Actually, the Economy Sucks.
With all the recent talk of the “economic recovery”, you might wonder why your own economic situation feels less than, well, recovered. Conservative and liberal pundits alike love to tout the 7.3% “unemployment rate”, the surging Dow Jones, and the buoyant housing market; but for most working-class Americans, it almost seems as though things are getting worse.
Which is probably because they are.
Thanks to the tireless efforts of governmental officials and the incredible complacency of “journalists”, the true—and alarming—state of our economy is being kept buried beneath a mirage of sanguine-sounding statistics.
Take, for instance, the so-called “unemployment rate”. By now nearly everyone knows that the Bureau of Labor Statistics (BLS) calculates unemployment by tallying unemployment claims: once your benefits are exhausted, you’re considered employed, whether or not you happen to be living under an overpass in a cardboard box. Even the more accurate U6 measure, which includes short-term unemployment and persons “employed part-time for economic reasons”, doesn’t really tell the whole story. Most independent analysts put unemployment anywhere between 14 and 22 percent. Those aren’t post-recessionary numbers; they’re depression-level.
But what about the stock market? The Dow Jones, Nasdaq, and Standard and Poor indexes all set record highs on July 23rd—15,567; 3,600; and 1,695 respectively. How bad can things be?
Depends whom you ask.
If you’re among the 10% of Americans who own 80 percent of stock wealth, well, then, I guess things are going just fine. If you’re one of the 90% whose stocks are tied up in 401Ks: not so much.
In the past, bull markets were a natural outgrowth of strong economic fundamentals—you get a pay-raise, you buy some stocks from Corporation X, Corporation X opens a new plant, more jobs are created, and so on. In today’s world, however, the opposite is true: the more poverty and debt, the higher the inflation and unemployment, the sweeter the closing bell averages. This is dues to low interest rates and the Federal Reserve’s infamous Quantitative Easing program, which through suppressing yields in the sovereign bond market, forces investors into the stock market.
In other words, the Fed is printing tons of money, and all this money is ‘inflating’ the stock market, creating the illusion of wealth. Not exactly the picture of economic health.
The housing “recovery” has been similarly contrived. Typically, home prices rise as a function of expanding employment and increasing population. In the “post”-Great Recession universe, however, real estate inflation is being driven by deep-pocketed Wall Street investment firms who’ve been snatching up houses en mass, and turning them into rentals. Since 2010, outfits like Blackstone and Colony Capital make up 20-20% of new housing purchases. In April alone, 68 percent of damaged home sales went to new investors.
Banks are also contributing to the artificial recovery. By keeping as much as 90 percent of repossessed homes off the market, they’ve succeeded in sustaining near-record prices. If all the houses in what’s known as the ‘shadow REO market’ were suddenly made available for purchase, prices would tank. That’d be good news for the millions of Americans who’ve been priced out of the market, but terrible news for the millions looking to sell.
The truth is, for the majority of Americans, the economy is in very sad shape indeed.
Consider the following:
- The Home ownership rate in the US is at its lowest rate in 18 years.
- 76 percent of Americans live paycheck to paycheck.
- The US economy lost 240,000 full-time jobs in June of 2013.
- The largest employer in the US is Wal-Mart; the second largest is the temp agency Kelly Services.
- 40 percent of all workers in the US make less than $20,000 a year.
- 60 percent of the jobs lost during the recession were mid-wage jobs, but 58 percent of the jobs created since then have been low wage jobs.
- One in four Americans has a job that pays $10 an hour or less.
- Since 2001, the US has lost more than 56,000 manufacturing facilities.
- The average number of hours worked per employed person per year has fallen by about 100 since the year 2000.
- 20.2 million Americans spend more than half their incomes on housing.
- Approximately 46.2 million Americans are living in poverty.
When was the last time you heard a politician or “journalist” mention any of this? If Obama actually leveled with the American public, there’d be riots:
My fellow Americans, as most of you know, life in America is, to say the least, bleak. Thanks to the policies of my administration and the hard work of lobbyists and self-serving Congressmen and -women, our economy is on the brink of collapse. While the last three decade’s attack on regulation has worked wonders for the richest 10%, it’s been sheer murder on the bottom 90%, so much so that 22% of American children now live in poverty. Your future is one of increased insecurity, privation, and broken dreams. As both energy depletion and the plundering of the middle class continue unabated, you can look forward to the complete collapse of the dollar, lawlessness, violence, and mass hysteria. May God bless you, and God bless the United States.
This is why politicians lie: If they actually confessed just how perilously perched the economy is, they’d be out of a job.
Sort of like the rest of us.