No Depression

The Blaze:

50 Facts About The U.S. Economy That Will Shock You
Posted on December 18, 2011 at 3:55pm by Becket Adams

“Even though most Americans have become very frustrated with this economy, the reality is that the vast majority of them still have no idea just how bad our economic decline has been or how much trouble we are going to be in if we don’t make dramatic changes immediately,” writes The Economic Collapse (TEC).

For those unfamiliar with this site, TEC is an economic blog that regularly compiles a comprehensive list of the most startling and unsettling facts about the U.S. economy.

Why? Because Americans need to understand that U.S. economy is precariously balanced on the edge of full-blown collapse.

“If we do not educate the American people about how deathly ill the U.S. economy has become, then they will just keep falling for the same old lies that our politicians keep telling them. Just ‘tweaking’ things here and there is not going to fix this economy,” the site explains.

Indeed, America’s economic situation has become increasingly unstable. However, what’s arguably more disconcerting than the state of the U.S. economy is the fact many Americans are largely–if not completely–unaware of just how serious things have become.

“America is consuming far more wealth than it is producing and our debt is absolutely exploding,” TEC explains. “If we stay on this current path, an economic collapse is inevitable. Hopefully the crazy economic numbers from 2011 that I have included in this article will be shocking enough to wake some people up.”

It might behoove Blaze readers to share the facts listed below with family and friends.

“If we all work together, hopefully we can get millions of people to wake up and realize that ‘business as usual’ will result in a national economic apocalypse,” writes TEC.

Here are the 50 economic numbers from 2011 that will shock you (via The Economic Collapse):

1. A staggering 48 percent of all Americans are either considered to be “low income” or are living in poverty.

2. Approximately 57 percent of all children in the United States are living in homes that are either considered to be “low income” or impoverished.

3. If the number of Americans that “wanted jobs” was the same today as it was back in 2007, the “official” unemployment rate put out by the U.S. government would be up to 11 percent.

4. The average amount of time that a worker stays unemployed in the United States is now over 40 weeks.

5. One recent survey found that 77 percent of all U.S. small businesses do not plan to hire any more workers.

6. There are fewer payroll jobs in the United States today than there were back in 2000 even though we have added 30 million extra people to the population since then.

7. Since December 2007, median household income in the United States has declined by a total of 6.8 percent once you account for inflation.

8. According to the Bureau of Labor Statistics, 16.6 million Americans were self-employed back in December 2006. Today, that number has shrunk to 14.5 million.

9. A Gallup poll from earlier this year found that approximately one out of every five Americans that do have a job consider themselves to be underemployed.

10. According to author Paul Osterman, about 20 percent of all U.S. adults are currently working jobs that pay poverty-level wages.

Read more »

The Great Depression And Today's Ailing Economy

In the January 2012 edition of Vanity Fair, Joseph E. Stiglitz writes the following:

...For the past several years, Bruce Greenwald and I have been engaged in research on an alternative theory of the Depression—and an alternative analysis of what is ailing the economy today. This explanation sees the financial crisis of the 1930s as a consequence not so much of a financial implosion but of the economy’s underlying weakness. The breakdown of the banking system didn’t culminate until 1933, long after the Depression began and long after unemployment had started to soar. By 1931 unemployment was already around 16 percent, and it reached 23 percent in 1932. Shantytown “Hoovervilles” were springing up everywhere. The underlying cause was a structural change in the real economy: the widespread decline in agricultural prices and incomes, caused by what is ordinarily a “good thing”—greater productivity.

At the beginning of the Depression, more than a fifth of all Americans worked on farms. Between 1929 and 1932, these people saw their incomes cut by somewhere between one-third and two-thirds, compounding problems that farmers had faced for years. Agriculture had been a victim of its own success. In 1900, it took a large portion of the U.S. population to produce enough food for the country as a whole. Then came a revolution in agriculture that would gain pace throughout the century—better seeds, better fertilizer, better farming practices, along with widespread mechanization. Today, 2 percent of Americans produce more food than we can consume.

[...]

The parallels between the story of the origin of the Great Depression and that of our Long Slump are strong. Back then we were moving from agriculture to manufacturing. Today we are moving from manufacturing to a service economy. The decline in manufacturing jobs has been dramatic—from about a third of the workforce 60 years ago to less than a tenth of it today. The pace has quickened markedly during the past decade. There are two reasons for the decline. One is greater productivity—the same dynamic that revolutionized agriculture and forced a majority of American farmers to look for work elsewhere. The other is globalization, which has sent millions of jobs overseas, to low-wage countries or those that have been investing more in infrastructure or technology. (As Greenwald has pointed out, most of the job loss in the 1990s was related to productivity increases, not to globalization.) Whatever the specific cause, the inevitable result is precisely the same as it was 80 years ago: a decline in income and jobs. The millions of jobless former factory workers once employed in cities such as Youngstown and Birmingham and Gary and Detroit are the modern-day equivalent of the Depression’s doomed farmers....

I do not agree with all of Stiglitz's conclusions, particularly in the final section of the article.

But I do think that he's largely correct and onto something that we have been desperately ignoring during this time of our ailing economy.

The coming damage will indeed be huge, and recovery as we want to think of it isn't going to happen.

In other words, for a very long time, if ever, Americans will not return to the standard of living that we had prior to this 21st Century depression (Yes, depression and not recession). And the present generation will not enjoy the same upward mobility and standard of living as previous generations have partaken of since World War Two.

Please take time to read the article. In my view, the article offers an important and ugly reality check: America will not again be what she was. Not in my lifetime. No matter who wins in November 2012.

I'm glad that I'm as old as I am.

Worst Wall Street Thanksgiving Week Since The Great Depression

With a hat tip to Randy's Roundtable:

Yep, the worst Thanksgiving week since the Great Depression.

This debacle is not all Obama's fault, of course. But he DOES own this debacle. The blame-Bush meme is finished. And the blame-the-GOP meme is wearing thinner and thinner.

The Obama Presidency By The Numbers

With a hat tip to Rational Nation USA:


Fact check (dated October 5, 2011):

The Obama administration passed another fiscal milestone this week, according to new data released by the Treasury Department. As of the close of business on Oct. 3, the total national debt was $14,837,099,271,196.71—up about $44.8 billion from Sept. 30.

...[I]n the less-than-three-years Obama has been in office, the federal debt has increased by $4.212 trillion--more than the total national debt of about $4.1672 trillion accumulated by all 41 U.S. presidents from George Washington through George H.W. Bush combined.

[...]

That would equal nearly $53,000 for each American household or more than $66,00 for each full-time private-sector worker....

What is the road out of this mess?

Days of Whine and Rages

I've noticed some curious things of late.

When you have a monthly mortgage your due date is usually the first of the month.

Built into that is usually a 15 day grace period where if you pay the amount within that time frame no fees no penalty no dink on your credit report. In short, no flag no foul no phone calls.

Over the last 3 years during our collective stretches of unemployment my wife and I have still managed to keep the mortgage paid although we have very frequently had to invade that grace period.

And mostly Citibankthebastards left us alone (we'll leave the saga of our HAMP attempt out of this discussion, it's truly Wagnerian).

Recently, however, as the markets have convulsed and gyrated, that has not been the case.

And what has stood out is whenever Citigroup takes a hit in the market or has bad news or press, the next day I surely get a call telling me I'm two or three days into the grace period when do I plan on making payment?

I used to argue with them about it, telling them I'm not past due yet, I'm not delinquent. To which they'd argue but your due date was the first today is the third etc.

Now I just ask them if I'm still in the grace period, they answer yes and I tell them to fuck off and not bother me until I've blown that.

To compound things my credit cards are Citi issued. I don't use them anymore but am still paying on them. Balances got run up because they had to be used during this period for car repairs etc when we didn't have the cash anymore.

And I've kept those paid on time as well. Minimum payments only but paid on time.

Knowing this was going to be a problem sooner or later I called and wanted to work out arrangements. Their credit department told me there was nothing they could do until I was delinquent.

Been to the grocery store lately?

I've been doing the grocery shopping for a bit over two years now. And like everyone else have watched the prices on food go up and up. The 5 for $5 or buy one get one are not much of a bargain anymore, when the one costs nearly as much as two did two years ago. For a coffee addict it has been particularly catastrophic. Terrifying, even.

But something else I've noticed in recent weeks.

Shelves that used to be full no longer are.

I thought it was because people were making a run when they had specials. and in part this is true.

But what I also noticed is during the day, more employees than usual going up and down the aisles with carts pulling the expired products from the shelves.

It has become so bad, at least around here, that people can no longer buy like they used to and the food is expiring before it can be sold.

I haven't yet had the nerve to ask if I could have it if they were just going to throw it away.

I heard a radio broadcast the other day talking about how there is a million home foreclosure backlog on the northeast.

The host went on to say that there are half a million homes in Florida alone like this so he suspects the number is far higher. Closer to four or five million backlog.

Keep all this in mind when you read the Sultan Knish post below. And you should read it all.

What do these young punks on Wall Street have to rage about? What do they know about having to fight with a mortgage company or credit card? What do they know about watching that $10.95 lb can of coffee dwindle to $10.85 for 12oz, then $10.95 for 11oz then $13.95 (!) for 10oz.

What do they know about working 20 years in the same place and suddenly finding yourself without a place at the table? About getting by on 1/3 what you used to make 3 years ago?

When this odyssey started for me three years ago most of these twits were still in their early college years.

A 22 year old raging about the bank bailouts and TARP? She was what, 18, 19, 20, when TARP first went into effect? And it affected her how?

Knish is right. These people are protesting at the wrong place. But more importantly, it is the wrong people protesting.

The right people to be protesting, however, can't. They can't afford the time off of work (if they have a job) or from trying to merely survive and find a job to sit on their asses taking orders from their Ipads and Iphones about where to march when and which cardboard sign to be holding today.

But when the shelves are finally empty because food has expired and been thrown away without being replenished because the groceries can no longer keep up with the losses. . .

Or they can no longer afford a can of beans. . .

Or are a week away from being tossed out in the street. . .

Or can only heat their homes for a few hours a day, and keep the thermostat on 60 at best. . .

Or can no longer keep their job because they can't afford the gas for the daily 2 hour commute. . .

Or can't get help at the food bank because they have run out of food because no one can afford to donate anymore. . .

THEN Barack Obama will see the real days of rage.

Then he'll see who's gone soft and who hasn't.

Then he'll see riot and revolt.

And nothing his teleprompter or Dick Trumka tell him to say will keep it from his door.

And he's going to look at the Wall Street Protests as the Good Old Days.

Go ahead. Make my day.

Continuing Down The Road To Serfdom

Today from CNBC:

No Rise in Home Prices Until 2020: Bankers

Home prices are unlikely to recover before 2020 and mortgage defaults will persist for years, says a survey of bank risk managers out Friday.

The survey conducted by the Professional Risk Managers’ International Association for FICO, found that 49 percent of respondents do not expect housing prices to rise back to 2007 levels for another nine years. Only 21 percent of respondents said they would.

The findings, which authors called “a decidedly pessimistic outlook”, are a sharp reversal from cautious optimism the survey respondents expressed late last year and in early 2011.

In addition, 73 percent of surveyed bankers say they expect mortgage defaults to remain elevated for at least another five years. And 46 percent believe mortgage delinquencies will increase over the next six months.

Only 15 percent of respondents expect mortgage delinquencies to decline during that period.

“While the housing sector will almost certainly gain strength during the next nine years, many bankers clearly believe prices will remain depressed for half a generation,” said Andrew Jennings, chief analytics officer at FICO.

Bankers concerns spread beyond the housing market.

A large number of respondents says they also expect to see an uptick in delinquencies on auto loans, credit cards and student loans....

Let's see....The GDP is in the sewer. And so is the housing market, a primary driver of the American economy.

COKE CEO: CHINA IS MORE BUSINESS FRIENDLY

When will this administration figure it out?

What is it going to take?

Coca-Cola now sees the US becoming a less friendly business environment than China, its chief executive has revealed, citing political gridlock and an antiquated tax structure as reasons its home market has become less competitive.

Muhtar Kent, Coke’s chief executive, said “in many respects” it was easier doing business in China, which he likened to a well-managed company. “You have a one-stop shop in terms of the Chinese foreign investment agency and local governments are fighting for investment with each other,” he told the Financial Times.

In Response To MR's Recent Post

MR posted THIS.

Here in the D.C. area, I've recently noticed something that I haven't seen since the recession first came down on our heads: less traffic on the roads.

I'm not sure when this volume change occurred. Over the summer, I think. Of course, traffic is usually lighter over the summer, so I didn't think much of the ease of traveling then.

But now school has resumed for all in the region. And, still, traffic is perceptibly below the usual levels. This drop cannot be attributed to telecommuting as the level of telecommuting now is the same as it was last May (as far as I know). In spite of the road construction going on, I'm now making my commute to work in less than 15 minutes; last May, my commute took at least 25 minutes.

Just recently, I was astounded when I learned that KFC had closed many of its outlets here in the region. These shutdowns occurred at some point in the last three months.

For the most part, restaurants, high end and medium end, have very little business as of this past summer -- in spite of all the specials and coupon deals.

Office space and retail space is sitting empty all over the place! As our residences -- and in surprising places too, places that usually are snapped up within 48 hours by renters or buyers.

The news keeps saying that we've had bump in the housing market here. But I can tell you for a FACT that the bump in only in certain areas of the D.C. Metropolitan Region: Tysons Corner, most noticeably as the new Metro Rail is getting closer to completion, and Georgetown, as two examples.

Newsflash! Not! The recession didn't end. We're not in a double dip recession. We're in a depression. Frankly, I cannot see a path out of this mess.

Federal Employees

I'm glad that I receive the print edition of the Washington Post because a gem such as the following comes along quite often:

Federal Answers: How would you be affected if you had to pay more into your pension plan?

We asked:
What would be the personal financial impact of President Obama’s call for an increase in contributions by federal employees to their pension plan of 1.2 percentage points?

You said:

I am a federal retiree (37 years of service). Here are my thoughts on the proposals being tossed around regarding federal workers (and retirees), including paying more for retirement.

■We grouse that we are not paid enough; we have to pay too much for health insurance, blah, blah, blah. The truth is: We are at the top of the employment food chain. Where else does one get a pension indexed for inflation, and one for which we pay a pittance? The rule of thumb is that we draw within two and a half years everything we pay in. To date, I have drawn very close to half a million dollars; if I live another 20 years (which is reasonable), I will draw another 1.5 million bucks. Did I “earn” that by anything I did while working for the government. Nope. Should my retirement pay be cut? Yep.

■Why do I have to pay Federal Employees Health Benefits premiums and still have to have Medicare (I did not take Part B)? Why cannot federal retirees at least be given the chance to opt out? And should I pay more for my FEHB plan? Yep.

■So many workers in this country are deeply hurting. One in 6 of us lives in poverty, and still federal workers and their unions . . . moan about how awful the government is to them. Ask any federal retiree, and you will be told something to the effect of “you could cut the federal workforce a good 30 percent and not lose much.” Think of what a money saver that would be.

Charles W. Walton

Contrast the above with this one, which also appears on the same page:

I think the federal workforce has been targeted enough. We took a two-year pay freeze without blinking an eye, but asking us to fund more into our retirement is asking for a pay cut on top of the pay freeze. . . .The FERS retirement system is terrible to begin with in terms of money received after retirement. Paying more for less is asking us federal workers too much.

Where were the overpaid contractors and private industry employees when the economy was robust and the federal workforce just chugged along, making lots less money? They said nothing but collected their large paychecks. Now that the wheels have turned, they want us to sacrifice for their benefit.I’ve been a federal employee for 26 years and plan on retiring in a little over three years, and I feel the public has had their hand in my pocket long enough.

Joe Plunkard

In my view, America is already embroiled in the early stages of class warfare. Frankly, I can't imagine that things will get any better for several years. Resentments are piling up, and, of course, Obama is promoting those resentments via his tax-the-rich theme. Were Americans not patient, we'd already have reaching the tipping point.

Additional statistics HERE, from the Bureau of Labor Statistics. Take a look!

The Irrelevant Obama Presidency

OUCH!

From Dana Milbank in today's Washington Post:

President Obama gave one of the most impassioned speeches of his presidency when he addressed a joint session of Congress Thursday night. Too bad so many in the audience thought it was a big, fat joke.

[...]

Obama rose to the occasion with a bold jobs proposal that delighted liberals but also had elements conservatives grudgingly endorsed. Yet long before the speech, both sides had concluded it didn’t much matter: Obama has become too weak to enact anything big enough to do much good.

“I thought it was a great speech,” said Rep. Steve Cohen (D-Tenn.) But the odds of Obama getting his plan through Congress “are probably as good as the Nationals winning the league this year.”

Presidential addresses to Congress are often dramatic moments. This one felt like a sideshow. Usually, the press gallery is standing room only; this time only 26 of 90 seats were claimed by the deadline. Usually, some members arrive in the chamber hours early to score a center-aisle seat; 90 minutes before Thursday’s speech, only one Democrat was so situated.

[...]

Even a mention of Abraham Lincoln, “a Republican president who mobilized government to build the transcontinental railroad,” brought no applause from the GOP side. Rep. Dana Rohrabacher (R-Calif.) yawned. One unidentified Republican backbencher chose this moment to hold up a sign demanding “Drilling for Jobs.”

So now even Lincoln doesn’t merit Republican applause when Obama invokes his name?...

Government Spending And Jobs

With at hat tip to Randy, the following video rebuts Obama's speech last night:

Happy Labor Day 2011!

With a hat tip to Brooke:


Does the above graphic resonate with you, MR?

Main Street Bank of Texas …. SHRUGS

WSJ:

Main Street Bank lends most of its money to small businesses and is earning decent profits. But the Kingwood, Texas, bank is about to get out of the banking business.

In an extreme example of the frustration felt by many bankers as regulators toughen their oversight of the nation’s financial institutions, Main Street’s chairman, Thomas Depping, is expected to announce Wednesday that the 27-year-old bank will surrender its banking charter and sell its four branches to a nearby bank.

Mr. Depping plans to set up a new lender that will operate beyond the reach of banking regulators—and the deposit-insurance safety net. Backed by the private investment firm of Microsoft Corp. co-founder Paul Allen, the company won’t be able to call itself a bank, but it will be able to do business the way Mr. Depping wants.

“The regulatory environment makes it very difficult to do what we do,” says Mr. Depping, who last summer saw his bank hit with an enforcement order from the Federal Deposit Insurance Corp.

A spokesman for the FDIC declined to comment on Main Street, a unit of closely held MS Financial Inc

Here's What the GOP Needs To Keep Harping On

With a hat tip to Z:


Have the GOP candidates across the board repeat it loudly and often to the point that the mainstream media cannot ignore it.

The Great Contraction

So says Ezra Klein. Some of what he writes does make sense:

...Recessions...imply a very particular economic phenomena: a business-cycle recession, in which the drop is quick, and the recovery is usually similarly swift. That is not what we’re in. That is not what financial crises are. And mistaking one for the other has, in his opinion, cost us a fortune.

Financial crises are not about the business cycle falling out of whack. They’re about debt. Lots of it. And that’s why they’re so resistant to efforts to speed a recovery. Whereas you normally get out of a recession by lowering interest rates and persuading consumers to spend, the period after a financial crisis is marked by consumers trying to dig out from under a mountain of borrowed money. You can accelerate that process, but it’s hard to do. But first you must correctly diagnose the problem.

Rogoff has suggested we call this period the “Great Contraction” in order to distinguish it from more normal recessions. You may or may not like the name, but consider this: When we talk about double-dip recessions, that implies, as the National Bureau of Economic Research has said, that the recession ended in summer 2009, and we’ve been recovering ever since. The Great Contraction, conversely, suggests we have been, and remain, mired in an ongoing financial crisis. Which better describes the economy you see?...

Read the entire essay HERE. I'm no fan of Klein's, but I think that he has some valid points in that essay.

Of course, what we call this disastrous economic situation doesn't matter. But how our so-called leaders analyze it DOES matter because the economic policy for addressing a recession and a depression is different.

Clearly, what Obamanomics has done is not the proper way to address the depression we're in.

I keep referring to the term "depression" because, in my view, we are indeed in a great depression and not a recession.

If our policy makers cannot use the "d" word, then let them use the term "contraction." I, for one, am sick and tired of hearing the words "recession" (or whatever euphemism the Obama regime is using) and "shared sacrifice."

Weekend Humor (Or Not)

But not so funny, particularly on the heels of Friday's news of the downgrade of the United States credit rating (Click directly on the image below to enlarge it):


On a very serious and somber note, watch the following video from the Wall Street Journal:

The Future

CEO Steve Wynn On The Obama Administration

With a hat tip to Indigo Red, the following sums up how many businessmen feel about the economic environment created by the Obama administration:

The Game Obama Is Playing

Last night, Obama abruptly departed the debt talks. Some in the GOP claim that he stormed out of the meeting, others say he merely left the room.

Where did he go?

In any case, Obama apparently uttered the following statement in yesterday's debt talks:

"I've reached my limit. This may bring my presidency down, but I won't yield on this."

This morning, the Huffington Post ran the photo below in the masthead with the headline "Gloves Come Off":


HERE is the conclusion of the article in the Huffington Post:

Before Obama left the meeting, he gave lawmakers a directive. By Friday, the president said, the people in the room needed to have figured out what path they were going to pursue so that they could start hammering out the details.

Obama's version of leadership.

WTF???

MSNBC:

McConnell proposes giving Obama debt ceiling power
Increase would take effect unless House, Senate enact legislation disapproving it

WASHINGTON — The top Republican in the Senate proposed on Tuesday giving President Barack Obama sweeping new power to, in effect, unilaterally increase the nation's debt limit to avoid a first-ever default on U.S. obligations.

The new mechanism would take the place of the current White House debt negotiations among congressional leaders and Obama. Those talks over spending cuts and tax increases have grown increasingly acrimonious.

Minority Leader Mitch McConnell, R-Ky., offered a new plan to allow the president to demand up to $2.4 trillion in new borrowing authority by the summer of next year in three separate submissions.

Those increases in the so-called debt limit would automatically take effect unless both the Republican-controlled House and the Democratic Senate enact legislation specifically disapproving it.

Obama would be able to veto such legislation. McConnell said he reluctantly offered the unusual proposal because it has become clear the negotiations with Obama are not going anywhere.

The Republican plan would require that Obama submit spending cuts along with his borrowing requests. But unlike the increase in the debt limit, they wouldn't automatically take effect.

Senate Majority Leader Harry Reid, D-Nev., said he had spoken briefly to McConnell about the idea and said he would consider it.

The sweeping new power would only be in effect through the remainder of Obama's term, which ends January 2013.

McConnell's plan would permit an immediate increase in the debt limit of $100 billion while Congress debates whether to disapprove of it.

An Aug. 2 deadline looms for Congress to raise the country's debt limit. Republicans are insisting on major budget cuts to reduce the swollen deficit. Obama and his fellow Democrats are also offering budget cuts but in tandem with tax increases that the Republicans say they won't support.

Both Democratic and Republican leaders agree the U.S. shouldn't be allowed to default on its obligations, which could skyrocket interest rates, send stock markets plunging and shatter faith in the world's No. 1 economy. The showdown comes as Obama and lawmakers head into next year's presidential and congressional elections.

McConnell offered the plan just a couple of hours before he was scheduled to go to the White House for the third round of budget talks in as many days.

"I had hoped all year long that the opportunity presented by his request of us to raises the debt ceiling would generate a bipartisan agreement that would begin to get our house in order," McConnell said. "I still hope it will. But we're certainly not going to send a signal to the markets and the American people that default is an option."

Treasury Secretary Timothy Geithner and other market experts have issued dire warnings of the effect a potential default would have on the still-struggling economy, including a downgrade in the government's AAA bond rating, higher interest rates and panic in financial markets here and abroad. Obama himself warned in a CBS News interview that he couldn't guarantee that government pension plan payments would go out as scheduled on Aug. 3.

An aide to House Speaker John Boehner, a Republican, said Boehner shares McConnell's concerns about the lack of progress in the talks. A spokesman for House Majority Leader Eric Cantor, a Republican, said Cantor feels that the McConnell proposal could be helpful.