According to the Economic Policy Institute (Bivens, and Irons) Briefing Paper #214, the U.S. has had the worst expansion since World War 2. The unemployment rate rose from 4.4% in March 2007 to 5.1% in March 2008. The only aspect of this business cycle that shined was the huge growth in corporate profits; the highest since 1949!!! How does that happen? The worst expansion brings about the second biggest profit taking since 1949? Read on.
Economic output spiraled downward in the fourth quarter of 2007 to a 0.6% annual rate and has continued into 2008. Payroll enrollment growth matched the weak economic output figure of 0.6%.
The EPI report looked at macroeconomic cycles, which consisted of 27 quarter durations, with 10 business cycles, since 1949.
John Bivens, in his EPI article, "GDP Growth Anemic Again. Since When Is 0.6% Growth Good News?", wrote that to have had three straight months of negative job growth totaling 232,000 jobs lost just this year is recessionary. Any GDP growth below 25% negatively effects employment and wage growth.
Employment must rise by 1.1% annually to absorb newly available workers. We are seeing a 0.5% difference when compared to payroll enrollment growth. This means that there has been a drop in hires.
The EPI report (#214) said that GDP growth in the latest expansion was a full 40% slower than the post-World War 2 average.
It is clear that the so-called "expansion" claimed by BushCo is over. We have financial market turmoil, housing price declines, and higher energy costs. Plus, "there are declines in consumption, spending, investment in equipment and software, residential and non-residential construction, exports, and imports. Residential investment fell for the 9th straight quarter, and its 26.7% drop was the largest quarterly change since the decline began." (Josh Bivens-EPI).
The recessionary pressures are effected by 2 factors: "slower hourly wage growth and fewer average hours worked per week." (Jared Bernstein, "Nation's Payroll Decline Again, and Hours, Wages and Incomes Feel the Squeeze,"EPI, 5-2-08). He went on to write, "At 5.2 million, this indicator of under-employment is up 850,000 over the past year."
With these reports, anyone believing that the middle class is becoming richer is foolishly ill-informed. I guess, the Kool-Aid drinkers have become addicted to the drug and need rehab immediately. The opportunity for our economy to turn around under these conditions will be a huge struggle, and very likely to not happen until there are major progressive reforms that must be addressed by a competent president and not by a stupid one. And that includes McCain't, oh, I mean McCain.
It has gotten so bad that Bugsy Bernanke has allowed banks, and financial institutions, to cough up student, auto, and credit card loan bonds as collateral for injections of clean Treasury capital at a low, low interest rate of 2%. So, why not? Bugsy continues to liquify a very liquid global market where banks are afraid to loan creating a freezing cold credit environment. Banks are not lending to one another, which is what they often do, because they don't know who else is hold the hot potato called junk bonds (collateralized debt obligations, and credit default swaps), or what is often called Monopoly money, hiding deep within their balance sheets. These banks are thick and knee deep in our Treasury dollars as they swapped away their junk for the good stuff. They are swimming in liquidity. Yet they don't loan it to one another or use it to stimulate our drowning economy, but loan it out to the ultra rich. More money is channeled to the ultra rich investor class through unregulated private equity and hedge funds, while the middle class loses jobs, benefits, assets, and confidence in the government.
Bugsy, and Paulie Paulson (Treasury secretary) keep shootin' up the banks with the bad-credit-swap narcotic exchanging their riskiest junk bonds (student, auto, and credit card bonds) through their bi-weekly Term Auction Facility to the tune of $75 billion per pop. In addition, these two banksta gangstas have lifted the cash give-away, by 50%, as they swap with the European Central Bank and Swiss National Bank purging any subprime stuff the Europeans were stuck holding from the financial Wall-Street shysters.
Spain, France, Germany and other European economies are doing well, as they did not get caught up in the subprime web (except for Britain) of lies, deception, and fraud to the extent that the Americans did. Also, they are not trapped in the buy-Chinese-cheap-stuff quick sand in which we are heavily sinking deep within. They respect livable wages, unions, and worker stability, which is paying off. The neo-con regressives took us in the opposite direction and look where we are today. The regressives were willing to destroy our economy so the ultra rich could become richer!!!
Robert Kuttner (5-5-08, Prospect.org) quoted Germany's Gunter Verheugen, the vice-president of the EU, "We need a strong and competitive industrial base in order to have a strong service economy. Don't try to be cheaper. Try to be better. Don't try to compete on low social standards." Now, that makes sense. Although, McCain't and BushCo don't believe in such thinking. The countries within the EU are running trade and/or budget surpluses!! Is that not a novel outcome?
It is clear to me that BushCo faked the economic expansion to sell a second term as he boasted about a booming economy throughout a completely failed presidency of 8 years. He built his lies upon a known but beautifully covered hole until the weight of a pervasive and burdensome debt load, accompanied by significant and widespread foreclosures sunk his fabricated illusive house-of-mirrors masterpiece.
He faked the economic expansion by performing two moves-one being the massive boosting up of housing prices and values (housing bubble), and the other by creating an extra $1 trillion in deficit spending handed over to the richest people in America through tax cuts.
Through the housing bubble, households took out approximately $6 trillion in home equity giving disposable income a 5% injection. But now, the high-flyin' spending Americans, from suburbs to cities, have lost their loft and are free-falling, along with Humpty-Dumpty, right to the ground.
All of this validates my theory that the plan all along was to allow the wealthiest Americans, by allowing laissez-faire regulatory standards, and oversight, as well as the reduction of paid government workers to do the regulating, and tax rules favoring the rich, and through high salaries, bonuses, commissions, fees and perks resulting in terrific corporate profits, the opportunity to profit further off of the misfortunes of middle and lower income Americans. The privileged elite within those corporations benefiting from such thievery by cashing in on the planned BushCo housing bubble (Greenspan believed in blowing bubbles) by investing in the sale of subprime and other mortgages, through an unregulated resale market, furthered their wealth at the expense of the nation's economic well-being. This should be investigated by the justice department and prosecuted to the highest levels and penalties.
It was never about increasing the strength of the nation. It was only about greed, while manipulating the economics of the country toward its most devastating peril since the 1928 Great Depression. Nothing else mattered to these greedy neo-con regressive Republicans more than increasing the wealth of the "haves and have mores"--as Bush refers to his base of supporters and contributors. They have created nothing but our nation's greatest national security risk. This risk outweighs everything else that they have used to scare us into believing that the boogieman is not them. The truth is---they are the boogieman. No terrorist group could ever harm this nation as they have so calculatively done.
4 comments:
If there's one thing Bush is good at, it's covering up his misdeeds. I suspect we'll see much more of his dirty laundry when Obama takes charge in 2009. What a lost economic opportunity over the last 8 years. The amazing internet, the most far-reaching technological development of all time, increased business productivity several fold. Untouched by Bush's fiscal incompetence, war debt, and engendering of bad will toward all things American, the last 8 years should have seen a stellar economic advance that would have cemented the United States as the world's economic leader for years to come. Instead, his disastrous policies have not only wiped away the great advances that were in our grasp, but left us behind where we were in 2000. Future economists will marvel at the colossal damage done and the way Bush and his cronies were able to avoid punishment for so long. Rock on eye-on-washington.
So what is a Neo-Con?? Someone who believes people who earn money should keep and spend it the way THEY want to, not have it stolen by the government? Someone who believes in personal responsibility, not that government can fix everything? Someone who believes your life is what you make of it not what the government can make of it? If so I guess I am a Neo-Con.
Impeachbush, lost economic opportunity??? What did President Bush do for the economy? Got us out of the Clinton/Gore recession and 911 financial hit as a minor bump. Let everyone keep more of their money. More money into the economy. Low un-employment rates throughout his 7 1/2 years, remember when Clinton ran for re-election they called 5.6% un-employment 'virtually full employment' but with President Bush a rate below 5% is then next depression! EU is running at a 6.8% un-employment.There is not another country set up to be an economic leader better than the US. I hate to tell you but WEALTH is the solution to poverty.
In spite of the EU's average 6.8% unemployment rate, their economies are much more successful. They are more self-contained and more decoupled from Asia than we are. Their citizens have quality health care, higher mortality rates, for better contained costs. Our misrepresented unemployment rate is not 5.1%. Anyone believing that has drunk the Kool-Aid. Those numbers only count people applying for the insurance. It does not count those no longer receiving it or not applying for it or under-employed. The true number is between 10-18%. 48 million uninsured Americans without health care add to our over-blown medical care costs. Bush screwed the economy. Taking a budget surplus ($200 B) and creating a $250 B deficit. And that is good for the economy? Manufacturing is now only 10% of GDP. Add into the mix an unregulated financial sector. What has evolved is a bubble with $48 trillion in accumulated private sector debt, seeking a taxpayer bailout! Where is the private sector's "personal responsibility" ? They don't believe in it, especially when it effects their bottom line. That's prosperity?
The Neo-cons seem to like unbounded capitalistic greed, not through hard work, but by tapping into the taxpayer's Treasury. It is like a person who steals from the family piggy bank and claims he earned that stolen money as a result of a hard day's work. What crap! Bush's delusional smoke and mirrors con-game has put America into its worst economic security risk since the Depression. This is prosperity?
I agree, education, ambition, and saving raises one's wealth. But fraud, corruption, deception, and lies has been the motto by which this Administration operates. From Stovepiping intelligence to justify the Iraq war, to the "ownership society" bringing about the housing bubble, Bush and pals have lied their way through these last 8 years. Clinton-Gore had a budget surplus, although brought upon by a Greenspan Wall-Street tech bubble. Greenspan allowed and convinced Bush to proceed with another bubble through the financial sector and Wall-Street again, making the ultra rich even richer at the expense of the nation.
9-11 allowed Bush to "spend his political capital" and allow for Treasury theft by setting up corporations to make massive profits via the Pentagon, HLS, and NSA by "over building" our national security and through U.S. imperialism in Iraq.
Let everyone keep more of their money? More money into the economy, Anonymous says? That was tried though tax cuts. It failed! Anonymous says "personal responsibility". RIght! The financial industry, Enron, WorldCom, and the rest have shown us that such fantasies fail. Ann Rand's mantra has failed. The Neo-con's--both Dems and Repubs---have created this mess and only an honest government can, hopefully, fix it.
The neo-cons appear to have been suffering from the Stockholm Syndrome--believing in the propaganda drilled into their heads by the capitalist evangelicals on Wall-Street and those getting bought off by expensive lobbyists operating behind the congressional scenes. After a while, the Stepford (Wife) Neo-cons bob their heads to the droning sounds coming from the Republican noise machines and begin to repeat the talking-points like a good foot soldier marching in a Bush-Cheney-Fox News lock step.
FYI--both private and public debt together has reached $48 trillion. Around 3x's more than our GDP! Debt outweighs all that we produce. Greed made off of debt. WOW! This is unsustainable. It's non-exportable. We're stuck with it. It cannot be sold except back to the taxpayers. The shysters took no personal responsibility---Anonymous. You make me laugh.
As it has been written throughout this blog--privatize the profits; socialize the losses/debt. What a con-job. When Greenspan took the reigns in 1987, our public/private debt was $10.5 trillion. Now it is $48 trillion. Only bobbleheaded neo-cons believe this is consider productivity and a responsible way toward growth. A nation cannot grow with this kind of debt holding it down.
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