Where Are The Jobs?
by ilene - September 14th, 2010 8:31 pm
What Michael describes here is the framework for a real or imagined economic recovery. Add these seemingly insurmountable macro-economic problems to a backdrop of political corruption and no will to make changes, and it’s hard to see where the term recovery fits in "jobless recovery." – Ilene
Where Are The Jobs?
Courtesy of Michael Snyder at Economic Collapse
Most Americans don’t really care about the economic minutiae that many of us who study the U.S. economy love to pour over. When it comes to the economy, the typical American citizen just wants to be able to get a good job, make a decent living and put bread on the table for the family. For generations, this arrangement has worked out quite well. The U.S. economy has provided large numbers of middle class jobs and the American people have worked hard and have helped this nation prosper like no other.
But now people are starting to notice that something has shifted. Millions of people are looking around and are realizing that the jobs that are supposed to be there are not there anymore. The American people are still working hard (and in many cases harder than ever) but all of that hard work is producing fewer and fewer rewards. Often politicians will placate voters by telling them that they are working harder and harder for less and less. That tends to ring true with voters because that is a very accurate description of what so many of them are actually experiencing, but what the politicians don’t tell us is that they are the ones to blame for the situation that we are in.
As millions of jobs become obsolete because of technology and millions of other jobs are shipped overseas, our politicians tell us over and over that we can "compete" with anyone and that if we will just go out and get some more education we can make it happen. But those of us who are extremely over-educated know what a fraud that line is. The truth is that there are not nearly enough jobs for all of us…
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DiggTuesday – Uncle Rupert Throws A Tantrum
by Phil - September 7th, 2010 7:28 am
Happy Tuesday to you!
Nice market take-down by the Journal this morning, who led off with an article questioning the EU stress tests saying: "From this point of view, it is not surprising that the doubts raised about the validity of the stress tests are weighing on the Euro and also on other risk-correlated currencies." Then, to make sure no one misses the article, they run another headline for the US markets that says "Concerns Over EU Banks Hit Euro" in which they quote themselves:
New concerns about the ability of European banks to weather the financial crisis came after the WSJ story highlighted once again the weaknesses of the stress tests. The report helped to widen the bond spreads on peripheral debtors and knocked European stock markets lower as another wave of euro zone jitters hit the market.
If this seems like BS manipulation to you, you will be doubly insulted to know that the US isn’t even the target of the manipulation. Mr. Murdoch, an Aussie and long-time foe of the Euro, is simply expressing his displeasure in a Labor Party victory in the Australian elections this weekend (real Democracy’s hold elections on weekends to encourage voting) and is knocking down their dollar by simultaneously boosting both the dollar and the Yen (also in the article is news that the BOJ will not intervene in the Yen, which is total BS) to push down his native currency and make a post-election statement. Just a media giant throwing a temper tantrum this morning.
![[EUSTRESS]](http://sg.wsj.net/public/resources/images/P1-AX101A_EUSTR_NS_20100906180015.gif)
Think about the "nature" of this story. There is nothing NEW in this NEWs, is there? It’s the kind of article that could be written any time someone wants to push the markets. Even the data they are using is from back on 3/31 – they didn’t even bother to update their facts for Q2! Notice that the article is pure worst-case speculation by the WSJ, followed by comments like:
- An FSA spokeswoman declined to comment.
- CEBS didn’t disclose that the banks were calculating the figures in that way.
Wow, pretty damning evidence that they couldn’t get a comment contrary to their BS on a holiday weekend, right? This news is also conveniently drowning out Obama’s proposed 6-year Public Works Program to combat unemployment by committing $50Bn for needed reparis on roads, rails and airport runways – putting some of our nation’s unemployed construction workers back to…
IMF Eliminates Borrowing Cap On Rescue Facility In Anticipation Of Europe Crisis 2.0; US Prepares To Print Fresh Trillions In “Rescue” Linen
by ilene - August 30th, 2010 11:28 pm
IMF Eliminates Borrowing Cap On Rescue Facility In Anticipation Of Europe Crisis 2.0; US Prepares To Print Fresh Trillions In "Rescue" Linen
Courtesy of Tyler Durden
Back in April, when we discussed the inception of the IMF’s then brand new New Arrangement to Borrow (NAB) $500 billion credit facility, we asked rhetorically, "If the IMF believes that over half a trillion in short-term funding is needed imminently, is all hell about to break loose." A month later the question was answered, as Greece lay smoldering in the ashes of insolvency, and the developed world was on the hook for almost a trillion bucks to make sure the tattered eurozone remained in one piece (leading to such grotesque abortions as Ireland, whose cost of debt is approaching 6%, funding Greek debt at 5%).
Well, if that was the proverbial canary in the coalmine, today the entire flock just keeled over and died: today the IMF announced it "expanded and enhanced its lending tools to help contain the occurrence of financial crises." As a result, the IMF has as of today extended the duration of its existing Flexible Credit Line (FCL) to two years, concurrently removing the borrowing cap on this facility, which previously stood at 1000 percent of a member’s IMF quota, in essence making the FCL a limitless credit facility, to be used to rescue whomever, at the sole discretion of the IMF’s overlords. Additionally, as the FCL has some make believe acceptance criteria (and with countries such as Poland, Columbia, and Mexico having had access to it, these must certainly be sky high), the IMF is introducing a brand new credit facility, the Precautionary Credit Line (PCL), which will be geared for members with "sound policies [which just happen to need an unlimited source of rescue funding] who nevertheless may not meet the FCL’s high qualification requirements." In other words everyone. In yet other words, the IMF as of today, has a limitless facility to bail out anyone in the world, without a maximum bound in how much is lendable. One wonders who would be stupid enough to take advantage of the gullibility of IMF’s biggest backers (the US), to borrow an infinite amount of money for any reason whatsoever… And just what all this means for the imminent explosion of the amount of money in circulation…Not to mention the brand new Ben Bernanke smokescreen of…
Kotlikoff: The IMF Says That the US Is Bankrupt, and They’re Right
by ilene - August 11th, 2010 11:21 pm
Kotlikoff: The IMF Says That the US Is Bankrupt, and They’re Right
Courtesy of JESSE’S CAFÉ AMÉRICAIN
I have not read it yet, but Kotlikoff has a book out called "Jimmy Stewart Is Dead" which was reviewed in April by Craig Heimark at Naked Capitalism.
I have not followed Kotlikoff closely and will attempt to read some of his more serious material in the near future. I did listen to a long discussion on Bloomberg television this afternoon, and he made some real sense to me, although he did not penetrate the miasma of corporate sloganeering that represents the minds of the anchors. They seem to lean to the ‘cut everything that is not a subsidy to or a cashflow owned by the oligarchy’ school of economic reform. And he takes that sort of supply side hoaxing to task, and harshly.
I have to take a closer look at his analysis of Social Security, which is highlighted in this Bloomberg piece (quelle surprise). But his comments on the need for reform in the financial system was point on.
He disagrees with both the supply siders and the demand siders, favoring a systemic overhaul and reform, and so my interest in what he says is obvious.
Bloomberg
U.S. Is Bankrupt and We Don’t Even Know
By Laurence Kotlikoff
Aug 10, 2010Let’s get real. The U.S. is bankrupt. Neither spending more nor taxing less will help the country pay its bills.
What it can and must do is radically simplify its tax, health-care, retirement and financial systems, each of which is a complete mess. But this is the good news. It means they can each be redesigned to achieve their legitimate purposes at much lower cost and, in the process, revitalize the economy.
Last month, the International Monetary Fund released its annual review of U.S. economic policy. Its summary contained these bland words about U.S. fiscal policy: “Directors welcomed the authorities’ commitment to fiscal stabilization, but noted that a larger than budgeted adjustment would be required to stabilize debt-to-GDP.”
But delve deeper, and you will find that the IMF has effectively pronounced the U.S. bankrupt. Section 6 of the July 2010 Selected Issues Paper says: “The U.S. fiscal gap associated with today’s federal fiscal policy is huge for plausible discount rates.” It adds
…
When Jail Threats Don’t Work: Greek Government Punctuates Case Against Strikers By Firing Tear Gas At Them
by ilene - July 29th, 2010 11:00 am
When Jail Threats Don’t Work: Greek Government Punctuates Case Against Strikers By Firing Tear Gas At Them
Courtesy of Tyler Durden
As we wrote earlier, Greece is currently paralyzed, literally, due to a wholesale shortage of fuel at gas stations, as drivers of trucks carrying the precious commodity have been striking for several days. As noted previously, the government invoked a war-time mobilization measure forcing the strikers to stop striking or face civil penalties and jail time. Shockingly, this had absolutely no impact on the angry mob. In order to make its point even more clear, the government accentuated its overturn of labor rights by firing tear gas at protesters, according to the Guardian. And, in an amusing turn of events, the IMF delegation which was rumored to be passing by at just this time to conclude the backroom deal in which US taxpayers would fund a few hundred more billion of failed Greek programs, was subjected to a Greek parliamentary guard wearing the traditional skirty attire, screaming in a bullhorn that the truckers were merely engaged in a modern remixed version of sirtaki and there was absolutely nothing to see there (obviously the guy had just graduated from the CNBC School for People who Want to Fabricate the Truth Good).
More from the Guardian:
With fuel shortages stranding thousands of tourists and disrupting supplies of food and medicines nationwide, prime minister George Papandreou resorted to emergency legislation, more usually used at times of war or great natural disaster, to end the walk-out.
But hopes of a return to normal were quickly dashed when riot police fired tear gas at thousands of truckers gathered outside the transport ministry this morning.
"The order is coming through to [drivers] but I have no idea how they are going to react to it," said Giorgos Stamos, a member of the truck drivers’ union. "It is highly unusual that after just three days of going on strike we should be mobilised in this way."
The ruling socialists called for the mobilisation – the fourth time since the collapse of military rule in 1974 that such an order has been issued – as it became clear that Greece was facing a public health crisis because of the strike.
On islands, where fuel supplies have totally run out, tourists could be seen abandoning rented cars by the side of
…
Chris Whalen Calls for Reforms, But Gives Crony Capitalism and the Neo-Liberals a Rewrite
by ilene - July 13th, 2010 2:24 pm
"ALL THE GREAT THINGS ARE SIMPLE, AND MANY CAN BE EXPRESSED IN A SINGLE WORD: FREEDOM, JUSTICE, HONOR, DUTY, MERCY, HOPE." WINSTON CHURCHILL
Chris Whalen Calls for Reforms, But Gives Crony Capitalism and the Neo-Liberals a Rewrite
Courtesy of JESSE’S CAFÉ AMÉRICAIN
I enjoy Chris Whalen of the Institutional Risk Analyst. His outlook and perspective are generally well-informed and well to the point, fresh and practical.
In his most recent essay titled Building a New American Political Economy, excerpted below, he spends quite a few words in taking Paul Krugman and the stimulus crowd to task, or more accurately, out to the woodshed for what we used to call a ‘proper thrashing.’
I like his conclusion, which strikes a similar chord to the tag line which I have been promoting since 2002.
"The Banks must be restrained, and the financial system reformed, with balance restored to the economy, before there can be any sustained recovery."
There must be a fundamental restructuring of the US economy, a reconsideration of globalization and its scope and impact on domestic policy, and a significant reform of the role of the financial system before there can be any sustained recovery.
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The housing bubble was not only noticeable well in advance of its collapse, but it was predictable in my view, because of what Greenspan’s policies had been coupled with the fiscal irresponsibility of the government.
What I do not like, at all, is the revisionism that imputes the problems facing the US today to ‘the Keynesians,’ seemingly alone.
Deficits Don’t Matter, Until They Do
Who was it who proved, according to Dick Cheney, that ‘deficits don’t matter?’ Not some wild eyed liberal, but Ronald Reagan. And if Reagan was a Keynesian, then Tim Geithner is Leonardo da Vinci.
The greatest deficit growth in the US came from a belief that cutting taxes for the wealthy, without cutting spending, and even increasing spending by enormous amounts on military projects, even in peacetime, in the pursuit of empire and the New American Century, was viable because this would stimulate growth from the top down, trickle down as it were, and negate the deficits.
It was from the anti-government Republicans and faux Democrat elites like Bill Clinton and his economic advisor Robert Rubin, and the billionaire boys club’s think tanks, that the ‘efficient markets hypothesis’…
The Attack of the Real Black Helicopter Gang: The IMF Is Coming for Your Social Security
by ilene - July 13th, 2010 11:51 am
The Attack of the Real Black Helicopter Gang: The IMF Is Coming for Your Social Security
Courtesy of Dean Baker at CEPR, writing at Truthout
See article on original website
A few years back there was a fear in some parts about black UN helicopters that were supposedly taking part in the planning of an invasion of the United States. While there was no foundation for this fear, there is basis for concern about the attack of another international organization, the International Monetary Fund (IMF).
Last week the IMF told the United States that it needs to start getting its budget deficit down. It put cutting Social Security at the top of the steps that the country should take to achieve deficit reduction. This one is more than a bit outrageous for two reasons.
First, the IMF deserves a substantial share of the blame for the economic crisis that gave us big deficits in the first place. The IMF is supposed to oversee the operations of the international financial system. According to standard economic theory, capital is supposed to flow from rich countries like the United States to poor countries to finance their development. In other words, the United States should be having a trade surplus, which would correspond to the money that we are investing in poor countries to finance their development.
However, the IMF messed up its management of financial crises so badly in the last 15 years that poor countries decided that they had to accumulate huge amounts of currency reserves in order to avoid ever being forced to deal with the IMF. This meant that capital was flowing in huge amounts in the wrong direction. One result of this reverse flow was that the United States ran a huge trade deficit instead of a trade surplus.
The trade deficit in the United States was a big part of the story of the housing bubble. The trade deficit cost millions of workers their jobs. This was one of the main reasons that economy was so weak coming out of the 2001 recession. This weakness led the Fed to keep interest rates at 50-year lows, until the growth of the housing bubble eventually began to generate jobs in the fall of 2003.
The IMF both bears much of the blame for the imbalances in the world economy and then for failing to clearly sound the…
China Drinks Our African Milkshake
by ilene - June 29th, 2010 2:57 am
China Drinks Our African Milkshake
Courtesy of Joshua M Brown, The Reformed Broker
When you think about it, the mineral-rich, underdeveloped continent of Africa should really be working with the US more than with China after a century of our aid and support. But the leaders of Africa now have a new gentleman caller, and a deep-pocketed one at that.
Africa has gone Sinophile as the Chinese have stepped up to the plate with massive investment mobilization…
From TIME:
The ambition, speed and scale of Chinese involvement in Africa is extraordinary. According to Chris Alden, author of China in Africa, two-way trade stood at $10 billion in 2000. By 2006, it was $55 billion, and in 2009 it hit $90 billion, making China Africa’s single largest trading partner, supplanting the U.S., which did $86 billion in trade with Africa in 2009. Today the Chinese are pumping oil from Sudan to Angola, logging from Liberia to Gabon, mining from Zambia to Ghana and farming from Kenya to Zimbabwe. Chinese contractors are building roads from Equatorial Guinea to Ethiopia, dams from the Congo to the Nile, and hospitals and schools, sports stadiums and presidential palaces across the continent. They are buying too. Acquisitions range from a $5.5 billion stake in South Africa’s Standard Bank to a $14 million investment in a mobile-phone company in Somalia.
The Chinese are getting access to the resources they need for economic growth and industrialization, the people of Africa are getting roads, schools, hospitals and a crack at the 21st century.
And here in America we’re coming up with new flavors of bottled water. Seriously, because how the hell did we ever make it as a nation without the taste of NutraSweet and boysenberry in our drinking water?
And why are the Chinese so successful in such a difficult place? Because they don’t do humanitarian rescues or loans or gifts, they do deals, according to the article:
For all the heat, even IMF officials admit that the Chinese model for African development has some advantages. First, it’s quick. Loan talks with multilateral agencies take years. The China-Angola discussions took weeks. "With the West, there are studies, analyses and bureaucracy," says the Western official. "The Chinese just ask what the government wants, and they don’t question or comment or judge. They just do it."
China for the block…
Trouble in Europe, China
by ilene - June 20th, 2010 8:58 am
Terrific weekend reading with Eric at iTulip interviewing Michael Hudson.
Michael Hudson is Distinguished Research Professor of Economics at University of Missouri, Kansas City (UMKC), a Wall Street Analyst, consultant, and president of The Institute for the Study of Long-term Economic Trends (ISLET). He is also Chief Economic Advisor to the Reform Task Force Latvia (RTFL) and author of America’s Protectionist Takeoff and Super Imperialism – New Edition: The Origin and Fundamentals of U.S. World Dominance
Trouble in Europe, China
Based on an interview with Eric Janszen of iTulip
Courtesy of Michael Hudson
On April 10, 2010 I caught up with Michael Hudson and he was in rare form. Readers know that my personal view is that much of the right wing of the political spectrum doesn’t know what the problem is and all of the left wing, while nailing the problem, doesn’t know how to solve it. No one is too left wing or too right wing to get an interview here.
Interviewer (EJ): Thank you for your time this morning.
Hudson (MH): Glad to be here.
EJ: It’s been a while since I’ve interviewed you so let’s have a wide-ranging discussion today. I want to include your Thursday Financial Times article on the fate of the ex-Soviet debtor nations, the Bank of International Settlement report I sent you on New Europe and other industrialized debtors, and China, and see where it goes. Let’s start with the BIS report.
MH: I skimmed through it quickly, and it’s the same class war junk economics that the Peterson Institute for International Economics (the lobbyist for international banks) and other neoliberal (that is, anti-labor and pro-financial) lobbying organizations have mounted against public obligations to any parties but the Finance, Insurance and Real Estate (FIRE) sector. The aim is to prepare the ground for President Obama’s recently appointed “bipartisan” commission to scale back Social Security and Medicare.
The argument is that these two programs need to be pre-funded, with savings levied regressively in advance, to promote a balanced federal budget. The effect would be to prevent fiscal policy from providing the growth in money and credit that economies need. This would all be provided by private-sector banks – at interest. So recent focus…
The Cult of Subprime Central Bankers
by ilene - May 28th, 2010 12:25 pm
The Cult of Subprime Central Bankers
Dean Baker, of CEPR
writng at Huffington Post, May 27, 2010
See article on original website
The world is suffering from the worst downturn since the Great Depression. The crisis has left tens of millions unemployed in the U.S., Europe, and elsewhere. The huge baby boomer generation in the United States, now on the edge of retirement, has seen much of its wealth destroyed with the collapse of the housing bubble.
It would be difficult to imagine a worse economic disaster. Prior periods of bad performance, like the inflation ridden seventies, look like mild flurries compared to the blizzard of bad economic news in which we are now enmeshed.
None of this is new. People don’t need economists to tell them that times are bad. However, what the public may not recognize is that the same people who caused this disaster are still calling the shots. Specifically, there has been little change in personnel and no acknowledgment of error at the central banks whose incompetence was responsible for the crisis.
Remarkably, this crew of incompetents is still claiming papal infallibility, warning governments and the general public that bad things will happen if they are subjected to more oversight. Instead, the central bankers and their accomplices at the IMF are dictating policies to democratically elected governments. Their agenda seems to be the same everywhere, cut back retirement benefits, reduce public support for health care, weaken unions and make ordinary workers take pay cuts.
Given how much they have messed up, it is amazing that these central bankers have the gall to even show their face in public. They are lucky that they still have jobs — and very good paying ones at that. (Many of the boys and girls at the IMF can retire with six figure pensions at the age of 50.) Ordinary workers, like teachers, autoworkers, or custodians, would be fired in a second if they performed as badly as the world’s central bankers.
What was going through their heads when they saw house prices in the United States, the UK, Spain and elsewhere spiral upward with no basis in any of the fundamentals of the housing market? How did they think this bubble would end; did they think that trillions of dollars of housing bubble wealth could just disappear without any impact on the economy. Or, did they think the…
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW. She manages the Favorites backup site
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