THE TRUE STATE OF THE U.S. ECONOMY

THE TRUE STATE OF THE U.S. ECONOMY

by Mike Whitney.  Weekend Edition October 4-6, 2013

Another Slump Ahead

http://www.counterpunch.org/2013/10/04/the-state-of-the-economy/

“Slumping asset prices show a recession is probably on its way. … Stocks tend to fall more frequently and further than property values, so they are better recession-predictors.” - IMF research paper by economists John C. Bluedorn, Joerg Decressin and Marco E. Terrones.


Obama supporters feel duped, misled, and despondent. Obama is not the agent of change they’d hoped for. He’s expanded the wars, slashed vital safety net programs, exonerated Wall Street criminals, and continued the vicious attack on civil liberties. He’s done everything in his power to boost the profits of the big corporations and banks, but hasn’t lifted a finger to help ordinary working people. And his efforts have paid off, too. Just look at this from Huffington Post:

“Corporate profits have increased by 18.6 percent over the past year…. In fact, corporate earnings now represent a larger share of GDP than during any other period in history…

Real wages have declined by nearly seven percent in the past seven years, according to data collected by the compensation research company Payscale. In other words, U.S. workers have less buying power now than they did before the financial crisis…

Payscale’s findings are just the latest in a slew of research that indicates the sluggish economic recovery has not been beneficial for most of us. Income inequality in the U.S. is at a new high as skyrocketing income gains for the top one percent are met by stagnating wages for practically everyone else.” (“Corporate Profits Are Soaring, But You’re Not Feeling It“, Huffington Post)

Gallup surveys show that “trust in all three branches of the federal government remains on the lower end of what Gallup has measured historically” while “Americans’ trust in banks fell to an all-time low of 18% — lower than its level at the height of the global financial collapse.” (Gallup)

A slowdown in personal consumption will impact retail sales, durable goods, hiring and capital investment. [..]Take housing, for example, which is progressively losing momentum as the year drags on. This is from an article at Global Economic Intersection:

  

 “Existing Home Inventories are building, which clearly reflects a fall in demand; and also possibly greater motivation amongst sellers to get out. The inventory trajectory continues to closely shadow the pattern of 2010…. This pattern suggests that the housing market is reaching a critical point at which further intervention from both the Federal Reserve and Federal Government may be needed to give it some more momentum.” (“Housing smoke and mirrors,” Global Economic Intersection)

Then there’s this from Wells Fargo concerning the vanishing of investors who’ve been driving the market for the last year: …. 

The fact is, the banks are dragging down the entire economy and everyone with it. You simply can’t restructure the whole system to accommodate bumbling imbeciles whose only strategy for survival is mooching off the government. Four years into the so-called recovery and bank lending is still contracting. This is ridiculous. These chiselers make their dough trading derivatives and moving loan loss provisions into the profit column to buffalo shareholders. It’s a big freaking game. We should have shut down these zombies when we had the chance. Now they’ve BECOME the government. And that’s why the economy is headed for another slump.

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SOCIAL COSTS OF MILITARISM.  THREE CHEERS FOR THE SHUTDOWN

by NORMAN POLLACK.  October 01, 2013

http://www.counterpunch.org/2013/10/01/three-cheers-the-shutdown/

The “shutdown issue,” presently mired in the political-ideological battle between the Far Right and the Less-Far Right (House Republicans and Administration Democrats), has little to do with the social welfare of the American people, and instead reveals discernible differences only on the degrees of sophistication informing the programs of each in their determined assistance to corporate capitalism. Republicans in this tableau (a staged presentation going back decades in the roles assumed by each side) are the visceral fascists, striking out at government without realizing how much it helps, assists, and protects business and banking, while Democrats actively, yet with becoming liberal rhetoric to hide from themselves their delusions and treachery, take help, assistance, and protection to a higher level of systemic interpenetration between business and government by means of a regulatory framework written by the affected interests.  […]

Shutdown, ideally, equals wake-up, an exposure of widespread impoverishment on one hand, widespread waste, corruption of democratic institutions, and military aggression pure-and-simple on the other. If nothing more, scaring the folks at JP Morgan Chase and Goldman Sachs until the legislative conflict is papered over, is worth the candle, considering that nothing will be done for the poor in any case.

The shutdown is “magnifying ideological differences that hardly exist, as perfect formula of keeping the masses distracted from the main show—not shutdowns or debt ceilings, but a foreign policy of global capitalist expansion geared to US-defined financial, monetary, and trade advantages, coupled with necessary regime change for their realization, all wrapped in a framework of massive surveillance at home and the quickening paces for demanding patriotism and conformity”.

Here government shutdown is welcome, because by giving the political-ideological spectrum a still further Rightward push (Republican intransigence as pretext and excuse for Obama’s failed presidency, except to those privileged by it), the Democrats somehow appear Left-leaning or centrist. Nonsense. Obama has demonstrated on every count subservience not merely to Wealth, but to its most atavistic form: from policies which sanction a rawness of capital accumulation via deregulation, regressive principles of taxation, and subsidies to such favored industries as defense and nuclear power, to social policies which keep working people in a state of suspended animation, their collective bargaining rights weakened, and through lack of job creation, a reservoir of hard-core unemployment resulting in deteriorating standards of living.

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