By Robert Reich
opednews.com
June 9, 2011 at 23:23:37
"I am concerned about the fact that the recovery that we're on is not producing jobs as fast as I want it to happen," President Obama said Tuesday, amid the flood of bad economic news, including last Friday's alarming jobs report.
Does this mean we're about to see a bold package of ideas from the White House for spurring growth of jobs and wages? Sadly, it doesn't seem so.
Obama says he's interested in exploring with Republicans extending some of the measures that were part of that tax-cut package "to make sure that we get this recovery up and running in a robust way."
Accordingly, the White House is mulling a temporary cut in the payroll taxes businesses pay on wages. White House advisers figure this may appeal to Republican lawmakers who have been discussing the same idea. It would, in essence, match the 2 percent reduction in employee contributions to payroll taxes this year, enacted as part of the deal to extend the Bush tax cuts.
Other ideas under consideration at the White House include a corporate tax cut, accompanied by the closing of some corporate tax loopholes.
Can we get real for a moment? Businesses don't need more financial incentives. They're already sitting on a vast cash horde estimated to be upwards of $1.6 trillion. Besides, large and middle-sized companies are having no difficulty getting loans at bargain-basement rates, courtesy of the Fed.
In consequence, businesses are already spending as much as they can justify economically. Almost two-thirds of the measly growth in the economy so far this year has come from businesses rebuilding their inventories. But without more consumer spending, businesses won't spend more. A robust economy can't be built on inventory replacements.
The problem isn't on the supply side. It's on the demand side. Businesses are reluctant to spend more and create more jobs because there aren't enough consumers out there able and willing to buy what businesses have to sell.
The reason consumers aren't buying is because consumers' paychecks are dropping, adjusted for inflation. And job losses are mounting. The 83,000 new private-sector jobs created in May represent a net loss because 125,000 jobs are needed merely to keep up with an expanding labor force. The number of Americans filing new claims for unemployment benefits edged higher last week.
At the same time, many Americans are falling behind in their mortgage payments. And housing prices continue to drop -- making homeowners feel even poorer.
Close to 60 percent of the half-trillion drop in household debt since the depth of recession has been defaults rather than repayments. This makes it harder for people who'd like to enter the housing market to get new mortgage loans, or for anyone to refinance. Other consumer debt burdens are rising. On Tuesday the Fed reported consumer credit outstanding rose in April -- mostly from record-high levels of student-loan debt and an up-tick in credit-card borrowing due to food and gas price increases outpacing wage gains.
All this translates into a continuing crisis on the demand side. Consumers can't and won't buy more. Between January and March, sales grew just .15 percent around the country -- perilously close to no growth at all. May sales look even worse. Chain stores are reporting weaker sales. Consumer confidence has dropped sharply.
How to get jobs back, then? By reigniting demand. Put more money in consumers' pockets and help them renegotiate their mortgage loans.
For example: Enlarge the payroll tax break for workers -- not just for employers. Exempt the first $20,000 of income from payroll taxes for a year. Create a WPA for the long-term unemployed. Allow distressed homeowners to declare bankruptcy on their primary residences, thereby giving them more clout with lenders to reorganize their mortgage loans. Lend federal money to (rather than bail out) states and cities that are now firing platoons of teachers, fire fighters, and other workers because state and local coffers are empty.
But we're not hearing any of these sorts of demand-side solutions from the White House. In seeking Republican votes, Obama is putting forth Republican supply-side ideas -- lowering the employer costs of hiring, cutting corporate taxes -- that have nothing to do with this demand-side crisis. He may attract some Republican votes for these, but what's the point if they're irrelevant to the real problem?
The President's putative embrace of the false notion that businesses need more financial incentives in order to hire also risks giving legitimacy to other Republican supply-side nostrums being pushed by House Republicans and GOP presidential aspirants. On Tuesday, Tim Pawlenty called for lower taxes on corporations (down to 15 percent from the current 35 percent), and lower taxes on the rich (to 25 percent from the current 35). Newt Gingrich wants to lower corporate income taxes to 12.5 percent and eliminate the estate tax altogether. And so on.
Better that the President advance ideas that work, and go to battle over them.
Supply-side economics doesn't work. It's been tried for 30 years, to no avail. And now, when our continuing economic crisis is so palpably being driven by inadequate demand, it's more bogus than ever.
The last thing we need is for the President to go over to the supply side.
Friday, June 10, 2011
Thursday, June 9, 2011
Bilderberg Dam Broken
Plutocratic Puppeteers Meet In Switzerland For Annual Bilderberg Conference
Saman Mohammadi
Infowars.com
June 9, 2011
It is that time of the year again, when the Bilderberg group meet to commit treason against humanity, democracy, and freedom. These Wolves of the West are converging to discuss just about everything related to your world such as how to manage the global economy, who to select to head the IMF, whether to raise gas prices or not, what to do with Greece and other collapsing EU nations, and if a world war should be started this year or the next.
If the Western plutocratic elite had a Mount Olympus, Bilderberg would be it. This year they are meeting in St. Moritz, Switzerland from June 9 – June 12.
Amongst their ranks are various banking chiefs, corporate CEOs, heads of states, finance ministers, newspaper editors, aspiring political leaders, intellectuals, all of whom believe a global dictatorship is better suited to meet many of the world’s current challenges and crises than democratic governments.
What sets them apart from you and I is they have mega-wealth and mega-power, and also a complete disdain for the masses of the world. They like to play god with nations and influence world events to their favor because they believe they have a monopoly in wisdom. What they care about is not saving the planet and helping people, but gaining more power to control humanity and history.
Top Bilderberg conspirators are full-blown sociopaths and parasites like Henry Kissinger and David Rockefeller who believe people deserve to be treated like slaves. If it was up to them they would get rid of billions of human beings on this planet to make managing the world a little bit easier for them. They also want to do away completely with Western democracies, the social safety net, and turn Western nations into large urban ghettos, similar to third world nations.
Good works are done in the open, and in front of public scrutiny. Evil is done in the dark. That is why Bilderberg attendees are very camera shy. Like vampires, they hate the light. Public attention means death to their treason and war against democracy and freedom. They’re scared that people will find out that they are part of a treasonous global agenda to manipulate mass opinion, and implement a global totalitarian state in order to rule the world.
If they fail they will be prosecuted and hanged for crimes against democracy, crimes against humanity, and crimes against the peace. If they succeed they will gain the world and be the keepers of mankind’s destiny as we enter a new era for our species.
“Power,” said Samuel P. Huntington, “remains strong when it remains in the dark; exposed to the sunlight it begins to evaporate.” For decades the Bilderberg vampires made public policy and instituted grand designs for Europe and North America from behind the scenes. The European Union was their pet project in the 1950s. But now, thanks to a new generation of journalists and global activists, their days in the dark are coming to an end.
Many years ago, veteran reporter Jim Tucker was alone in the struggle to expose the Bilderberg conspirators and document their abuse of power. He is still on the scene today. On Monday he spoke with Alex Jones about what the Bilderberg are planning to do with their power in the months and years ahead.
Ending world poverty is not on the Bilderberg’s corrupt agenda. Eradicating disease is not one of their policy goals. Peace in the Middle East is not in the interest of Bilderberg traitors. They want global chaos, wars, economic depressions, mayhem, and mega destruction on the planet.
These freaks gain power and wealth by profiting off of the suffering of others. They do not care about human happiness or using their power and authority to raise people above poverty. War is good business for them. Peace means declining profits and less power. So this Western power elite does everything in its power to create and increase tensions between nations instead of bringing together heads of states to brainstorm peaceful and just solutions to wars.
Once they generate global chaos and create global crises such as new wars their political lackeys who operate on the ground level sell their “high-minded” solutions to the people. These solutions are anti-freedom in nature and benefit only them and their monopolies, such as a global dictatorial government and a global currency.
Time will tell if the Bilderberg’s global empire of hell and slavery will become a historical reality. There is mounting resistance coming from below all across the world. For the first time in its history the Bilderberg conference is being reported in the mainstream press. Their epic treason against mankind is no longer going unnoticed.
Either sunlight and death awaits the Bilderberg vampires, or this evil clan of war profiteers, criminal banksters, power mongers and charlatans will achieve total power and total control over humanity.
____________________________________________________
Breaking: Secret Bilderberg Agenda Leaked by Mole
Kurt Nimmo
Infowars.com
June 8, 2011
Alex Jones and Infowars.com have received inside information regarding the Bilderberg agenda now unfolding in the idyllic Swiss countryside.
According to AFP journalist and legendary Bilderberg sleuth Jim Tucker’s inside sources, the agenda now under review includes a number of critical issues at the top of the elite’s to-do list. These breakdown as follows:
The elite are concerned that the American Congress may soon turn against the illegal and immoral invasion under humanitarian cover by NATO and the UN against the north African dictator Moammar Gaddafi.
As columnist Patrick Buchanan noted yesterday, Congress is rising in opposition to bogus wars launched by the executive branch in violation of the Constitution.
“Last week, House Speaker John Boehner had to scramble to cobble up a substitute resolution to prevent half his GOP caucus from joining with Democrats to denounce President Obama’s war in Libya as unconstitutional and to demand a total U.S. pullout in 15 days,” Buchanan wrote.
More than a third of House Republicans voted to pull out of the NATO coalition attacking Gaddafi’s forces, in essence forcing a NATO withdrawal from the color revolution engineered civil war in that country.
In January, former oil industry pastor Lindsey Williams revealed that his inside sources said oil prices will skyrocket – a fait accompli with gas prices at the pump now at historically high levels – as the global elite work behind the scenes to take take down national economies. Williams appeared on the Alex Jones Show to talk about new revelations that deal with the death of the dollar, exploding energy prices, and the engineered onset of order out of chaos revolution worldwide.
The elite now meeting behind closed door in the Switzerland are pushing for a wider war and incalculable suffering in the Middle East.
The money masters have long profited from war and mass murder. Nathan Rothschild made a financial bet on Napoleon at the Battle of Waterloo and while also funding the Duke of Wellington’s peninsular campaign against Napoleon. The House of Rothschild financed the Prussian War, the Crimean War and the British attempt to seize the Suez Canal from the French and also financed the Mexican War and the Civil War in the U.S.
In addition to worrying about Congress waking up to the Libyan scam, the global elite is also concerned about a diverse liberty movement that has grown exponentially with the help of an open and free internet.
In response, the pocketed pawns in Congress have introduced a raft of bills over the last few months designed to take down the internet and blunt its impact as a medium for alternative news and information.
On April 1, 2009, the Senate introduced two bills, endangering a free and open internet: S. 773: Cybersecurity Act of 2009 and S. 778 to establish a White House cybersecurity czar.
In addition, on September 20, 2010, S. 3804: Combating Online Infringement and Counterfeits Act (COICA) was introduced.
Early last month, an especially ominous bill was introduced in the Senate. Entitled Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property Act of 2011, PROTECT IP for short, this legislation would use copyright infringement as a smoke screen to take down web domains and institute rolling censorship.
On the international front, the European Commission gave a nod toward implementing the Anti-Counterfeiting Trade Agreement (ACTA), a draconian measure that will subvert national sovereignty, trash Net Neutrality, consumer privacy, and civil liberties. In the United States, the corporate media has virtually ignored ACTA, but then key players in the Mockingbird media are often Bilderberg attendees and privy to aspects of the agenda.
The above represent a small sampling of legislation and treaties that will be used to shut down the opposition under the cover of protecting copyright and preventing terrorism.
Hyperventilating over exaggerated threats of cybersecurity, Senator Jay Rockefeller mused during a congressional meeting on cyber crime and terrorism in 2009: “It really almost makes you ask the question would it have been better if we had never invented the internet.”
The globalists are not opposed to the internet, especially as a corporatized money-making instrument. They are, however, opposed to an open, free, and unregulated by government internet where alternative media opposed to their globalist devices are allowed to thrive.
In addition, we can expect minions of the global elite who parade around as our elected representatives and appointed government officials to continue their propaganda efforts to convince the American people that the internet will be used as a terrorist weapon of mass destruction and as such needs to be tightly regulated – for our own safety, of course, and that of the children.
Finally, the Bilderbergers will work on an effort to sucker an already economically besieged American public into further fantastic debt producing bankster bailouts, specifically for Greece, Ireland, Portugal, and other member EU nations sliding toward bankruptcy and social disruption on a monumental scale.
In late 2010, the U.S. Treasury, now operating as a liaison between the government and the bankster owned private Federal Reserve, indicated it was ready to fork over billions more to the European black hole.
“There are obviously some severe market problems,” said a faceless bureaucrat, speaking on condition of anonymity. “In May, it was Greece. This is Ireland and Portugal. If there is contagion that’s a huge problem for the global economy.”
As of late 2010, the IMF, whose biggest single “shareholder” (read: parasitical host) is the United States, has committed 250 billion euros to the bankster engineered black hole.
“Why should American taxpayers be on the hook because a foreign government cannot cover its debts?” asked Rep. Ron Paul, R-Texas, at a House subcommittee hearing last May.
Because the plan is to take down national sovereignty, impose drastic austerity measures, hold fire sales on national assets, consolidate wealth and power, and use an endless economic crisis as an excuse to usher in world government, a one-world currency, and a sprawling high-tech police state
Saman Mohammadi
Infowars.com
June 9, 2011
It is that time of the year again, when the Bilderberg group meet to commit treason against humanity, democracy, and freedom. These Wolves of the West are converging to discuss just about everything related to your world such as how to manage the global economy, who to select to head the IMF, whether to raise gas prices or not, what to do with Greece and other collapsing EU nations, and if a world war should be started this year or the next.
If the Western plutocratic elite had a Mount Olympus, Bilderberg would be it. This year they are meeting in St. Moritz, Switzerland from June 9 – June 12.
Amongst their ranks are various banking chiefs, corporate CEOs, heads of states, finance ministers, newspaper editors, aspiring political leaders, intellectuals, all of whom believe a global dictatorship is better suited to meet many of the world’s current challenges and crises than democratic governments.
What sets them apart from you and I is they have mega-wealth and mega-power, and also a complete disdain for the masses of the world. They like to play god with nations and influence world events to their favor because they believe they have a monopoly in wisdom. What they care about is not saving the planet and helping people, but gaining more power to control humanity and history.
Top Bilderberg conspirators are full-blown sociopaths and parasites like Henry Kissinger and David Rockefeller who believe people deserve to be treated like slaves. If it was up to them they would get rid of billions of human beings on this planet to make managing the world a little bit easier for them. They also want to do away completely with Western democracies, the social safety net, and turn Western nations into large urban ghettos, similar to third world nations.
Good works are done in the open, and in front of public scrutiny. Evil is done in the dark. That is why Bilderberg attendees are very camera shy. Like vampires, they hate the light. Public attention means death to their treason and war against democracy and freedom. They’re scared that people will find out that they are part of a treasonous global agenda to manipulate mass opinion, and implement a global totalitarian state in order to rule the world.
If they fail they will be prosecuted and hanged for crimes against democracy, crimes against humanity, and crimes against the peace. If they succeed they will gain the world and be the keepers of mankind’s destiny as we enter a new era for our species.
“Power,” said Samuel P. Huntington, “remains strong when it remains in the dark; exposed to the sunlight it begins to evaporate.” For decades the Bilderberg vampires made public policy and instituted grand designs for Europe and North America from behind the scenes. The European Union was their pet project in the 1950s. But now, thanks to a new generation of journalists and global activists, their days in the dark are coming to an end.
Many years ago, veteran reporter Jim Tucker was alone in the struggle to expose the Bilderberg conspirators and document their abuse of power. He is still on the scene today. On Monday he spoke with Alex Jones about what the Bilderberg are planning to do with their power in the months and years ahead.
Ending world poverty is not on the Bilderberg’s corrupt agenda. Eradicating disease is not one of their policy goals. Peace in the Middle East is not in the interest of Bilderberg traitors. They want global chaos, wars, economic depressions, mayhem, and mega destruction on the planet.
These freaks gain power and wealth by profiting off of the suffering of others. They do not care about human happiness or using their power and authority to raise people above poverty. War is good business for them. Peace means declining profits and less power. So this Western power elite does everything in its power to create and increase tensions between nations instead of bringing together heads of states to brainstorm peaceful and just solutions to wars.
Once they generate global chaos and create global crises such as new wars their political lackeys who operate on the ground level sell their “high-minded” solutions to the people. These solutions are anti-freedom in nature and benefit only them and their monopolies, such as a global dictatorial government and a global currency.
Time will tell if the Bilderberg’s global empire of hell and slavery will become a historical reality. There is mounting resistance coming from below all across the world. For the first time in its history the Bilderberg conference is being reported in the mainstream press. Their epic treason against mankind is no longer going unnoticed.
Either sunlight and death awaits the Bilderberg vampires, or this evil clan of war profiteers, criminal banksters, power mongers and charlatans will achieve total power and total control over humanity.
____________________________________________________
Breaking: Secret Bilderberg Agenda Leaked by Mole
Kurt Nimmo
Infowars.com
June 8, 2011
Alex Jones and Infowars.com have received inside information regarding the Bilderberg agenda now unfolding in the idyllic Swiss countryside.
According to AFP journalist and legendary Bilderberg sleuth Jim Tucker’s inside sources, the agenda now under review includes a number of critical issues at the top of the elite’s to-do list. These breakdown as follows:
The elite are concerned that the American Congress may soon turn against the illegal and immoral invasion under humanitarian cover by NATO and the UN against the north African dictator Moammar Gaddafi.
As columnist Patrick Buchanan noted yesterday, Congress is rising in opposition to bogus wars launched by the executive branch in violation of the Constitution.
“Last week, House Speaker John Boehner had to scramble to cobble up a substitute resolution to prevent half his GOP caucus from joining with Democrats to denounce President Obama’s war in Libya as unconstitutional and to demand a total U.S. pullout in 15 days,” Buchanan wrote.
More than a third of House Republicans voted to pull out of the NATO coalition attacking Gaddafi’s forces, in essence forcing a NATO withdrawal from the color revolution engineered civil war in that country.
In January, former oil industry pastor Lindsey Williams revealed that his inside sources said oil prices will skyrocket – a fait accompli with gas prices at the pump now at historically high levels – as the global elite work behind the scenes to take take down national economies. Williams appeared on the Alex Jones Show to talk about new revelations that deal with the death of the dollar, exploding energy prices, and the engineered onset of order out of chaos revolution worldwide.
The elite now meeting behind closed door in the Switzerland are pushing for a wider war and incalculable suffering in the Middle East.
The money masters have long profited from war and mass murder. Nathan Rothschild made a financial bet on Napoleon at the Battle of Waterloo and while also funding the Duke of Wellington’s peninsular campaign against Napoleon. The House of Rothschild financed the Prussian War, the Crimean War and the British attempt to seize the Suez Canal from the French and also financed the Mexican War and the Civil War in the U.S.
In addition to worrying about Congress waking up to the Libyan scam, the global elite is also concerned about a diverse liberty movement that has grown exponentially with the help of an open and free internet.
In response, the pocketed pawns in Congress have introduced a raft of bills over the last few months designed to take down the internet and blunt its impact as a medium for alternative news and information.
On April 1, 2009, the Senate introduced two bills, endangering a free and open internet: S. 773: Cybersecurity Act of 2009 and S. 778 to establish a White House cybersecurity czar.
In addition, on September 20, 2010, S. 3804: Combating Online Infringement and Counterfeits Act (COICA) was introduced.
Early last month, an especially ominous bill was introduced in the Senate. Entitled Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property Act of 2011, PROTECT IP for short, this legislation would use copyright infringement as a smoke screen to take down web domains and institute rolling censorship.
On the international front, the European Commission gave a nod toward implementing the Anti-Counterfeiting Trade Agreement (ACTA), a draconian measure that will subvert national sovereignty, trash Net Neutrality, consumer privacy, and civil liberties. In the United States, the corporate media has virtually ignored ACTA, but then key players in the Mockingbird media are often Bilderberg attendees and privy to aspects of the agenda.
The above represent a small sampling of legislation and treaties that will be used to shut down the opposition under the cover of protecting copyright and preventing terrorism.
Hyperventilating over exaggerated threats of cybersecurity, Senator Jay Rockefeller mused during a congressional meeting on cyber crime and terrorism in 2009: “It really almost makes you ask the question would it have been better if we had never invented the internet.”
The globalists are not opposed to the internet, especially as a corporatized money-making instrument. They are, however, opposed to an open, free, and unregulated by government internet where alternative media opposed to their globalist devices are allowed to thrive.
In addition, we can expect minions of the global elite who parade around as our elected representatives and appointed government officials to continue their propaganda efforts to convince the American people that the internet will be used as a terrorist weapon of mass destruction and as such needs to be tightly regulated – for our own safety, of course, and that of the children.
Finally, the Bilderbergers will work on an effort to sucker an already economically besieged American public into further fantastic debt producing bankster bailouts, specifically for Greece, Ireland, Portugal, and other member EU nations sliding toward bankruptcy and social disruption on a monumental scale.
In late 2010, the U.S. Treasury, now operating as a liaison between the government and the bankster owned private Federal Reserve, indicated it was ready to fork over billions more to the European black hole.
“There are obviously some severe market problems,” said a faceless bureaucrat, speaking on condition of anonymity. “In May, it was Greece. This is Ireland and Portugal. If there is contagion that’s a huge problem for the global economy.”
As of late 2010, the IMF, whose biggest single “shareholder” (read: parasitical host) is the United States, has committed 250 billion euros to the bankster engineered black hole.
“Why should American taxpayers be on the hook because a foreign government cannot cover its debts?” asked Rep. Ron Paul, R-Texas, at a House subcommittee hearing last May.
Because the plan is to take down national sovereignty, impose drastic austerity measures, hold fire sales on national assets, consolidate wealth and power, and use an endless economic crisis as an excuse to usher in world government, a one-world currency, and a sprawling high-tech police state
Wednesday, June 8, 2011
QE2 Has Failed. Time To Move On
By Mike Whitney
June 06 2011 "Information Clearing House" -- Was Friday's job's report the final nail in the coffin for QE2?
It should be. After all, how is Fed chairman Ben Bernanke going to convince people that his bond purchasing program is working when payrolls rose by a measly 54,000 and the unemployment rate climbed back to 9.1 percent? It'll take a lot more than fast-talk to sell that load of horse-manure. The truth is, QE2 has been a total bust and the BLS's report is just the icing on the cake. Just look at the data; it's as grim as anything we've seen in the last two years. Here's a clip from an article titled "Disastrous US jobs report points to deepening slump" that will give the reader some idea of how bad things really are:
"The Economic Policy Institute (EPI), a liberal Washington think tank, explained Friday that the official unemployment figure masked an even grimmer reality. It pointed out that the labor force participation rate remained at its lowest point of the recession and that the labor force in May was smaller than it was a year ago, by about 500,000 workers, even though the working-age population grew by 1.9 million in that period.
“Consequently,” it noted, “the proportion of the population that is in the labor force is now 0.7 percentage points below where it was a year ago. If the labor force participation rate had held steady over the last year, there would be roughly 1.8 million more workers in the labor force right now. Instead, they are on the sideline. If these workers were in the labor force and were counted among the unemployed, the unemployment rate would be 10.1 percent right now instead of 9.1 percent. In other words, the improvement in the unemployment rate over the last year (from 9.6 percent to 9.1 percent) is due to would-be workers deciding to sit out the economic storm”. ("Disastrous US jobs report points to deepening slump", World Socialist Website)
So, the only reason the stats look as good as they do (which isn't very good at all) is because people are throwing in the towel and calling it "quits" altogether. So much for the American dream, eh?
And there's an interesting twist to the BLS report that readers may not have noticed. The reason the jobs picture is so bleak, is because the "austerity crazed" government has been laying people off while the economy is still struggling which is making things even worse. This is from the Streetlight blog:
"The government sector of the economy continued to make the jobs picture worse. May was the seventh month in a row during which government layoffs undid some of the work of the private sector in creating jobs. Since January 2009, government employment has shrunk in 21 of 29 months -- and without temporary hiring for the Census, it would probably have shrunk in 25 of the last 29 months.
This steady reduction in government employment is a form of contractionary fiscal policy.....If government employment were simply keeping up with population growth in the US, we would expect to see about 17 to 18 thousand more state and local government jobs each month. Instead employment has shrunk by an average of 15 thousand jobs per month since the start of 2009....
In other words, in the absence of the sharp cutbacks in government spending that have been prevalent in the US over the past year or two, about 1.3 million additional people would be working now compared to 8 months ago, rather than the actual job growth we've experienced over that time of about 1 million - a 30% difference. That's a pretty tough headwind to fight, especially for an economy that's already struggling." ("Contractionary Fiscal Policy and the US Job Market", The Streetlight blog)
So, if the government hadn't been foolishly slashing jobs in the middle of a Depression, 1.3 million more people would still be working today. How's that for shooting yourself in the foot? Remember, the easiest way to prime the pump is to make sure that people aren't fired during a slump. That's Rule #1. But, of course, the deficit hawks have already won that scrimmage, so it's probably pointless to even talk about it.
And this isn't just about employment either; it's about distribution, too. As economist David Rosenberg points out in a recent post at Zero Hedge "the labor share of national income has fallen to its lowest level in modern history - down to 57.5% in the first quarter from 57.6% in the fourth quarter of last year, 57.8% a year ago, and 59.8% when the recovery began."
What does that mean? It means all the gains in productivity are going to the fatcats in the front office while workers are scraping by on fewer and fewer crumbs. It means working people are getting reamed again bigtime.
But, then, Bernanke promises to level the playing field with QE2, right? Everyone who wants a job will be able to find one and it'll be Happytime in America again. At least, that's what he intimated in his op-ed in the Washington Post before the program kicked off in November. Here's an excerpt:
"The Federal Reserve's objectives ---- are to promote a high level of employment and low, stable inflation.....Low and falling inflation indicate that the economy has considerable spare capacity, implying that there is scope for monetary policy to support further gains in employment without risking economic overheating.....the Federal Reserve has a particular obligation to help promote increased employment..... Steps taken this week should help us fulfill that obligation." ("What the Fed did and why: supporting the recovery and sustaining price stability", Ben Bernanke, Washington Post)
So, has QE2 lowered unemployment?
Nope.
Reduced spare capacity?
Not much.
Increased inflation?
Slightly.
So, it was all baloney; QE2 didn't really do anything except send gas and food prices skyrocketing. (which has further crimped consumption)
But that's not how Bernanke sees it. According to him the program has worked spectacularly. Here's the Fed chief crowing about the miraculous effects of QE2:
“Equity prices have risen significantly, volatility in the equity market has fallen, corporate bond spreads have narrowed, and inflation compensation ...has risen to historically more normal levels.” (Bloomberg)
Yipee. Another freebie for the investor class! And we're supposed to be grateful for that? What about the jobs you promised? What about stimulating the economy and putting people back to work? Wasn't that how you sold QE2 to the American people in your op-ed, Mr. Bernanke?
It was all lies. Every word of it. Here's how Cullen Roche sums it up over at Pragmatic Capitalism:
"QE2 didn’t monetize anything. It didn’t cause the money supply to explode. It didn’t really do anything except cause a great deal of confusion and generate an enormous amount of speculation in financial markets that now appears to be contributing to turmoil and strife around the globe......
Where we saw a real impact was in commodity prices, general price speculation and the financing pyramid.....Rates have meandered up and down and up and down without a care in the world for the Fed’s $600B purchase program. In other words, the program had no impact on rates." ("The QE3 conundrum", Pragmatic Capitalism)
QE2 has been a total flop. The rise in stock prices was a reaction to the temporary increase in corporate earnings which fueled investor optimism. That was a one-time deal caused by trimming expenses and laying off workers. Now production costs are rising at the worst possible time, when all the other economic indicators are beginning to sag. Current data shows weakness throughout the economy, which is why stocks are falling. Expect the worst.
Bad ideas have a way of outlasting their shelf-life. (Especially when people in positions of power have ulterior motives.) Quantitative easing should be put to rest once and for all. It hasn't lowered interest rates, increased GDP, boosted employment, or sparked another credit expansion. The plan has failed. Time to move on.
June 06 2011 "Information Clearing House" -- Was Friday's job's report the final nail in the coffin for QE2?
It should be. After all, how is Fed chairman Ben Bernanke going to convince people that his bond purchasing program is working when payrolls rose by a measly 54,000 and the unemployment rate climbed back to 9.1 percent? It'll take a lot more than fast-talk to sell that load of horse-manure. The truth is, QE2 has been a total bust and the BLS's report is just the icing on the cake. Just look at the data; it's as grim as anything we've seen in the last two years. Here's a clip from an article titled "Disastrous US jobs report points to deepening slump" that will give the reader some idea of how bad things really are:
"The Economic Policy Institute (EPI), a liberal Washington think tank, explained Friday that the official unemployment figure masked an even grimmer reality. It pointed out that the labor force participation rate remained at its lowest point of the recession and that the labor force in May was smaller than it was a year ago, by about 500,000 workers, even though the working-age population grew by 1.9 million in that period.
“Consequently,” it noted, “the proportion of the population that is in the labor force is now 0.7 percentage points below where it was a year ago. If the labor force participation rate had held steady over the last year, there would be roughly 1.8 million more workers in the labor force right now. Instead, they are on the sideline. If these workers were in the labor force and were counted among the unemployed, the unemployment rate would be 10.1 percent right now instead of 9.1 percent. In other words, the improvement in the unemployment rate over the last year (from 9.6 percent to 9.1 percent) is due to would-be workers deciding to sit out the economic storm”. ("Disastrous US jobs report points to deepening slump", World Socialist Website)
So, the only reason the stats look as good as they do (which isn't very good at all) is because people are throwing in the towel and calling it "quits" altogether. So much for the American dream, eh?
And there's an interesting twist to the BLS report that readers may not have noticed. The reason the jobs picture is so bleak, is because the "austerity crazed" government has been laying people off while the economy is still struggling which is making things even worse. This is from the Streetlight blog:
"The government sector of the economy continued to make the jobs picture worse. May was the seventh month in a row during which government layoffs undid some of the work of the private sector in creating jobs. Since January 2009, government employment has shrunk in 21 of 29 months -- and without temporary hiring for the Census, it would probably have shrunk in 25 of the last 29 months.
This steady reduction in government employment is a form of contractionary fiscal policy.....If government employment were simply keeping up with population growth in the US, we would expect to see about 17 to 18 thousand more state and local government jobs each month. Instead employment has shrunk by an average of 15 thousand jobs per month since the start of 2009....
In other words, in the absence of the sharp cutbacks in government spending that have been prevalent in the US over the past year or two, about 1.3 million additional people would be working now compared to 8 months ago, rather than the actual job growth we've experienced over that time of about 1 million - a 30% difference. That's a pretty tough headwind to fight, especially for an economy that's already struggling." ("Contractionary Fiscal Policy and the US Job Market", The Streetlight blog)
So, if the government hadn't been foolishly slashing jobs in the middle of a Depression, 1.3 million more people would still be working today. How's that for shooting yourself in the foot? Remember, the easiest way to prime the pump is to make sure that people aren't fired during a slump. That's Rule #1. But, of course, the deficit hawks have already won that scrimmage, so it's probably pointless to even talk about it.
And this isn't just about employment either; it's about distribution, too. As economist David Rosenberg points out in a recent post at Zero Hedge "the labor share of national income has fallen to its lowest level in modern history - down to 57.5% in the first quarter from 57.6% in the fourth quarter of last year, 57.8% a year ago, and 59.8% when the recovery began."
What does that mean? It means all the gains in productivity are going to the fatcats in the front office while workers are scraping by on fewer and fewer crumbs. It means working people are getting reamed again bigtime.
But, then, Bernanke promises to level the playing field with QE2, right? Everyone who wants a job will be able to find one and it'll be Happytime in America again. At least, that's what he intimated in his op-ed in the Washington Post before the program kicked off in November. Here's an excerpt:
"The Federal Reserve's objectives ---- are to promote a high level of employment and low, stable inflation.....Low and falling inflation indicate that the economy has considerable spare capacity, implying that there is scope for monetary policy to support further gains in employment without risking economic overheating.....the Federal Reserve has a particular obligation to help promote increased employment..... Steps taken this week should help us fulfill that obligation." ("What the Fed did and why: supporting the recovery and sustaining price stability", Ben Bernanke, Washington Post)
So, has QE2 lowered unemployment?
Nope.
Reduced spare capacity?
Not much.
Increased inflation?
Slightly.
So, it was all baloney; QE2 didn't really do anything except send gas and food prices skyrocketing. (which has further crimped consumption)
But that's not how Bernanke sees it. According to him the program has worked spectacularly. Here's the Fed chief crowing about the miraculous effects of QE2:
“Equity prices have risen significantly, volatility in the equity market has fallen, corporate bond spreads have narrowed, and inflation compensation ...has risen to historically more normal levels.” (Bloomberg)
Yipee. Another freebie for the investor class! And we're supposed to be grateful for that? What about the jobs you promised? What about stimulating the economy and putting people back to work? Wasn't that how you sold QE2 to the American people in your op-ed, Mr. Bernanke?
It was all lies. Every word of it. Here's how Cullen Roche sums it up over at Pragmatic Capitalism:
"QE2 didn’t monetize anything. It didn’t cause the money supply to explode. It didn’t really do anything except cause a great deal of confusion and generate an enormous amount of speculation in financial markets that now appears to be contributing to turmoil and strife around the globe......
Where we saw a real impact was in commodity prices, general price speculation and the financing pyramid.....Rates have meandered up and down and up and down without a care in the world for the Fed’s $600B purchase program. In other words, the program had no impact on rates." ("The QE3 conundrum", Pragmatic Capitalism)
QE2 has been a total flop. The rise in stock prices was a reaction to the temporary increase in corporate earnings which fueled investor optimism. That was a one-time deal caused by trimming expenses and laying off workers. Now production costs are rising at the worst possible time, when all the other economic indicators are beginning to sag. Current data shows weakness throughout the economy, which is why stocks are falling. Expect the worst.
Bad ideas have a way of outlasting their shelf-life. (Especially when people in positions of power have ulterior motives.) Quantitative easing should be put to rest once and for all. It hasn't lowered interest rates, increased GDP, boosted employment, or sparked another credit expansion. The plan has failed. Time to move on.
Subscribe to:
Posts (Atom)