Economy Watch: Online Data Thieves Hit IMF, Rouge State Suspected
The IMF's computer systems have been hacked; a McKinsey Global Institute report outlines the immensity of the task of restoring the labor market; and the cost of TARP has shrunk more than expected.
By Dees Stribling, Contributing Editor
Over the weekend, word broke that the computer systems of the International Monetary Fund were attacked in some unspecified yet reportedly major way. Maybe it was through a technique known as “spear-phishing,” in which an individual computer user is duped into accessing a website or running a program that allows the attackers to access the user’s network–which in this case would be databases containing all sorts of information the IMF doesn’t want made public.
This would include such information, for example, as the details of ongoing negotiations on the various Euro-bailouts or other communications between the fund and its many member states (194, at last count). The attackers haven’t been named, though speculation has it that they are “state-sponsored.”
It’s hardly the first large-scale data theft in recent months, or even the first such attack on a large organization concerned with macroeconomic policy. Recently attackers hit the French Ministry of Finances and Canadian Finance Department and Treasury Board and lifted some data. The private sector, too, has seen plenty of computer-based attacks of late, such as the hacking of Google, which the search engine blames on China, and the many attacks on Sony, so many that hackers seem to be doing it for sport.
Full employment promises to be Herculean task
A new report by the McKinsey Global Institute says that for the United States to return to “full employment”—that is, finding work for the currently unemployed and accommodating new entrants into the labor force this decade—the U.S. economy will need to create some 21 million jobs by 2020. To achieve such Herculean growth will require not only a robust economic recovery, MGI posits, but also a concerted effort to address other factors that impede employment, including growing gaps in worker skills and education.
“The U.S. workforce will continue to grow until 2020, but under current trends, many workers will not have the right skills for the available jobs,” the report predicts. “Technology is changing the nature of work: Jobs are being disaggregated into tasks, work is becoming virtual, and firms are relying on flexible labor.” (Which is a euphemism for temporary, contract workers.)
Unfortunately, the report also found that recoveries have increasingly becoming “jobless” due to firm restructuring, skill and geographic mismatches between workers and jobs, and sharp decline in new start-ups. On the other hand, technological change will offer new opportunities for creating jobs in this country, but “it’s a trend that some companies do not fully appreciate,” says MGI.
TARP estimates take small bite out of deficit
The federal government took in about $175 billion in May and spent about $233 billion, according to the U.S. Department of the Treasury on Friday, a deficit of $57.6 billion for the the month. Remarkably, that compares with a deficit of $139.6 billion during May 2010.
The main reason for the decline is that the cost of the Troubled Asset Relief Program has shrunk more than expected. All together, Treasury is expecting TARP to cost about $48 billion. The Congressional Budget Office has put the figure even lower, at about half that. Both of those estimates are considerably lower than the prevailing opinion about the much-maligned bank-stabilizing program back in its early days, when “an arm and a leg” was the most common estimate.
Investors clearly have the heebie-jeebies. After an uptick on Thursday, Wall Stock headed downward again on Friday, with the Dow Jones Industrial Average dropping 172.45 points, or 1.42 percent, with the index dropping below 12,000 for the first time since March (it’s still positive 3.23 percent year-to-date, however). The S&P 500 lost 1.4 percent, and the Nasdaq plunged 1.53 percent.