Busted: Bankers and The Global Economy

June 27, 2010

Jobs & G20: Budget Slashing Fever & Fantasy

To hear the G-20 proclaim it, the U.S. and other “prime economies” had better slash their budget deficits before the world comes to an end. The U.S. Senate quashes continued aid for the unemployed. Wall Street investment firms and banking succeeds in watering down financial reform. The fantasy continues while economists and politicians worry behind the scenes.  Even VP Joe Biden openly admitted that the United States will not regain the jobs that were lost in the “Great Recession.”

The official jobless rate, projected at below 10%, is pure fiction and must treated as such by those that seek the truth. It doesn’t consider many unemployed people that have dropped off the charts into oblivion. Underemployment is a national plague that the Labor Bureau of Statistics has revealed. Many are the discouraged job seekers and those that have settled for part-time work. The U.S. Labor Department shows that there are 79 million men in America between the ages of 25 and 65. Nearly 18 million of them, a record 22%, are out of work. This doesn’t include the underemployed. The impact is larger in African-American men.

The financial markets, like the government lawmakers, could care less about the deficit. Perhaps they should. As a result, investment rates in bonds is down. Almost all of them ignore engineered inflation which pays off central bankers to the tune of about 10% yearly, the real loss in buying power for the nation. In the meantime, the official inflation rate is a “convenient” 3% most years. Powers that be project an inflation rate 2.3% yearly for the next 30 years. Dreamland. Because of what is really a stagflation economy, falling prices and deflation of the dollar are more likely.

Wall Street and multinational capitalism seems to be in robust condition, to the cost of everyone but them. Corporate profit margins have reached record levels at 36% as the average American is short circuited entirely. These profits have never been so high since record keeping began. These figures are much the same as they were in the Reagan administration.

More than half of the national budget funds defense (don’t forget the wars), national debt interest and Social Security/Medicare. Politicians are eyeballing cuts on the latter, often silent as a senior political voice fades away. Don’t kid yourself. You’ll pay for seniors and the disabled one way or the other. Don’t kid yourself about the other major expenses either. Meanwhile, the national budget has climbed steadily for decades in the 6% to 10% range, much higher than the professed inflation rate.

There are no easy answers beyond beginning to live within our means as a nation. For years, Americans had forgotten about this necessity, encouraged by the system to spend endlessly, until the recession hit us between the eyes. Only bankers, multinationals and Wall Street have profited in their own economic bubble. Government has forgotten what economic balance and locally productive jobs mean, threatening to destroy their own system of weights and balances with unfettered spending and wars overseas, designed to keep terrorist attacks overseas and out of America. We have created our own reality. Are we willing to change?

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May 8, 2009

The New Brand of Corporatism: Unemployment

unemployedThe fruits of the ‘new brand’ of corporatism have squarely placed the nation and world where it is today. Corporate cheerleaders and government experts are now combining forces to create a new outlook that fully accepts policy of the last few decades. For many decades, government has quietly adjusted record keeping to massage public statistics.  Once again, corporatism and a fully complicit government is seeking to adjust the future of the United States by redefining full employment. This vanity seeks to install the idea that we don’t need economic health or reasonable employment to enjoy record profits or the ideal of prosperity. If we can’t have prosperity the way the leaders of corporatism want, they will simply redefine that definition of prosperity to fit their own mold while continuing to blow their own horns.

The experts want the nation to bite off on the notion that “post-recession America” will be stressed with high unemployment even after the good times return. Good times for who? Obviously, the outlook of good times without a sizable portion of the United States participating involves only the outlook of corporate bodies and the capability of maintaining or promoting profits for the structure of the current system in place. The economy of the whole of the nation isn’t being considered, at least not realistically.

unemployment4Millions of jobs have vanished forever. Most will find it harder than ever to get hired again. The idea is being promoted that we will be required to accept lower earnings and a diminished economic role in the country as the rich get richer and the poor and disenfranchised fall off the economic map and into government assistance. As it stands approximately 54% of America that is employed is paying for the rest of America’s unemployed, disabled, retired and imprisoned.

unemployed1The ‘new brand’ of corporatism considers that employment has nothing to do with economic prosperity. Politicians and ‘economic corporatists’ console themselves and hopefully the populace by stating that the natural rate of unemployment neither accelerates or decelerates inflation.  They want us to accept a markedly higher ‘natural rate’ of unemployment by disassociating employment from the economy.

All this is drizzled by the news media with the admission that there is no relief in sight for the unemployed. By the admission of many, like Laurence Ball, it will be a long time before the nation sees 5 percent unemployment rates.

Then the media fully deploys the most heinous part of the corporate plan. The more time that workers spend without a job, the less attractive they become. Why? Ostensibly because the unemployed are not keeping up with ‘new technology’. This skewed outlook of corporatism is expected to keep the unemployment rate elevated. In the same breath, the experts say that the unemployed become discouraged and change lifestyle. Corporatism has dealt America a very nasty blow indeed and isn’t finished yet. Should Americans continue to bite off on the same old political and social wisdom of the past? We have a right and the privilege to reinvent ourselves. I encourage you to get on the road to reinventing yourself and standing on your own two feet without being dependent on corporatism. Otherwise, you have very little to look forward to beyond spending endless amounts of cash on dubious college training to continue to tickle corporatism’s insane fancies. ~ E. Manning

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

January 27, 2009

U.S. Unemployment Reality

John Williams, founder of Shadow Government Statistics, calculates that the jobless rate is a full 10 percent higher than the government is reporting.

Unemployment: Jiggering with Accounting

Unemployment: The Skinny about Obama’s Stimulus

June 26, 2008

More Jobless Bankers Set to Hit Job Market

Citigroup Inc., one of the larger international bank holding companies, will cut 10 percent or about 6,500 of the jobs in its investment banking division here in the States. Citigroup has trimmed more than 350,000 employees around the globe. By the end of March at least 9,000 positions had been cut based on information from the Wall Street Journal.

The Journal voiced that entire trading desks in New York and other cities are expected to be cut and especially hard-hit will be mergers and acquisitions bankers.

Meanwhile, certain investment firms like Stifel Nicolaus and Thomas Weisel are hiring to take advantage of the fire sale of available labor.

Meanwhile, the banking community continues to seek investors in an effort to stop the bleeding from bad securities. State government is piling on as well. California’s attorney general has filed a civil lawsuit against Countrywide Financial claiming the mortgage lender used misleading advertising and other unfair business practices to trick borrowers into taking on risky home loans they didn’t fully understand. Greed and bad business eventually consume the perpetrators. Banking is being forced to look at itself in the mirror.

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