The stock market was down today on fears the Greek PM would not survive a no confidence vote in Parliament, he did narrowly keep his job late today by pledging to create a new government with a broader base even if he doesn‘t lead it. He had announced that he was going to let the peasants have a vote on their descent into serfdom just before going to the G-20 meeting and he didn’t get a warm reception, in fact they sent him packing. The big money players not only threatened to cut off already promised loans but to isolate Greece from the world. The Greek PM may well have done this on purpose in order to panic the opposition party and grumblers in his own party into endorsing his position so that he isn’t alone in taking the blame when the coming disaster unfolds.
Back in the US, private employers added 104,000 jobs in October but with 24,000 cuts in red state government jobs, this created a net October jobs number of 80,000. The figure for September was revised upward to 158,000 from the initially reported 103,000. If red states hadn’t cut 34,000 public sector jobs the September number would have been 192,000 new jobs. October’s number is also subject to revision and my guess is that it too will be increased. A survey of CEOs is saying that planned layoffs have been cut sharply and the economic numbers in general have been positive.
These job numbers aren’t indicators of real growth as they barely cover the increase in the population. Job creation would be significantly higher if the states weren’t slashing jobs and overall spending as part of the Koch Brothers agenda being pushed by their lobbyists. Even though a significant number of jobs were created during the past two months, weekly jobless claims have stayed above 400,000 until this week when they dipped slightly below the so-called magic 400,000 number everybody in media obsesses over.
When jobs are being created the weekly initial jobless claims number should be no higher than 275,000 and this is the real magic number, but claims remain high because of the churning of jobs by corporations in order to drive down wages. Median income has dropped sharply in the last three years with 50% of workers earning less than $26,364 last year, down from over $30,000 and this trend is obviously continuing.
Despite a number of reports from smaller companies that they are moving production back from China, large companies continue to outsource as much as they can and they are also closing plants simply from lack of consumer demand. The one exception is the automobile industry where new US plants are opening, but at half wages. Union factory jobs in the US typically pay $28/hour and the “new” ones are half that or roughly equivalent in today’s dollars to the minimum wage set in 1938 at 25 cents/hour. Auto workers in 1938 made several times the minimum wage. Today in Germany the same factory jobs pay $48/hour with better benefits and everybody in Germany gets those benefits.
Germany is not in trouble from the Euro crisis, but increasingly Italy is, with bond rates above 6% and climbing. The Wall Street hedge funds are angling to make a killing by taking the smaller Euro currency countries to the cleaners. It may not work out for all them however, ask former NJ Gov Jon Corzine, he has hired a criminal defense attorney as he can’t account for 700 million in customer money. Today it was leaked that this money maybe in Jamie Dimon’s JP Morgan bank. Exactly why we don’t know, but JPMorgan took several banks to the cleaners during the 2008 crash.
In summary, the US economy is trying to right itself with GDP now above its peak from before the 2008 crash, but the Republicans are busily drilling holes in the bottom of the boat. This isn’t just the crazy ideologue Tea Bagger Congressmen doing this but a cadre of billionaires who can each write a check from the petty cash account that would exceed the total expenditures of the 2008 election. They buy Congressmen like Trick or Treat candy bars and this extends to state and local officials too. Their corporations fund the “news” channels so you only hear what they want you to hear. Word of mouth is the only thing they can’t control, learn the facts, talk about them, take action while you can. Time is running out. www.prairie2.com