Jobs Report Isn’t Good News as Most Think

This past Friday, the August jobs report was released by the U.S. Bureau of Labor Statistics. According to the report, total nonfarm payroll employment rose by 96,000 in August, and the unemployment rate edged down to 8.1 percent. Specific employment increases were in food services and drinking places, in professional and technical services, and in health care.

Almost automatically, proponents of the Obama Administration as well as political pundits touted this as good news and as being proof of the effectiveness of the President’s economic policy. Unfortunately, few if any political talking heads discussed this in reference to the general citizenry of America or offer that the aforementioned may not be the case.

If one actually takes the time to read the report and do some basic math, they would clearly see that for the average American, the data does not provide such a rosy picture. First, is the obvious observation of that 119,000 fewer persons were employed in August compared to the month of July and that Manufacturing employment edged down in August (-15,000).

The reality is that around 89 million people in America are unemployed and the value of the dollar has started to retract if one pays any attention to the Forex markets. Moreover, Gold is up 3.1 percent and silver is up 7.1 percent when the administration and the Federal Reserve are thinking about another phase of quantitative easing (QE3).

Job loss will continue to be a problem for whoever is in the Whitehouse. In particular with the strange policies of the Federal reserve. Bernanke knew in 1988 that quantitative easing was ineffective work because bank lending channel typically close if banks have access to external sources of funding (other people money). Yet, Bernanke and the present administration continue to advocate that in order to revive economic growth and avert deflation, QE is a necessity.

The jobs reports show that QE only makes the rich richer. In fact the Fed has increased its balance sheet from $900 billion to $2.9 trillion the difference is $2 trillion (or 13% of GDP) while the job report shows that 58% of Jobs Created Pay Only $8 hour or less.

Now I know many will say I am just bashing Obama, that I am jealous of the President and that I just don't know what I'm talking about because the jobs report shows the President is doing a good job.  They may even say that the CBO (Congressional Budget Office), as the Presidents often states supports his economic policies. Unfortunately, on the CBO's track record, I trust them as much as I do a white man with a sheet to have lighter fluid and a match at a BBQ. Let the CBO tell it, from their unrealistic view of this economy, America never goes into a recession. 

Currently, the CBO is assuming a deficit of $3.5 trillion from 2012-2021 and if past history is any indication, they are at least likely off by 60% meaning it is really close to $10 trillion. Recall that just ten years ago, the CBO predicted that the US deficit would be at $7.6 trillion currently, but the actual number as of this week is above the $16 trillion mark. Between 2002 and 2010 all of their real GDP projections were between 2.6% and 2.9%. By overestimating growth, you overestimate revenues, which underestimate the deficit and gives politicians the impression they have more of our money to spend before they get into trouble.

Last week at the DNC, Obama suggested that he would cut the deficit but strongly asserted he would use money saved from the wars to reduce the deficit, which is strange since that money doesn’t exist since the war is being paid for by borrowed money mainly from China. All of this seems to be ignored when discussing the economy and the jobs picture, but what can one expect, for only by American math can you have 119,000 Fewer Employed in August than July and unemployment rate go down.

There is a hole in the economy

It gets me as to how folks can propound on the esoteric meaning of nothing in the world of economics. Especially here in America, were we hear how to solve problems with solutions that do neither have method nor definition. All reminds me of an Island song I would hear harry Belafonte sing when I was a child growing up, “There's a hole in the bucket dear Liza, dear Liza.” If ever was there a need of a song to be remixed, it should be this one and the word bucket should be replaced with economy.

What is their not to see? It seems that politicians, albeit not very good in math as most Americans, want to make this a complex issue and act as if the solutions are massive and difficult – for lack of a better phrase, as if we are talking about Calculus or differential equations. Unfortunately it is not that complex and really a function of basic, simple, remedial math – adding, subtracting, multiplying and dividing.

The simple truth is that the way we are going economically is unsustainable. We are borrowing as a nation more than one-third of what we spend. I mean, let me put it another way. We as a nation, the United States, are spending $3 for every $2 we are bringing in the form of GDP.

It is also infelicitous that our political leaders know this and don’t or won’t tell us or worse, they do not know or understand the rusticism of the situation at hand themselves. For if they did they would do something and stop pointing fingers at each other. If they do not, you can best believe that the global capital markets will do it for us and like at the G20, we will not be in a position to do anything about it. We see what has happened in London, with students marching against the conservative political leadership, or last year in Greece with protesters in the streets or even this year in France. Don’t sleep it can happen here also.

But what is more troubling and scary to me is that if the Government, regardless of political affiliation does not see on the horizon what I fear, and that is a collapse in the bond market. I mean if the US is a company, with a massive debt problem plus $12 trillion and counting, with all these nations like China holdings of dollar-denominated short-term U.S. securities, including Treasury bills, and other custody liabilities, and the feds drop $600 billion into circulation, the value of the dollar may drop.

If this happens then it would not surprise me if foreign governments no longer want long-term US debt and will dump all the bonds on the markets if interest rates rise from current lows. This is not as farfetched as one may think given what has just occurred in Ireland and soon maybe in Portugal.

Politicians, there is a hole in the bucket. We have a sovereign debt crisis and all yawl do is point fingers at each other. We see that neither the Bush Tax Cuts, nor Obama’s massive spending have not worked. Regardless, something needs to be done now before it is too late, and it must entail at looking at entire projects and not bits and pieces. For inaction, may take our jobless rate up like Greece while they are trying to tackle their deficit. Maybe we could learn something from the difficulty they face now trying to restore fiscal soundness to their economic policy – naw, that would be too simple, instead we pass the buck, a borrowed buck at that,.

Truth About Bush Tax Cuts: They Don't Work

It appears that with midterm elections quickly approaching in November, all any Washington, D.C., politician can talk about is tax cuts. Not just any tax cuts but the Bush tax cuts, which largely benefited the rich. Republicans believe that we should keep them in place — at least for another two years and Democrats say they should only be kept in place for the middle class. What is not talked about is whether the tax cuts have had any impact on the average American.

The two major tax-cutting bills from the Bush era were the Economic Growth and Tax Relief Reconciliation Act (EGTRRA) of 2001, and the Jobs and Growth Tax Relief Reconciliation Act of 2003. These bills lowered tax rates across the board on income, dividends and capital gains; eventually eliminated the estate tax; further lowered burdens on married couples, parents and the working poor; and increased tax credits for education and retirement savings. The Obama Administration’s proposal would extend most of these reductions, allowing only those for individuals earning more than $200,000 and families earning more than $250,000 per year to expire.

Bush tax cut dollars benefit higher-income households, the group of people who save more and spend less than lower income earners. If this is how jobs are created then there should be some visible growth, given that they are still in place until December 31, 2010. Also, it is inaccurate to say that if removed they will hurt small businesses. Less than 2 percent of tax returns reporting small-business income are filed by taxpayers in the top two income brackets.

The fact is that extending the tax cuts adds to the deficit by creating an even larger deficit. In fact, even if everyone in America was employed, continuing the Bush tax cuts would lead to a national debt, meaning the yearly deficit would rise from 6 to 7 percent of GDP by 2020. The Bush tax cuts reduced revenue and by some estimates, account for 25 percent of our current deficit. As for creating jobs, there is no evidence of that for if they did, we would have more jobs being created now with the tax cuts still in place

Tax Payer Life Support

Dang, I knew it was too good to be true. As soon as I give the President Props on his first interview on a major national television network, it just so happened to be the same day I got a hold of the presidents spending, I mean stimulus, I mean recovery plan. To be honest it seems as if it just is a way to package all of the wishes of the democrats in one bill. It may even need to be called the Reed-Pelosi Bill, which would be more appropriate.

Last year. More than 20 banks failed. This year I predict more that that number, if not double will fail. I don’t mind this, except for the fact that the FDIC has to insure these funds and that it is insured with our loot. Now, we have seen our economy shrink 3.8% in the last quarter alone, the largest decrease in 26 years coupled with a GDP that has been constricting anywhere from 5 to 10 percent since 2000 (my math).

Unfortunately, although they call this spending, I mean stimulus plan something needed NOW, it won’t go into affect until fiscal year 2010. Not to mention, it feels as if I am one of the few that has read from front to back the 600 plus pages of Obama’s spending, I mean stimulus plan. The scary thing is that many feel it is better to do something now than to wait to see what happens. I would rather think and do something that works than to TRY and implement a short term fix. Believing that this will fix the economy or will help is like telling me that I should believe in the tooth fairy and Santa Claus.

People, don’t be dumb, the choice is not do something now versus not doing anything at all, but rather if it doesn’t work, what will we do then? Seems nobody knows. I mean Obama calls it a recovery plan, yet he cannot assure the public that spending our money the same way Bush did will work. He speaks of a multi- legged stool, and that this is one leg, but any designer would design all legs for the stool at once. It’s like designing a house with one wall at a time. This just shows me that neither Penn avenue nor Capitol Hill has a clue of how to solve this problem. Being a person without a job, and one who owns his own business, it hard for me to see why it is that folk who got jobs, who’s salary I pay, act as if since they got a check coming in, I can do shit have azzed. I mean increasing food stamps and increasing unemployment benefits is not a stimulus plan.

One concern is that it seems that all of the job creation is designated for the public sector, you know state and local and federal government jobs. This makes no sense given that these aint where the job losses are occurring, in fact job losses at the government level is at about 2 percent. Most of the jobs are in the private sector: the Caterpillars, Home Depots and Astrazenca’s of this great nation. Add to that increasing spending in health care, education and unemployment benefits does nothing to stimulate the economy. What we need is manufacturing, in particular, making a product that everyone else around the globe would want to purchase. India got it down, why don't we?

But check this, the money for the Obama planned is all BORROWED, and the associated administration aint gone tell us that let alone how much that’s gone cost us to borrow this $800 plus billion. This is shady, just as shady as bailing out credit unions to the tune of 80 billion and not telling WE the general public.

We all need to be responsible and look at this seriously for our kids depend on this. The strange thing is that folks who may have voted for Obama, just seem to trust him, like he aint no politician. I wouldn’t be surprised if the same folks aint even read what he has proposed as a stimulus, I mean recovery plan for if they did, the would see it does nothing to solve the problem which is two fold: housing devaluation and foreclosures and debt accrued by synthetic papers in the form of collateralized debt. Especially with us having about a $1 trillion deficit this year - even before this stimulus bill, and with a $10.6 trillion national debt, we may as well just sign over our nation state to China, our largest creditor.

So to all the republicans and democrats and you to Mr. President, don’t piss on me and say it is raining. I as a tax payer am suffering. It was you that said the problem should be directed towards “mortgage relief” but you plan don’t even address this, nor does it reach us regular folk. Like I said, I pay my taxes, but this tax payer here feels like he is on life support.

Body Blow, Body Blow, Body Blow

Yo, I must admit, in grad school I played video games, Madden and this boxing shit. What I remember about the boxing game was that when u would hit folk, it would say stuff like “body blow, body blow, head shot, body blow.” I like-ed that shit.

I am reminded of this because I feel that it is the perfect introduction to our economic concerns as we are all citizens of the united states of America, now true, I was gonna post on something I wrote this morning called “WORK HARD AND DONT COMPLAIN.” But after reading the comments to the previous post by the scholarly Jay MidNite, Kelso (and he has interest) and No slappz, I digress. Again, blame my pons, and throw in the sulcus of my medulla oblongata and my subsequent Glossopharyngeal nerve anatomy (in picture) while u at it.

Mane, Jones here love him some loot. And as a person that has adapted capitalism for his own well being, I take pride in using brain cells to do such, just as much as I do showing love to others. But it seems as if my economy don’t got no love for folk no more. I have personally documented several contusions to my efforts to accrue capital albeit I will not be denied.

First, the housing market is basically a bust, and it aint been this bad in 70 years. As of date houses prices have dropped maybe 15 to 20 percent in real terms and its only just beginning. Before it is all over, if you pate 100 stacks for a crib, it may end up being worth 70 stacks. Add to that the credit crunch which I figure is the worse since the post war period thanks to Sir Alan green hornet, I mean Span – which I wrote about a few weeks ago. I mean when folk loose a trillion dollar globally, it makes me think that one is in serious trouble; and don’t trust what am mother fucking bankers say. Then there are oil prices coupled with equity dropping like its jumping out an airplane. Just tell me that we got to work a lot longer to buy gas, let alone a barrel of oil. So as jay said, it dont matter, Europe at 10$ a gallon and we gon finally reach the rest of the developing world -yawl aint ready though.

The strange thing to me is that households are paying interest rates no different than in the past. Sure we just got some stimulus checks, but they will only last and benefit one quarter – the second. Yep, it is good; I mean a 100 billion for one quarter but when it is gone what happens next?

All I am saying, and Jones here aint no economist, but rather a single man that like saving and counting money, for money is to make money and not to spend. We don’t even contribute to global GDP growth, but rest assure, the rest of the world does when we cant and will move alone.

The US has weakened for past to years when the rest of the world has shown increased growth and in most cases accelerated economic growth. Europe, Japan, China, and don’t add Arab countries. Not to scare yawl living like life is all that, my query is if the rest of the world can find economic growth, why cant we folk? Cause all I’m seeing and feeling is body blow, body blow, head shot and body blow.

$3 ATM

Point of order: Sorry for delay in post, forgot I was still a scientist and had two journal articles to proof and correct for Health Education Journal and Global Public Health

Now since I was finally able to post Recess – is- on and PP (which were written in April), back on the grind, which you know in most cases means loot. I am kind of frustrated with America, I mean we aint got what it takes it seems anymore. I can understand how K street gets politicians in a bind but I can’t understand why regular folk don’t see why things are the way they are economically.

We are big on crying and asking folks to do for us, but we never have a good understanding of first what needs to be done or even what or how serious the problem is. Come this November, after the general election, well really before, I hope we can come to an understanding of the aforementioned.

This country has not been in this bad of shape economically since the 1920s and 1030s. I’m sure some will disagree with me, but this is just my opinion. Right now, at least based on numbers from two years go; our domestic financial debt was more than 14 trillion dollars. Fourteen trillion. Today I suspect it is maybe 4 or 5 trillion more, but there aren’t any real numbers available, just estimates so I made my own.

And although we talk about the housing market as being a major contributor to this problem as well as multiple wars, the truth is that the financial sector is mostly to blame, along with republican and democratic leadership at the legislative and executive level. For as I said before, with regulatory constraints basically removed, this created an environment for this particular sector of our economy to go buck wild. Bill Clinton repealed the Glass –Stegall Act and bam.

Long time ago, there were regulated fees for Credit Cards for example, now they can make up fees and even charge you for paying on time or even if you pay off your monthly balance. Don’t even throw in the outrageous and wide ranging interest rates credit card companies (the financial sector) can charge, that is a whole ‘nother story. But to sum it all up, this is where the problem lies. We didn’t have this type of concern when America made stuff and had a strong manufacturing base. Since the financial sector has replaced manufacturing as our largest industry, our national debt has sky rocketed. This sector alone accounts for more than 30% of all of our national debt. Namely as a result of what is called Securitization or what can be called collateralizing debt obligation

Like I said back in the 20s and 30s when we saw similar problems, the national debt was about 250% of our gross domestic product. Today it is about 350%. What does this mean, well in simple terms, maybe a 10% reduction in the values of our houses for those of us who own one, commodity inflation (as mentioned in a prior post) and a 500 trillion dollar debt, which will eventually come back to bite us in the ass one day. I think that is one of the reasons I don’t have an ATM card. Never had one ever. So they next time you go to an ATM machine, just remember that the $3.00 they charge you to use it, is just adding to our national debt. Three cheers for the financial sector. Hip Hip Hooray.

Addendum: Love the fact folks can come in shop with dogs and kids, lay up and drink wine for free – they always end up buying stuff.

What’s it made off

As many of you know I do not like to write about entertainment, but today I will digress and do such. So please bear with me on my new endeavor. Down in this camp, the ATL, there a social event that will go on tonight called “Hot on the Runway.” It is a fashion show and concert that will be held it this joint called the Compound, which was founded by the Black Mafia Family (BMF). Performances are slated to be made by Atlanta’s own Blood Raw of CTE, Mario, Ray-J and Ashanti among others.

Now there is nothing wrong with fashion, or fashion shows. I even went to a fashion show once (my daughters mother was in it and said i never came to see her model) and although I cannot recall of the designers, and didn’t attempt to get any of the models phone numbers, what I recant most was that it was outside and that the had a barb-q pit and he was serving pork – and I simply loved that.

However, at this show, they have a promotional contest in which the will be giving away a $5000 red Dolce & Gabbana Crocodile Purse. Now correct me if I am wrong, but what can a purse be made of that make it worth $5000? Sure I know the obvious, but when I lived in Nigeria you could get them for $50 US dollars. I tried to find a picture of the purse but could’t because didn’t know WTF I was looking for, so one of my favorite beverages has to suffice for this post.

Now the way I see it, which may be foul, I could get 68.7 shares of National Oilwell Varco (NOV) or 40.7 shares of PBR (Petroleo Brasileiro), although it could by me a lot of Pabst Blue Ribbon also. But that is just me. But on the real, with the recession, and the high cost of education, and folks losing teir houses, why not give away a scholarship, or a down payment on a home, or even offer to pay $5000 on someone’s mortgage?

I just don’t get, I really don’t. To me, such action play into sterotypes tha are already debilitating. Such as buying cars over homes, spinners(Sprewell’s) over stock, and last but not least the ubiquitous flossin’ and frontin’ – which by definition means pretending like you got loot when you do not. As a people, we command a GDP of $688 billion. That’s way more than the highest GDP for an African nation (Egypt), which has an estimated annual GDP of $290 billion. Our estimated GDP is in the ranks with countries the likes of Spain and Mexico.

So what gives folk, when we gone stop and look at the big picture. 5 stacks could get me central air and heat for my home, and at least a years worth of gas. I just want to leave you with this think, cause if I spent 5 stacks, and it wasn’t on stocks, it better be some aluminum siding or stucco on my crib.

Hypocrite Me

You know I love the Christmas season. I don’t actually know why, but I do. It doesn’t have anything to do with getting anything but it may have a lot to do with my childhood memories spent with family during this time of year – oh yea, and the meals.

But I am troubled with myself also about the holiday. I mean, I was taught that it is the celebration of the birth of Jesus, but it seems that I have learned otherwise. At least since I learned that the twelve days of Christmas actually start on the 25th and end on January 6 (the day orthodox Christians acknowledge the birth of Jesus Christ.

Of all the holidays celebrated via European tradition, Christmas is probably the most Western or European of them all. In the early days of this fledgling country, Christmas was not even celebrated and was even outlawed in certain parts of the colonies in the late 1600s. It wasn’t made a federal holiday until June 26, 1870. It was only until after the civil war; with the influx of German immigrants to the United states did it actually begin to spread across the country.

The term Christmas comes from the old English 'Criste Maesse,' and may also be connected to the German word, 'Weihnacht' (Holy Night). Thus I aint surprising that Santa Claus himself also comes from German. But I don’t know if his name “Kris Kringle” or “Sinter Klaus” (which means Klaus of the cinders or as some put – the demon saint of Christmas - in picture with body guards), has anything to do with the Romans (Dionysus was said to have been born on December 25th also-in painting), Horus ,or the birth of Jesus.

History suggest that the Roman pagans first introduced the holiday of Saturnalia, “a week long period of lawlessness celebrated between December 17-25.” It was the celebration of the “Lord of Misrule.” “Each Roman community selected a victim whom they forced to indulge in food and other physical pleasures throughout the week. At the festival’s conclusion, December 25th, Roman authorities believed they were destroying the forces of darkness by brutally murdering [these] innocent men or women.”

Horus, the Kemetic/Egyptian God of the Sun to was said to have been born on December 25 and that during the times of the Roman empire, during this time period, celebrations were conducted to honor the sun at its farthest distance fro the Earth, returning to bring warmer days – this as during the winter solstice, my birthday Dec 22.

With all of this, and my whimsical feelings toward celebrating a holiday that all I can see objectively merely provides to buttress western economic powers by bringing up sales at the end of the fiscal year and increasing the gross domestic product, I still love this time of year. Why, like I said, my memories of family unity more than all else, so I guess that makes me a hypocrite, hypocrite me, kind of like American me.