Debts

As Americans Celebrate Labor Day 2010, U.S. Factories Are Closing In Droves

Labor Day 2010 comes in the midst of a stunning wave of U.S. factory closings that stretches from coast to coast.  Once upon a time America was the greatest manufacturing machine that the world has ever seen, but now it seems as though the only jobs available for working class Americans involve phrases such as “Welcome to Wal-Mart” and “Would you like fries with that?”  Even though the population of the United States has exploded over the last several decades, the number of Americans employed in the manufacturing sector today is smaller than it was in 1950.  America has become a voracious economic black hole that “consumes” as much as possible and yet actually produces very little.  The United States is becoming deindustrialized at a blinding pace, and it is becoming increasingly difficult for blue collar American workers to find jobs that will actually enable them to support their families.  The sad truth is that American workers don’t have a whole lot to actually celebrate this Labor Day.  14 million U.S. workers are “officially unemployed” and tens of millions of others have been forced to take part-time or temporary jobs that they are overqualified for just so they can survive.   Unfortunately, this is not just a temporary situation for American workers.  As millions of good jobs continue to get outsourced and offshored, Labor Day celebrations in coming years will be even more depressing.

The following are just some examples of the recent factory closings that have been sweeping the nation…. 

*Chrysler has announced that its plans to close an engine plant in Kenosha, Wisconisn are official.  The factory will be shut down for good on approximately October 8th and about 575 jobs will be lost.

*The largest milk producer in the United States, Dean Foods, says that it will close a South Carolina dairy plant in October.  That factory closing will eliminate 151 jobs.  This is just the latest in a string of factory closings for Dean Foods.  Over the past several years Dean Foods has closed factories in Michigan, Nebraska, Pennsylvania, Tennessee and Wisconsin.

*Continental Structural Plastics, a major producer of body panels for cars, is shutting down its plant in North Baltimore, Ohio in October and as a result 214 people will lose their jobs.

*Perfect Fit Industries (a prominent manufacturer of bedding accessories, pillows and comforters) has announced that it plans to close a factory in Loogootee, Indiana by the end of the year. As a result, 95 jobs will be lost.

*Ford Motor Company recently announced the closure of a factory that produces the Ford Ranger in St. Paul, Minnesota.  Approximately 750 good paying jobs are going to be lost.  Minnesota Governor Tim Pawlenty was so desperate to keep the plant open that he offered Ford a multi-million dollar incentive package full of tax cuts and job creation incentives to keep it open, but Ford rejected the offer, saying that the St. Paul plant just does not fit with Ford’s new “global” manufacturing strategy.

*The city of Breckenridge, Texas has been shaken by news that Karsten Homes notified nearly 130 employees that their local factory will be closing in two months.

*It has been announced that there will be a new round of layoffs at the Whirlpool factory in Fort Smith, Arkansas, but at this point the company is not saying how many jobs will be lost.  Whirlpool has been laying off workers at the plant steadily over the past few years as much of the work that was once done at the factory has been moved to a facility down in Mexico.

*Midcoast Aviation is closing its Savannah, Georgia factory by the end of the year.  This move will affect approximately 362 jobs.

*Federal-Mogul has been making headlamps for automobiles and for industrial use since 1954 in Boyertown, Pennsylvania, but now that era is coming to an end.  Federal-Mogual has announced that the Boyertown plant will close by the end of the year and 70 jobs will be lost.

*Duro Bag Manufacturing Co. plans to close its factory in Hudson, Wisconsin by October 22nd.  As a result, 63 workers will be without jobs.

*Quad/Graphics is the second-largest commercial printer in the United States.  It prints Newsweek, Rolling Stone, Sports Illustrated, Time and Wired magazines.  Unfortunately, times are tough for Quad/Graphics and they have announced the closing of five plants.  The facilities to be closed are located in Mississippi, Ohio, Nevada and Tennessee.  As a result of the closings, 2,200 workers will lose their jobs.

Scenes such as these are being repeated over and over and over across the United States.

What we are witnessing is the slow-motion deindustrialization of the United States.

This is very bad news for American workers, and indeed it is very bad news for all Americans, because the truth is that any economy that consumes far more than it produces does not have a bright future.

So what do you think about the deindustrialization of America?  Feel free to express your opinion by leaving a comment below….

10 Reasons Why Conservatives Should Be Against Unfair Trade With China And 10 Reasons Why Liberals Should Be Against Unfair Trade With China

There are very few things that the top politicians in both political parties agree on these days, but one of the things that that they do agree on is that free trade with China is a good thing.  George W. Bush, Dick Cheney, John McCain, Barack Obama, Nancy Pelosi and Harry Reid have all fully supported our trade relationship with China.  In this day and age, virtually anyone who even dares to question how fair our “free trade” is with China is immediately labeled as a “protectionist” and is dismissed as a loon.  But when you sit down and really analyze it, there are a whole lot of very good reasons why both conservatives and liberals should be fundamentally against our unfair trade relationship with China.  But you won’t hear these reasons being talked about on CNN, MSNBC or Fox News.  You won’t hear many members of Congress get up and give speeches about how trade with China is bleeding our economy dry.  Both major political parties have completely and totally bought into “the benefits” of globalism and free trade and there isn’t even much of a national debate about our trade policies anymore.

But there should be a national debate.  Unfortunately, most conservatives are just going to accept whatever their leaders tell them to believe.  Conservatives have been convinced that to be against unfair trade is to be “anti-business” and no conservative ever wants to be anti-business.

Similarly, most liberals blindly follow whatever Obama, Pelosi and Reid tell them to believe.  Millions of hard working Democrat voters have lost their jobs due to our nightmarish trade relationship with China, but they are still convinced that Obama is their savior and that they must not ever say anything that he does is wrong.

Well, I have a message to members of both political parties….

WAKE UP!  YOU HAVE BEEN LIED TO!  

If you are truly a conservative, there is no way that you should ever support our trade relationship with China.

If you are truly a liberal, there is no way that you should ever support our trade relationship with China.  

Globalism has allowed the big global corporations that dominate our economy to make huge amounts of money, but it has also forced American workers into one gigantic global labor pool. 

Are you willing to work 12 hours a day for less than $2.00 an hour in sweatshop conditions?  

Well, that is your new competition.

The top 1 percent of all Americans is using globalism to make huge profits, but the standard of living for the rest of us is slowly but surely being forced down toward the rest of the world.

Is that what you really want?

If after reading the reasons below you can still consider yourself a good “conservative” or a good “liberal” and still support our current trade relationship with China please leave a comment to this article.  I would love to hear your reasoning.  

10 Reasons Why Conservatives Should Be Against Unfair Trade With China

1 – Conservatives are supposed to be all about creating jobs.  But millions upon millions of good paying middle class jobs have been shipped off to China and they are never coming back.

2 – Once upon a time, conservatives were opposed to communism.  But our trade relationship with China has enabled the largest communist economy in the world to go from third world status to superpower status.  China is now the second largest economy in the world, and that would have never happened without our cooperation.

3 – Conservatives are supposed to be concerned about national security.  But thanks to the massive amount of money they have made from us, the Chinese have been able to dramatically upgrade and modernize their military.  At the top levels of the Chinese government, most officials still believe in the ultimate worldwide triumph of communism, and now thanks to us they have a world class military with which to advance that agenda.

4 – China has a very strict one-child policy which should be absolutely abhorrent to any true conservative.  

5 – China uses mobile abortion vans to help enforce the one-child policy.  How any social conservative can justify trade with China after learning this is a total mystery. 

6 – If Republicans actually started fighting to protect American jobs from going overseas they could win the “angry working class vote” and take both houses of Congress and the White House in 2012.

7 – Conservatives don’t like when other countries try to take advantage of the American people.  Yet China is taking advantage of the American people by keeping their currency artificially low and most conservatives are strangely quiet about this.  This currency manipulation has put large numbers of U.S. small businesses at a huge competitive disadvantage and has forced many of them to shut down.  Essentially, this currency manipulation has enabled China to get us down on the mat and continually beat the stuffing out of us.  Meanwhile, our politicians stand by and do nothing.     

8 – Our trade deficit with China has enabled them to accumulate about a trillion dollars of our debt.  This gives them tremendous leverage over us and is a very serious threat to our economy and to our national security.

9 – Conservatives are traditionally very protective of national sovereignty and state sovereignty.  But a global economy governed by the G20, the WTO, the IMF and the World Bank is a giant step toward world government and a giant step away from national sovereignty and state sovereignty.

10 – The giant trade deficit that the United States runs is making us poorer as a nation each and every month.  Each year, somewhere around half a trillion dollars of our national wealth gets transferred out of the United States.  Much of that gets transferred to China.  The United States spends approximately $3.90 on Chinese goods for every $1 that the Chinese spend on goods from the United States.  The transfer of wealth that this represents is absolutely mind blowing.  China is literally bleeding us dry.

10 Reasons Why Liberals Should Be Against Unfair Trade With China

1 – Liberals are supposed to defend unions, yet our trade relationship with China has done more to hurt unions than anything else and most liberal politicians don’t seem to care.  Globalism has put the average American worker in direct competition with the cheapest labor in the world.  Unemployment is going to continue to increase unless something is done to stop the offshoring and outsourcing of our jobs.

2 – Liberals are supposed to care about the environment.  But our trade relationship with China means that thousands of factories and businesses leave our shores and end up in China where the environmental regulations are not nearly as strict.  In fact, China has become a complete and total environmental nightmare at this point.  If liberals truly cared about the environment they would want to keep factories and businesses here.

3 – Our trade relationship with China (and with the rest of the world) has caused the income inequality gap in America to explode.  The top 1% of all Americans have done very well in this environment while the rest of us suffer.  For much more on this phenomenon, please see my recent article entitled “Winners And Losers“.

4 – Dangerous products from China are pouring into the United States. Liberals should be horrified that so many of our products are now made outside the United States far from the watchful eyes of our regulatory agencies.  Over the past couple of years, there has been headline after headline about dangerous products made in China.  The following is just one example of this: 10 Babies Die Mysteriously At Fort Bragg: Toxic Drywall From China Used In Base Homes The Culprit?

5 – In a global economy, every piece of legislation that Democrats intend to help American workers with ends up backfiring.  For example, a rise in the minimum wage or a law increasing worker benefits causes American workers to become even more expensive and gives corporations even more incentive to move jobs overseas.

6 – “Free Trade” has been the most destructive in the inner cities where Democrats have traditionally gotten a tremendous amount of support.  Shiny new factories are going up all over China while at the same time formerly great manufacturing cities such as Detroit have degenerated into rotting war zones.  This is not good for liberals.

7 – Democrats won’t get elected if there are no jobs.  Each month, more jobs leave the United States for China and the growing number of long-term unemployed workers in the U.S. is not going to be inclined to keep the same politicians in office if this continues.  If liberal politicians value their jobs they should start protecting the jobs of average Americans.

8 – Free trade with China threatens to ruin our social safety net.  It is a good thing to help those in need, but there comes a point where too many people jump on to the net and it breaks down.  Already, one out of every six Americans is enrolled in at least one anti-poverty program.  Over 40 million Americans are on food stamps.  These are not good numbers for liberals.

9 – True liberals should be absolutely horrified by the exploitation of labor in China.  In China, millions of people work in horrific conditions for what is essentially slave labor pay.  The fact that big global corporations are getting rich from this should make the stomach of every liberal turn.   

10 – The giant trade deficit that the United States runs is making us poorer as a nation each and every month.  Each year, somewhere around half a trillion dollars of our national wealth gets transferred out of the United States.  Much of that gets transferred to China.  The United States spends approximately $3.90 on Chinese goods for every $1 that the Chinese spend on goods from the United States.  The transfer of wealth that this represents is absolutely mind blowing.  China is literally bleeding us dry.

Liberals and conservatives should both be able to agree that it is not a good thing for millions of American jobs to leave the United States and go to China.

Liberals and conservatives should both be able to agree that it is not a good thing that billions of dollars in wealth gets transferred from the United States to China every single month.

But will our leaders wake up and start pursuing a more logical approach to China?

Don’t count on it.

Record Low Mortgage Rates, A Record Low Federal Funds Rate And Obscene Economic Stimulus Spending Have All Failed – Will Nothing Stimulate This Dead Horse Of An Economy?

Over the past several years, the Federal Reserve and the U.S. government have tried everything that they can think of to stimulate this dead horse of an economy but nothing has worked.  The Fed has slashed the federal funds rate to record low levels, mortgage rates have been pushed to all-time lows and the U.S. government has spent hundreds of billions of dollars in an effort to get the economy going.  But despite all these of these extraordinary efforts, the U.S. economy continues to just lie there like a dead corpse.  Never before have the Federal Reserve and the U.S. government done more to try to stimulate the economy and never before have their efforts produced such poor results.  Home sales continue to set new record lows, more than 14 million Americans continue to be unemployed, foreclosures continue to soar, personal bankruptcies continue to soar and an increasing number of Americans continue to sign up for food stamps and other anti-poverty programs.  All of the things that once worked so well to stimulate the U.S. economy seem to be doing next to nothing here in 2010, and the American people are becoming increasingly frustrated by economic problems that just keep getting worse.

Once upon a time, a big drop in mortgage rates would get Americans running out to buy homes in big numbers.  But that is just not happening this time. 

As you can see from the chart below, mortgage rates are at ridiculously low levels right now.  The average rate for a 30-year fixed mortgage was 4.32 percent this week.  That is the lowest it has ever been since Freddie Mac began tracking mortgage rates back in 1971.

These low rates have motivated millions of Americans to refinance their existing home loans, but sales of new and existing loans remain at record low levels.  In fact, the number of Americans refinancing their homes is now at its highest level since May 2009, but the U.S. housing crisis just continues to get worse.  Despite these record low mortgage rates, existing home sales declined 27 percent during the month of July and new homes sales dropped to the lowest level ever recorded in July.

So if Americans are not buying houses when mortgage rates are this ridiculously low, what in the world is going to cause a turnaround in the U.S. housing market?

The Federal Reserve has sure been trying to do what it can to resuscitate the U.S. economy.  For decades, a drop in the federal funds rate could always be counted on to give the economy a jump start.  But the Fed has dropped the federal funds rate almost to zero for quite some time now and it has done next to nothing to get things moving again. 

So is the Federal Reserve out of ammunition?  Well, let’s just say that they have used up all of their “best” ammunition.  The Fed has been telling us since March 2009 that the federal funds rate will remain between zero and 25 basis points “for an extended period” of time, but the U.S. economy doesn’t seem to care. 

Of course Ben Bernanke insists that the Fed is not out of ammunition and that everything is going to be okay, but at this point there is just not a lot left of Bernanke’s fading credibility.

The U.S. government tried to do their best to help the economy by passing stimulus bill after stimulus bill, but it just has not helped much.  The government spent hundreds and hundreds of billions of dollars on some of the most wasteful things imaginable, and while the massive injection of cash may have helped temporarily stabilize the economy, it has not brought about the “recovery” that our politicians were hoping for.

Now the pendulum has swung the other way in Congress and there is very little appetite for more economic stimulus spending.  But if the economy was not recovering when the government was throwing giant piles of money at it, what is going to happen as the economic stimulus totally dries up?

Already there are signs that the U.S. economy is in big, big trouble.  General Motors announced this week that U.S. sales in August fell 24.9% to 185,176 vehicles from 246,479 vehicles in August 2009.

But don’t let up and down sales reports fool you.  One month they may be down and the next month they may be up a bit.  The important thing is to keep your eyes on the truly disturbing long-term trends.

Thanks to the nightmarish U.S. trade deficit, far more wealth leaves the United States each month than enters it.  That means that the United States is getting significantly poorer each month.  As I noted yesterday, the United States spends approximately $3.90 on Chinese goods for every $1 that the Chinese spend on goods from the United States.  That is not sustainable and China is going to continue to bleed us dry for as long as we allow it to continue.

In addition, the United States continues to go into more debt every single month.  Each month the U.S. national debt gets bigger, state governments go into more debt and local governments go into more debt.

So what we have is a nation that is getting poorer and that is going into more debt month after month after month.

We are on the road to economic hell, and the American people don’t even realize it because things are still relatively good – at least for now.

But as the economy continues to unravel, is there anything that the folks over at the Federal Reserve can do?

Well, yes there is.  It is called “quantitative easing” and the Fed has already indicated that they are going to start doing it again.  Essentially, quantitative easing is when the Federal Reserve creates money out of thin air and starts buying things like U.S. Treasuries, mortgage-backed securities and corporate debt.

But isn’t there a good chance that this could cause inflation?

Well, yes.

But “Helicopter Ben Bernanke” seems determined to live up to his nickname.  Anyone who thinks that Bernanke is going to just sit there and do nothing is delusional.  At some point he is going to fire up his helicopter and start showering the economy with money. 

And the reality is that feeding massive quantities into the economy will create more economic activity.  However, it will also come with a price.

Someday soon, you may wake up to newspaper headlines that declare that our economy is growing at a 10% annual rate, but what they won’t tell you is that the real rate of inflation will be running about 15 or 20 percent at the same time.  In fact, the U.S. government will probably try to convince us that the “official” rate of inflation is only about 5 or 6 percent.

The cold, hard truth is that the U.S. economy is going to continue to get worse.  Whether it will be a deflationary decline or an inflationary decline depends on the boys over at the Fed.  But it is going to be a decline.

Meanwhile, millions of American families are hanging on by their fingernails and are hoping in vain for the great economic recovery which is never going to come.

Can A Family Of Four Survive On A Middle Class Income In America Today?

When I was growing up, $50,000 sounded like a gigantic mountain of money to me.  And it was actually a very significant amount of money in those days.  But in 2010 it just does not go that far.  Today, the median household income in the United States for a year is approximately $50,000.  About half of all American households make more than that, and about half of all American households make less than that.  So if your family brings in $50,000 this year that would put you about right in the middle.  So can a family of four survive on $50,000 in America today?  The answer might surprise you.  Twenty years ago a middle class American family of four would have been doing quite well on $50,000 per year.  But things have changed.

You see, despite government efforts to manipulate the official inflation numbers, the price of everything just keeps going up.  The price of food slowly but surely keeps moving up each year.  The price of gas is far higher than it was 10 or 20 years ago.  Taxes just keep going up.  Utility bills just keep going up.  Each year middle class American families have found themselves increasingly squeezed as their expenses have risen much more rapidly than their incomes.  

So just how far will $50,000 go for a middle class American family of four today?  Well, $50,000 breaks down to about $4,000 a month.  So how far will $4,000 a month stretch for a family of four in today’s economy?….

First of all, the family of four needs some place to live.  Even though house prices have come down a bit recently, they are still quite expensive compared to a decade ago.  Let’s assume that our family of four has found a great deal and is only spending $1000 a month on rent or on a mortgage payment.  In many of the larger U.S. cities this is a completely unrealistic number, but let’s go with it for now.

Next, our family of four has to pay for power and water for their home.  This amount can vary dramatically depending on the climate, but let’s assume that the average utility bill is somewhere around $300 a month.

Our family is also going to need phone and Internet service.  Cell phone bills for a family of four can balloon to ridiculous proportions, but let’s assume that our family of four is extremely budget conscious and has found a package where they can get basic phone service, Internet and cable for $100 a month.  Most middle class American families spend far more than that.

Both parents are also going to need cars to get to work.  Let’s assume that both cars were purchased used, so the car payments will only total about $400 a month.  If the vehicles were purchased new this number could potentially be much higher.

If our family has two cars that means that they will also be paying for automobile insurance.  Let’s assume that they both have exemplary driving records and so they are only spending about $100 a month on car insurance.

Our hypothetical family of four is also going to need health insurance.  In the past, families could choose to go without health insurance (at least for a while), but now thanks to Barack Obama all American families will essentially be forced to purchase health insurance.  Health insurance premiums are absolutely skyrocketing, but let’s assume that our family has somehow been able to find an amazing deal where they only pay $500 a month for health insurance.

Our hypothetical family is also going to have to eat.  Let’s assume that our family clips coupons and cuts corners any way that it can and only spends about $50 for each member of the family on food and toiletries each week.  That works out to a total of $800 a month for the entire family.

Lastly, the parents are also going to need to buy gas to get to and from work each week.  Let’s assume that they don’t live too far from work and only need to fill up both cars about once per week.  That would give them a gasoline bill of about $50 a week or $200 a month.  Of course if either of them lived a good distance from work or if a lot of extra driving was required for other reasons this expense could be far, far higher.

So far our family has spent $3400 out of a total of $4000 for the month.  Not bad, eh?

Wrong.

We haven’t taken federal, state and local taxes out of the paycheck yet.  Depending on where our family lives, this will be at least $1000 a month. 

So now we are $400 in the hole.

But to this point we have assumed that our family does not have any credit card debt or student loan debt at all.  If they do, those payments will have to be made as well.

In addition, the budget above includes no money for clothing, no money for dining out, no money for additional entertainment, no money for medications, no money for pets, no money for hobbies, no money for life insurance, no money for vacations, no money for car repairs and maintenance, no money for child care, no money for birthday or holiday gifts and no money for retirement.

On top of all that, if our family of four has a catastrophic health expense that their health insurance won’t pay for (and health insurance companies try to weasel out of as many claims as they can), then our family of four is not just broke – they are totally bankrupt.

Are you starting to get the picture?

It is getting really, really hard out there for middle class American families these days.

And unfortunately, many American families now have at least one parent that is not working.  In some areas of the nation it just seems like there are virtually no jobs available.  For example, at 14.3%, the state of Nevada now has the highest unemployment rate in the nation.  Michigan (which had been number one) is not very far behind.

But even those Americans who are able to find work are finding themselves increasingly squeezed.  For many Americans, a new job means much lower pay.  Millions of highly educated people who once worked in professional positions now find themselves working in retail positions or in the food service industry.  Many are hoping that the economy will “turn around” soon and that they will be able to go back to higher paying jobs, but the truth is that the U.S. economy is simply not producing enough good jobs for everyone any longer.

So where did all the good jobs go?  Well, millions of them have been shipped off to China, India and dozens of other nations around the globe.  Today the United States spends approximately $3.90 on Chinese goods for every $1 that China spends on goods from the United States.  A Chinese factory worker makes about a tenth of what an American factory worker makes.  And China continues to keep their currency artificially low so that jobs will continue to flow into China and so that we will continue to run a massive trade imbalance with them.

In a previous article, “Winners And Losers“, I went into much greater detail about how globalism is destroying middle class jobs.  We are rapidly moving toward an America where there will be a small group of “haves” and a very large group of “have nots”. 

The middle class in America is going to continue to shrink and shrink and shrink in the years ahead.  Not only are both parents going to have to work to pay the bills, but both parents in many families will be forced to take two or three jobs each just to make it each month. 

So what do you think?  Do you think that a family of four can make it on a middle class income in America today?  Feel free to leave a comment with your thoughts….

Winners And Losers

When you mention the word “globalism” to most people, they think of something that is going to happen someday in the future.  But the truth is that globalism is already here.  At this point we essentially already have a one world economy.  Goods and services flow across national borders more freely today than at any other point in human history.  A major economic event on one side of the world instantly affects financial markets on the other side of the world.  Labor has become a truly global commodity.  You can go to the exact same fast food restaurant or buy the exact same iPod on six different continents.  A whole host of international trade agreements are making national borders economically irrelevant.  Today our “big box” stores and shopping malls are jammed full with products that have been made overseas and it is becoming increasingly difficult to find American-made products.  The reality is that it has now become undeniable that globalism has arrived and we are now part of a world economy that is integrating at lightning speed.  Unfortunately, all of this globalism has created some very clear winners and losers.  But most middle class Americans are in such a deep sleep that they don’t even realize that they are the losers.

The sad truth is that as work has become a global commodity, middle class American workers have been placed in direct competition with the cheapest labor in the world.  For years the U.S. economy was so strong that nobody really noticed that it was bleeding thousands of jobs every single month.  But now that 14 million Americans are unemployed and the U.S. economy is literally hemorrhaging jobs people are starting to sit up and take notice.

Let’s take a look at one recent example.  Ford Motor Company has just announced the closure of a facility that produces the Ford Ranger in St. Paul, Minnesota.  Approximately 750 good paying jobs are going to be lost.

But isn’t Ford doing better these days?

Sure.

Don’t people still need Ford Rangers?

Of course they do.

Minnesota Governor Tim Pawlenty even offered Ford a multi-million dollar incentive package full of tax cuts and job creation incentives to keep the factory going.

Basically, Pawlenty did everything except get down on his hands and knees and beg Ford to keep the plant open.

But it wasn’t good enough for Ford.

So where is Ford going to make those Ford Rangers now?

Well, the statement issues by Ford did not say, but it did offer some clues….

“Ford continues to concentrate on implementing the plan we initiated four years ago to streamline our plant operations and better leverage our global platforms. At this time, the Twin Cities Assembly Plant does not fit into our global manufacturing strategy.”

Did you notice that the world “global” was used twice there?

In other words, Ford plans to move their factory some place where labor is cheaper.

But the truth is that this is happening in every industry.

Between 2004 to 2008, tire imports from China increased 215 percent by volume and 295 percent by value.

During that same time period, tire manufacturing in the United States fell by 25 percent.

It turns out that there are lots of people who are willing to make tires for near slave labor wages in China.

In our new “global economy”, American workers are just far too expensive.  So middle class manufacturing jobs are fleeing our shores at a staggering pace.

Since 1979, manufacturing employment in the United States has fallen by 40 percent.

Are you alarmed yet?

You should be.

The truth is that we did not have to merge our economy with nations like China.  China does not have the same minimum wage laws that we do.  China does not have the same environmental protection laws that we do.  In China, companies can treat their workers like crap.  As a result of open trade with the United States, scores of shiny new factories have opened all over China while once great manufacturing U.S. cities such as Detroit have degenerated into rotting war zones.  We continue to expand trade with China even though their communist government stands for things that are absolutely repulsive and has a list of human rights abuses that is seemingly endless.

But politicians from both parties swore up and down that globalism would be so good for us.  Now we have created a network of free trade agreements that would be virtually impossible to unwind.  The following are just some of the free trade agreements in force around the world right now….

The ASEAN Free Trade Area (AFTA)
The Central American Integration System (SICA)
The Central European Free Trade Agreement (CEFTA)
The Common Market for Eastern and Southern Africa (COMESA)
The Commonwealth of Independent States Free Trade Agreement (CISFTA)The G-3 Free Trade Agreement (G-3)
The Greater Arab Free Trade Area (GAFTA)
The Gulf Cooperation Council (GCC)
The North American Free Trade Agreement (NAFTA)
The Southern African Development Community (SADC)
The South Asia Free Trade Agreement (SAFTA)
The Trans-Pacific Strategic Economic Partnership (TPP)

Of course the most important trade organization of them all is the World Trade Organization (WTO) which is constantly working to expand world trade and further integrate the economies of the world.

But the American people don’t understand all this.  They just want the U.S. government to do something to create more jobs. 

But whenever the U.S. Congress tries to do something nice for U.S. workers like raising the minimum wage or requiring companies to give them more benefits it ends up backfiring.

Why?

Because those things make American workers even more expensive and it gives companies even more incentive to send our jobs overseas.

We have recklessly merged our economy with economies around the world that are far less developed than our own.  Unless this thing is reversed, it is inevitable that the standard of living of American workers will be forced down until it approximately matches workers in the rest of the world.

Already, millions of high-paying manufacturing jobs are being replaced by low-paying service jobs.

The U.S. Labor Department’s 2009 Occupational Employment and Wages report found that retail sales, cashiers, general office clerks, food preparation and service workers, and nurses were the occupations with the highest levels of employment in 2009.

Retail sales and food service workers?

Those are jobs for 17 year old kids.

But today apologists for this flawed system tell us that we just need to suck it up and take two or even three low paying jobs because things will never go back to how they used to be.

So has globalism created any winners?

Of course.

As I noted yesterday, the folks down on Wall Street are doing quite well.  New York state Comptroller Thomas DiNapoli says that Wall Street bonuses for 2009 were up 17 percent when compared with 2008.

The reality is that the exploitation of very cheap foreign labor has enabled many large global corporations to make insane amounts of money.  Things are very good if you are at the top of the food chain.  According to Harvard Magazine, 66% of the income growth between 2001 and 2007 went to the top 1% of all Americans.

In addition, our elected officials are doing quite nicely these days.  According to an analysis by The Hill, the 50 wealthiest members of the U.S. Congress saw their collective fortunes increase 85.1 million dollars to $1.4 billion in 2009.

Yes, it is very profitable to be part of America’s ruling class.

Meanwhile, tens of millions of average Americans continue to suffer.  Recently a user on Unemployed-Friends named Jim shared his tragic story….

My Name is Jim and I was laid off last June.

My whole department was outsourced.

There was talk of it and when I heard it from my boss (the CFO) when I went home I started to send out resumes.

Then the day came when the layoff came.

So in 1.3 years I have sent out 160K resumes, between blasting, send out from job boards and e-mailing my resume blindly to companies HR departments.

I was on 5 interviews.

I want to work badly.

Everyday I send out resumes but lately I have been getting depressed, I found out who my real friends and family are now.

I have been kicked down substantially in these 1.3 years.

I feel like I’m staring into an abyss of no jobs, will I ever work again? IDK.

When I used to talk to “Friends” and “Family” they all say “Things will get better” “Don’t worry”, Yeah right.

I feel so alone and worthless.

I wish I had at least 1 GOOD friend but it seems like no-a-days the dog eat dog world is worst than ever.

I’m NOT suicidal, not at all.

Then I found this site.

I have been saying we are in a depression for 2 years but nobody listened and people have dismissed what I have said.

The sad thing is it seems like we are on the verge of an economic collapse or worst.

So that is my story

Americans like Jim don’t understand why they can’t get jobs anymore.

They feel like failures, but it is actually the system that is failing.

Globalism is not good for middle class American workers.

Democrats can continue to pass law after law that attempts to help American workers, but unless something is done to protect American jobs they are going to continue to be shipped overseas.

Republicans can pass tax break after tax break, but unless those tax breaks are linked to jobs the ruling elite and the big global corporations will just pocket those tax breaks and will continue to ship jobs overseas in order to make bigger profits.

What both parties should be doing is trying to figure out ways to keep American jobs in America, but at this point both parties are completely sold out to globalism.

Globalism was the official policy of the Bush administration and it is the official policy of the Obama administration.

Unless something dramatic changes, the U.S. economy is going to continue to lose huge numbers of jobs and people like Jim are going to continue to wonder what in the world happened to their lives.

But in 2010, most Americans are so busy drinking beer, watching sports, keeping up with Lady Gaga and Justin Bieber, and obsessing over the new cast of Dancing With The Stars that they aren’t even aware that things are literally falling apart all around them.

It is really sad.

30 Statistics That Prove The Elite Are Getting Richer, The Poor Are Getting Poorer And The Middle Class Is Being Destroyed

Not everyone has been doing badly during the economic turmoil of the last few years.  In fact, there are some Americans that are doing really, really well.  While the vast majority of us struggle, there is one small segment of society that is seemingly doing better than ever.  This was reflected in a recent article on CNBC in which it was noted that companies that cater to average Americans are doing rather poorly right now while companies that market luxury goods and services are generally performing exceptionally well.  So why aren’t all American consumers jumping on the spending bandwagon?  Well, it seems that there are a large number of Americans who either can’t spend a lot of money right now or who are very hesitant to.  A stunningly high number of Americans are still unemployed, and for many other Americans, there is a very real fear that hard economic times will return soon.  On the other hand, there is a significant percentage of Americans who are blowing money on luxury goods and services as if the economy has fully turned around and it is time to let the good times roll.  So exactly what in the world is going on here?

Well, in 2010 life is very, very different depending on whether you are a “have” or a “have not”.  The recent article on CNBC referenced above described it this way….

Consumer spending in the U.S. has turned into a tale of two cities in 2010, with an entire segment of consumers splurging confidently on the finer things in life, while another segment, concerned about unemployment and with little or no discretionary income, spends only on bare necessities.

So why is this happening?

It is happening because the rich are getting richer and they have plenty of money to buy stuff and the poor are getting poorer and have less money to spend than ever.

In case you haven’t been paying attention over the past couple of decades, what we have in America today is a system that is designed to funnel as much wealth into the hands of the elite as possible.

This isn’t capitalism that we have in America in 2010.  Instead, what we have created is a system where the laws are set up so that the power elite and their big, dominant corporations always win. 

Why do you think so many of America’s largest corporations pay so little in taxes? 

Why do you think so many of them are showered with government subsidies, tax breaks and bailouts?

It’s not about competition anymore.

It’s about rigging the game in your favor.

The power elite and the giant corporations they control spend millions and millions on lobbying and campaign contributions and they expect a big return on that investment.

Let’s take a look at one example.  Many people think that Barack Obama and the Democrats are supposed to be anti-business, right?

Well then why are some of Barack Obama’s biggest donors the very same corporations that are receiving giant bailouts, making record profits and paying their employees billions in bonuses?

Goldman Sachs was Barack Obama’s second biggest donor.  Microsoft was number four.  Citigroup was number six.  JPMorgan Chase was number seven.  Time Warner was number eight.

Are you starting to get the picture?

Every single year, the U.S. Congress passes law after law after law that makes it easier for big corporations to dominate and makes it easier for the rich to get even richer.

America’s economy is not about competition anymore.

It is about eliminating competition.

And unfortunately for middle class Americans, the giant predator corporations that now dominate our economy are realizing that they don’t really need nearly as many American workers anymore.

Instead, they are slowly but surely shipping our jobs off to the other side of the world where workers are willing to work for about a tenth as much.

And yet we still run out to the “big box” stores and fill up our carts with a bunch of plastic crap made on the other side of the world by these giant corporations.

Meanwhile, those giant corporations are taking the profits they make out of our communities and they are taking our jobs and are shipping them overseas.

So in the final analysis, is it any wonder why the income inequality gap is growing?

Without small businesses having a legitimate chance to compete and without good jobs for American workers, the middle class in America is going to continue to get chewed up and spit out.

The following are 30 statistics that prove that the elite are getting richer, the poor are getting poorer and the middle class is being destroyed in 2010….

The Rich Are Getting Richer

1 – As of 2007, the top 1 percent of all Americans was taking home 24 percent of the national income.  This was a level that had not been seen since the days of the Great Depression.

2 – Incomes have been growing in the United States, but those at the very top of the pyramid have been gobbling up almost all of the income growth.  According to Harvard Magazine, 66% of the income growth between 2001 and 2007 went to the top 1% of all Americans.

3 – Even official government figures bear out the fact that the rich are getting richer.  An analysis of income-tax data by the Congressional Budget Office a few years ago found that the top 1% of all American households own nearly twice as much of the corporate wealth as they did just 15 years ago.

4– Most Americans have suffered during the last few years, but not the boys and girls down on Wall Street.  New York state Comptroller Thomas DiNapoli says that Wall Street bonuses for 2009 were up 17 percent when compared with 2008.

5 – Even as the number of Americans living in poverty skyrockets, the number of millionaires just keeps growing.  In fact, the number of millionaires in the United States rose a whopping 16 percent to 7.8 million during 2009.

6 – The amount of money some of these Wall Street hotshots are making is incredible.  Back in 2005, the top 25 hedge fund managers earned a total of 9 billion dollars.  That would be bad enough, but even in these hard economic times the rich just keep getting richer.  One year after the recent financial collapse the top 25 hedge fund managers earned a total of approximately $25 billion.  That breaks down to an average of $1 billion each.  The truth is that the United States has been experiencing uneven prosperity for quite some time and things just seem to get worse with each passing year.

The Poor Are Getting Poorer

7 – Government anti-poverty programs are exploding in size in response to the recent economic difficulties.  USA Today is reporting that a record one in six Americans are now being served by at least one government anti-poverty program.

8 – Over 50 million Americans are on now Medicaid.  That figure is up more than 17 percent since the beginning of the recession.

9 – The number of Americans in the food stamp program rose to a new all-time record of 40.8 million in May.  That number is up almost 50 percent since the beginning of the recession.

10 – The number of Americans who cannot afford even the basic necessities is absolutely staggering.  A whopping 50 million Americans could not afford to buy enough food in order to stay healthy at some point over the last year.

11 – Compared to other industrialized nations, the United States is doing very poorly.  The U.S. poverty rate is now the third worst among the developed nations tracked by the Organization for Economic Cooperation and Development.

12 – The saddest part of this is what we are doing to our children.  According to one recent study, approximately 21 percent of all children in the United States are living below the poverty line in 2010. 

13 – But the American people cannot provide for their families if they don’t have jobs.  Today there are not nearly enough jobs for everyone.  In 2010, it takes the average unemployed American worker over 8 months to find a job.

14 – Approximately 10 million Americans are currently receiving unemployment insurance, which is a number that is nearly four times higher than what it was at back in 2007.

15 – The truth is that we are creating a permanent underclass of Americans that cannot get jobs.  The number of Americans receiving long-term unemployment benefits has increased over 60 percent in just the past year.

16 – Increasingly, the wealth of the United States is being held in fewer and fewer hands.  One study found that as of 2007, the bottom 80 percent of American households held about 7% of the liquid financial assets.

17 – It is not a good time to be living in “the bottom half” in America.  The size of “the pie” being divided up among those at the low end of the wage scale is becoming really, really small.  In fact, the bottom 40 percent of all income earners in the United States now collectively own less than 1 percent of the nation’s wealth.

The Middle Class Is Being Destroyed

18 – Even those Americans that still do have decent jobs are seeing their wealth fade rapidly.  For example, U.S. families have $6 trillion less in housing wealth than they did just three years ago.

19 – Home ownership used to be a sign that one had arrived in the middle class, but in 2010 an increasing number of Americans are finding out that they simply can’t afford their homes anymore.  One out of every seven mortgages were either delinquent or in foreclosure during the first quarter of 2010.

20 – The reality is that incomes have just not kept up with housing costs.  This has put an incredible amount of pressure on the middle class.  Just how much pressure?  Well, only the top 5 percent of all U.S. households have earned enough additional income to match the rise in housing costs since 1975.

21 – The debt binge middle class Americans have been on over the past couple of decades has drained many of them completely dry, and now more Americans than ever have bad credit scores.  Over 25 percent of Americans now have a credit score below 599, which means that they are a very bad credit risk.

22 – A rapidly rising number of Americans are actually choosing bankruptcy as a way out of their financial problems.  Nationwide, bankruptcy filings rose 20 percent in the 12 month period ending this past June 30th.

23 – The middle class manufacturing jobs that once defined so many American cities are rapidly disappearing.  Despite the fact that the U.S. population has dramatically increased, less Americans are employed in manufacturing today than in 1950.

24 – These days it seems like almost everyone is looking for a good job, but very few people are finding them.  According to one recent survey, 28% of all U.S. households have at least one member that is looking for a full-time job.

25 – Even many of those Americans that still have decent jobs have been hit hard by this economic downturn.  A recent Pew Research survey found that 55 percent of the U.S. labor force has experienced either unemployment, a pay decrease, a reduction in hours or an involuntary move to part-time work since the recession began.

26 – The number of jobs that are evaporating is absolutely stunning.  According to one analysis, the United States has lost a total of 10.5 million jobs since 2007.

27 – So where are the jobs going?  It doesn’t take a genius to figure it out.  China’s trade surplus (much of it with the United States) climbed 140 percent in June compared to a year earlier.

28 – The truth is that “globalism” and “free trade” have put middle class American workers in direct competition with the cheapest labor in the world.  This is what middle class American workers must now compete against: in China a garment worker makes approximately 86 cents an hour and in Cambodia a garment worker makes approximately 22 cents an hour.

29 – Due to these difficult economic conditions, the middle class is being squeezed as never before.  According to a poll taken in 2009, 61 percent of Americans “always or usually” live paycheck to paycheck.  That was up significantly from 49 percent in 2008 and 43 percent in 2007.

30 – So what kind of future do our young people have in front of them?  Unfortunately, things don’t look pretty.  Many fresh college graduates can’t even get a job that will allow them to be independent.  One recent survey of last year’s college graduates discovered that 80 percent moved right back home with their parents after graduation.  That was up significantly from 63 percent in 2006.

The Death Of Cash? All Over The World Governments Are Banning Large Cash Transactions

Are we witnessing the slow but certain death of cash in this generation?  Is a truly cashless society on the horizon?  Legislation currently pending in the Mexican legislature would ban a vast array of large cash transactions, but the truth is that Mexico is far from alone in trying to restrict cash. All over the world, governments are either placing stringent reporting requirements on large cash transactions or they are banning them altogether. We are being told that such measures are needed to battle illegal drug traffic, to catch tax evaders and to fight the war on terror. But are we rapidly getting to the point where we will have no financial privacy left whatsoever? Should we just accept that we have entered a time when the government will watch, track and trace all financial transactions? Is it inevitable that at some point in the near future ALL transactions will go through the banking system in one form or another (check, credit card, debit card, etc.)?

The truth is that we now live at a time when people who use large amounts of cash are looked upon with suspicion. In fact, authorities in many countries are taught that anyone involved in a large expenditure of cash is trying to hide something and is probably a criminal.

And yes, a lot of criminals do use cash, but millions upon millions of normal, law-abiding citizens simply prefer to use cash as well.  Should we take the freedom to use cash away from the rest of us just because a small minority abuses it?

Unfortunately, the freedom to use cash is being slowly stripped away from us in an increasingly large number of countries.

In fact, as countries like Mexico “tighten the noose” around big-ticket cash purchases, our freedom to use cash is going to erode rather rapidly.

The following is a summary of some of the very tight restrictions being placed on large cash transactions around the globe right now….

Mexico

In Mexico, a bill before the legislature would completely ban the purchase of real estate in cash.  In addition, the new law would ban anyone from spending more than MXN 100,000 (about $7,700) in cash on vehicles, boats, airplanes and luxury goods.

$7,700 is not a very high limit, and this legislation has some real teeth to it.  Anyone violating this law would face up to 15 years in prison.

Greece

In Europe, some of the “austerity packages” being introduced in various European nations include very severe restrictions on the use of cash.

In Greece, all cash transactions above 1,500 euros are being banned starting next year.  The following is a comment by Greek Finance Minister George Papaconstantinou at a press conference discussing the new austerity measures as reported by Reuters….

“From 1. Jan. 2011, every transaction above 1,500 euros between natural persons and businesses, or between businesses, will not be considered legal if it is done in cash. Transactions will have to be done through debit or credit cards”

Italy

Even Italy has gotten into the act.  As part of Italy’s new “austerity measures”, all cash transactions over 5,000 euros will be banned.  It is said this is being done to crack down on tax evasion, but even if this is being done to take down the mafia this is still quite severe.

The United States

The U.S. government has not banned any large cash transactions, and hopefully it will not do so any time soon, but it sure has burdened large cash transactions with some heavy-duty reporting requirements.

For example, your bank is required to file a currency transaction report with the government for every deposit, withdrawal or exchange over $10,000 in cash.

Not only that, but if a bank “knows, suspects, or has reason to suspect” that a transaction involving at least $5,000 is “suspicious”, then another report must be filled out.   This second type of report is known as a suspicious activity report, and it is also filed with the government.

But the reporting does not stop there.  As Jeff Schnepper explained in an article for MSN Money, if you are in business and you receive over $10,000 in cash in a single transaction you must report it to the IRS or you will go to prison…..

If you’re in a business and receive more than $10,000 in cash from a single transaction, or from related transactions within a 12-month period, you have to file Form 8300 and report the buyer to the IRS. Don’t file, and you go to jail.

The IRS isnt kidding. I had a client who was a dealer in Corvette sports cars. He told me he didnt have time to file the forms. I told him several times to file. He thought he knew better. He went to jail. So did his children who were involved in the business.

This is very, very serious.

Just because someone forgets to file a certain form with the IRS, that person can go do serious jail time?

Yes.

According to Schnepper, quite a few Americans have already received very substantial sentences for this kind of thing….

In fiscal 2004, the Internal Revenue Service initiated 1,789 criminal investigations. There were 1,304 indictments and 687 convictions — and an 89.1% incarceration rate. The average sentence: 63 months.

In fiscal 2005, the IRS started 4,269 investigations, winning 2,406 indictments and 2,151 convictions and an 83% incarceration rate. Average sentence: 42 months.

The reality is that governments around the world are getting very, very sensitive about large amounts of cash and they are not messing around.

They don’t want all of us running around with big piles of cash.  They want our money in the banks where they can track it, trace it and keep a close eye on it.

On the one hand, it is a good thing to catch criminals and terrorists, but on the other hand how much privacy and freedom are we willing to lose just so that we can feel a little safer?

And as cash becomes criminalized, are all of us going to be forced into the banking system whether we like it or not?  If we cannot pay for things in cash, what other choices are we going to have?

The truth is that the more you think about this issue, the more disturbing it becomes. 

So what do you think about all of this?  Feel free to leave a comment below.

Helicopter Ben Bernanke Says Everything Is Going To Be Okay

Don’t worry everybody. Federal Reserve Chairman “Helicopter Ben” Bernanke says that the U.S. economy is going to be just fine, and that if it does slip up somehow the Federal Reserve is ready to rush in to the rescue. That was essentially Bernanke’s message to an annual gathering of central bankers in Jackson Hole, Wyoming on Friday. Bernanke insisted that even though the Federal Reserve has already cut interest rates to historic lows it still has plenty of tools that could be used to stimulate the U.S. economy if necessary. Well, considering Bernanke’s track record, the “don’t worry, be happy” mantra is just not going to cut it this time. After all, if Bernanke and his team were such intellectual powerhouses the “surprise” financial crisis of 2007 and 2008 would not have caught them with their pants down. The truth is that just before the “greatest financial crisis since the Great Depression” Bernanke was telling everyone that the economy was just fine. So are we going to let him fool us again?

But Bernanke insists that this time is different.  This time the Federal Reserve really has got a handle on things.  During his remarks at Jackson Hole, Bernanke said that the Fed will adopt “unconventional measures if it proves necessary, especially if the outlook were to deteriorate significantly.”

Unconventional measures?

Could that be a thinly veiled way of saying that Helicopter Ben and his pals will do as much “quantitative easing” as they feel is necessary to keep the economy moving forward?

Unfortunately, most Americans have absolutely no idea what quantitative easing is.

Basically, when quantitative easing takes place the Federal Reserve creates money “ex nihilo” (out of thin air) and uses that money to buy stuff like U.S. government bonds and mortgage-backed securities.  By pumping money into the economy like this, the hope is that banks will start lending more and people and businesses will have more money to spend. 

As far back as 2002, Bernanke has been openly advocating “easy money” policies as a way to stimulate the U.S. economy out of troubled times….

“The U.S. government has a technology, called a printing press (or today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at no cost.”

Now, before we go on and discuss some of the problems with quantitative easing, it must be noted that the statement by Bernanke above is absolutely rife with errors. 

It is absolutely frightening that someone like Bernanke has more power over the U.S. economy than any member of Congress or even the president of the United States.

First of all, the U.S. government does not issue our dollars.  They are issued by the Federal Reserve.

Just pull out a dollar bill right now.  It says “Federal Reserve Note” on it right at the top.

Secondly, the U.S. government cannot produce as many dollars as it wants.  Whenever it wants more U.S. dollars it has to give U.S. Treasuries to the Federal Reserve in exchange.

If the U.S. government could produce as many dollars as it wants, it could just print up $13 trillion and pay off the national debt tomorrow. 

But under the current system, it cannot do that.  The Federal Reserve controls the currency, and the truth is that the Federal Reserve is a private central bank that is about as “federal” as Federal Express is.

Thirdly, there is always a cost for producing more dollars.  We’ll talk about inflation in a moment, but first it must be noted that any time “the printing presses are fired up” the U.S. government goes into more debt, and every time the U.S. government goes into more debt, more interest must be paid on that new debt.

So there is a very high cost involved in the creation of more dollars.

In addition, every time a new U.S. dollar is created, every other U.S. dollar becomes a little bit less valuable.  Essentially, the more dollars there are in existence, the less purchasing power each dollar is going to have.  This phenomenon can be masked or delayed for a while, but inflation will always triumph in the end when the money supply is constantly expanded.

The U.S. dollar has lost over 95 percent of its value since the Federal Reserve was created in 1913.  This has not been a mistake.  The Federal Reserve system is designed to slowly but surely inflate the U.S. dollar.  What they do want to avoid, however, is doing it too quickly.

And this is exactly what is in danger of happening in the years ahead.  As the U.S. money supply dramatically expands in response to the exploding U.S. national debt we are eventually going to be dealing with some very, very serious inflation.

Right now, the Bush and Obama administrations have been getting the United States into so much debt that there aren’t enough buyers in the world to absorb it all (at least at the current super low interest rates on U.S. government debt).  So, instead of raising interest rates to a point where U.S. debt would be suitably attractive to investors, the Federal Reserve is stepping in and is “buying” (once again with money created out of thin air) all the excess U.S. Treasuries that don’t sell.  This is essentially a Ponzi scheme and it keeps interest rates on U.S. Treasuries artificially low.

In addition, the Federal Reserve has been handing gigantic sacks of cash to very large banks and financial institutions such as Goldman Sachs, JPMorgan Chase, Bank of America and Citigroup at almost zero percent interest and those big banks and financial institutions have been turning around and investing a large percentage of that cash in U.S. Treasuries.  This has created a gigantic U.S. Treasury carry trade bubble, and it has enabled many of these giant financial monsters to make massive piles of essentially risk-free cash.  This is another Ponzi scheme.

But these Ponzi schemes are not sustainable and they cannot last forever.  Right now Bernanke and his cohorts have been able to finance trillions in U.S. government debt and still keep interest rates on U.S. Treasuries and inflation very, very low.  At some point, their juggling act will come to an end and we will have a gigantic mess on our hands.

But for right now, Bernanke seems quite please with himself.  The following is how Bernanke concluded his speech at Jackson Hole….

As I said at the beginning, we have come a long way, but there is still some way to travel. Together with other economic policymakers and the private sector, the Federal Reserve remains committed to playing its part to help the U.S. economy return to sustained, noninflationary growth.

In Bernanke’s fantasy world, the U.S. economy is going to roar back to life and will soon be stronger than it ever has been.

But don’t you believe him.

The truth is that every single month the U.S. economy is seeing large numbers of jobs leave the country.

The truth is that thanks to our exploding trade deficit, the U.S. economy is poorer at the end of every single month than it was at the beginning.

The truth is that every single month the U.S. government (along with the vast majority of state and local governments) gets even deeper into debt.

The United States economy is not on the road to prosperity.

The United States economy gets poorer and deeper in debt every single month and is slowing bleeding to death.

Ben Bernanke can run around all he wants and try to convince us that “the sky isn’t falling”, but at some point the American people are going to wake up and simply not believe him anymore.

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