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Powered by Guardian.co.ukThis article titled “Ben Bernanke warns jobs recovery may be ‘out of sync’ with economic picture” was written by Dominic Rushe, for guardian.co.uk on Monday 26th March 2012 16.01 UTC

Federal Reserve chairman Ben Bernanke has warned that the recovery in the job market remained fragile – but said he believed cyclical, not structural, problems were to blame.

The US economy has added an average 245,000 jobs over the past three months, and the number of people applying for initial unemployment benefits slipped to a four-year low last week.

The recovery has been seen as a major boost to president Barack Obama’s re-election campaign. But Bernanke warned there may be trouble ahead.

“We have seen some positive signs on the jobs front recently, including a pick-up in monthly payroll gains and a notable decline in the unemployment rate. That is good news. At the same time, some key questions are unresolved,” Bernanke said in a speech to the National Association for Business Economics on Monday.

He said the recent positive jobs numbers seemed “somewhat out of sync” with the overall pace of economic expansion, and that a close look revealed some worrying trends.

The number of people working and total hours worked are still significantly below pre-crisis peaks, said Bernanke. He said he was particularly concerned by the large number of people who have been unemployed for more than six months.

“Notwithstanding these welcome recent signs, the job market remains quite weak relative to historical norms,” he said. “After nearly two years of job gains, private payroll employment remains more than 5 million jobs below its previous peak.”

The share of people unemployed for more than six months has been higher than 40% since December 2009, he said. “By way of comparison, the share of unemployment that was long term in nature never exceeded 25% or so in the severe 1981-82 recession,” said Bernanke.

Even though the unemployment rate has been falling, it was still roughly 3% above its average over the 20 years preceding the recession, he said. “Moreover, a significant portion of the improvement in the labor market has reflected a decline in lay-offs rather than an increase in hiring,” said Bernanke.

The Fed chairman said he believed in part that the recent bounce back in the jobs market may have been the “flip side of the fear-driven lay-offs that occurred during the worst part of the recession.”

Worried employers sacked too many workers going into the recession and have now started hiring back employees to cope with demand, Bernanke said.

But he said he was not convinced that the high rates of unemployment were caused by structural factors, including the shift of jobs from people to technology and US skill shortages.

While structural changes are important in the long-term, Bernanke said he believs they have played only a “modest” part in the recent increase in long-term unemployment.

If he is wrong, said Bernanke “it will become even more important to take the steps needed to ensure that workers are able to obtain the skills needed to meet the demands of our rapidly changing economy.”

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Powered by Guardian.co.ukThis article titled “Obama: US and China will co-ordinate response to North Korea rocket launch” was written by Justin McCurry in Osaka, for The Guardian on Monday 26th March 2012 13.39 UTC

The US and China have agreed to co-ordinate their response if North Korea goes through with a planned rocket launch next month, a day after Barack Obama urged Beijing to use its influence to rein in its unpredictable ally.

Speaking at the start of a two-day summit on nuclear security in the South Korean capital, Seoul, the US president said China and the US had a shared interest in preventing nuclear proliferation.

“We both have an interest in making sure that international norms surrounding non-proliferation, preventing destabilising nuclear weapons, is very important,” he said.

Obama and the Chinese president, Hu Jintao, did not elaborate on how they would respond to a North Korean missile launch, which is expected to take place between 12 and 16 April to coincide with the centenary of the birth of the country’s founder, Kim Il-sung.

“The two leaders agreed to co-ordinate closely in responding to this potential provocation, and if necessary consider what steps need to be taken following a potential launch,” a senior White House aide told Reuters.

But the early show of unity is a step forward after the US leader chided China, North Korea’s biggest benefactor, on Sunday for failing to exert more pressure on the North to abandon its nuclear weapons programme.

During bilateral talks on Monday, Hu told Obama that the North Korean issue remained “very sensitive”, according to China’s official Xinhua news agency. “We do not hope to see a reversal of the hard-won momentum of relaxation of tension on the [Korean] peninsula,” Hu was quoted as saying.

But Ben Rhodes, Obama’s deputy national security adviser, said North Korea had previously ignored Chinese concerns about its nuclear and missile programmes.

“China has expressed those concerns before and North Korea has continued on with its behaviour,” he said. “China needs to look at whether it needs to be doing more above and beyond the types of messages and warnings it’s been giving to the North Koreans.”

South Korea and Japan have said they will shoot down the missile if it passes over their territory. “We are preparing measures to track the missile’s trajectory and shoot it down if, by chance, it deviates from the planned route and falls into our territory,” a South Korean defence ministry spokesman said.

The North insists that the rocket, whose main component has reportedly been moved to a launch site in the country’s north-west, is designed to carry an observation satellite into orbit.

The US, South Korea and Japan, however, say the launch would violate a UN ban on missile activity as the same technology could be used to develop long-range missiles, including those capable of striking the US mainland, possibly within five years.

The show of unity by the US and China, however ambiguous, will not be welcomed in Pyongyang, according to North Korea experts.

Shin Jong Dae, a professor at the University of North Korean Studies in Seoul, says North Korean provocations are partly motivated by a desire to divide the US and China over their response.

“North Korea doesn’t want to see an improvement in Sino-US relations, so to rupture relations between China and US, it opts for military adventurism, just as it did with the sinking of the Cheonan, bombing Yeonpyeong island and conducting missile tests,” he said.

Shin added that China’s main concern was avoiding political instability in the North. “The best-case scenario for China is a stable North Korea without nuclear weapons. The worst-case scenario is an unstable North Korea. But if China can’t achieve that ideal, then it will at least try to avoid the worst possible alternative. That means it will tolerate a North Korea with nuclear weapons, as long as it remains stable.”

The planned launch has put on hold a deal reached last month that would have required North Korea to suspend long-range missile tests and its uranium enrichment programme in return for 240,000 tonnes of US food aid.

In a speech to students at Hankuk University in Seoul, Obama warned North Korea’s new leadership under Kim Jong-un not to invite “more isolation” by developing nuclear weapons.

“By now it should be clear,” he said. “Your provocations and pursuit of nuclear weapons have not achieved the security you seek, they have undermined it. Instead of the dignity you desire, you are more isolated.”

His comments may also have been directed at Republicans who are seeking to exploit what they see as Obama’s failure of diplomacy on North Korea in an election year.

“The United States doesn’t want to do anything that will result in North Korea conducting nuclear tests or missile launches or anything that would be detrimental to the Obama administration,” said Kim Hyun Wook, a professor at the Institute of Foreign Affairs and National Security in Seoul.

“If that happens, there could be criticism from Republicans of Obama that his diplomatic efforts with North Korea have failed. Obama doesn’t want that; it would make his re-election more difficult.”

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Powered by Guardian.co.ukThis article titled “Why Obama’s healthcare reform is the court’s supreme test” was written by Jason Farago, for guardian.co.uk on Monday 26th March 2012 15.01 UTC

In October 2009, a reporter from something called the Cybercast News Service – a strange outfit run by the same people who put a giant ad in New York’s Times Square screaming “Don’t Believe the Liberal Media!” – asked Nancy Pelosi a question about the pending healthcare legislation. “Madam Speaker,” he asked, “where specifically does the constitution grant Congress the authority to enact an individual health insurance mandate?” The then-speaker couldn’t believe it. “Are you serious? Are you serious?” she asked, and laughed the guy out of the room.

That was about the reaction most serious conservative legal scholars had, too, when a few outliers groused that Congress had no right to require Americans to obtain healthcare. Their disapproval often went hand in hand with the strange constitution-worship of those early Tea Party days, complete with tricorn hats, irrational defenses of states’ rights, and, not incidentally, a bit of uncertainty about the president’s birth certificate. Within Congress, where Republicans led by Charles Grassley tried for months to forge a bipartisan deal, nobody except a few crusaders, among them Michele Bachmann and Jim DeMint, ever proposed that the Affordable Care Act would contravene the rules of the road.

But here we are, not three years later, and the signal accomplishment of Barack Obama’s presidency could be headed for the rubbish heap – by order not of the lawmakers, but of the supreme court. The sun is shining, the capital’s cherry blossoms are in bloom, but outside the courthouse people stood in line (or paid others to do so) for so long you’d think a new iPad was being released. It’s the biggest show in a tiny town, and the justices know they’re being watched. Otherwise, they would never have scheduled three days of oral arguments – the longest parley the court has permitted in nearly half a century.

Monday is for completists only, but could be revealing: the justices will go through some procedural arguments to determine whether they should rule on the act’s constitutionality now or wait until its central planks comes into force in 2014. Though the debate will be dry – it hinges on the Anti-Injunction Act, an arcane piece of tax law from the 1860s – the circumstances of the argument certainly aren’t. Neither the administration nor the law’s opponents claim that the court can’t rule yet; instead, it was the justices themselves who introduced this so-called “orphan argument” and appointed a hotshot DC attorney to make the case. If the justices decide they want to duck the whole issue, we may get a hint Monday.

The real red meat doesn’t come until Tuesday, when the justices will consider whether the “individual mandate”, or the requirement that Americans buy healthcare, falls under the commerce clause. That provision, in Article 1 of the constitution, lets Congress make laws that “regulate Commerce … among the several States,” and it is one of the most fundamental powers assigned to the legislature. The galling justification of the Obamacare opponents is that the mandate impermissibly forces the uninsured to “enter into commerce” – as if the 50 million Americans with no health insurance had never participated in a $2tn industry and were all living in Unabomber-like isolation. Two judges in Atlanta endorsed this argument (in a decision that cited the actual Boston Tea Party), but several conservative appellate judges, including a former clerk for Justice Antonin Scalia, were not convinced.

Wednesday is another technical day, hinging partly on states’ participation in Medicaid, but also on whether the court can strike down the individual mandate and leave the rest of the act intact, or whether they have to take it all or nothing.

What this supposed case of the century really amounts to is a political grudge dressed up as a meritless constitutional challenge, and a reminder that a tradition of conservatism that believed in judicial restraint has been superseded by one willing to use the courts to torpedo anything they don’t like. Calling the individual mandate unconstitutional is ridiculous on its face – but it’s even more so when you remember that the Heritage Foundation touted it as an ideal free-market solution to the healthcare crisis back in the 1980s, that it had Newt Gingrich’s backing as recently as the last election cycle, and that poor Mitt Romney signed a nearly identical program into law as governor of Massachusetts. This is not a legal argument; this is a ploy.

And there’s good reason to believe that even this court, with its clear conservative majority, is not going to strike down the most important domestic legislation since the civil rights movement on such flimsy grounds. To be clear, the only reason that this case has a chance of ending with a defeat for the White House is because of the 2006 retirement of Sandra Day O’Connor, and the lurch to the right the court has undergone since her departure. Like nowhere else, the presidency of George W Bush endures in the quiet work of the smiling John Roberts and the scowling Sam Alito, to say nothing of the 62 judges Bush placed on the appellate benches, many of them relatively young and fire-breathing.

But unlike Clarence Thomas, who’ll certainly vote to kill Obamacare and maybe a few decades’ worth of earlier rulings besides, Roberts is neither indifferent to precedent nor deaf to public skepticism about the court’s impartiality. He certainly isn’t the minimalist “umpire” he claimed to be at his 2005 confirmation hearing. None of us, during this first Citizens United election, can still believe that now.

But Roberts, as well as Anthony Kennedy, knows that the court has never recovered from the disgrace of Bush v Gore 12 years ago. John Paul Stevens wrote in his dissent that that case would destroy “the Nation’s confidence in the judge as an impartial guardian of the rule of law”, and he was right. According to a poll this month, fully three out of four Americans think the justices’ political views will determine their decision in this case.

John Roberts surely wants to see the president lose this election as much as any establishment conservative, but it may be the election of 2000, rather than 2012, that really forces the chief justice’s hand. Whether he believes the zany arguments of the act’s opponents have worth is not the central question – because, to be frank, he has more to lose than Barack Obama, if he strikes it down. Obama may get a second chance, but for Roberts, the entire legitimacy of his court is as stake.

I wouldn’t go before a “death panel” to say so, but it seems a safe bet that Roberts and Kennedy will back the administration, if on narrow terms. But in the unlikely event that the justices kill part or all of the Affordable Care Act, it will at least remind us of one unspoken issue in this presidential race: that when we choose a president for four years, we’re also getting supreme court justices for decades more.

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Powered by Guardian.co.ukThis article titled “Obama derides Republican ‘posturing’ over use of force against Iran” was written by Chris McGreal in Washington, for guardian.co.uk on Tuesday 6th March 2012 22.02 UTC

Barack Obama has accused Republican presidential candidates of casually “beating the drums of war” over Iran without having the political courage to directly advocate a military attack or considering the human cost of battle.

In his first press conference of the year Tuesday Obama turned on the Republican politicians who for days have been accusing him of weakness and naivete over Iran, ramped up by Israeli prime minister Binyamin Netanyahu’s visit and a meeting of the US’s most powerful pro-Israel lobby group.

The president said that his policy of sanctions has united much of the international community to pressure Iran and that “we have a window of opportunity where this can still be resolved diplomatically”.

“That’s my track record. Now, what’s said on the campaign trail – those folks don’t have a lot of responsibilities. They’re not commander-in-chief. And when I see the casualness with which some of these folks talk about war, I’m reminded of the costs involved in war,” he said.

“I’m reminded that the decision that I have to make in terms of sending our young men and women into battle, and the impacts that has on their lives, the impact it has on our national security, the impact it has on our economy. This is not a game. There’s nothing casual about it.”

Obama returned to the theme later in the press conference.

“When I sign letters to families that haven’t – whose loved ones have not come home, I am reminded that there is a cost. Sometimes we bear that cost. But we think it through. We don’t play politics with it,” he said.

“Typically, it’s not the folks who are popping off who pay the price. It’s these incredible men and women in uniform and their families who pay the price.”

The president went on to challenge his Republican opponents to say if they want a war and then address the consequences of attacking Iran.

“Now, the one thing that we have not done is we haven’t launched a war. If some of these folks think that it’s time to launch a war, they should say so. And they should explain to the American people exactly why they would do that and what the consequences would be. Everything else is just talk,” he said.

Obama’s comments were aimed, among others, at Mitt Romney, who described the president as “feckless” over Iran in Tuesday’s Washington Post and advocated a policy of “peace through strength”.

The press conference came hours after the announcement that the US will join Britain, France, China, Russia and Germany in a new round of negotiations with Tehran, a move that led Rick Santorum to accuse Obama of “appeasement”.

Obama defended those talks, saying they are an opportunity to judge whether Iran understands that “the world community means business”.

“I don’t expect a breakthrough in a first meeting, but I think we will have a pretty good sense fairly quickly as to how serious they are about resolving the issue,” he said.

Obama derided the aggressive posturing of some of his opponents and more hawkish supporters of Israel who have pressed for an explicit commitment to the use of force against Iran by setting “red lines” that Tehran’s nuclear programme must not cross.

“When I see some of these folks who have a lot of bluster and a lot of big talk but when you actually ask them specifically what they would do, it turns out they repeat the things that we’ve been doing over the last three years, it indicates to me that that’s more about politics than actually trying to solve a difficult problem,” he said.

The president had a similar reaction to calls for military action against Syria, including Senator John McCain’s demand this week that the US bomb in support of the forces fighting the regime in Damascus.

Obama said that events in Syria are “heartbreaking” but that military intervention is not the answer.

“For us to take military action unilaterally, as some have suggested, or to think that somehow there is some simple solution, I think is a mistake. What happened in Libya was we mobilised the international community, had a UN security council mandate, had the full cooperation of the region, Arab states, and we knew that we could execute very effectively in a relatively short period of time. This is a much more complicated situation,” he said.

“The notion that the way to solve every one of these problems is to deploy our military, that hasn’t been true in the past and it won’t be true now. We’ve got to think through what we do through the lens of what’s going to be effective, but also what’s critical for US security interests.”

The president has been accused of weakness over both Syria and Iran, but the focus of recent days has been on Tehran because of differences with Netanyahu over the value of sanctions and diplomacy.

The Israeli prime minister on Monday derided the effectiveness of sanctions in a speech to the American Israel Public Affairs Committee (Aipac) and said that “none of us can afford to wait much longer” to act against Tehran.

Romney told Aipac on Tuesday that Obama’s policy of “engagement” with Tehran is naive and gave the Iranian leadership time to develop its nuclear programme.

“Hope is not a foreign policy. The only thing respected by thugs and tyrants is our resolve backed by our power and our readiness to use it,” he said. “As president I’ll be ready to engage in diplomacy but I will be just as ready to engage our military might.”

Newt Gingrich went the further in telling Aipac that as president he would give Israel the means to attack Tehran’s nuclear facilities and let it do so without question.

“I will initiate a strategy in the tradition of Reagan, Thatcher and Pope John Paul II to undermine and replace the Iranian dictatorship by every possible method short of war in order to achieve a government we could trust and could deal with,” he said.

“At the same time I would provide all available intelligence to the Israeli government, ensure that they had the equipment necessary and reassure them that if an Israeli prime minister decides he has to avoid the threat of a second Holocaust through pre-emptive measures that I would require no advance notice to understand why I would support the right of Israel to survive in a dangerous world.”

Santorum said Obama should put an ultimatum to Tehran to end its nuclear programme and “that if they don’t tear down those facilities, we will tear down them ourselves”.

Obama’s pushback was reinforced by the US defence secretary, Leon Panetta, who told the president’s critics not to mistake a willingness to pursue diplomacy for weakness.

Panetta, speaking to Aipac on Tuesday, said the military option is on the table as a last resort if sanctions fail and the president’s record demonstrates that he will use it if he believes there is no alternative.

“As the president made clear, the United States does not bluff. In this town it’s easy to talk tough. Acting tough is a hell of a lot more important,” he said.

“The president ordered 30,000 additional troops to battle in Afghanistan to confront a resurgent Taliban. He launched a comprehensive precision bombing campaign to protect the Libyans and ultimately toppled a brutal dictator. He has ordered US warships to pass through the straits of Hormuz despite the threats that we have received from Iran.

“And he has been the driving force behind the most successful and lethal counter-terrorism campaign in US history culminating in the bold decision to send US special operations forces hundreds of miles into Pakistan to take the risk to take down bin Laden. And he did.”

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