Busted: Bankers and The Global Economy

January 31, 2009

Unemployment and Government Stimulus

economic-ideaAs Digital Economy has previously noted, the heralded stimulus plan is mostly a safety net for government services, government jobs and the disadvantaged, including the recently unemployed. What is the current ‘$825 billion’ stimulus plan going to do for the recent numbers of jobless Americans?

• $43 billion for increased unemployment benefits. Weekly benefits will go up by $25 a week and the amount of time the unemployed may claim them will be extended by at least 20 weeks, plus another 13 weeks for those in high-unemployment states.

• $39 billion for expanded health care benefits for the unemployed. The federal government will reimburse states to extend Medicaid coverage for the jobless through Dec. 31, 2010. For those who want to keep their old employer’s insurance plan, the government will subsidize their Cobra payments – paying 65% up to 12 months. Cobra eligibility will be extended for some groups of workers.

• $20 billion to increase food stamp payments by 13%. For a family of four, that means an average increase of $79 a month – from $588 now to $667 if the current legislation passes.

internet-personal-businessThe largest opportunity for economic growth, especially for small business and the individual in these times, remains on the internet segment of the digital economy. In other words, Americans need to get creative and found a personal small business based on solid business principles while employing creativity. I am not referring to internet hype or ‘affiliate business’ that has become the rage and plague of the internet. The fact remains that you cannot depend on Wall Street or Main Street Corporate America for your livelihood. Counter to the intuition of business activity and the economy, the internet remains a bright spot for many, Amazon.com among them. ~ E. Manning

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January 7, 2009

Federal Reserve Declares Deep Contraction

unemployment-ads2008 ended with an economic whimper mostly because of huge and underestimated American job losses, resulting in further economic collateral damage. Retirement savings that millions have poured their souls into have lost substantial value. At the December FOMC meeting, the Fed spent a considerable amount of time mourning and recounting the flailing job market and resulting economic damage.

What has really garnered attention is their revised picture regarding economic expectations for 2009. The economic gross national product is expected to fall much more sharply in the first half of 2009 than previously anticipated by the Fed. They expect a slow recovery of GDP over the remainder of the year depending on the political stimulus “from monetary and assumed fiscal policy actions.” That is “Greek” for government intervention.

“GDP was projected to decline for 2009 as a whole and to rise at a pace slightly above the rate of potential growth in 2010.” In economics, economic growth or economic growth theory often refers to growth of potential output or production at full employment, which is caused by growth in aggregate demand or observed output. Since all the relevant figures are skewed, the Fed’s statement is pretty much meaningless as far as content, but is designed to inspire hope in the psychological realm.

wealth destruction

wealth destruction

Americans are taking a beating where their personal wealth is concerned. Interbank lending and bank lending in general remains frozen, the system continues as broken, a creation of the unprecedented greed and misuse of the economic system during the Bush administration as they cheered on the economic boom as true prosperity. Instead, the boom years of the Bush administration has proved to be a manipulation of the system for corporate and personal goals by those in power without supervision and little regulation.

The problem of transparency continues to be the single major issue in all finances across the board. However, the process of making the financial process more transparent will put someone in more control, with the potential to not only to observe and manipulate, but profit directly from the any new process of transparency. Additional transparency creates power for the administrative body that deals with transparency issues, likely creating a fascist influence. The Federal Government isn’t likely to jump at the task of dealing with the prospect of increased transparency that is being heralded. Congress has proved that they don’t really deal with the reality of money.

The process and the profit from any additional transparency will likely fall to the Federal Reserve, a corporate body with their own profit and global agenda: a brotherhood of central bankers. They have received the power so far because of the lack of discipline and direction offered by U.S. government officials, whether executive or legislative. ~ E. Manning

November 9, 2008

American Job Crisis Solution

cash needed, not corporate bailoutsEver since job losses followed by consumer consumption hit the red zone 10 months ago, the American job crisis has worsened. What gets the most attention is still retail sales, the prospect of Big Business and consumer consumption. Every measure of economic growth is measured on that consumption. In that light, there is little hope for quick results beyond drawing unemployment unless you are willing to look for small business opportunities.

Big Business is awash in crisis amid sagging numbers. Instead of focusing on lazy investors with big pocketbooks looking for investments, consider the small businessman rising to the challenge to spark innovation and a stronger economy. Investors should look at investing in themselves for their growth.

Look to spend what hard-earned dollars you have with small business, even on the internet to support the small business that builds your economy and families like yours. Vote your confidence with your wallet. Big Business is or will be sucking down huge volumes dollars in the hopes of bailing out millions of jobs in the next few months, mostly in the auto industry for cars that nobody wants. What will done with all those cars? Hopefully, they will either sell them at fire sale prices for impoverished Americans that need them, but can’t afford them or they will resell them as next year’s model. American automakers can’t afford to be choosy with taxpayer dollars. Big business needs to be giving back in spades for taxpayer bailout money received. Forget the meager interest payments Americans will never see. The American citizens need a real boost, especially among the harder hit elderly and lower to middle income. Americans need solutions, not corporate bailouts for stupid decision-making. ~ E. Manning

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