It’s 98 years ago today that the Titanic struck the iceberg. It was one of the many events of its era that led to stricter government oversight of corporate activity in the Progressive Era. Everything that went wrong that night was a result of “free market” forces. The captain ordered full speed in the fog to stay on schedule. The Jr officer on watch didn’t have the experience to ignore that order as the fog worsened. He probably feared for his job and his lack of training caused him to do exactly the wrong things when the warning sounded. Water tight compartments weren’t really water tight and there was no good way to lower the lifeboats they did have. They were running the Titanic like it was a coal mine or a commuter airline.
The report on North Atlantic icebergs, I mean the Federal Reserve’s Beige book estimate of the economy was up for 11 of 12 Fed Districts. It was up largely from improvements in retail and car sales. They say industrial activity is up but then again the trade deficit is up even more sharply. You see industrial activity in the US revolves around installing Chinese parts and putting on the decals for what ever big box store ordered the product from China.
The Fed also said that most of the new hiring is only temps. To a big corporation hiring temps isn’t quite as good as using prison labor, you still have to pay them but not that much. It’s probably on a par with the cost of owning slaves. Since there are no purchase costs with temps or need to feed and house them when you’re not using them and there‘s no investment lost if you kill some temps. Initial unemployment claims surged by 24,000 last week, up for the third week and is again approaching the half million level.
As for the not quite slaves having housing; the first quarter set a new record for home foreclosures with 900,000 families served with some sort of notice. That’s 10,000 per day every day, they‘d probably leave for a better land if they could afford a steerage ticket.
The Fed’s Beige Book is really a collection of anecdotes from the advisory boards for its member banks. It can often reflect more what they would like to believe as opposed to what is really happening. The economy is unsinkable, have another drink, we have plenty of ice. www.prairie2.com