Unemployment Creeps Into Double Digits

"In 14 states and the District of Columbia at least a tenth of the work force was unemployed in August," according to the latest Bureau of Labor Statistics report and the New York Times. Ten percent, a sort of magic threshold, has officially been broached in large swaths of the country in which manufacturing jobs are simply not returning with the more general economic recovery that other statistics say the country is experiencing. “The only positive news, probably going into next year, will be slower rates of decline, not job additions,” one economist told the newspaper. Michigan tops the rolls with a 15.2 percent rate, but many other states, including California, are experiencing record highs as well.
 
Remember the stimulus? Government agencies do, as, the Times reports, all that promised money is really starting to flow out the door. The Federal Housing Administration in particular is feeling the crunch, as its promise to insure certain mortgages is straining its cash reserves. The agency, neglected during the days of easy subprime loans, is experiencing a renaissance, but one that may force it to soon ask for federal funds—i.e., a bailout. The paper also notes the case of the FDIC, whose insurance of bank deposits has been stretched to record levels this year, thanks to, well, record levels of bank failures—more than 90 this year already. Agency head Sheila Bair is thinking about raising premiums on banks, which fund the system, but bankers, perhaps unsurprisingly, would rather have the government issue new Treasury debt to replenish the insurance fund.

Google's (GOOG) digital book deal, in which the company assumed the right to digitize most of the world's books, is under fire from the Justice Department, according to the New York Times. The book program, considered by competitors to be an unfair business practice, "turns copyright law on its head," because it puts the onus to claim copyrights on the holder, which is a first. Google, which was criticized by book publishers until agreeing to the current terms of the deal, is defending its agreement, saying it doesn't prevent anyone from negotiating a similar deal with the publishers. The deal as it stands will allow Google to show up to 20 percent of a book to searchers and provide free access to the collection at one terminal in every library in the country.

The Wall Street Journal says the FCC will be playing traffic cop in the fight over Internet data transmission. Julius Genachowski, the commission's new chair, is enforcing the Obama administration's committment to net neutrality, which will allow Google, Amazon (AMZN), and others to offer services over broadband with no artifical bottlenecks placed by Comcast (CMCSA), Verizon (VZ), or other providers of broadband service. The Times notes the issue is a campaign promise to the former group of companies, who have worried about developing innovative services only to see them blocked by providers who would rather steer consumers to their own Web sites. Genachowski's speech laying out the plan, on Monday, will also explicitly include wireless communications under the net neutrality regulations, clarifying a long-murky issue, the paper said.

The Federal Reserve is not letting up on taking a closer look at banking industry pay, says the Washington Post. The central bank is proposing rules that will take out some of the perverse incentives, such as guaranteed bonuses, that in turn helped distort the banking system and, some say, helped cause the financial crisis. The plan, thanks to the Fed's regulation powers, would cover all banks in the nation, not just those that partook in the bailout. Banks and conservative legislators are pushing back, saying they don't believe the Fed even has the powers necessary to write or enforce such regulations. Though the rules would apply to all banks, the Fed is envisioning talking to the largest two dozen banks and basing the rules on adjustments to their compensation practices.

Finally, Skype, Joost, and eBay (EBAY) are engaged in a three-way battle over the recent sale of Skype to Joost, a company Skype's co-founders later started. The Times reports that Joost's CEO, who put together his end of the sale, has been removed from Joost's board and sued by his company. A flurry of lawsuits has resulted, but eBay said, “We had a good clean process. We got a good valuation, and our focus now is on getting the deal closed.”