Tuesday, April 26, 2011

I feel good about the edge

Wall Street had a good day today as higher corporate profits overcame fears that debt ceiling might not be raised. And the folks on Main Street seem to be feeling a little better about the economy according to consumer confidence polling. The perception of the job market is improving with those who say jobs are “hard to get” down to 41.8 per cent in April from 44.4 per cent in March, while the those saying jobs are “plentiful” rose to 5.2 per cent from 4.6 per cent.

Of course these numbers just indicate a “feeling” that people have and don’t reflect the availability of jobs for anybody out of work. It’s more the fact that the guy in the next cubicle hasn’t gotten the axe lately then any real change for the job market. The “jobs are plentiful” statistic of 5.2% is amusing. They would probably get a higher percentage if they asked people if the world was flat. Basically, nobody thinks the job market is good and they are right.

Housing prices continue to fall reaching the post crash level 2009 wiping out most of the market “gains” of the past decade and there is no bottom in sight. This is draining away the only real wealth that most of middle class had and is dragging still more people underwater on their mortgages. The current glut of foreclosed homes will take ten years to clear and this is leaving whole neighborhoods boarded up and rotting away.

The Government’s preliminary report on first quarter GDP will come out Thursday and is expected to show a 2% growth rate, down from 3.1% last quarter. I would be surprised if it’s that good and anyway the first number is never even close to being correct.

The big new talking point from the Right is that we need to slash government jobs because there are now more people in government than in the manufacturing sector. They are also running the parallel talking point that government is too big because it’s a larger percentage of GDP than ever before. They don’t mention that tax revenue as a percentage of GDP is at a 60 year low or that they tanked the economy to make themselves rich.

The same people said we didn’t need any manufacturing jobs, now say we will get them back if we just cut government jobs. They say tax revenue will go up if we just cut taxes. They say the home foreclosure crisis will go away if we stop trying to regulate the banks and allow a free market and deregulated oil companies will drill more and gas will be cheap. The people saying this would be the same 5.2% that say jobs are “plentiful”, but don’t get too close to the edge of the world, the view is nice but you could fall off.  www.prairie2.com