So many economists and financial pundits seem absolutely shocked that the U.S. economy is slowing down again. It is as if this latest wave of bad economic data has caught them completely by surprise. Now, in the mainstream media we are seeing all kinds of headlines declaring that the U.S. economy is headed for disaster. But anyone with half a brain could have seen this coming. This year alone, we have seen the worst tsunami in Japanese history, the worst U.S. tornado season in recent memory and the worst Mississippi River flooding in decades. In addition, chaos in the Middle East has pushed the price of oil up to very high levels. Of course all of those things were going to have an effect on the economy. In addition, all of the long-term trends that have been destroying the U.S. economy for decades have not been taken a breather. In fact, the truth is that all of our long-term economic problems have been accelerating. So yes, the sky is falling, it is time to panic and the U.S. economy really has fallen and it really can't get up. It is just that everyone in the mainstream media seems to have believed that Ben Bernanke and Barack Obama would just sprinkle a bunch of fairy dust on the economy and everything would just magically get better. Well, in the real world things simply do not work that way.
Despite an unprecedented debt binge by the federal government and nightmarish money printing by the Federal Reserve, the economic downturn continues to drag on. Andrew Barber, a strategist at Waverly Advisors in Corning, New York recently told CNN the following....
"People are starting to see that this sort of malaise is not just going to go away no matter what you do."
And "malaise" is a really good word for what we have been experiencing. For those that remember the late 1970s, what we are going through today is similar in a lot of ways.
But what is perhaps even more frightening is that 2011 is starting to look a lot like 2008 all over again.
In particular, we are starting to see some real signs of instability in the financial markets.
When Moody's downgraded Greek debt again on Wednesday all the way down to Caa1, I was only moderately alarmed. The truth is that everyone knows Greece is a basket case so a debt downgrade wasn't really all that surprising.
When Moody’s announced that it plans to review the U.S. government’s AAA debt rating "if there is no progress on increasing the statutory debt limit in coming weeks" that got the attention of a lot of people around the world, but it was not totally unexpected. Moody's is telling Congress that they better raise the debt ceiling or else. A lot more pressure will be applied to Congress before this is over.
When Moody's warned that it may downgrade the debt ratings of Bank of America, Citigroup and Wells Fargo, that really set off alarm bells for me.
Do you all remember what set off the financial panic in 2008?
Do the names "Bear Stearns" and "Lehman Brothers" ring a bell?
Well, right now there are some frightening indications that we may see more trouble at some "too big to fail" institutions.
But will there be any willingness to do more bailouts this time?
Right now the financial markets are closely mirroring their performance just prior to the financial collapse of 2008. One great example of this is these charts which were recently posted by the Financial Armageddon blog. It looks like bank stocks may once again be leading the way down.
Hopefully the financial system can hold together and we won't have a repeat of 2008 right now, because if it happens it is going to be really messy.
But even without a "financial collapse" we already have all of the economic problems that we can handle.
Robert Brusca, the chief economist at FAO Economics, is being quoted by CNN as saying the following....
"We've had a poor economic recovery to begin with, and now it appears to be segueing into an end."
At this point, U.S. consumer confidence is already lower than it was back in September 2008 when Lehman Brothers collapsed. U.S. consumers are holding on to their money more tightly these days and that is not a good sign for an economy that is so highly dependent on consumer spending.
The latest manufacturing numbers have also been very distressing. Measures of manufacturing activity all over the world are indicating that we have now entered an economic slowdown. This is also similar to what we saw a few years ago.
We should all feel really bad for anyone that is entering the workforce right now. We are in the midst of graduation season, and the only thing that our new graduates have to look forward to is an economic crisis that never seems to end.
On a recent article entitled "Global Financial Markets Tremble As Bad Economic News Continues To Pour In" a reader named Esta left the following comment....
I feel sad for yet another year of graduates entering a horrible job market. I recently read, and I think it was in the mainstream media, that only half the 2010 college grads have found jobs of any kind, only half of those have found jobs requiring a college education, and that 85 percent of all grads moved right back in with their parents. The job growth rate is so low that we keep employing fewer and fewer people as a percentage of our adult population. Why isn’t that still a recession?
What a future our college graduates have to look forward to, eh? Moving back in with your parents, a crappy job (if you can find one) and a pile of student loan debt that will crush you financially for decades.
We are always told that "more education" is the answer, but even many of our most highly educated young people can't find jobs. In fact, it turns out that a third of last year's law school graduates aren't even practicing law....
The law school class of 2010 is making news for all the wrong reasons. The budding legal minds who managed to find employment last year have set a new record--only 68.4 percent of them are in jobs that require them to pass the bar exam, the lowest share since the Association for Legal Professionals began collecting data.
Now it looks like the economy is going to starting heading downhill once again.
What is that going to do to the job market?
Last year, only 45.4% of Americans had jobs. That was the lowest figure since 1983.
In some states it was even worse than that. In states like California, Arizona and Mississippi only about 37 percent of people had a job last year.
The economic news just seems to get worse and worse and worse. The American people have been relatively calm over the past several years as they have waited for the promised "economic recovery", but what do you think is going to happen if we have another major economic downturn and unemployment spikes back up by several more percentage points?
And what in the world can our "leaders" really do to "help" the economy if we do have a repeat of 2008?
We are already running trillion dollar deficits.
The Federal Reserve is already printing money like it is going out of style.
So what would their next moves be?
Most Americans have no idea how fragile our financial system and our economy really are.
Let us hope and pray that things can hold together for as long as possible, because when the next wave of the economic collapse happens it is going to be really, really messy.
1) Exxon Mobil made $19 billion in profits in 2009. Exxon not only paid no federal income taxes, it actually received a $156 million rebate from the IRS, according to its SEC filings. (Source: Exxon Mobil’s 2009 shareholder report filed with the SEC here.)
2) Bank of America received a $1.9 billion tax refund from the IRS last year, although it made $4.4 billion in profits and received a bailout from the Federal Reserve and the Treasury Department of nearly $1 trillion. (Source: Forbes.com here, ProPublica here and Treasury here.)
3) General Electric made $26 billion in profits in the United States over the past five years and, thanks to clever use of loopholes, paid no taxes.(Source: Citizens for Tax Justice here and The New York Times here. Note: despite rumors to the contrary, the Times has stood by its story.)
4) Chevron received a $19 million refund from the IRS last year after it made $10 billion in profits in 2009. (Source: See 2009 Chevron annual report here. Note 15 on page FS-46 of this report shows a U.S. federal income tax liability of $128 million, but that it was able to defer $147 million for a U.S. federal income tax liability of negative $19 million.)
5) Boeing, which received a $30 billion contract from the Pentagon to build 179 airborne tankers, got a $124 million refund from the IRS last year. (Source: Paul Buchheit, professor, DePaul University, here and Citizens for Tax Justice here.)
6) Valero Energy, the 25th largest company in America with $68 billion in sales last year, received a $157 million tax refund check from the IRS and, over the past three years, received a $134 million tax break from the oil and gas manufacturing tax deduction. (Source: the company’s 2009 annual report, pg. 112, here.)
7) Goldman Sachs in 2008 only paid 1.1 percent of its income in taxes even though it earned a profit of $2.3 billion and received an almost $800 billion from the Federal Reserve and U.S. Treasury Department. (Source: Bloomberg News here, ProPublica here, Treasury Department here.)
9) ConocoPhillips, the fifth largest oil company in the United States, made $16 billion in profits from 2006 through 2009, but received $451 million in tax breaks through the oil and gas manufacturing deduction. (Sources: Profits can be found here. The deduction can be found on the company’s 2010 SEC 10-K report to shareholders on 2009 finances, pg. 127, here.)
10) Carnival Cruise Lines made more than $11 billion in profits over the past five years, but its federal income tax rate during those years was just 1.1 percent. (Source: The New York Times here.)
http://www.greenpartywatch.org/2011/04/30/top-10-corporations-who-paid-no-taxes/
According to history buff, Alan Batterman, the German word for “Gestapo” is an acronym of GEheim STAdt POlezi. Translation: “Homeland Security.”
Scary stuff.
Maybe you should mention that to Janet Napolitano. Hee!!
Homeland Security is “Heimat Sicherheitsdienst.”
Your history buff should brush up his German. “Geheim Stadt Polizei” is not only grammatically wrong – it also means approximately “secret town’s police”.
In reality, Gestapo stood for “GEheime STaadsPOlizei” (one word, double “a”), which means “secret state police”.
The indulgence of our lives has cast a shadow on our world.
Our devotion to our appetites betrayed us all.
An apocalyptic plight.
More destruction will unfold.
Mother Earth will show her darker side and take her toll.
“If the American people ever allow private banks (the Federal Reserve Banks) to control the issue of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their fathers conquered..” –Thomas Jefferson
It’s a brand new world. Tick tick tick.
Yippers! Welcome to Zimbabwe North!
We don’t have zebras roaming the plains, but we sure got just about everything else! *sigh*
If the alleged and long suspected New World Order is supposed to be based on a resource depleted, burned out, war torn, shit hole of an earth, with the majority of left over human beings suffering, they deserve congratulations because we are well on our way to it.
the new world order sounds like a corpse.
what if their goal isn’t to rule?
You build prisons and fill them with people for selling dime bags and stealing CD players. But for stealing a billion dollars? For fraud that puts a million people into foreclosure? Pass. It’s not a crime. Prison is too harsh. Get them to say sorry, and move on. let’s not even make them say they’re sorry. That’s too mean; let’s just give them a piece of paper with a government stamp on it, officially clearing them
Smashing the control Machine says:
You build prisons and fill them with people for selling dime bags and stealing CD players.
Dearest Smash
I agree with you but please let me tell you what a high ranking state official in NY said to me once about that and it is very scary.
He said and I quote: “it’s cheaper to lock up a lot of these (little) people for petty crimes (pot), (Stealing CD players)because there are not enough jobs for everyone and prison is cheaper then giving them welfare, assisted living, medicaid, etc.”
and this he told me before the economic collapse 2008.
According to the Office of the Comptroller of the Currency’s Quarterly Report on Bank Trading and Derivatives Activities for the Second Quarter 2010 (most recent), the notional value of derivatives held by U.S. commercial banks is around $223.4 TRILLION.
Five banks account for 95% of this. Can you guess which five?
New Gallup poll: By 57-35 margin, Americans feel wealth in the USA “should be more evenly distributed.”
TAX THE RICH SPREAD THE WEALTH!!!!
How come all of the economic analysts that we see in the mainstream media never mention a simple way to at least alleviate somewhat the job scarcity?
stop importing foreign workers aka immigration
you are correct. There are a fair number of us progressives who completely agree with this.
The last thing we need is more unskilled people coming to this country. We have enough already, too many truth be told.
Look at the piss ass cheap farmers complaining they can not get anyone to pick their crops. Newsflash-pay more!!! Make less profit DUH!!
“According to the Office of the Comptroller of the Currency’s Quarterly Report on Bank Trading and Derivatives Activities for the Second Quarter 2010 (most recent), the notional value of derivatives held by U.S. commercial banks is around $223.4 TRILLION.”
Cooked books, creative accounting, and a sucker is born every minute regulations… its all pieces of paper these fraudsters have been swapping around the globe in a grand Ponzi scheme. That is what makes them ‘too big to fail’.
“Five banks account for 95% of this. Can you guess which five?”
I’ll try Goldman Sachs, Bank of America, J.P. Morgan Chase, Citigroup, and Wells Fargo for $50 trillion.
But seriously, their real assets are probably worth no more than 10% of that $223 trillion. See reference to a grand Ponzi scheme, above.
Gary2,
One more humorous attempt at pointing out the logical fallacy of your stale religion (tax the rich solves everything) and then I promise to forever ignore you:
http://iowahawk.typepad.com/iowahawk/2011/03/feed-your-family-on-10-billion-a-day.html
Its game over time, dude. You can take everything the ‘rich’ possess and feed them and their children to the poor and it won’t solve the problem.
Burn and crash.
Or is that crash and burn?
What the hell’s the difference??
Recession over? Ha-ha-hee-heee hee hoo hooooo!
Double dip recession?!! (Repeat above phrase)
The recession never ended.
You think it did, because Katie Couric (she’s leaving CBS as of 6/6/11) and Brian Williams told you it ended in July of 2009.
Their info is wrong. Wrong! Wrong! WRONG!!!!!
Check the latest unemployment figures. (Distorted as they are)
Our current economic problems – current as of June 5th, 2011 – are a continuation of the policies initiated in 2008, 2009 and 2010.
That snake oil they’re selling, it may be mighty good stuff. I’m still not buying it.
Dear John,
The people that don’t prepare for anything are the first one’s to panic.I think there are alot of people who are getting ready for a downturn.You can have all your numbers on a piece of paper that shows you have something but let the electric go out for a day or two and your on the phone screaming.When big Ben wants to add 3 zero’s to a one dollar bill maybe people will get how bad it is. I think the reset button is coming and people I know just want to know when.If this will not turn around soon the change will be so quick and suffering great
The present economic mess affects us all in a very immediate way and the American public has a right to know how we got to this point. Anything congress/Obama/FED does will only make things worse in the long term. Government undertakings always backfire with catastrophic results. Beware of the unintended consequences.
We help Americans find jobs and prosperity in Asia. Visit http://www.pathtoasia.com/jobs/ for details.
John, yes it might be possible to turn it around IF Americans would be willing to roll back DC, stop the wars, cut taxes and get the evil feds out of our lives. But the majority of people don’t want that. Any politician who hints at even the most limp-wristed medicare or SS reform will be demonized by Democrats and kicked out of office. The democrat “solution”, of course, is to raise taxes on “the rich” and keep growing entitlements. And then you have all the insane and ruinous wars that the republicans love. So that it is why most of us are so pessimistic.
Years ago, I watched the movie “Dr. Strangelove” (great movie, by the way!) And in the opening scenes, they showed soldiers in front of a background that said, “Peace is Our Profession”.
Perfect.
I believe that was the motto of the now-defunct Strategic Air Command, then responsible for nuclear weapon delivery via bombers and ICBMs.
and ” War Is Just A Hobby”
Damn straight, we WILL be raising taxes on the scum bag thieving rich and their ill gotten wealth WILL be spread around.
We will be absolutely creaming the repubes in 2012. Recalls in WI, NY-26, were even trying to get rid of Paul Ryan. Too bad tea-publicans-you are nothing but cannon fodder for the rich. What stupid dolts! We want to do everything we can to make Walker(college dropout) fail. He is doing a pretty good job on his own on this…
The right wing hate radio in Milwaukee has gone from saying no repubes will be recalled to saying we (dems) will get back the senate.
This man, James G. Rickards, demonstrates Clear ideas how the economic issues will transpire.
http://kingworldnews.com/kingworldnews/Broadcast/Entries/2011/6/4_Jim_Rickards.html
Former Reagan aide Bruce Bartlett, meanwhile, blasted GOP leaders in Congress for asserting, without evidence, “that cutting taxes for the well-to-do and big corporations” will solve what ails America. In truth, says Bartlett, federal taxes on corporations and the rich remain “very low,” and we have “no reason to believe that reducing them further will do anything to raise growth or reduce unemployment.”
TAX THE RICH SPREAD THE WEALTH. former Raygun aid says!
TAX THE WEALTHY TO KEEP US HEALTHY!!
Seeming as everyone else is chiming in here….this is entertainment people.
nothing on this tea party website is supposed to be taken seriously.
This is what happens, when a whole bunch of old white people, become alarmed, as more and more Mexicans, move next door, into their fine white neighborhoods.
” The sky is falling” is the battle cry of the tea baggers..trying to scare the **** out of the old people.
I think it is funny, myself. And NO, this isnt the first time in our history, for these facists to proclaim, the end of the USA is near. That, is a joke!
Little bit of anti-white racism there, huh Mr. Singh?
Mr. Singh are you one of those people exploiting those Mexicans, by any chance?
Mr. Singh is anti-white racist. You wanna know what happens when dozens of Mexican families move to a neighborhood.
Falling property values, dense traffic due to a dozen people living the house, increased crime, mariachi music blaring at night.
Singh, if you love these mexicans so much, why don’t you take care of them? Oh no, you’re too busy exploiting them.
Hey owner of this blog, you never posted my last comment about immigration. But you continue to allow posts in here that are anti-white and bigots like Singh and other spam posts with links to outsourcing companies.
What gives here?
Well, lets see now. Wall Street criminals have literally stolen hundreds of billions if not trillions. States across the U.S. are forced to pay for illegal aliens by the millions, that create job depression in blue collar industries,and force taxpayers to take care of their large families, and worthless government “workers”, especially in states like Illinois, California, New Jersey, ….etc. are cleaning up with big salaries and grossly high pensions. So the U.S. economy has fallen? Do say.
Excuse me Mr. Singh, those old white people, and their ancestors built this whole nation. Capish Mr. Singh?
baloney!!
If economy is as bas as you claim, why is US Government alowing over a million legal foreign workers a year plus doing little to stop the 300,000 illegal workers coming in yearly?? Why haven’t usa made everify mandatory and stopped suing Arizona for protecting itself from immigration.
Diversity will make us stronger.
And if you think that is a bad thing, why haven’t you joined numbersusa yet? Hypoccrites!
Liberals preach about embracing diversity. Yea, unless diversity is holding a can of Mountain House food. And Liberals love to preach ‘exit strategy’. OK, we have Christ. What’s yours? One more question while you’re standing there looking like deer in the headlights. We are prepared to be wrong. Are you?
I have watched CNN’s “World Business Today” and on several occasions the irrational exuberance in the markets was questiones. Specifically whether volumes in markets were pent up or based on fundamentals.
Michael. Thanks for your blog. Its people like you who are helping to get peoples heads out of the sand.
Alot of people, out of disbelief that the US is failing, prefer to ignore the facts. Instead they shun the obvious hoping the problems will fade away and they can keep right on waisting time with NFL games, Hollywood and text messaging irrelevancies.
It is the soldier, more than anyone else, who prays for peace. For it is the soldier, more than anyone else, who knows the high price of war.
John its people like you we are trying to teach. just sit down one day and do the math.
No wonder many people in the world consider us arrogant. The sad part is many of us are not only arrogant, we are blind.
Arizona is burning. Is that a bad omen for the economy?
Robert Reich also warned against the dangers of second mortgages and how they’re going to come back and bite the borrower with a vengeance. The other problem is getting the genie back in the bottel.
In the good ol’ days of the 50s and early 60s the wealthy were taxed over 50% and they didn’t run off shore.The roads, librarys and schools were in great shape and the little guy actually had money to spend. It wasn’t until the military industrial complex figured out how much money there’s to be made in war profiteering.
A good example is HWBush neutering Saddam. Halliburton and it’s cronies made a “killing”. They couldn’t wait to get a patsy like GWbush to start another war and this time make it never ending.
The elites closing factories in the US for slave wages in China have been making money hand over fist and coupled with the “supposed” tax breaks to stimulate jobs aren’t going to part with their obscene amounts of money now that they have it.
The corporatists running this kleptocracy only use patiotism when they want to send troops to protect their assets abroad. They could care less to the damage their greed has done to America.
We need something to replace housing. I know it became a bubble that ended up hurting a lot, but people forget too easily that housing carried the economy for several years. By which I mean 100′s of thousands of people were gainfully employed – their lives, and therefore, the lives of many around them – were on a positive footing.
What can replace housing now? I say a war footing to end our dependence on foreign oil. First, break ground on a nuclear power plant each month for the next several years. We’re not going to build anything like those damaged dinosaurs in Japan, nor are we going to build any on seismic faults.
A nuke plant is 90% steel and cement – fairly low tech, high paying jobs. The average large plant will employ 2,400 construction workers at peak construction, and will create around 700 permanent jobs when done. There are usually 1 or 2 support jobs created in the surrounding community for every job at the plant.
If we broke ground on a new plant each month for four years, and if the plants take an average of four years to build, the first one will be finished when ground is broken on the last one. In 8 short years we will have increased our fleet of nuclear plants by 50%, employing probably 100,000 people. As many as 50,000 construction workers will have been busy at the peak of construction.
Of course, why stop with only 48 plants? We ought to double our inventory from the current 104 – and displace a ton of coal from making electricity in the process. We ought to use that coal to make pristine clean diesel and jet fuel – that’s where we reduce our dependence on foreign oil: Nuclear power displaces coal out of electricity, the displaced coal is used in transportation, displacing foreign oil right out of our economy.