Robert Reich, former Labor Secretary and known Liberal, writes on his blog, “The economy is still in the gravitational pull of the Great Recession. All the booster rockets for getting us beyond it are failing”.
Looks like at least some Liberals are starting to “get it”.
Home sales are down. (New home sales, the lowest in recorded history!) Retail sales are down, and factory orders suffered their biggest decline since March of last year. So what are we doing about it? "Less than nothing," says Reich on his blog.
For the second time in two years, Arnold Schwarzenegger has ordered most state workers' pay cut to the federal minimum wage because lawmakers missed their deadline to fix the state's $19 billion budget deficit. The Legislature's failure to act has left the state without a spending plan as the new fiscal year begins. Other states are approaching this Greek-style debacle.
Total nonfarm payroll employment declined by 125,000 in June. About a million Americans have COMPLETELY dropped out of the job market over the past two months. That is the only reason why the statistical unemployment rate is not soaring to a post-war high, and is stuck in the 9.5% range. Let’s not forget that it takes 125,000 real new jobs every month – just to keep up with population growth. The latest "job creation" numbers were something like 82,000! Stimulus, my butt!
Let’s deal with reality: the US is still trapped in depression after a full 18 months of virtual zero interest rates, quantitative easing, and huge fiscal stimulus (mostly directed in all the wrong places) that has pushed the budget deficit to unsustainable levels. Keynes must be rolling his eyes and giggling from the grave!
In order to finance this huge gap between federal income and spending, the Obama administration will mostly follow the path of the previous administrations, and it is expected that outstanding public debt will reach some $18.5 trillion by 2020, essentially doubling in a decade, which equates to more than 100% of GDP by the numbers of today.
This approaches the astronomical values registered in Japan since the aftermath of the 1989 stock market crash. In case you don’t remember, the Japanese economy subsequently went nowhere for the next 10 or 11 years. Clearly, based on recent experiences in the EU, this is completely, utterly unsustainable.
The count of people who are unemployed but not receiving a check is now something like 9.2 million.
On Friday, Jacques Cailloux from RBS put out a "double-dip alert" for Europe. "The risk is rising fast. Absent an effective policy intervention to tackle the debt crisis on the periphery over coming months, the European economy will double dip in 2011," he said. Notice how Mr. Cailloux refers to the "European Economy" in the same sense as one would describe the "American Economy". What it really is, however, is a collection of member states in various stages of fiscal stability, all sharing a single currency - to the great alarm of some of them. The decision to have a single Euro fiat currency could very well have been one of the great financial blunders of the last 100 years.
The current occupant of the White House claims to know how to create jobs. He claims jobs have been created. This is the same fellow who recently preached “recovery” in Racine – which has a 14% unemployment rate!
Meanwhile, the government has kept the union workers of GM and Chrysler employed (with taxpayer money), made sure that most government employee union members got their annual raises for sleeping on the job (with taxpayer money). And Obama has made sure that major campaign contributors collected billions off government stimulus (with taxpayer money). Fannie and Freddie ( thanks in part to our friends Barney Frank and Chris Dodd) with billions pouring into the Bailout Black Hole (again, at taxpayer expense). This printing of huge quantitities of money and shoveling it into the gaping mouths of failed zombie institutions does nothing. They just keep coming, with their arms outstretched, "Feed Me!" It would be cleaner to just flush all this money down the toilet! Dismantle the Zombies, sell off their parts, and let them finally die.
ESPN Zone just closed all their restaurants across the country. If they can't make it selling cheap food and beer with 100 big screens blaring every sporting event on the planet to a sports-crazy society, we are in trouble.
Small businesses don't have the power to impose taxes or print money. So unlike government, we'll just have to cut employees and run lean and mean – or go out of business.