Friday, December 3, 2010

Fairy Dust works, if you still have a good paying job

Where are the jobs? Economists were predicting 90,000 new jobs had been created in October but the real number was only 39,000 and we need a 150,000 new jobs to keep up with population growth. In simple terms this 111,000 jobs short fall is in terms of economic impact similar to laying waste to a city of 250,000 with no plans to rebuild it. And, this was a good month.

The US stock markets ignored the news since they have nothing to do with the real world, free money from the Fed continues to feed irrational exuberance. The NYSE listed companies do more than half their business outside the US but the rest of the world (outside China) isn’t doing so hot largely from all the new USD being printed. But in fact the big companies are still doing well as they continue to drive down wages and borrowing money at a fraction of percent interest makes it hard not to make money as long as there are more wage cuts to make and smaller competitors to target.

Gold is on the rise again and the USD is down sharply compared to the Euro despite the ongoing bond crisis in the conservative countries know as the PIGS (I’m referring to their banking and economic practices) . (Portugal, Ireland, Greece and Spain) This appears to be changing to the PIIGS as Italy’s borrowing costs have shot up despite their relatively good economic health. It’s just that they happen to be small enough to be brought down by the Wall Street predators.

The crocodile only grabs an animal it thinks it can drag under and the thing about crocodiles is the more they eat the bigger and hungrier they get. Since the total decriminalization of Wall Street’s practices, the feeding has been good. The Republicans in Congress are those little birds that clean the teeth of the big Crocs while they sun themselves on the river bank and nary a tear is shed. It’s the victim’s fault you know.

About those economists that were wrong about the job numbers; they all seem genuinely shocked that the numbers weren’t better. These are the same economists who have spent the last 30 years telling us how good Reaganomics is, that trickle down will make you rich too, told us what a good deal tariff free imports are and that the earth is flat don’t you know. This requires a level of detachment from reality that requires a firm belief in fairy dust to make their economic models work. In fact they have gone completely over to slogans and don’t bother with those depressing models anymore. It works for them, they still have good paying jobs.


Anonymous said...

Thats hitting the nail on the head.