Friday, December 2, 2011

The good news and the bad news

Initial jobless claims went back up over the magic 400,000 mark last week that indicates no job growth, but today’s employer survey showed the private sector hired 140,000 workers in November, but Republicans eliminated 20,000 government jobs for a net gain of 120,000 jobs. The Unemployment rate surprisingly fell to 8.6% from 9% as determined by household phone surveys. The Republicans are unhappy with this news and cling to the workforce participation rate of 64% as proof of Obama's failure (this number isn't as bad as it sounds, but has been trending down). There were 315,000 people who left the workforce last quarter. (conservatives conveniently “misspeak” and say it all happened last month). 

The number of jobs created was revised up for the months of September and October showing a total 278,000 jobs added for the 3rd quarter. Unfortunately this is less than needed to absorb the population growth. There is however something strange about another more obscure labor survey the government does. The Adjusted Household Survey of Employment actually asks people if they are working, in contrast to the employer survey that is widely reported in the media. 

Historically the two surveys track pretty closely, but over the past year the two graphs have begun diverging. Last month it went nuts, the difference was 498,000 jobs to the positive with an overall total of 2.5 million new jobs created this year compared to the official numbers of 1.6 million jobs created. If the grain got lost in all that chaff, the kernel is:  HALF MILLION NEW JOBS in one month. 

If there isn’t something wrong with the survey (they’ve been doing this for decades so it should work) things are really picking up, but not with the big “job creators” that heavily weight the Employer Survey. That survey did place half of the new growth with small business, but they tend to completely miss certain types of small businesses, as well as start up companies and people who create their own job.

This would explain the general improvement in the economic numbers that we have been seeing despite the continued high unemployment rate and that rate’s sudden drop last month. It’s not time to start singing “Happy Days Are Here Again” for a number of reasons. For one thing we need to see this improvement sustained over time, and contrary to the conservative talking point that says, “a job is a job, take what we give you or we‘ll let you starve”, that is not how an economy recovers nor does it produce the American Dream.

A long term study of the unemployed by Rutgers University has been following people who lost their jobs in the first year of the Bush Great Depression. Only 7% have found a comparable job that allowed them to escape relatively unharmed. A third are in varying degrees of poverty having had their lives “totally wrecked” by their job loss, and 21% see this change as permanent. The middle third see themselves recovering, at least so far. 

Nationwide 25% of all full time workers make wages that keep them below the poverty rate. Companies like Walmart can’t operate without government programs to support the bulk of their workers. Food Stamps, Medicaid, housing assistance as well as Food Banks and support from worker’s families keep Walmart in business. As Red states continue to cut programs and drive down wages the pressure builds for a shift to a Mexico style economy or simply a not quite “failed state” existence. Don’t kid yourself right winger,  the Republicans have economists that explain these things to them. They just don’t care. We need to care for ourselves, we are the 99%.

Thursday, December 1, 2011

Cue the Twilight Zone music

Presented for your approval… a Rick Perry campaign ad in Iowa; video bookends of Jimmy Carter and President Obama calling for the end to our dependency on foreign oil. Perry complains there has been no change over this entire period as if no Republicans ran things in the interim. As an “outsider” he will make American energy independent again. Another man like George Bush but lacking his intellect or humility... Rod Sterling could never create such terror, (I think I may have peed myself, oh wait, it‘s just beer)

Never mind that the thinking that dominated the period between Jimmy Carter and Barrack Obama was entirely Republican. Ronald Reagan took office after Carter and immediately tore down, not the Berlin Wall, but the solar collectors on the White House. More importantly he ended the tax credits and Federal programs to make solar power 20% of our energy by the year 2000. This bankrupted almost all of the mushrooming solar energy business.

If Carter’s policies had been followed, we would not need any Middle East oil, not one drop. No Iraq war, no 4500 dead Americans, no 100,000 to 1,000,000 dead Iraqis (depending on who you believe), no 75,000 permanently disabled Americans, no 500,000 Iraqi orphans, no 500,000 new VA patients with chronic health problems, no 5,000,000 Iraqi refugees, no 2 million Iraqi Christians that are dead, dying or hiding in fear of their lives, and on and on.

Rick Perry will fix all that (except for the Iraqis, they‘re not Christians, at least not the “right kind“), not because he’ll get us off of oil, but because he’ll free up the oil companies to drill where ever they want. No matter that the oil companies have only tapped 10% of the leases that Clinton gave them 15 years ago. The fact is that we have plenty of oil, there is no shortage and there never has been. This is why Rick Perry fights so hard to keep us dependant on oil. If we shifted away from oil, give the surplus, the price would go back to $18/barrel as it was before the Iraq war. Rick Perry’s masters prefer the $101/barrel they get now.

Thin man in a dark suit talking, “The American citizen has found their fate has been decided. Not by logic, or from events beyond their control, but from believing the lies that prey on their prejudice and that take advantage of their ignorance”. Fade to stars on a black, cold screen.

Perry alternates this bit of insanity with an ad slamming liberals for equating faith with weakness. How about blind faith combined with ignorance and stupidity?

In global warming news: California experienced record Santa Anna winds of 140 mph today. Iowa experienced straight line winds of over 140 mph last summer. That was straight line, not a tornado. Rick Perry’s Texas has now entered its worst drought on record with no end in sight. Texas now qualifies as the world’s 4th largest desert. Extremes of weather is consistent with Global Warming Theory and it's worse than predicted. Why can’t we have Jimmy Carter again?

Jimmy Carter wasn't only a Christian (never mind the Baptists excommunicated him), he was an Annapolis graduate with a degree in nuclear engineering. He served as an aide to Admiral Hyman Rickover (the father of nuclear propulsion), Carter understood energy of all types. He could do the math, unlike any Republican, he understands how his toaster works. He didn't want to build nuclear plants or drill more oil wells. He wanted to build solar plants on every roof top. There are thousands of those installations built under Carter's policies, they are still operating, generating energy and having been paid for decades ago, they operate for free. This doesn't make any money for billionaire bankers or oil executives, and that's the problem with that.

Tuesday, November 29, 2011

Tomorrow could be one of those days

The British are experiencing an economic disaster driven by austerity and corporate tax evasion, but their PM announced today that there will be five more years of the same only worse in his budget. He’s also setting them up for even harsher measures if the Euro collapses.

According to people who claim to be informed on the subject, the Euro has weeks or months to live at best. Reports are that businesses are already laying plans for operating in a post Euro environment. With the European Central Bank refusing to step in, this is certainly the outcome to be expected.

It’s impossible to predict the fallout from ending the Euro. It could actually be a good thing, allowing for the smaller countries to control their own debt by inflation. Only with the bankers moving to grab power it definitely won’t be a good thing at all. How this will all shake out with the big zombie banks in the US is anybody’s guess. Doubtless they will use it as an opportunity to grab more power. However, some people seem to be concerned about resistance from the peasants.

The US Senate has retained a provision in the Defense Authorization Bill to allow indefinite detention of Americans taken prisoner anywhere in the world (including your house). Prisoners can be taken secretly at anytime with no more cause than their say so that you might be whatever they choose to define as terrorist. No evidence is required, no probable cause to get a warrant, no hearing, no trial, no public disclosure that you are a prisoner, not where you held, nor whether you are dead or alive; forever.

The Udall amendment to strip this blatant repeal of the Constitution from the Defense bill failed today with 61 votes against including 13 Democrats plus Leiberman. This law will end the concept of  habeas corpus after 800 years. President Obama has vowed to veto the law if it reaches his desk. I would say that would be a defining moment if he doesn’t.

A similar repeal of Constitutional rights during the reign of the Bush Crime Family was itself repealed the following year by Congress.  I suspect that bank lobbyists maybe the real impetus behind this amendment, but only four of the Democrats serve on the Banking Committee voted in favor of. Still that is a third of the Democrats who voted on the dark side.

In other news, American Airlines became the last legacy carrier to file for Chapter 11 protection from creditors. It’s not even pretending this about anything but breaking its unions. It claims it has a 900 million dollar annual disadvantage from its competition because it pays decent wages. AA isn’t in any real trouble however, since it has 3 billion in the bank.

Standard & Poors downgraded six of the biggest zombie banks today. We’ll see in the next couple of days if this triggers some sort of disaster involving that unimaginable mountain of derivatives these banks are involved in.  A credit downgrade can easily trigger a margin call on Credit Default Swaps used to insure the bonds of banks. This was what brought down Lehman Brothers and AIG triggering the credit collapse of 2008 and confirming we are in fact in a Great Depression.

Bank of America recently moved 47 trillion in derivatives to its banking division from Merrill Lynch in order to cover a margin call. This came after a credit downgrade in September putting the taxpayer on the hook to cover 17% of all US bank deposits if the BoA fails because of it. Bank of America along with Citigroup Inc., Goldman Sachs Group Inc., JPMorgan Chase & Co., Morgan Stanley and Wells Fargo & Co all were downgraded after hours today. Tomorrow might be one of those days you tell the grandchildren about around the campfire, under bridge where they live.

President Hoover (I mean Obama) continues to claim we are climbing slowly out of our current difficulties. I guess you can’t blame Obama for cheerleading, Herbert Hoover could have did something since he had a willing Congress. If Obama acknowledged our current predicament, it would only make it worse, and it wouldn’t affect the death cult in control of Congress. They would blame him for “talking down” the economy while continuing to do everything they can to seal our fate. Our fate is really in our hands, you just need to stay one step ahead of the military’s terrorist round up.

Monday, black and blue

The stock market was way up Monday after the worst Thanksgiving week since 1932, the gains were mostly on the strength of the retail sector that is claiming (by estimates from its lobbying group) a 16% increase in Black Friday weekend sales. These numbers are probably just hype and even if Friday was banner day it won’t be sustainable. Increased retail sales aren’t even very simulative anymore since the money drains away immediately to China and the corporate profits are skimmed to Caribbean tax havens. (something that would get you or me into Federal Prison)

Sales numbers are probably up some as they were up in October, but the dollar amount increases come from higher prices and not from any real increase in business activity. The mob scenes they show on TV are “staged”, by that I mean they are created by the same sort of unsafe practices in marketing and crowd control that desperate retailers engaged in during the Reagan recession.

Stores were then pressured by local fire authorities to stop doing these things at the time but they are at it again. Resorting to these tactics probably indicates that the retailers are in worse shape than we have been led to believe. There is a lot of corporate paper coming due next year and you will probably start seeing major bankruptcies.

Bank stocks were up Monday morning but a Federal Judge has thrown out the SEC settlement with Citigroup over its massive securitized mortgage fraud case. This likely means a real trial and major revelations of the corrupt banking industry’s practices. Citigroup won’t go quietly to the gallows however, as they have more lawyers than 2 of the 3 inner circles of Hell.

The big Wall Street banks led by Goldman Sachs put the fear of god into the German government last week by organizing a strike against the German bund (bond) auction. After failing to sell even 2/3 of its offering on Wednesday, the German government was by Friday backing down from its position over the Greek crisis. They had demanded that the banks take responsibility for the debt crisis by taking a 50% haircut on the Greek bonds. You see bankers “make” money anyway they can and never take responsibility for the damage. That’s what taxpayers are for.

Italy and Greece are now both under the control of Prime Ministers that were not elected but picked by bankers. That’s how Hitler became Chancellor in the 30s with the help of Prescott Bush and his banking friends. While the Nazi’s had a small minority in the parliament, they were sold to the public as being able to bring economic order that would end the rioting.

While the current crop of bankers and corporate oligarchs may not be planning to commit genocide, they aren’t shy about wholesale murder if you get in their way. You could die by getting in the way of them taking your country’s resources, or simply by them poisoning your air and water. If they control your economy then death can come by them denying you access to affordable food, healthcare or a job.

It’s simple math, the world economy is a closed system. The one percent can’t increase or even maintain the lifestyle to which it has become accustomed without either growth of the economy, or by taking money from the 99%. Since their goal is to capture all of the wealth, they can’t very well allow any real growth as that would dilute their power. The Occupy Movement is really just holding a beachhead under fire, get in the fight yourself or lose everything.

Sunday, November 27, 2011

Why Europe and the middle class here are in so much trouble

During the 90s de-regulation, or really the de-decriminalization of corrupt banking practices including the "Modernization" of Commodities Trading Act allowed Wall Street and big banking in Europe to load everybody up with over leveraged debt. Then they created derivatives to "insure" against the risk. Creating the bubble to end all bubbles, the end of us all bubble. A quadrillion dollar bubble in a 60 trillion dollar world economy (and a lot of that is just paper).

There were people who sounded the alarm on this, they were by and large silenced by anyway necessary (Eliot Spitzer for example) or just ignored if they could be portrayed as cranks or (gasp) socialists. Huge salaries, perks and bribes were available to anybody in a position of power who would look the other way.  Bill Clinton left office millions in debt and facing possible prison time for any number of trumped up charges. In a few short years he was worth more than $200 million. That's couch cushion change compared to what the people who paid him off are raking in. But remember Clinton only signed laws that Republicans passed, that's where the real treason is.