel expenses prompted some to question if Mr. Gee practices what he preaches. 

“He’s very capable. He’s a very smart guy, and he’s engaging and all these things,” said Dale Butland, a spokesman for Innovation Ohio, a nonprofit policy research group. But he added, “Students and their parents who are struggling, not just with coming up with the money, but paying off the debt, I think there is a disconnect between what they are being asked to do and what they are seeing the leader of the university doing.”

Mr. Gee maintains that Ohio State is getting its money’s worth. On his watch, Ohio State has become a more prestigious university, he says, while remaining a relative bargain, even with fewer resources from the state. It now receives just 7 percent of its budget from the state.

Ohio State costs about $25,000 a year for in-state residents who live on campus. The average debt for graduates who borrow is $24,480.

A lanky 68-year-old who is known for his bow ties, horn-rimmed glasses and sometimes zany antics (he has shown up, unannounced, at 21st birthday parties for his students, which he finds on Facebook), Mr. Gee has had the top job at five universities, including twice at Ohio State. He returned to the Columbus campus in 2007 after stints at Brown and Vanderbilt. Mr. Gee acknowledges that college affordability and student debt are growing problems that university presidents long ignored. He said they now needed to address them quickly. 

“We have not been as conscious about costs as we should be, and that has now come home to roost,” he said. 

Like many other college presidents, Mr. Gee has set about trying to make Ohio State’s highly decentralized bureaucracy more efficient. He said he planned to cut $1 billion from the university’s $5 billion budget in the next five years.

“We are like Noah’s Ark,” he said. “We do two of everything.”

The university saved $20 million simply by switching to common vendors for pens, copiers and overnight shipping; previously Ohio State’s 14 colleges chose their own. Creating a common expense report will save $75 million. 

“When I got here, I asked to see their long-term financial model, and they brought me a paper for one year, and I said, ‘What?’ ” said Geoff Chatas, a former banker whom Mr. Gee hired in 2010 as chief financial officer. “Now we have a 15-year plan.” 

Mr. Gee said he was considering selling off Ohio State’s airports and golf courses, and he might privatize campus parking, though faculty members are balking at the idea. Last year, Ohio State became the first public university to issue a 100-year bond, for $500 million.

He is also is trying to beef up Ohio State’s enrollment of out-of-state and international students, who bring in more tuition revenue and higher test scores. And, he is pressing alumni for more money, a task in which he is particularly skilled. 

At a ceremony to honor a $100 million donation from Leslie Wexner, the clothing magnate and Ohio State graduate, Mr. Gee choked back tears. 

“Every time I get a lot of money I cry,” Mr. Gee told the crowd. “And I got a lot of tears left.”

Another Huge Problem Just Below The Radar!!

Student loans are now larger than all credit card debt!!  Now that is not as large as home owners debt, but it is deeply troubling for three reasons.

1)  About half of all recent graduates have no jobs whatsoever, and their ability to pay back those student loans is extremely limited.  And compound interest just makes the loan grow and grow.

2) As people (see L.A. Times story below to understand we are not just talking about people in their twenties) pay down their debts, that is money that cannot be used to buy new cars, to get married and start a family, to buy a new house, and on and on.  Remember that 70% of our economy is driven by consumer purchasing so this inability to spend is a significant drag on our recovery.

3)  Lower income students are simply being priced out of the market and won't finish college.  Since there is zero co-relation between  parent's income and IQ, we will be losing a significant resource among young people who could make real contributions to society.

So what is the real problem? The  Times story makes it clear that rising tuition and college costs are the root problem.   So what do we do about that?

Here is real source of the problem.  In twenty-five years at a public university, I have NEVER seen anyone, at the department level, school level or university level, who was willing to set priorities.  Everybody behaves like children in a sand box.  Everyone wants everything they want and they want it now.  And nobody wants to pay for anything.

One small example:  once, the state government of California awarded grants of $5 million to individual campuses to create video capabilities.  Since it had to do with electricity, the dean appointed me to a campus wide committee that was supposed to decide what to do with the money.  I sat through two meetings where the discussion ranged from what was the most advance video equipment we couldbuy to how we would assign somebody to run the whole thing.  After about five hours of this "conversation", I asked one simple question, "What are we trying to accomplish here?"  They never invited me to another meeting.  They spent the money on expensive equipment, hired a couple of people to work the equipment, and ABSOLUTELY NOTHING  was ever done with the facility.  After a couple of years, the equipment just disappeared and the two employees were let go.

While this is a trivial example, I have seen it happen over and over and over.  And I have worked at a number of universities and it is the same everywhere.

So the solution is to get accountability from a lot of children pretending to be adults.  And I have no idea whatsoever about how to do that.  Your suggestions are invited.

And now the Times story.

latimes.com

Student loan blues

More Americans can't get on with their lives because they're still paying for college years after graduation

By Walter Hamilton, Los Angeles Times
May 13, 2012

Advertisement

Brenda Small didn't think twice about taking out student loans to pay for nursing school in the late 1980s. She figured she could easily pay off the $20,000 bill — until an injury a few years later left her permanently unable to work.

Her dreams of working in her chosen profession vanished, but not her student debts. Including interest and penalties, the 59-year-old Los Angeles woman now owes more than $39,000 and can't afford to pay the debt from a disability income of $1,234 a month.

"It's just unbearable to have that type of weight on you and you can't do anything about it," Small said.

Despite the perception of educational debt as a twentysomething phenomenon, Americans of all ages are on the hook for student loans that in some cases were taken out several decades earlier. And many middle-aged people are taking out new loans as they go back to school or finance their children's educations.

Of the estimated 37 million Americans with outstanding student loans, nearly 5.5 million are 40 to 49 years old, and more than 6.3 million are 50 or older, according to the Federal Reserve Bank of New York.

"Student loan debt is now no longer isolated to young people," said Rich Williams, a higher-education advocate at U.S. Public Interest Research Group. "It's now across the board."

The burden on older people is one element of a growing debate about the effects of student-loan debt on Americans of all ages.

In addition to the often significant financial effect on students and their parents, experts worry that rising education indebtedness among all age groups has wider social implications.

"People aren't buying houses or starting families until later on and progressing on what we as a society see as the steps of life," said Radhika Singh Miller, a student-debt specialist at Equal Justice Works, a nonprofit advocacy group in Washington.

Paying for college has been on the minds of millions of parents and students in the last few weeks as incoming freshmen decided which schools they would attend.

"Many students were waiting down to the last day because costs were a big part of the equation," said Deborah Fox, founder of Fox College Funding in San Diego, which advises families on how to finance their educations.

"They were trying to get schools to add a little more money at the last minute [to an aid grant] or parents were trying to figure out a way to make it all work," she said.

The financial benefits of college still outweigh the costs, according to studies.

One found that lifetime earnings of college graduates average $650,000 more than that of their counterparts who completed only high school. Another concluded that the average annual take-home pay of college graduates is nearly twice that of high school-only graduates — $38,950 versus $21,500.

Steadily rising tuition and steep government cutbacks have pushed more students to borrow increasing amounts of money.

Two-thirds of college seniors graduated with loans in 2010, compared with fewer than half in 1993, according to the nonprofit Project on Student Debt in Oakland. Total debt loads have been rising about 5% a year, with the average graduate now on the hook for $25,250.

Last year, students took out $117 billion in new federal loans, pushing the total above $1 trillion, according to the Consumer Financial Protection Bureau.

A heavy student-debt load also weighs on decisions about careers. Celeste Knight, an 18-year-old UC Berkeley freshman, is considering becoming a social advocacy lawyer, but she worries that student loans could force her to look for a higher-paying job.

"I don't think everyone should be choosing a job based on 'Will my income be high enough to pay off my student loan?'" Knight said. "A whole generation of students is already so far in debt that even if you get a great-paying job, you're not going to live this great American standard of living."

Such concerns resonate even more acutely with older students such as Tressie McMillan Cottom.

Cottom, 34, went back to school in 2010 to get a doctorate in sociology at Emory University in Atlanta and has already racked up more than $55,000 in loans, with more than two years to go.

"We make jokes about the way it influences our life choices," she said. "My best friend said she chose her husband because he was the one without student-loan debt."

For Brenda Small, the situation is bleak. Her inability to repay her loans hangs "like a millstone around my neck," she said.

The U.S. Department of Education, which guaranteed her loans, briefly garnished part of her disability payments until a legal aid lawyer got them reinstated.

Educational debt also burdens many older Americans who took out loans to put their children through school.

Ellyn Herb, a 59-year-old San Jose psychologist and college professor, and her husband owe $132,000 on college loans they took out for their two sons. The couple have cut expenses and moved to a cheaper home but still have had to defer their loans for one son while paying off those incurred for the other.

"Many of us had kids late," Herb said. "We're headed toward retirement, but we can't retire because we have all these loans."

Unlike most other forms of debt, student loans funded or backed by the federal government are virtually impossible to discharge through bankruptcy.

The government frequently garnishes paychecks, Social Security payments and other forms of income of people who haven't paid their loans.

Yet the sluggish job market is making it difficult for many recent graduates to avoid the government's hammer.

A study released Thursday by Rutgers University showed that only half of recent college graduates are working full time.

And paychecks don't stretch as far as they used to: The 6.4% average annual rise in college costs since 1981 far outstrips the 0.4% annual income growth, according to ConvergEx Group in New York.

"Even if you do everything right, you might find it harder to pay back your loans than you thought," said Lauren Asher, president of the Project on Student Debt's parent organization.

College funding has become a flash point in the presidential election and in Congress, with lawmakers sparring over the proposed extension of subsidies that have kept a lid on federal student-loan interest rates.

President Obama and Mitt Romney, the expected Republican nominee for president, both said they oppose letting the current 3.4% rate on one type of federal loan double to 6.8% on July 1. But Democratic and Republican lawmakers are clashing on how to pay for the subsidies.

Rising costs make it even more important to make smart financial choices.

Most people should save as much as possible as early as possible, experts say, and should consider investing in a 529 college savings plan, which allows investment earnings to be disbursed tax-free for tuition and certain other school expenses.

People who have to borrow should favor federal loans, borrowing directly from the government, rather than private loans, which are made by banks or other lenders, experts say.

Federal loans have fixed rates and more flexible repayment options than private loans, which typically have variable rates.

"Rising student debt is cause for concern for a variety of reasons, but it doesn't mean you shouldn't go to college or borrow," Asher said. "But you have to shop around, borrow wisely as to what kinds of loans and how much, and know your repayment options."

walter.hamilton@latimes.com

And if you want even more, and personal, stories about this problem, try today's New York Times at this link.

 http://www.nytimes.com/2012/05/13/business/student-loans-weighing-down-a-generation-with-heavy-debt.html?_r=1&hp

Is The U.S. Becoming A Three Tier Economy?

This rant has long warned, and worried about, the signs that the U.S. is becoming a two tier economy, e.g., the Mega Rich and the rest of us.  The evidence of history is that this growing dichotomy can only have a bad, really bad, out come.

Now we have evidence that there is a third tier forming in the economy, e.g., the permanently unemployed.  The only reason the unemployment rate has fallen lately is because of all the people who have given up even looking are no longer counted.

This piece in today's New York Times provides numbers and does a good job of spelling out the problem.

It also includes one piece of outrageously bad advice.  The kind that only economists who have never had a real job could offer.  The authors suggest that fifty something year old  unemployed people should take all their life savings and start a new business. 


The facts are that FOUR OUT OF FIVE new businesses FAIL within in the first five years.  And that fact has been absolutely consistent for over 70 years, and in good times and bad times.


Anyway, here is the good part of the article.

The Human Disaster of Unemployment

By DEAN BAKER and KEVIN HASSETT

THE American economy is experiencing a crisis in long-term unemployment that has enormous human and economic costs. 

In 2007, before the Great Recession, people who were looking for work for more than six months — the definition of long-term unemployment — accounted for just 0.8 percent of the labor force. The recession has radically changed this picture. In 2010, the long-term unemployed accounted for 4.2 percent of the work force. That figure would be 50 percent higher if we added the people who gave up looking for work.

Long-term unemployment is experienced disproportionately by the young, the old, the less educated, and African-American and Latino workers. 

While older workers are less likely to be laid off than younger workers, they are about half as likely to be rehired. One result is that older workers have seen the largest proportionate increase in unemployment in this downturn. The number of unemployed people between ages 50 and 65 has more than doubled.

The prospects for the re-employment of older workers deteriorate sharply the longer they are unemployed. A worker between ages 50 and 61 who has been unemployed for 17 months has only about a 9 percent chance of finding a new job in the next three months. A worker who is 62 or older and in the same situation has only about a 6 percent chance. As unemployment increases in duration, these slim chances drop steadily.

The result is nothing short of a national emergency. Millions of workers have been disconnected from the work force, and possibly even from society. If they are not reconnected, the costs to them and to society will be grim. 

Unemployment is almost always a traumatic event, especially for older workers. A paper by the economists Daniel Sullivan and Till von Wachter estimates a 50 to 100 percent increase in death rates for older male workers in the years immediately following a job loss, if they previously had been consistently employed. This higher mortality rate implies that a male worker displaced in midcareer can expect to live about one and a half years less than a worker who keeps his job. 

There are various reasons for this rise in mortality. One is suicide. A recent study found that a 10 percent increase in the unemployment rate (say from 8 to 8.8 percent) would increase the suicide rate for males by 1.47 percent. This is not a small effect. Assuming a link of that scale, the increase in unemployment would lead to an additional 128 suicides per month in the United States. The picture for the long-term unemployed is especially disturbing. The duration of unemployment is the dominant force in the relationship between joblessness and the risk of suicide. 

Joblessness is also associated with some serious illnesses, although the causal links are poorly understood. Studies have found strong links between unemployment and cancer, with unemployed men facing a 25 percent higher risk of dying of the disease. Similarly higher risks have been found for heart disease and psychiatric problems. 

The physical and psychological consequences of unemployment are significant enough to affect family members. The economists Kerwin Charles and Melvin Stephens recently found an 18 percent increase in the probability of divorce following a husband’s job loss and 13 percent after a wife’s. Unemployment of parents also has a negative impact on achievement of their children. In the long run, children whose fathers lose a job when they are kids have reduced earnings as adults — about 9 percent lower annually than children whose fathers do not experience unemployment. 

We all understand how the human costs can be so high. For many people, their very identity is their occupation. Few events rival the emotional strain of job loss.

IT seems clear that neither political party was prepared to deal with the crisis of long-term unemployment. In spite of the severity of the downturn, there was a general expectation that the economy would bounce back, as it had after previous downturns.

Some countries that were more familiar with long-term unemployment, notably Germany, were much better prepared to deal with the fallout from the crisis. The German government aggressively pushed work-sharing measures. This meant that instead of workers’ being laid off and receiving unemployment benefits, the German government helped companies keep employees, working fewer hours, on their payrolls by subsidizing their wages with the money saved on unemployment benefits. 

The result of this policy is that Germany’s unemployment rate is now lower than it was at the start of the downturn, even though its growth has been no better than ours. 

Thankfully, there is some effort to learn from this model. The recent bill that extended the payroll tax cut included a provision that covered the cost of work-sharing programs in the 23 states that already had them as part of their unemployment insurance systems, and it helped other states start such programs. This should slow job destruction in those states, which will improve chances for all workers seeking employment. From now on, the first line of defense during a recession should be to expand work sharing rather than simply extend unemployment benefits. 

But these changes come late, and we must get much better at sending a lifeline to those who are hardest to reconnect. 

In the United States and elsewhere, government training programs have a mixed record at best. Some people have suggested that the unemployed be encouraged to start their own businesses, and entrepreneurship is one valid option for some. But given that most new businesses will fail, it may not be the best advice to tell older workers who have lost their jobs to also put their savings at risk to start a new business. 

Clearly, an improving economy will help some, but those who have been out of work for an extended period have a difficult time finding jobs for many reasons. They are more likely to be discouraged, more likely to have seen their skills wane, and more likely to be seen as a risk by a prospective employer. 

Policy makers must come together and recognize that this is an emergency, and fashion a comprehensive re-employment policy that addresses the specific needs of the long-term unemployed. A policy package that as a whole should appeal to the left and the right should spend money to help expand public and private training programs with proven track records; expand entrepreneurial opportunities by increasing access to small-business financing; reduce government hurdles to the formation of new businesses; and explore subsidies for private employers who hire the long-term unemployed. Those who hire for government jobs must do their share, too: managers who are filling open positions should be given explicit incentives to reconnect these lost workers. 

Every month of delay is a month in which our unemployed friends and neighbors drift further away.

Dean Baker is co-director of the Center for Economic and Policy Research. Kevin Hassett is director of economic policy studies at the American Enterprise Institute.