Why does the GDP have Fed Chairman Ben Bernanke wringing his hands or at least he is pretending to be concerned, he can‘t be fired. The GDP for the quarter just ended was up 2.4% and that sounds good since it was up and not down but the devil is in the details. The Gross Domestic Product includes almost everything in the economy where money changes hands but here are the relevant numbers. Consumers represent seventy percent of the economy and their increased consumption upped the total GDP by one percent, okay that’s good but considering where we’ve been it’s not providing much recovery.
Business investment added fully 2% to the GDP but the companies that are buying equipment aren’t hiring, just getting leaner. An increase in inventories added another one percent but that doesn’t represent growth but is a reason to worry as at some point the inventory must be sold down. Exports added 1.25% and that’s a bright spot but not very bright. Increased Government spending added .88% which is your stimulus dollars at work.
That all adds up to a 6.4% growth of GDP which is pretty respectable for any period since the Depression, but wait the GDP number we’re using is only 2.4%, so what gives? Imports are what gives, on a flat earth there are really no such things as imports and exports since trans-national corporations don’t recognize borders or governments. But for us serfs who used to think we were living the American Dream and building wealth this is the telling number. Imports increased so dramatically that it cut the entire GDP of the United States by fully 4%. This is four times the increase in consumption so if you were wondering like the Republicans, “where are the jobs?”, this is where they went.
The trans-national monopoly corporations continue to eliminate jobs and squeeze more work for less pay from every worker. Conservatives say that’s efficiency and that’s a good thing. The GDP tells a different story, the unemployment lines, the pay cuts, the ever rising tide of home foreclosures, the growing number of homeless people all these tell a different story. Small and medium businesses continue to disappear or become debt ridden hollow shells as big business squeezes them out.
When increased worker productivity doesn’t benefit the worker who does the work but only benefit’s a handful of people at the top you cease to have an economy as we have come to think of it in the land of the free. What you have is a feudal society. Even the upper middle class is feeling the pinch and are cutting back sharply on spending as their investments turn south and the wealth they had in their homes disappears. While the top earners experienced half the job losses that the rest of the work force have endured, those out of work aren’t finding jobs easily nor are their children finding those yuppie status jobs their parents did after college.
The flat earth used to be a concept that didn’t apply to the upper middle class but no longer true. The upper middle class have a list of talking points supplied by the millionaires at Fox who work for the billionaires who own the flat earth, these talking points are designed to make them think this is all Obama’s fault. It doesn’t matter that this has been going on since Obama was in junior high school, but it didn’t used to apply to them so that’s the part they blame on Obama.
The conservatives with comfortable incomes and investment portfolios thought they were part of the ruling class and they desperately want to believe the black man in the White House is the one who is taking that away from them. They thought they were getting trickle down and not snake oil. They thought that they each had their own little mountain on the flat earth but the really rich have a mountain top removal program to take care of that. While the guy that still makes 200,000 a year isn’t in the same hole with the rest of us, he’s discovering that his wealth is drying up and he’s only a job loss or a market flash crash away from the edge, and on the flat earth, once you go over the edge, there is no climbing back up. www.prairie2.com