Main Street America's Great Depression Continues
Economics / Great Depression II Jul 11, 2011 - 04:56 AM GMTBy: Stephen_Lendman
Friday's jobs report threw more cold water on so-called recovery. Since 2008, Main Street America's been in Depression.
Conditions have worsened, not improved, because of force-fed austerity, not badly needed stimulus to create jobs, reemploy people, and revive real economic growth, not the illusory kind since the National Bureau of Economic Research (NBER) officially declared June 2009 the end of recession.
At 11:05AM on July 8, Obama commented from the Rose Garden, doing what he does best - dissembling and distorting reality to conceal what's going on and why.
His best shot was saying:
"We still have a long way to go and a lot of work to do to give people the security and opportunity that they deserve."
In fact, since day one in office, he's done precisely the opposite, an agenda still in place. It includes bailing out criminal banks, their complicit counterparties, and other corporate favorites, as well as waging multiple imperial wars. At the same time, he stiff-armed budget strapped states and spurned efforts to create jobs, leaving unemployed Americans largely on their own sink or swim.
His latest excuse is "know(ing) that we'd have ups and downs on our way back from this recession. And over the past few months, the economy has experienced some tough headwinds - from natural disasters, to spikes in gas prices (because markets are manipulated), to state and local budget cuts" that lost jobs because federal aid was cut off when most needed.
Nonetheless, he said "we can make this better." Indeed so, but "we" don't because resources are diverted elsewhere, not where they're most needed, and that pattern will continue unchanged.
On July 8, the Labor Department reported 18,000 new jobs created. Its Household Survey showed 445,000 lost. In fact, the dismal job picture is exacerbated by monthly BLS reports saying:
"The confidence level for the monthly change in total employment is on the order of plus or minus 430,000 jobs."
Emphasize more "minus" than "plus" during hard times.
By reengineering employment data accurately based on how calculated in the 1980s, economist John Williams reported 22.7% unemployed, not the fictitious 9.2%, showing a very sick economy.
The only sensible comments from a Wall Street Journal editorial headlined, "The Jobs Double-Dip" were that:
-- most "Americans believe the economy is still in recession"
-- millions of lost jobs since 2008 haven't been regained; and
-- "Obama's economic advisors have been leaving one by one to return to private life, and who can blame them."
Bloomberg's Timothy Homan quoted Bank of Tokyo-Mitsubishi's chief financial economist Chris Rupkey saying he was "stunned" by Friday's report.
In fact, not a single economist surveyed predicted it. Apologists were everywhere blaming reality on "season adjustments (that are) really hard to predict," according to BLS chief economist Betsey Stevenson, dissembling like Obama along with tout TV experts.
In fact, manipulation distorts numbers more than seasonality. Notably, Zero Hedge.com said total full-time employment is the worst on record since data was first collected 43 years ago, based on Household Survey numbers.
In addition, the employment to population ratio is the lowest since post-war 1940s when far fewer women were employed.
Simply put, conditions are dismally bad, getting worse, but worst of all is yet to come because bad policies assure it.
In his latest economic assessment, Progressive Radio News Hour regular, economist Jack Rasmus, headlined his article, "The Predicted Job Collapse Now In Progress," saying:
Months ago he predicted earlier reported job gains would "collapse....That prediction is now underway," based on July's dismal data.
Aside from manipulated, misreported, falsified figures, Rasmus said analysis for the past four years showed "every spring quarter, April - June, job numbers are distorted and inflated" by the so-called "birth-death model" estimate of net non-reported jobs from new businesses minus losses from others no longer operating. The model, in fact, distorts every month, though perhaps more in Q II.
In each October - December period since 2008, BLS reported job losses, at the same time way understating them. Then in January - March, BLS reversed/manipulated the trend falsely. Inflated numbers, however, don't continue in the summer and fall.
Moreover, "(t)he longer term trend behind the annual (Q I - Q II) inflation, then decline in jobs, is a continuing (job creation) stagnation (ongoing) for at least the past three years." Deteriorating conditions now show a job market "triple dip....having already experienced a second" in summer 2010 when 600,000 were lost.
At issue is administration policy, letting private business create jobs, not government the way New Deal policies effectively worked. At the same time, corporate America's been hoarding cash because expected growth opportunities don't warrant investment.
Small businesses create half or more jobs during good times. However, they need bank loans to expand, but they're not forthcoming. In fact, since 2009, "big banks have been reducing lending to small businesses..almost every month."
As a result, the National Federation of Independent Business (NFIB), "a small business trade group," says they "plan to reduce their hiring," not increase it. In fact, "NFIB's May report showed the worst hiring plans in eight months, trending down since last year and now turning negative - meaning more layoffs than hiring." Moreover, "78% of small businesses still think the US economy is in recession and expect it to continue for another year."
Bottom line:
-- corporate America isn't investing;
-- some sectors (like Wall Street) are shedding jobs or plan to; and
-- small businesses now intend layoffs.
"And there is no indication (that) these conditions are about to significantly change." The only alternative is what should have been done in the first place - "direct government job creation programs."
However, large domestic budget cuts, not stimulus, are planned, and states and local governments have reduced payrolls sharply. "And all this before" major federal and state cuts this fall, assuring further economic erosion, not recovery.
As a result, the jobs picture looks dismal "as government at all levels continue to cut spending." Ahead, expect another million or more public workers to be shed in the next 12 months, besides "700,000" sacked from "June 2010 to June 2011," exacerbating conditions because private sector job creation isn't happening as "(w)e are entering an era of 'negative stimulus.' "
Ongoing bipartisan deficit cutting negotiations plan something on the order of cutting "$3 dollars in spending (for) every tax dollar raised....mostly (slashing) Social Security, Medicare, Medicaid, and government aid to education," the most vital programs to preserve.
In other words, back room deals are dismantling America's social democracy, while assuring largesse for Wall Street, other corporate favorites and war profiteers, continuing America's road to tyranny and ruin.
In fact, Rasmus predicts that the top corporate tax rate will be slashed from 35 - 20%, so for every dollar in tax revenue raised, big business will get back $2 in revenue, courtesy of working household taxpayers.
Over the past three decades, "(t)his political shell game" reduced corporations' tax burden (as a percent of federal revenues) from around 20% to today's average of 10% or less."
Moreover, gaming the system lets companies like General Electric earn billions of dollars in profits, supplemented by billions back in tax rebates.
Meanwhile, global economies are slowing or cratering like Japan, Australia, Greece, Ireland, Portugal, Spain, Italy, Eastern European ones and others. As a result, healthier ones feel the pinch. Consumer spending is affected. Global trade is slowing. So are US manufacturing and service areas.
As a result, "there is no 'light at the end of the economic growth tunnel' for renewed economic or significant job creation from the (US) private sector" to compensate, in part, for continued federal, state and local government job cuts.
It's not hard seeing where this trend is heading. It portends hard times getting harder when many millions already lost jobs, steady incomes, homes and future prospects because governments at all levels plan tougher than ever conditions ahead to transfer more wealth to America's super-rich already with too much.
While millions rage across Middle East, North Africa, and European countries, it's hard understanding why Americans so willingly let corrupt government officials steal them blind and destroy their lives. It's long past time they got mad enough to stop it because nothing will change things otherwise.
By Stephen Lendman
http://sjlendman.blogspot.com
Stephen Lendman is a Research Associate of the Centre for Research on Globalization. He lives in Chicago and can be reached in Chicago at lendmanstephen@sbcglobal.net.
Also visit his blog site at sjlendman.blogspot.com and listen to The Global Research News Hour on RepublicBroadcasting.org Monday through Friday at 10AM US Central time for cutting-edge discussions with distinguished guests on world and national topics. All programs are archived for easy listening.
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