America's "Houdini Recovery" under IMF-Type Austerity

by Stephen Lendman on March 6, 2010 - 12:17pm

The following article originally appeared on OpEdNews.com.

It's what economist David Rosenberg calls recovery given plenty of supportive evidence, including:

-- over five million homeowners behind on their mortgage payments;

-- at record levels, foreclosures are alarmingly high; moreover, "the foreclosure pipeline is enormous;"

-- "housing, the quintessential leading indicator," turning lower again in starts, sales and prices;

-- instead of a normal 5 - 6 months home supply, the market has a 21 month overhang, including shadow inventory from the foreclosure pipeline;

-- mortgage applications for new home purchases down 13.9% on top of last year's 29.4%;

-- over six million Americans unemployed for at least six months, "a record 40% of the ranks of the joblessness;"

-- over 11 million full-time jobs lost since late 2007, and well over four and a half million since Obama took office, despite pledging to create them;

-- millions of jobs lost despite massive economic stimulus, and when it slows, watch out;

-- a federal deficit over 10% of GDP, twice the 1930s ratio;

--private capital growing at its slowest rate in nearly two decades;

-- 30% of manufacturing capacity idle;

-- 19 million vacant residential housing units - about 15% of the total;

-- one in six Americans unemployed or underemployed;

-- the adult male employment-to-population ratio at a record low 67% compared to 73% when the recession began;

-- at this stage of the economic cycle (two and a half years after Fed easing began), employment typically expands at least 150,000 per month; instead, it's still contracting, the level is 8.4 million lower than before the recession began, and the economy is 12 million jobs shy of full employment, a gap that will take years of sustainable growth to close;

-- commercial real estate values down 30% in the past year and falling;

-- the average American worker $100,000 poorer (including loss of home equity), even with the stock market rally;

-- bank credit contracting at an unprecedented 15% annual rate this year "as lenders sit on a record $1.3 trillion in cash;"

-- collapsed commercial and industrial loans;

-- Falling Gross Domestic Income, approaching an annualized minus 4% compared to the 1982 recessionary low of plus 4% and 2001 low of plus 2%; "the discrepancy between the income and spending accounts has never been so wide as" today; and

-- unit labor costs down 4.7% in the past year, meaning workers earn and spend less.

Conclusion - "the era of 'green shoots' is officially dead." Now you see them, now you don't because they never were there in the first place.

A recent issue of the Economist magazine asked "Why Is the recovery jobless? Maybe because it isn't a recovery," with no lack of supportive evidence. "In February, for the twenty-fifth time in 26 months, the American economy shed jobs," and beneath the surface it's much worse.

The official 9.7% headline number (so-called U-3; U-6, including discouraged workers, is 16.8%) obscures the true figure, what economist John Williams calculates at 21.6%, minus the manipulated deception. The Economist concludes that "the American economy simply hasn't been doing as well as the output figures have suggested."

Take GDP, for example. Rosenberg explains that Q 4's 5.9% growth "came in two non-recurring items - inventories and capital spending (the former a temporary alignment of stocks with sales and the latter a late-year rush to take advantage of some tax goodies)."

Those aside, the economy slowed to less than 1%, may be revised lower, and the two headline figures won't likely repeat, given a wealth of depressing data, including retail sales. The headline February 0.3% (0.8% minus autos) rise beat an expected 0.2% decline.

However, the raw data paints a different picture - minus 1.6% month-over-month in February (a month when rises usually occur) or four times as bad as the norm, and worst February in 12 years.

This (says Rosenberg) in spite of "the greatest stimulus experience in seven decades, and retail sales are still down 5% from the pre-recession peak and on a per capita basis 8%." They're lower than in January 2006 despite a 4.3% larger population, and adjusted for inflation, they're down to 1996 levels on a per capita basis.

Some recovery, and little wonder the latest Conference Board consumer confidence survey showed only 6.2% of the public thinks business conditions are good - a record low.

As a result, several presidential tracking polls have Obama at from 44 - 49%, down from 68% in January 2009, and for Congress it's worse at around about 30%. If conditions worsen, expect further erosion, and if an economic storm erupts, they may crash.

Click here to read the article in its entirety

Submitted by Harry Dingey (not verified) on March 19, 2010 - 7:33pm. #

I learned a long time ago in order to solve any problem; the problem must first be properly defined.

Most people make the mistake of wanting to solve the symptoms and totally over look the real problem.

As an Industrial Engineer the first thing I was taught, was to cut all of the fat away and concentrate on the main Problem.

Here is the Logic I used.

The main Problem is America must start creating Jobs ASAP.

The Idea situation is to create a lot of jobs and do it without spending any money because America has no MONEY.

When I analyze the International Trade Numbers here is exactly what I found:

The International Trade Numbers for the year 2006.

America was creating 48.39 million jobs from Exports.

America was losing 63.41 million jobs from Imports.

This problem is very easy to SOLVE because the American Trade Deficits have become so humongous and out of balance.

America has absolutely no control on Exports Numbers.

America has Total Control of everything we Import into this Country. America has total control of whom and where these Imported products are made.

First you must know the America Consumer Market is the largest and the most profitable Market in the World.

I would just close the American Consumer Market to the entire World. Then tell the world America must balance our International Trade and starting today if you want to Sell your products in America then these products must be MADE in America.

America would absolutely create 63.41 million jobs by producing all the Imports right here is America almost over night.

I am sure we will not lose all of the 48.39 million jobs from Exports because there are many of these products can only be made in America.

So, based on my computations If America Pulls out of NAFTA and the WTO right now we will automatically CREATE well over (63.41-48.39=15.02) 15.02 Million JOBS, plus all of the Material Export JOBS that must be made in America.

Here is way I see it.

America has only one choice if we want to Survive as a Free Nation.

Do we want lose everything including our whole country to Obama’s NEW WORLD ORDER?

We do have a Choice and the Choice is totally in the hands the American People.

May God have mercy on America.

Submitted by Harry Dingey (not verified) on March 19, 2010 - 7:31pm. #

WHY IS IT HARRY DINGEY THE ONLY PERSON IN AMERICA TO FIGURE THIS OUT?

Make no mistake about it the International Trade Deficit must be balanced if America is to SURVIVE. There is only three ways to correct this humongous Trade Imbalance.

1. Increase the American Exports by $450.6 Billion Dollars per year. This is absolutely impossible.
or

2. Decrease the American Imports by $450.6 Billion Dollars per year. Then manufacture the merchandise in America.
or

3. Pull out of NAFTA and the WTO. Then Close the Largest Consumer Market in the World to all Imports. Do not worry about Exports and this will create well over 15.02 million Jobs instantly and maybe ever more.

I am suggesting we do number three. This will be done by the new American Congress to be elected in November 2010 and will automatically bring the large American Manufactured Goods Trade Deficit into BALANCE almost over night.

Where Exports + Imports = a Balance of ZERO.

Here is exactly what would happen. Toyota of Japan would be forced to totally manufacture in America, every car sold in America.

Every item sold in every store in America would be required to be manufactured right here in America. America would be swimming in newly Created Jobs almost over night.

I can remember this large sign posted in Wal-Mart: “EVERYTHING SOLD IN THIS STORE WAS MADE IN AMERICA”.

Sam Walton said: “Everything sold in all Wal-Mart stores will be made in America”.

I CAN CREATE 15 MILLION JOBS ALMOST OVER NIGHT right here in America !!!

Here is my Job creation Computations:

+++++++++++++++++++++++++++++++++++++++++++++++++

Total USA Imports in 2006:
----------------------------------
$ 2,211.7 billion ----- Total Imports.
$ - 309.4 billion minus -(Money spent on Imported Crude Oil)
--------------------------------------------------
$ 1,902.3 billion / 30 billion=63.41 million jobs lost from Imports.

==================================================

Total USA Exports in 2006:
----------------------------------
$ 1,451.7 Billion / 30 billion=48.39 million jobs America Created from Exports.

If USA Pulls out of NAFTA and WTO right now:
USA would absolutely gain a total of 63.41 million Jobs by Manufacturing all IMPORTS right here in the USA.

So, 63.41 minus 48.39 = 15.02 million NET JOBS GAIN. But, a lot of Exports must be purchased in the USA. That would mean an even larger number of jobs created in America than I have estimated.

Also, I should note that I have subtracted out the $309.4 billion dollars that America spent on Import Crude Oil in 2006. This is another problem that must be solved later.

My calculation means an ABSOLUTE 15.02 million Jobs gained if the rest of the world did not buy even one penny of USA EXPORTS.

SO MOTE IT BE. . . . .

Do you truly want to help straighten out the United States Government now? Then, copy and post this article everyplace on the Internet you can post.

BY: Harry Dingey

Have a good day my friends.

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