Tag: Economic Recovery

The Good News Is…………….

A lot of economists say that the recession is over……but few actually live on Main Street or even care what is happening to normal Americans.  I see NO end to the recession, the economic crisis, anywhere…jobs are lost, homes seized and investors making all the gains…..

CNN Money reported:

More than 80% of top economists believe that the recession that started almost two years ago is finally over. But most don’t expect meaningful improvement in jobs, credit or housing for months to come.That’s according to a survey released Monday by the National Association for Business Economics (NABE). The group asked 43 top economists last month if they believe the battered U.S. economy has pulled out of the worst U.S. downturn since World War II. Those surveyed include economists from leading Wall Street firms and major corporations, as well as from highly respected universities and research firms.

Economists in the survey forecast that the U.S. economy grew at an annual rate of 3% in the three months that ended in September, though the official reading of gross domestic product won’t be out for weeks.

And all of the economists surveyed expect the recovery to be slow and painful, leaving many people and businesses feeling the effects of the downturn for years to come.

There you have it….the RECOVERY will be long and painful….that means Main Street will continue to take it in the ass until Wall Street decides that they have been fucked enough.

That means that the American worker will continue to lose their jobs and their homes and their health insurance…all the time investors will be rolling in the dough…..the only pain that the thieves on Wall Street will feel is that of any minor regulation the government may put on them….as with the recession and the economic crisis, they lose very little.

The people need to wake up and smell the pile of manure in front of them…..they WILL NEVER get a fair shake from the government…no matter which liar is elected and bought….

The Economy Is In Slow Recovery

At least that is what is being championed by the Obama mouthpieces on the Sunday talk shows and by the Prez himself in his radio address.

The Prez used his speech to pat themselves on the back.  Obama used his weekly address on Saturday to hail the GDP figures as a vindication of his economic policies. He said that his stimulus package and his “other difficult but important steps” had “put the brakes on this recession.”

“We took unprecedented action,” he continued, “to stem the spread of foreclosures by helping responsible homeowners stay in their homes and pay their mortgages. We helped revive the credit markets and open up loans for families and small businesses. And we enacted a Recovery Act that … provided relief to struggling states to prevent layoffs of teachers and police officers and made investments that are putting people back to work rebuilding and renovating roads, bridges, schools and hospitals.”

Tom Eley observed:

One can only wonder: What country is Obama talking about? State and city governments are slashing jobs and social programs to meet the most crippling budget deficits in modern history. New data released this week reveal that bailed-out banks continue to deny loans to consumers and are hoarding cash more now than at the beginning of the year. As for helping “responsible” homeowners, foreclosures in the first six months of this year hit a record 1.5 million.

The supposed success of his policies, Obama suggested, vindicated his unquestioning support for the profit system and his drive to relieve businesses of their health care obligations to workers. That this is the underlying aim of his health care proposals was made clear by his call for “a health care system that makes it possible for entrepreneurs to innovate and businesses to compete without being saddled with skyrocketing insurance costs.”

All of the policies of the Obama administration have been focused on protecting the interests of a financial aristocracy that exercises a de facto dictatorship over the social and political life of the country. Now, the crisis which the bankers precipitated is being used to effect a permanent reduction in the living standards and social position of working people.

There will be no return to the already depressed wage levels and paltry social benefits that existed prior to the crash of 2008. Instead, a further redistribution of wealth from the bottom to the top will be carried out through the destruction of all that remains of past social gains and an immense intensification in the exploitation of the working class.

Mr. Eley sounds a bit radical in his observations, but I will have to agree with him….I see nothing on Main Street that says we are doing any better now than we were a year ago.  In the same vein, Wall Street is doing just fine, so much so that they are handing bonuses.  The stimulus money is well spent if you happen to be in the Wall Street clic.  Unfortunately, most of us live on Main Street and that road is full of potholes and speed bumps.

We Have Economic Growth

This is a cross post from my entry on Progressive Independence ( visit sometimes a very good site).

Professor’s Classroom

Subject:  Economics

We hear daily that the markets are up, at least for now, and that economic growth is slowly returning.  That brings to mind a saying I heard from MSNBC’s Dylan Ratigan, “slowly down is the new UP”…Sorry I digress.

Have you heard the words economic growth?  Are you tired of it yet?  Do you even know what is truly meant by economic growth?

Economic growth means an increase in the production of goods and services…this is represented by the Gross Domestic Product (GDP).  A strong economy is likely to strengthen the revenue pool that the government has at its disposal.  This is likely to make the redistribution of wealth  (entitlements) more acceptable to the population because they are experiencing a rise in their own wealth.

That is a classical explanation of what is meant by economic growth…but there is a problem with this…..what you ask?….GREED…economic growth is NOW based on greed and with the rise of that the likelihood of any expansion of entitlements unlikely…the attitude now is ..”I have made mine…let everyone else do the same”.

Nowadays, at least to some, the expansion of economic growth hinges on tax cuts…tax?…is not that where the government gets its income?  Short answer..uh huh.  Then how does the government get more money and have economic growth if they are getting less money?

Damn good question!  The theory is that if the wealthy pay less taxes they will expanmd their monetary endeavors and that will put more people to work and that will mean more tax revenues.  But then, Congress passes an income tax cut…and less money comes in…it is all the old “trickle down” theory…that never gets to the taxpayer all the benefits stay with the wealthy.

The problem with economic growth fueled by greed, it eventually leads to an economic slowdown or a recession.  Let us look at the recent rise in the markets….employment is still low….prices still high….inflation rising….credit tight….foreclosures still running rampant…consumer confidence is still low….yet housing starts are up…markets are rising…..profits are starting to rise….a mised bag of indicators.  If so, then why the optimism about the economy?

Yet another good question and there is a one word answer….SPECULATION!

Speculation simply put is….buy low sell high…Speculation has been the leading causes of economic slowdowns in recent years…the current one, of course and then there were the recessions of the 80’s and the bust in the 90’s…all lead by speculators and the search for maximizing profits at all costs.  And the cost was the recessions that followed.

This is a very simple and easily understood explanation of the happenings, as written by economist Henry George:

Enterprises slow down their expanding. We have reached the inflection point. Even though enterprises are still expanding rapidly, the rate of expansion has slowed down due to the too-high price of real estate. Contributing to the slow-down are higher prices for labor and other inputs as well, but these have not increased nearly as much, because only with land does an increase in demand fall fully on an increase in price – because the supply of land in a given area cannot be expanded, unlike other inputs!

The slowdown in real-estate construction spreads to other industries, as, for example, less furniture is ordered and less steel and lumber is demanded. Industries producing such capital goods, which expanded rapidly, now contract. Workers laid off or working fewer hours spend less. The rate of increase in the economy slows even more, until the slope becomes horizontal – growth has halted. The economy is at its peak, but is now headed for a fall! Because the growth rate has been decreasing, and now turns negative.

When investors realize growth has stopped, many will want to unload stocks, and a crash in the stock market often heralds the coming depression. But that’s only the beginning, and only a symptom of the problem, not the originating cause, although the loss of stock value contributes to the decline, since those who have lost their financial wealth will no longer spend money on large items.

The recession feeds on itself, as lower output leads to lower income and to lower spending, which reduces output even more. Real estate prices have remained at a plateau even though vacancies have increased, because the owners don’t wish to sell below peak prices. This phenomenon repeats itself each cycle! But eventually, increasing bankruptcies result in lower rentals for landlords, and some of those with negative cash flows must sell. Prices now start tumbling down. Many landlords go broke, not being able to pay their mortgages. In many cases, the debts of real-estate owners are greater than the value of their properties. Loans are not being repaid, and banks are losing great amounts of money. Many banks fail.

Check today’s news….do you not see everything written by George coming true?  Re-read his explanation…..Damn!  He was spot on and over a century ago…..somethings never change.

There is little economic growth, there is however, a rise in speculation.  All the talk about economic growth in today’s news is just window dressing to help protect the markets and speculators.

And now you have it…if you learn these points you can keep from losing your ass in the next bust and make NO mistake there will be another one in due time.

Post Script:  I have been writing and lecturing on politics and economics for the last 40 years or so, when you get to be my age you lose track of the years, and I have tried to keep all the info I can find on a subject out there to educate the reader and the people…..I will now go out on a limb…..the sitcom playing out in Washington is doing nothing to solve the problems and eliminate the causes…for that reason we will see the same thing play out in the next couple of decades…in other words…we will be in same exact spot in the coming decades and a whole new group will be having the same conversation they are having today…..watch for it!

Things To Get Better Than Forecast

The admin cheerleaders are predicting that the economy will be getting much better by the end of the year.

The Obama administration projected that the U.S. economy will expand at a 3.5 percent annual rate by year-end, a rebound that would be almost twice as strong as private forecasters expect.

As early as the end of this year, GDP may rise at a 3.5 percent annual rate, the same pace projected for all of next year, helped by a $787 billion stimulus package, the administration said in the report today. That’s more optimistic than the 1.8 percent fourth-quarter growth estimate in the monthly Blue Chip Economic Indicators survey released May 10.

The administration expects “housing starts to reach bottom this year and to begin a robust recovery as relative housing prices stabilize,” today’s report said.

The Federal Reserve’s “novel” policies of extending funds to banks to boost liquidity and purchasing short- and long-term Treasuries also will help underpin the recovery, the White House said. Still, a doubling of the Fed’s balance sheet to about $2 trillion “holds the potential for an explosive increase in the nation’s money supply,” it said.

With each passing day the news coming from the Obamna economic team keeps getting better and better…..personally, I do not see it, but then I am not trying to convince a country of my outlook.

Native Americans Get Stimulus

About time!

American Indians stand to gain almost $3 billion as part of the economic stimulus moving through Congress, money that could help some of the nation’s poorest communities rebuild roads, improve health care and boost employment that has lagged behind the rest of the country for decades.

The Senate Appropriations Committee on Tuesday included $2.8 billion for Indian tribes in its portion of the nearly $900 billion economic stimulus bill, and a House version to be voted on Wednesday includes a similar amount. That includes hundreds of millions of dollars for schools, health clinics, roads, law enforcement and water projects.

Indian Country has a long way to go in terms of reviving tribal economies. According to the National Congress of American Indians, real per-capita income of Indians living on reservations is still less than half the national average, unemployment is twice that of the rest of the country, and eight of the 10 poorest counties in the United States are on reservations.

That group originally asked for $6.1 billion in the stimulus, an amount that they said would generate more than 50,000 jobs.

Obama’s Stimulus Plan

Sounds good on the surface but a closer examination, it only helps those who started the whole thing–banks.

Obama’s proposed solution—the American Recovery and Reinvestment Plan—will allocate hundreds of billions of dollars in public funds, the bulk of which will flow into the coffers of the very banks and corporations that reaped massive profits from the policies that precipitated the crash of 2008.

In a number of interviews leading up to Thursday’s speech, Obama made a point of stressing that in formulating his stimulus plan he had consulted Republican politicians and economists—that is, the very forces who have been the most ferocious advocates of the “free market” policies that contributed to the crisis and who most directly aided and abetted the corrupt practices he criticized in his address.

The modus operandi of Obama’s speech mirrored that employed three months ago to rush through Congress the Troubled Assets Relief Program (TARP), which transferred $700 billion in taxpayer funds to the banks. At that time, Bush took to the airwaves to issue dire warnings of recession and mass unemployment should Congress fail to act immediately to bail out the banks. The aim was to create an environment of anxiety and preempt any public discussion of the causes of the financial crisis or the merits of the bailout bill. Obama, then the Democratic presidential candidate, joined with the Democratic leadership in Congress to support the Republican administration’s rescue of Wall Street.

Of course, the TARP windfall for the financial elite has done nothing to prevent the disaster it was supposed to avert. The stimulus plan announced by Obama on Thursday will likewise do nothing to solve the economic crisis. Once again, a dire economic crisis is being exploited to implement policies favorable to big business that could otherwise not be implemented.

In his speech, Obama did not put a price tag on his plan, generally estimated to total between $675 billion and $775 billion over two years. Indeed, his transition team has repeatedly delayed submitting an actual plan to the new Democratic-dominated Congress, while Obama has sought to accommodate its provisions to the most right-wing factions in both parties. Earlier this week he let it be known that some $200 billion initially allocated as part of infrastructure funding will instead go toward tax breaks, bringing the total in tax windfalls to $300 billion, half of which will go to business. Ordinary families will get a mere $1,000 year in tax relief.

The “recovery” Obama envisages will, in fact, do little to relieve the distress and suffering of working class families. He declared his plan would “create or save at least 3 million jobs over the next few years.” But the US economy lost nearly 2.5 million jobs in 2008 alone and, as Obama hinted, it will continue to lose millions of jobs in the coming years. “It will take time—perhaps many years” before “we can restore opportunity and prosperity,” he declared, adding at another point that “it is altogether likely that things may get worse before they get better.”

Sorry, but my optimism has left the building.  Early in the electoral process, I suggested that Obama was not the agent of change that others thought he was, I was chasitized, especially on Daily Kos, but so far he has proven me right and the more he talks the more he continues to make my prediction accurate.  Thank you, Mr. President-elect.