Why Isn’t Our Economy Getting Better?

WASHINGTON — The U.S. economy grew at a much slower pace this spring than previously estimated, mostly due to the largest surge in imports in 26 years and a slowdown in companies’ restocking of goods.

Can the average American even come up with an accurate definition of our economic condition? Are we in a “Recession” or a “Depression?” What is the difference? Who can tell us? None of the Political Talking Heads are telling for one simple reason: There is not a universally agreed upon definition of the term “Economic Depression”. If you ask 100 different economists to define the terms recession and depression, you would get at least 100 different answers.

The renowned financial publication The Economist reports that, based on the characteristics of the current financial crisis, the U.S. is in a depression, not a recession. The Economist says a “Depression” …… “is the result of a bursting asset and credit bubble, a contraction in credit, and a decline in the general price level.”

The standard newspaper definition of a “Recession” is a decline in the Gross Domestic Product (GDP) for two or more consecutive quarters. This definition is unpopular with most economists as it does not take into account the changes in the unemployment rate or consumer confidence.

So after reading and hearing all this economic analysis mumbo-jumbo in the news for the past three years, trying to find out when our economy will improve, and realizing that we’re entering into our 3rd year of this economic freefall, I find myself asking “When will it all end? When will things begin to improve?” I remember in early 2008 the Talking Heads were telling us we would see significant improvement in our economy in the later half of that year. However, since then things have only become worse.

Now I’ve decided to take a look at the situation through my own eyes, activate a little common sense, and come up with my own analysis. The facts and findings I came up with are really quite simple:

1. In the United States over 2.5 million homes have been foreclosed on since this current economic condition began in 2007. That’s more than 3 times as many as were foreclosed on during the Great Depression of the 1930′s. The Talking Head’s officially state that the United States has a current 9.6% unemployment rate. I find it interesting that this “released figure” has always held itself steady for the past 3 years at just under 10%. The Talking Heads know that if a 10% or more figure is announced, it would undoubtedly cause uneasiness and perhaps pandemonium amongst the minions.

But realistically, this fictitious unemployment rate doesn’t include the millions of independent contractors and self employed Americans who have gone belly up or the millions of Americans who have exhausted their unemployment benefits; those who have fallen out into the streets only to be stepped over and forgotten. And it certainly doesn’t take into account the tens of millions of Americans who are now grossly under-employed, having lost their $50,000.00+/yr. career jobs and have now taken on menial jobs at places like Burger King and Walmart for minimum wage in order to survive, but certainly not earning enough to keep their homes from foreclosure. The Talking Heads don’t include these groups. But if they were factored into the whole unemployment equation, the U.S. unemployment rate would be closer to 25%!

Most Americans have never seen a time of such economic turmoil – and those who have, have only the Great Depression of the 1930′s to compare it to. The rich don’t really care because for most of them, life rolls merrily along under their protective glass bubbles that their disturbing wealth easily affords them.

America has seen several bad economic recessions since the 1930′s but none has ever resulted in an unprecedented 2.5 million home foreclosures and an actual 2 year sustaining unemployment rate of close to 25%, sending the net worth of just about every American imploding. So, is this a recession or a depression? No, this is not a recession. For the past several years we have been living through The Great American Depression II!

But the question remains. WHY is our economy NOT getting better? Is there hope? Can we ever come out of this? My answer: Yes, and yes.

Published economist reports for the past two years have been predicting an economic turnaround “very soon”, usually termed as “later this year” based on their latest findings and predictions. With most of us not being economists and not fully understanding the inner workings of why our economy crashed to begin with, we take these words of false hope and put faith in them.

But from a common sense approach, anyone can understand that the economy will improve once people get back to work again; when they are gainfully employed. We are all waiting for that day to come. But my question is, where will these jobs come from? Most of the lost jobs in this country didn’t happen due to “temporary layoffs”. They occurred due to thousands of American companies, mainly manufacturing companies, closing down permanently.

98 out of 100 of the top U.S. markets posted declines in manufacturing jobs over the past decade.

It wasn’t long ago that every city in America housed manufacturing plants that supplied thousands of jobs for the community. Today, however, almost every one of these factories have been closed due to American corporate giants outsourcing their production to overseas manufacturing plants, most notably, China.

In China, workers get paid a fraction of what American workers get (or got). So simple math spells out huge profits for corporate giants like Walmart, Target, et al. As American corporate greed accelerates, more manufacturing jobs continue to go overseas and more and more American factories are closing, permanently laying off millions of workers. 3.5 million manufacturing jobs have been lost this decade! Where will all of these laid off workers go back to work when this recession/depression ends?

I’m told that the job market is shifting now with the computer age. We are all told that standard manufacturing jobs are being replaced with new high tech jobs. So everyone is waiting for these new jobs to appear. But again, my common sense tells me that in order for these new high tech jobs to materialize, there must be a demand for the technology, the software and the computers. And I’m not talking about PC’s. The type of tech jobs that are mentioned are jobs that huge corporations will offer in helping run big business including manufacturing factories. However, there ARE no more factories! There is no demand for high tech computer systems, therefore there will be little, if any, high tech jobs to replace the lost manufacturing jobs!

The jobs aren’t coming back

Americans still believe that this is an ordinary recession and things will improve — it is a Depression that has not been publicly recognized by the people in power. There is still faith in capitalism as an economic system. Yet, tools which have worked in the past, like low interest rates, are no longer working. Low interest rates are helping mega banks that can borrow for 0% but are devastating to ordinary Americans who are penalized for any savings.

Obama has declared many times that things are improving, when they are not, which makes him economically impotent and unable to lead. He will certainly lose re-election and be replaced with another GOP clown — probably Jeb Bush.

Workers need aggressive collective bargaining but almost no progress is being made. America has a crushing and accelerating national debt. Corporations control the government and elections making reform impossible. And the reason it will be a long time before things begin to get better (if ever) is because there are still too many people who are doing ok and are not worried about the people who are not; eventually, everybody will be worried about the people who are suffering.

Our only hope:

The only way to get American workers back to work is to have jobs for them. Jobs are becoming fewer and fewer with each passing month. And as long as all of our jobs have been taken from us and given to other countries, things cannot improve! The only way to reestablish our employment standard is to stop the corporate greed and return the manufacturing jobs back into this country. How can that happen? Perhaps the only way is to get the political jackasses to impose heavy tariffs on all imported goods. Such heavy tariffs would require retail giants such as Wal-Mart to pay heavily to get their cheap slave labor goods into this country, the same way we all have to pay tariffs (or duty) taxes on goods and gifts we buy overseas when we’re on vacation and want to bring them home with us.

Every product that is imported for the infrastructure project means a watering down of the stimulus impact of the dollars spent. You can’t put people to work in American factories that don’t exist. A true national recovery effort would mean re-industrialization, on a grand scale and a green model, through massive direct federal creation of state-owned industries independent of the finance capitalists who murdered American manufacturing and then blew up their own businesses on Wall Street.

But this is already nearly impossible, since the political forces have been committed to saving the banking class through unlimited infusions of public money, and then allowing these reborn zombies to resume their roles as lords of development. The bankster parasites have neither the capacity nor the intention to build anything other than mountains of debt for the rest of us. Therefore, the political forces’ partnership with them spells doom for national recovery.

It must be made clear to these greedy bastards, “If you want to forsake the American workforce for your own personal gain, then a heavy price will be imposed in order for you to bring the slave labor goods into this country”. If the tariffs are imposed, the greedy corporations would no longer have incentive to have their goods manufactured overseas. The outcome would result in American manufacturing becoming more economical again. The American factories could re-open and the millions of laid-off manufacturing workers could go back to work and become prosperous again.

Americans need to vote out the current self-serving political Talking Heads who simply don’t care about the masses of unemployed people in this country. We need to elect or appoint a completely new breed of leaders who are aware of the problem and are competent enough to do what it will take to correct it! This is a common sense issue people! Greedy American corporations AND our own greedy political leaders have sold out the heart and soul of America, which was our industrial infrastructure, for their own personal gain! We need a new breed of leaders to reverse this soon or our economy and our once great country will fail!

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Obama’s New Job Plan

Obama’s $830 billion economic stimulus package was approved by Congress in February, 2009. The package was designed to quickly jumpstart economic growth, and save between 900,000-2.3 million jobs. The result after 2+ years? Nothing. In fact the economy has gotten worse and continues to decline.

Nowhere in that Stimulous package was there anything addressing the core issue of our economic meltdown which is our nearly non-existent U.S. Industrial Production.

As my previous post “Crippled Economy – No end in sight” clearly points out, the economic woes of the U.S. are due to lack of employment, no jobs. And the reason there are no jobs in America is because virtually all of our manufacturing infrastructure has moved overseas.

Since 2001, the nation has lost more than 3.5 million manufacturing jobs and more than 1 million professional service and information sector jobs. Various independent estimates indicate the number of white-collar jobs lost to shipping work overseas over the past few years is in the hundreds of thousands and millions are at risk in the next five to ten years. Increased overseas outsourcing also undermines wages and working conditions in those jobs left behind and threatens the long-term health of the economy.

Manufacturing facilities (factories) once existed in virtually every American city, big and small. Jobs were plentiful and diversified. But today, mere ghost towns of boarded up decaying former factories are all that’s left behind to remind us of just how great our country once was.

NAFTA is largely responsible for the shift in manufacturing to overseas production. As I mentioned in my previous post, NAFTA has failed! And until the free trade agreements are torn up or stiff tarriffs are imposed on all imported goods, the U.S. economy cannot improve!

Now Obama has a $440 billion “New Jobs Plan”. But again, within it not one iota of reference is made to the issue of lost manufacturing jobs in America much less a plan to right the wrong. American’s are great people but they are gullible and they apparently forget all too soon. They subscribe completely and follow blindly the corrupt and out of control politicians leading their political parties who are destroying our once great country.

As my previous post says, unless and until someone steps up to the plate and addresses this very crucial issue, not only will America not recover from this terminal economic condition, but we will continue to digress, decline and ultimately fall.

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Crippled Economy – No end in sight

A recent news story read:  “Economists Stunned by Stagnant Economy”.  The story went on to say that economists were “stunned” because their predictions that the economy would be rebounding by the 2nd quarter of 2011 didn’t come true. What were these fools expecting, that the Economy Fairy was going to appear and wave her magic wand? I mean really, what did these jackals think was going to happen by the 2nd quarter of 2011?

Nothing has changed since the 2nd quarter of 2010 or the 2nd quarter of 2009 or 2008! NAFTA is still intact, huge corporations are still manufacturing their goods overseas, no tarriffs have been imposed for foreign made goods being imported from overseas and American factories are all still boarded up. So what would make an economist, or anyone else for that matter expect to see an economic rebound during the 2nd quarter of this year?

No one anywhere is even addressing the source of the problem much less suggesting ways to remedy it. The issue that needs to be addressed is that there are no jobs in America. And there are no jobs in America because factories in the U.S.A have closed down. And these factories didn’t just lay off their workforce temporarily due to a slow-down in the economy, they’ve closed up shop permanently.

There’s not a city in America that didn’t once have factories. Some cities were founded on manufacturing. But today practically every one of these factories have closed down, boarded up and  left to decay. Former industrial areas of America are now literal ghost towns.

Practically all of the USA’s manufacturing infrastructure has transplanted itself overseas, primarily in Asia. NAFTA and other Free Trade Agreements have enabled Corporate America to make record profits by benefiting from slave labor work forces and lax environmental regulation. But no U.S. politician from either Party is mentioning the causes of our crippled economy. Why? Because Corporate America has both political parties in it’s hip pocket by means of mega campaign contributions and other abhorable bribes and payoffs.

The only REAL solution to the massive unemployment we are seeing now must include what is never mentioned in talk about jobs creations in the USA. That would be tearing up our so-called Free Trade Agreements and Favored Nation Status with China, Mexico, etc, and then implementing new tariffs and trade policies that would make it unprofitable for American corporate giants to import goods not manufactured in the USA.

This evisceration of the USA’s manufacturing base was an incredibly short-sighted experiment that has gone on too long and has miserably failed. Protectionism IS a national good when it keeps jobs and the ability to produce our own basic needs here within our own borders. National security depends upon it, and there really is NO other solution that will bring back jobs to the USA without instituting some harsher new trade laws that insist upon production being done HERE in the USA. Only then will we see the boards come off the windows and doors of our factories so our idle work force can begin collecting pay checks again instead of unemployment and welfare checks.

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US Postal Service Hemorraging Cash

The US Postal Service is crying the blues again this year reporting a loss Tuesday of more than $2 billion over the first three months of this year (2011) and warning it could be forced to default on federal payments.

Where do I begin with my thoughts on this. We hear this every year from the USPS that they’re billions of dollars deeper in debt. The Postal Service lost $2 billion for the first quarter of this year (2011) while FedEx earned a $380M profit and UPS reported a $980M profit for the same time period, both of whom provide almost identical services that the US Postal Service provides.

Here’s a quote from an actual ex-employee of the United States Postal Service:

“I am a retired Mail Handler from Lansing, Michigan. My opinion is the postal Service has the most MORONIC and WASTEFUL people running it. Ninety Percent of management people could be eliminated and the place would run smoother. despite managements stupidity, clerks, Carriers, and Mail Handlers have kept that sinking ship afloat but having overpaid bosses that don’t care, the moral of everyone deteriorates. It’s a hopeless sinking ship”

The Postal Workers Union demanded and received content in their contract that “prohibits layoffs” and guarantees a 3 1/2% annual raise through 2015 regardless of economic factors and conditions such as a stagnant cost of living period. This is on top of C.O.L.A adjustments. Basic wages for Postal clerks and carriers is over $50,000.00/yr with many after so many years of service receiving over $80k/yr. and recieving the best health insurance and retirement benefits known to man, which boosts the average annual income of postal workers to well over $150k/yr.

Postmaster General John Potter’s base salary climbed to $265,000.00 last year from $186,000 in 2007. He also received a performance bonus of $135,000. I want to know what the hell he did to get a “performance bonus”?! In all his total compensation — salary, bonuses, retirement benefits and other perks — topped $850,000.00!

Personally, I don’t use the USPS unless I absolutely have to, and we all do because of their monopoly on letter delivery which prohibits private enterprisse competition. And despite having that monopoly, it still can’t make it profitable.

Upon walking into any Post Office, take notice and you’ll see the lethargic, often unkempt slobs behind the counter looking like it takes great effort just to fuction. The clerks are unfriendly, often rude, and they don’t care if the line of people extends out the door, there is absolutely no incentive for them to be efficient, friendly or expedient. Their union contract guarantees them a job for life with no way of getting laid off or fired so efficiency is not even a thought in their heads.

I’ve noticed most Post Offices usually stink inside of stuffy air, the floors are filthy, pens attached to chains are often missing or out of ink, and regardless of how many service windows there are, invariably there are rarely more than 2 open. I’ve found the best time to go to the Post Office is 15 minutes before they close because the over paid giant sloths come to life in an incredible way around that time, wanting to deplete the line of people so they can get out of there by quitting time.

You see the same slothful, inefficiencies at any DMV office or any other government office for that matter. A bunch of lazy, dumpy looking overpaid slobs not giving a frogs ass about efficiency and having not an ounce of incentive to perform on any level except watching the clock.

FedEx, UPS, DHL and all the other private courier services have proven there are profits to be made in this industry. If the private companies were allowed to compete with basic letter delivery, even at .44 per letter, I assure you these companies would make good profits considering the sheer volume of letters per year which are in the billions.

Take notice the next time you go to a UPS, FedEx or DHL delivery office. You’ll see friendly, efficient and clearly competent employees getting you in and getting you out in a hurry. Take a look at the driver of the next UPS truck you see. He/she will be cleanly dressed, usually always in good physical shape and impeccably courteous and efficient often sprinting from the truck to the door to deliver the package, which is in sharp contrast to the classic slow moving mail trucks driven by some fat slob just trying to kill time til his shift ends.

UPS, FedEx and DHL drivers start out in the morning with a truckload of parcels that must be delivered that day. That’s why it’s not uncommon to see these delivery vehicles still on the road making deliveries well past 7-8:00 PM, whereas the overpaid buffoon mail truck drivers quit at 4:00PM regardless if their truck is empty or half full. There’s no incentive whatsoever for them to perform.

When will we learn that the Federal Government cannot handle or manage money much less manage and operate a business. Every agency that the government is running is hemorrhaging colossal amounts of money and is hopelessly in the red such as Social Security and Medicare to name just two.

There is no emphasis on quality control or customer service on any level of government services. And until we reform our stale patterns of thinking and break away from the 2 party self serving political system and start electing people for our leaders who’s true objective is to reform our system, our economic ship will continue to sink.

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The Real Estate Recovery

To put it bluntly, the real estate market cannot get back on track as long as there are foreclosed homes all across America being sold for pennies on the dollar, bringing the value of median home prices down. There are so many defaulted mortgages that have resulted in foreclosures and short-sales that it has affected the overall condition of our economy. In a significant way, we have a colossal Catch-22 situation going on.
How did it all start? Who is to blame? Let’s start with the Bush Administration’s idea of the “American Dream Down Payment Act” of 2003. That’s what lit the fuse for the disaster that followed. With this Act, basically anyone who could fog a mirror qualified for a mortgage. There were even methods around having to make down payments and closing costs for most.

Banks soon began seeing the value of writing mortgages in sheer volume which, on paper, appeared to show huge profits. It was then big banking greed that took over from there. I remember seeing billboards along I-75 in Southwest Florida in 2005 stating “Think you can’t afford a million dollar home? Think again!” Banks were financing high end million dollar plus homes to basically anyone who wanted one, with ridiculously top heavy Jumbo Loans and impossible Adjustable Rate Mortgages which, in many cases, were constructed whereby payments would quadruple after 24-48 months leaving the homeowner with an inevitably impossible situation.

It wasn’t just limited to high end homes with impossible terms. Average people buying average homes were affected too. It became very disheartening for families who bought a median priced home, ranging approximately $200,000.00 in 2003 to find out 3 years later that the value of their home was now about half of what they paid for it. Due to the real estate down spiraling,  millions of jobs were lost in the finance, real estate and construction industries. Incomes had ceased for many Americans. Millions of mortgages were quickly in default.

Again, Bush, a man who has now proven himself to be nothing more than a functioning moron, came up with yet another ingenious plan. Bank bailouts! Any bank that wanted money to cover their greedy mistakes got all they needed. And there were practically no conditions set to qualify for this money. I would think that a mandate should have been invoked in that any bank who accepts bail out money must place an immediate moratorium on foreclosures, and all existing mortgages in default must be recalculated and re-written. In other words, it should have been a condition that if we bail the banks out, then the banks must in turn bail out the poor homeowners to prevent them from losing their homes.

Instead, the banks got all the money they needed, after which they began the biggest wave of home foreclosures in American history! For the past 3 years home foreclosures exceeded the year before. The banks took their bailout money and socked it away and then began yanking homes out from under American families who fell victim to the fractured economy. Banks are taking these foreclosed homes and selling them for pennies on the dollar, causing every other home in America to plummet in value. In perspective, why should a prospective home buyer pay full market price for your home if the one just down the street is selling as a foreclosure for about half the price?

So with all their losses made up for by bailouts, any money that banks get for these foreclosures is just gravy money for them. The banking industry is the only industry in America that has profited so heavily from this recession/depression, and they will continue to do so! 2010 had more foreclosures than the preceding two years and 2011 will see more yet. The housing disaster has affected every industry in America and there is no end in sight. So, unless and until the federal government steps in and forces these banks to cease foreclosing on American homes and begin rewriting existing mortgages, the real estate market will not only not improve, but will only continue to get worse.

 

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Aggressive Driving

Almost daily I read in the news about police stepping up action against “aggressive drivers”. For years I’ve been saying that “aggressive driving” is only a symptom of the underlying problem. In my opinion,“aggressive driving” in 80% of cases is simply people who are on a time schedule, such as trying to get to work on time, making attempts to get around the arrogant jackasses cruising at or below speed limit in the left hand passing lane on the highways.

These people take it upon themselves to set the speed limit at whatever speed they deem proper thereby impeding the flow of traffic and preventing anyone from passing them. On Interstate highways it’s rare for police to ticket anyone traveling 5-10 mph over the speed limit, yet these left lane road hogs persist in lollygagging in the left lane clogging the flow of traffic.

As taught in all Driver Education classes, one of the rules of the road is “keep right except to pass”. Many states have signs posted on the highways stating this. Yet police don’t enforce this law. Instead, they go after the people who out of necessity and sheer frustration perform risky maneuvers (labeled aggressive driving) in trying to get around these arrogant slobs who hold up the flow of traffic by driving slow in the hammer lane!

This problem is widespread and constant and getting worse. If the cops would smarten up and realize that “aggressive driving” is the symptom/result of people breaking the law of “keep right except to pass” and begin aggressively ticketing these left lane hogging jackals who “fail to keep right”, the “aggressive driving” aspect of the situation would dramatically diminish.

So come on law makers and enforcers, “aggressive driving” is not the problem, it’s a symptom of the problem. Let’s work on eliminating the problem!

 

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dusty frank ~

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