Initial unemployment claims jumped back up over 400,000 for last week. This is getting to be a tired old song, the number will need to be under 275,000 to indicate new jobs are being created. The continued high number doesn’t indicate we are losing jobs but it reflects the continued decline in wages as workers are replaced with people working at ever lower wages.
The Federal Reserve is upping its prediction of growth for 2012 to somewhere between 3.4 to 3.9%. I’m predicting that pigs will fly. The Fed is buying out the rich who were invested heavily in 30 year Treasury Bonds to the tune of a trillion dollars. The rich are in turn buying into hedge funds that put money into anything and everything but creating jobs and the interest rates that were supposed to come down are going up on inflation fears. The Fed is predicting unemployment to remain high but to start coming down slowly. I predict supersonic flying pigs.
Not only is nothing meaningful being done to “create jobs” but this extra trillion the hedge funds now have to play with is driving up consumer prices which hobbles what little economy we have left. Besides no trade policy and no manufacturing policy, Obama has no problem with pay freezes despite the Consumer Price Index rising sharply which makes them into to pay cuts. This is of course exactly the wrong thing to do to head off a Depression, Herbert Hoover proved that.
With no Trade Policy (or rather with a pro trans-national corporate trade policy) any growth in the economy is reflected in a burgeoning trade deficit. Even no growth or a decline in economic activity there will still be an ever bigger trade deficit as factories continue to close, the latest count is 50,000 just since 2000. The bad economy encourages factory closings with tight credit, weak demand and increasing commodity costs as the hedge funds and Wall Street banks drive up the prices of raw materials.
Obama says everything will be okay if we just become more competitive and have more free trade deals. The Republicans say everything will be okay if we just cut taxes and stop regulating business and do away any government spending that doesn’t benefit the rich.
I say everything will be okay in the spring when the pigs come back north, They are beautiful flying in a graceful V formation their oink calls echoing across the prairie. www.prairie2.com