Tag: Economic Problems

Inherit The Wind!

That would be the economic wind…….

We have a new president and his biggest challenges will be foreign policy, pandemic and the economy.

Regardless how the stock markets do does not indication a strong economy…..just the monetary game the wealthy play…..but what about the US economy……what is the Biden admin looking at?

Policymakers cannot ignore the economic devastation happening to workers and their families across the country.

As the nation continues to be consumed with the election—which Joe Biden appears poised to win—millions of people across the country remain out of work. The latest data from the Bureau of Labor Statistics show that 638,000 jobs were added in October, a continued slowdown in job growth. The U.S. economy is still down 10 million jobs from where it was in February, before the pandemic hit. Using average monthly job growth over the year ending February 2020 as the counterfactual, the jobs deficit is over 11.6 million. In other words, that’s 10.0 million fewer jobs we have than in February, plus nearly 1.6 million jobs we would have added if the recession hadn’t occurred.

Even without the 147,000 loss in temporary Census employment in October, the economy added only 785,000 jobs. At this pace, it will take years for the U.S. economy to fully recover. With long-term unemployment on the rise and little hope for additional relief, workers and their families do not have years to keep their heads above water. As the winter approaches and COVID-19 cases continue to rise, millions of people across the country will be left out in the cold. Unlike his predecessor, the incoming Biden administration will inherit a devastated labor market that will need considerable relief and stimulus—quickly.

https://www.commondreams.org/views/2020/11/06/thanks-gop-next-president-inherits-devastated-economy-millions-out-work

Do not mistake the high markets with a booming economy….as I have already stated…it is just an indication of the games the wealthy play with our country.

But like ALL candidates Biden has a plan for the economy…..

The 77-year-old’s economic agenda is not as detailed as others and does not contain similar sweeping proposals, but his plan for the U.S. is still ambitious and represents more than a reassuring reset button for Americans rattled by Trump. He has also shown signs that he’s willing to pivot to the left to win over Sanders supporters. He proposed two new policies to “ease the economic burden on working people” a day after the democratic socialist dropped out of the race.

https://www.investopedia.com/joe-biden-s-economic-plan-save-the-middle-class-4769869

But just viable are Biden’s plans…..https://www.dw.com/en/joe-biden-economic-plan/a-55022468

Ambitious indeed….but little will ever see light of day.

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Winner-Take-All Economy

We are told almost daily of the attributes of the “free market” economy….but those markets are far from free….for many years I have written numerous times about this lie….this illusion…..

https://lobotero.com/2008/09/20/free-markets-truth-not-spoken/

https://lobotero.com/2020/05/25/that-free-market-illusion/

Then there is the economic inequality….where 1% of the population owns more than the bottom 80%…..but how bad can it possibly be?

Well as you might imagine I have also written numerous posts on this as well…..

https://lobotero.com/2014/02/25/the-increasingly-unequal-states-of-america-income-inequality-by-state-1917-to-2011-economic-policy-institute/

https://lobotero.com/2018/03/17/inequality-how-bad-can-it-be/

After WW2 the economic growth ranged across all levels of society but that equality was to be short lived……our economy has become winner take all….and each passing year the inequality spreads.

In the three decades following World War II, the US saw economic growth that was shared across all levels of income, from the working class to the richest 1 percent. But that changed after the mid-1970s as income inequality increased exponentially during the next four decades.

A new study by nonprofit research organization RAND nails down what really happened. It shows that this rising inequality took a substantial bite out of the earnings of up to 90 percent of American households.

In this week’s WhoWhatWhy podcast, we talk with the authors of the RAND study, mathematician Carter Price and labor economist Kathryn Edwards.

Price and Edwards detail the unique approach they took in putting this report together. Up until now, they explain, nobody had devised a formula to show just how individuals and their families were affected by the rising inequality across the entire income spectrum. 

Proof Positive of the Winner-Take-All Economy

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Not Since World War Two

2020 election is around the corner and there are things one should consider before they cast their vote (ever how many times they are told to)……economics should be one of those deciding issues.

The markets are hitting all time highs and yet the deficit just keeps growing….and GDP is not all that good either….now I am waiting for one of those “expert” economists to explain this….probably in graphs that NO ONE understands…..

The federal budget deficit is projected to hit a record $3.3 trillion as huge government expenditures to fight the coronavirus and prop up the economy have added more than $2 trillion to the federal ledger, the Congressional Budget Office said Wednesday. The spike in the deficit means that federal debt will exceed annual gross domestic product next year, a milestone that would put the US in the company of countries like Greece whose accumulated debt exceeds the size of their economies, the AP reports. The $3.3 trillion figure is more than double the levels experienced after the market meltdown and Great Recession of 2008-09. Government spending, fueled by four coronavirus response measures, would register at $6.6 trillion, $2 trillion-plus more than 2019.

The shutdown of the economy in the spring led lawmakers and President Trump to pump money into stimulus steps that have helped the economy in the short term. Most economists are untroubled by such huge borrowing when the economy is in such peril, and the debt was barely a concern when a cornerstone $2 trillion coronavirus relief bill passed almost unanimously in March. But now that lawmakers and the White House are quarreling over the size and scope of a fifth virus relief bill, Republicans are growing skittish at the enormous costs of battling the pandemic. The Democratic-controlled House passed a $3.5 trillion measure in May. Sentiment among top leaders in the GOP-held Senate has been for a bill in the $1 trillion range, with recent party efforts focused on a measure that’s even smaller.

This will take the Congress to screw someone to try and stem this tide…..and that usually means the poor and working people of this country.

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Next year could be another historic year…..it is on track for the deficit will out pace GDP……

 

Covid-19 Was There A Better Way?

Closing Thought–31Aug20

6 million cases…..183,000 deaths…just to catch everybody up.

We have heard all the arguments on what is right or wrong with the social distancing thing to help save us from the pandemic.

In all fairness I try to give a balanced look at the pandemic and the treatments and “solutions”…..I would expect the WSJ to NOT approve of anything that would see a drop in retail sales……and as if right on cue….

In response to the novel and deadly coronavirus, many governments deployed draconian tactics never used in modern times: severe and broad restrictions on daily activity that helped send the world into its deepest peacetime slump since the Great Depression.
The equivalent of 400 million jobs have been lost world-wide, 13 million in the U.S. alone. Global output is on track to fall 5% this year, far worse than during the financial crisis, according to the International Monetary Fund.
Despite this steep price, few policy makers felt they had a choice, seeing the economic crisis as a side effect of the health crisis. They ordered nonessential businesses closed and told people to stay home, all without the extensive analysis of benefits and risks that usually precedes a new medical treatment.
There wasn’t time to gather that sort of evidence: Faced with a poorly understood and rapidly spreading pathogen, they prioritized saving lives.
 
Shoulda….woulda…..coulda…..what is they say about hindsight……
 
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Come August

Closing Thought–03Aug20

Kinda reminds of a tune by Earth, Wind and Fire…..but sadly this date is some dire predictions for the economy…..

There’s a chance that the worst of the damage caused by the coronavirus pandemic hasn’t happened yet. According to a troubling BuzzFeed News op-ed, the real economic and societal collapse could arrive in August.

Part of the problem, according to BuzzFeed’s argument, is that many of the measures put in place by the U.S. government to mitigate the coronavirus’s impact will expire in August — while the actual pandemic will likely continue to rage. The result is that unemployed Americans could once more be vulnerable to evictions, right when federal employment payments helping keep them afloat stop coming.

Back in April, when the limited federal aid offered by the U.S. government started to arrive, American households began to save, on average, 33 percent of their income out of fears of an impending economic crash, according to the op-ed.

https://futurism.com/the-byte/economy-collapse-august

Of course the White House or maybe the Congress will offer up some stim money to head off this possibility….but will it work?

The problem is that a significant portion of the money is being funneled directly into capital buffers, leading to an increase in precautionary balances. The situation is akin to the “liquidity trap” that so worried John Maynard Keynes during the Great Depression.

Today’s stimulus measures have understandably been rolled out in haste – almost in panic – to contain the economic fallout from the pandemic. And while this fire-hose approach was neither targeted nor precise, many commentators would argue that it was the only option at the time. Without a massive injection of emergency liquidity, there probably would have been widespread bankruptcies, losses of organizational capital, and an even steeper path to recovery.

https://www.project-syndicate.org/commentary/stimulus-policies-must-benefit-real-economy-not-financial-speculation-by-joseph-e-stiglitz-and-hamid-rashid-2020-06

The problem is the oligarchs always want money thrown at them and they will fix the economy…..they have not done so in 200 years and yet their wealth keeps going up….and problems still exist.

Does that tell you want these stim plans are really doing?

But not to worry….the markets are up….and yet you are still trying to find the cash to buy food or pay the rent…..how did all that stim money help you?

That brings me to a question I have asking for a very long time…..

We’ve said it before: The stock market is not the economy.

Usually, this simply means that fluctuations in the markets may have little to no real bearing on the underlying realities we think of as making up the economy. Or that there are many important structural factors that make the markets’ outlook different from how ordinary citizens view the country’s overall economic health.

But now, those usual bromides risk wildly understating the disconnect. In the time of COVID-19, the stock market couldn’t be more divorced from the United States’ broader economic situation. Although the S&P 500 tumbled sharply in March, as the coronavirus shut down large swaths of the economy, it had made back almost all of its losses by the first week of June — before dipping again and then quickly rebounding yet again.

The Economy Is A Mess. So Why Isn’t The Stock Market?

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Closing Thought–08Jun20

This is my closing thought early for I must visit my doctor and this afternoon will be a bit busy…..so enjoy and be well and be safe…..

First…TS Cristobal dumped lots of rain and wind with a bit of flooding but damage was minimal in my area…..but the heat and humidity is stifling…..

Now the count for the Covid-19…..

Pandemic….Cases–2.0 million  Deaths–110,000+

Onward to the rest of the world…..

We hear all the time from some economic wannabes about the money we owe to China….well they are the same low IQ weasels that use to bitch about the same thing only it was Japan in the 1980s.

Have you ever wanted to ask….just how much money is owed to China anyway?

China has been rapidly rolling out its Belt and Road Initiative to build new roads, ports and rail lines in mostly developing nations, extending the country’s reach across continents.

China says the infrastructure will benefit countries while critics say China is extending unfair influence over others.

Many nations have been rethinking their involvement amid accusations that China has overpriced projects.

Between 2000 and 2017, the world’s debt obligations to China rose from $500bn to a staggering $5 trillion – about six percent of the world’s economic output – according to the Kiel Institute for the World Economy.

Researchers also found that China and its subsidiaries have lent $1.5 trillion directly to 150 nations – making China the world’s biggest creditor, overtaking the IMF and World Bank. It has also made unreported loans worth $200bn.

We talk to Professor Christoph Trebesch from the Kiel Institute, who explains how China’s opaque lending practices make it difficult for investors and international lenders to make accurate investment decisions.

https://www.aljazeera.com/programmes/countingthecost/2020/05/money-world-owe-china-200530080200892.html

But I guess you might not know what the Belt and Road Initiative (BRI) is all about and why is it a big deal….

The BRI comprises a Silk Road Economic Belt – a trans-continental passage that links China with south east Asia, south Asia, Central Asia, Russia and Europe by land – and a 21st century Maritime Silk Road, a sea route connecting China’s coastal regions with south east and south Asia, the South Pacific, the Middle East and Eastern Africa, all the way to Europe.

The initiative defines five major priorities:

  • policy coordination;
  • infrastructure connectivity;
  • unimpeded trade;
  • financial integration;
  • and connecting people.

The programme is expected to involve over US$1 trillion in investments, largely in infrastructure development for ports, roads, railways and airports, as well as power plants and telecommunications networks.

https://www.ebrd.com/what-we-do/belt-and-road/overview.html

Read that last paragraph closely……$1 trillion US….we had better get our heads out of the sand and soon.

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“Lego ergo scribo”

That Economy That We Were Promised

Trump has been promising that the US economy will make a comeback as soon as we remove ourselves from virus lockdown.

But let’s look at the economy…..(a subject that most Americans will glaze over at the mention of the issue)….

The unemployment continues…..42.6 million unemployed workers….

Continuing claims, which provide a clearer picture of how many Americans remain unemployed, totaled 21.5 million, a gain of 649,000 over the past week, also worse than Wall Street expected.

The insured unemployment rate, which is a simple measure of those collecting benefits compared with the total labor force, rose 0.5 percentage points to 14.8%.

https://www.cnbc.com/2020/06/04/weekly-jobless-claims.html

GDP is down……

Consumption is way down…..

Why has the media not reported this story….it is an important one…

A Bloomberg analysis released Tuesday estimates that nearly a third of the unemployment benefits owed to jobless Americans have not yet been paid out, a finding critics described as a “scandal” deserving of more media attention as millions of people struggle to afford basic expenses due to the Covid-19 pandemic.

“The Treasury disbursed $146 billion in unemployment benefits in the three months through May,” Bloomberg reported. “But even that historic figure falls short of a total bill that should have reached about $214 billion for the period, according to Bloomberg calculations based on weekly unemployment filings and the average size of those claims.”

https://www.commondreams.org/news/2020/06/03/should-be-bigger-news-analysis-finds-nearly-one-third-owed-unemployment-benefits

The media refuses to report anything that would turn the people from believing in the system we have….

The hunger will continue because of the unemployment status…..

A poll released by the U.S. Census Bureau this week revealed that at least nine million American households that include children are unsure whether they’ll be able to access enough food in the next four weeks and millions more are experiencing housing insecurity during the coronavirus pandemic.

The bureau’s weekly Household Pulse Survey, taken between May 14 and 19, asked respondents about their loss of employment, food security, overall health, and other issues they are facing during the pandemic.

https://www.zerohedge.com/economics/over-9-million-us-families-fear-they-cant-afford-food-next-month-census-survey

There is so much fiction being passed as news these especially when it involves the economy…..some of the “news” is pure fiction and has been for many years….

One of the favorite myths they perpetrate is that ‘wages are sticky downwards’. That means that in conditions of recession or worse, because workers won’t accept lower wages the recession tends to continue. If only workers would allow wage reductions it would mean business would have more disposable income (from wage cost savings) on hand. Business would then reinvest the extra income. Investment would rise. Workers would be rehired. Wage income would then recover and the economy would grow from more investment and consumption

Two Fictions of Mainstream Economics

Sadly the ignorance around the economy for most Americans will keep the so-called “Dream” out of reach…..

Just one in five American voters want to expand government control over the economy after coronavirus, according to a new the Just the News Daily Poll with Scott Rasmussen.

The results come as Congress and the White House negotiate over how to continue to respond to the economic crisis around the coronavirus, amid rising unemployment and shuttering businesses.

https://justthenews.com/politics-policy/coronavirus/only-1-5-american-voters-want-expand-government-control-over-economy

Pure fantasy that the media and the government continue to push….and as usual YOU will be screwed by believing the LIES.

So when can we expect the recovery that Trump has said would be immediate once the country re-opened…..

……..how soon can we expect a recovery? There’s a range of predictions — from one year to 10 — but forecasters agree it will be slow going.

As promised!  Another lie to add to the expanding codex of lies.

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Economic Humor For A Friday

Closing Thought–14Feb20–#2

Happy Valentine’s Day to all the lovers here on IST…..I hope your day will be good and filled with love…..

I always like it when some self-absorbed d/bag feels he/she needs to add his/her voice to any conversation…..this time it is the candidacy of Bernie Sanders……

The face of a crook that got away with massive theft….

Premium: Lloyd Blankfein, Goldman Sachs 170920

This time it is the former CEO of Goldman-Sachs has added his voice to the attacks on Bernie…..

Following his win in the New Hampshire primary last night, Sanders has emerged as the front-runner for the Democratic nomination to face President Donald Trump in November’s election.

In a rare outburst on Twitter, Blankfein suggested that Sanders becoming the nominee would mean “the Russians will have to reconsider who to work for to best screw up the U.S.”

“Sanders is just as polarizing as Trump AND he’ll ruin our economy and doesn’t care about our military. If I’m Russian, I go with Sanders this time around,” the former Wall Street titan tweeted.

https://www.cnbc.com/2020/02/12/former-goldman-ceo-blankfein-if-im-russian-i-go-with-sanders.html

How good is this the same d/bag from Goldman-Sachs that helped blow up the economy in 2008?

This d/bag is not worried about Bernie’s economy he is worried that if Bernie wins election he will have to pay taxes on the cash he stole from the people.

How pathetic….some wealthy crook telling the American people to watch out for someone who will blow up the economy….

Seriously?

This would be humorous if it weren’t so goddamn pathetic.

Just another d/bag trying to look like he cares about anything but the accumulation of wealth and fucking anyone in their way.  Capitalism at its worse.

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“lego ergo scribo”

Closing Thought–20Nov19

The economic outlook for Gen Xers, those born between 1961-1981, will have a much bleaker future than us Boomers.

My daughter is a Gen Xer and I have watched her struggle with debt mostly from her college and I hate that I read that her future and retirement does not look well…..

In 1991 the demographers Neil Howe and William Strauss published their awkwardly-titled tome “13th Gen,” about Generation X—the Americans born between 1961 and 1981. If Xers had paid attention they would have committed suicide.

“Child poverty, employment, wages, home ownership, arrest records — in every category, this generation, the 13th since the American Revolution, is doing worse than the generation that came before,” New York Times book critic Andrew Leonard wrote at the time. “Indeed, for the first time since the Civil War, the authors of ‘13th Gen’ keep reminding us, young people are unlikely to surpass the affluence of their parents.”

Tellingly, the Times titled Leonard’s review “The Boomers’ Babies” as though their relationship to The Only Generation That Mattered at the time was their status as offspring. Which, equally tellingly, was incorrect. Most Xers’ parents belong to the Silent Generation that came of age in the 1940s and 1950s, not the Boom.

Gen X Faces a Bleak, Impoverished Old Age

I hate that she may be in dire straits in her senior years…I just hope that I do not have some debilitating disease and I can leave her a little something to help her  and her family out in their declining years.

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Closing Thought–20Aug19

Economics

How many of you, my readers, believe that China is holding our debt?

Let me correct this erroneous thinking….

It is NOT China but Japan that owns the most Treasury notes……that craps on so many talking points.

Japan surpassed China as the largest foreign holder of U.S. Treasury securities in June.

Japan has added about $21 billion since May, making its holdings the largest since October, 2016. Japan now holds $1.12 trillion Treasurys, and China has $1.11 trillion, a $2 billion increase from the month earlier, according to U.S. Treasury department data.

China has been a less aggressive buyer of the U.S. sovereign debt, and market players have speculated that one action it could take in the trade war with the U.S. is to lighten up on its U.S. holdings. But there are no signs that is happening, according to traders.

The U.K. is the third-largest holder with $342.3 billion, up from $323.1 billion a month earlier.

(CNBC)

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