- Sooner or later the usual pundits and "experts"
showing up on tout TV will buckle and admit what honest analysts have been
saying all along:
- America's economy is sick and getting sicker. Since 2008,
working households have struggled through the early stages of a protracted
global depression, getting worse.
- While corporate profits recovered, workers experienced
growing poverty, homelessness, hunger, and high unemployment.
- At the same time, barely more than crumbs were offered
for help. Now ended, austerity cuts are coming, not vitally needed stimulus,
including an effective job creation program. More on that below.
- In times of trouble, alcohol consumption increases. In
fact, Bloomberg News said it's soaring. So are lottery ticket sales, according
to USA Today and firearms purchases at a time more people either feel scared
or very uneasy.
- The latest consumer confidence survey shows why. The
Economist called it "dreadful with the headline figure falling to
a two-year low." It's similar to a late August EU measure, showing
sentiment "experiencing its biggest fall since December 2008."
- The dismal jobs picture explains. Economist David Rosenberg
called August report "horrible." So did economist and regular
Progressive Radio News Hour contributor Jack Rasmus in his latest article
headlined, "August Jobs Report - Worse Than Zero," saying:
- Monthly, the Labor Department releases two reports:
- -- the headline Establishment Report Survey (Current
Employment Statistics - CES), "over-represented by large businesses,"
- -- "the more accurate Current Population Survey
(CPS)", also called the Household Survey.
- CPS "covers small business much better than the
CES," so presents a more accurate jobs picture in its details, beyond
the headline number that fluctuates up and down. In most recent months,
it's mostly pointed south, showing job destruction, not gains.
- Until recently, large companies created modest numbers
of jobs. However, "smaller businesses (are) the source of more than
half of (all) created or lost."
- The latest headline CES number "showed no jobs created
for the month of August. Zero," confirming the dire state of America's
economy on track minimally for "relapse" or considerably worse
because policy measures have done more harm than good.
- CPS numbers best reflect the dire picture. They includes
discouraged workers who've stopped looking and others "converted from
full (to) involuntary part time jobs."
- Its more comprehensive picture also "shows the duration
of the long-term unemployed." In August, it revealed "an alarming
additional 430,000 workers....hired as involuntary part timers, bringing
their total to more than 8.8 million."
- Several points are relevant. Employers are shifting growing
numbers of workers from full to part-time status. It reflects the first
step "many companies take before reverting to direct layoffs in greater
numbers," as occurred in 2008.
- As a result, Rasmus calls "(l)ast month's major
rise in part-time employment (perhaps) the canary in the mineshaft indicating
mass layoffs to come in a few more months," and continuing in 2012.
- Moreover, the 430,000 rise in part-timers "represents
an actual reduction of up to 215,000 jobs, as hundreds of thousands of
workers are converted from" full to part-time status involuntarily.
- Another dangerous trend was the "significant rise
in the number of discouraged and marginally attached workers" in the
past three months, a trend likely to continue.
- Since June, 266,000 workers dropped out, as well as the
430,000 converted to part-time status - clear signs of a deteriorating
labor market heading south.
- Data for employed non-supervisory workers also "shows
their average hourly wage and average weekly pay both declined" in
absolute terms - before inflation impacted them further, especially for
food, energy, medical and transportation costs, among others.
- Obama will shortly announce his fourth job creation plan.
After three previous tries, he struck out. Expect more of the same now,
including tax cuts for businesses already sitting on $2 trillion they won't
spend at a time they're beginning to shed, not add jobs.
- In fact, added handouts may up executive pay and bonuses,
but won't create a single job.
- Other Obama schemes may include corporate tax breaks
for infrastructure development, cutting regulations that do more harm than
good, job destructive trade deals even more counterproductive, and perhaps
other ways to enrich America's aristocracy at the expense of ignored working
- As a result, expect the dire state of working America
to get more dismal ahead, especially because of a bipartisan commitment
for austerity at the worst possible time.
- In a late August report, Rosenberg presented a disturbing
global picture, including:
- -- 0% French GDP Q2 growth, combined with a 0.7% consumer
spending decline, the largest in 15 years and third steepest drop on record;
- -- Australia had its worst employment report in the past
- -- Insolvent banker occupied Greece saw its GDP contract
6.9% at an annual rate;
- -- Hong Kong's GDP dropped 0.5%, its first slippage in
- -- South Korea, Japan and Britain just downgraded their
- -- Bernanke did the same for America;
- -- China's growth is slowing across the board; and
- -- Eurozone industrial output fell 0.7%, the sharpest
drop in a year.
- He also said America's equity market is no higher now
than 12 years ago and employment is stuck at the 2000 level. It's actually
much worse including discouraged workers.
- These numbers, in fact, suggest worse to come later this
year and in 2012. Out in front equity markets signal it, including 25 or
more European, Asian and North and South American ones down over 20% and
- Detroit - Symbolic of Industrial America's Decline
- On July 31, UK Daily Mail writer Peter Hitchens headlined,
"From Motown to Ghost town: How the once mighty Detroit is heading
down a long, slow road to ruin," saying:
- America's earlier industrial hub is in disrepair and
dying. "Detroit is not just fading away gracefully, but noisily sick"
in its death throes, "expiring as spectacularly as it once" thrived.
- Fifty years ago, it was America's fifth largest city
with 1.85 million people. Today, it's 11th ranked with about 700,000. Most
of its "great buildings are ghosts." So are its neighborhoods
in disrepair, decaying and dying.
- Detroit is a testimony to America's decline. It's the
nation's poorest city with unemployment well over 50%, including discouraged
workers. It's where hunger also affects the middle class.
- It's an intensifying crisis getting worse because little
is done, and nothing so far tried has helped.
- In spite of dire conditions nationwide, Obama brazenly
addressed a Detroit Labor Day event, suggesting little will be done to
deal with America's worst employment crisis since the Great Depression.
- Instead of highlighting the dismal state of working America,
he focused on saying the "recovery" wasn't "fully"
complete. At the same time, he admitted that "times are tough,"
no thanks to his destructive economic policies for over two and half years.
- Instead of saying his September 8 address to Congress
will outline significant help coming, he arrogantly claimed credit for
"keep(ing) our teachers on the job," despite continuing huge
nationwide layoffs and his disdain for organized labor.
- He said "(w)e're fighting for health care when you
are sick," when, in fact, Obamacare rations it to enrich insurers,
drug companies, and large hospital chains. He's also working with Republicans
to slash Medicare and Medicaid benefits before taking aim at cutting Social
Security later on.
- With Detroit in its death throes, he claimed the city
"is coming back." He praised his "strong cities" initiative
under which mayors like Detroit's David Bing are "downsiz(ing)"
by cutting services for thousands of residents.
- He claimed he and Republicans are working together "to
solve our problems," when, in fact, everything they've exacerbated
- Overall, he had the audacity to suggest he's helping
working Americans when his policies increased poverty, unemployment, hunger,
despair and anger about political Washington's indifference to their growing
- For the fourth time, Obama's Thursday address to Congress
will explain policy measures similar to past failed ones.
- As a result, expect harder than ever hard times ahead
with working Americans left increasingly on their own, sink or swim because
neither Obama or Congress give a damn enough to help them.
- Stephen Lendman lives in Chicago and can be reached at
- Also visit his blog site at sjlendman.blogspot.com and
listen to cutting-edge discussions with distinguished guests on the Progressive
Radio News Hour on the Progressive Radio Network Thursdays at 10AM US Central
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