Initial claims for unemployment dropped by 12,000 last week. Great news, makes a big headline. There is a small problem though, continuing claims went up 129,000. That’s 129,000 more people are on unemployment than last week and this does not include approximately 100,000 whose benefits run out every week for a total of 229,000 jobs lost. And of course none of these numbers reflect the people who aren’t eligible for unemployment.
Factory output was up slightly, another big headline, but this was just a bounce from the lack of inventory. Inventories were cut severely in the spring and an increase in output does not reflect any significant growth and more probably is masking further declines. In fact most increases are in factories with low wages that produce goods for the European markets that are rebounding. Even with that, US industry is operating at less than 70% of capacity despite the wholesale closing of US plants.
As benefits run out, more people are expected to face foreclosure putting more downward pressure on home prices that are expected to decline another 25%. This will put more people underwater and this is expected to exceed 50% of homes by next year putting still more pressure on prices. The eight thousand dollar Federal new home buyer credit is about to expire and if not renewed it will put the entire real-estate business under water.
Credit card defaults continue to increase despite the banks severely reducing or eliminating the credit lines of the majority of their customers. Most people are getting notices with lots of fine print saying that your interest rate is going up slightly but if you read far enough you will probably find that your interest rate is about to go to 30% and you are now on an adjustable rate that has no upper limit.
The truth that is being kept from everybody is this mess didn’t start with sub prime loans or a real-estate bubble. It didn’t start with people living high on credit cards or consuming too much. It wasn’t the unions or high taxes or any of the things on the list of the right-wing blowhards. It was deliberate economic policy pushed by right-wing think tanks. Pushed by the corporate media as "the free market", "we have to compete", "it’s a flat earth", "everything you buy will be cheaper" and on and on. You’ve heard these slogans so much over the past thirty years that you probably believe some of them without realizing it and they are all just "bat squeeze". The latest one is that we can’t change now because we owe China too much money.
Alexander Hamilton and the other people whose pictures you see on your Federal Reserve notes would be shocked that Americans could be that stupid. They fought wars to free us from this sort of nonsense. Especially things like the Federal Reserve and the giant corporations that overwhelm local markets, destroy businesses and drive down wages. The real Tea Party was an attack on the British East India Company that was the Walmart of its day. If the tea baggers today had a clue about their real future, they would be out in front of their local Walmart with torches and pitchforks.
The truth is that the corporations are in charge. You don’t have to look very hard to realize that they don’t hesitate to lie to people, neglect people, abuse people, enslave people, kill people, kill lots of people. The truth is that every week a couple of hundred thousand people start down a path that will end when they use up the last of their canned goods.