by Mike McCune –
The jobs report for February came in nicely and Wall Street cheered. Meanwhile the January jobs report was slashed by 25% from a gain of 157,000 to 119,000 and Wall Street yawned.
That is because the deceit must be maintained. According to Washington, America has been in a recovery since June of 2009. Any and all data that doesn’t fit with that proclamation is dismissed as racist rhetoric and not put in the economic grinder.
But take a close look at the behind-the-scene massaging of raw data and you begin to get an inkling of the scope of the influence Washington has on the market place.
Is there anyone other than the unholy trio of then-Treasury Secretary Tim Geithner, Federal Reserve Chairman Ben Bernanke and President Barack Obama that doesn’t think inflation over the past four years is more than 8%? It was a great big deal when Bernanke granted cost of living expenses rose 1.7% in FY2012 for Social Security recipients.
That’s a far cry from the 28% rise that can be documented in my home valuation from the local government or the 14% rise in grocery store prices or the 21% rise in my electric and natural gas bill or even the 12% rise in my insurance costs over the same time span.
If the value of a dollar hasn’t changed, then Wall Street’s trumpeting new highs would have some merit. But because the Federal Reserve has been printing money as fast as possible, the new ‘highs’ of the Street are worthless comparisons. If the market indexes were pushing past 16,000 then the confetti parade would show a return of the economy to pre-Recession levels.
To determine the continuing economic slowdown all anyone has to do is check that highly-sensitive barometer of retail, Wal-Mart. The retail giant gets eight cents of every dollar spent in America. Yet even that magnificent cash flow has slowed substantially to the point the pinch is being felt.
Wal-Mart admitted it can see the elimination of the ‘Bush-era Tax Cuts’. Only twice a month, on paydays, is the current revenue similar to 2012. Some days you can even find a parking spot within walking distance of the door.
To emphasize the lingering recession, more than 1 in 4 American households owe more in credit card debt than they have in available cash. Toss in mortgage payments, car payments and student loan obligations and most households are running negative cash flows–so they default, oops, defer is now the preferred word, they defer in one way or another.
While CNBC’s Mad Money host Jim Cramer has reversed himself and is now gushing over Bernanke’s genius in leading America out of this mess, his praise seems hollow when the behind the number analysis doesn’t meet attorney Alan Dershowitz’s infamous “laugh test.’
America also should be rejoicing with Wall Street over the unemployment rate dropping to 7.7%. I certainly would, except that number is as phony as one of Bernanke’s $3 bills. The government continues lopping people from the rolls at a record pace, bringing the number down. The Labor Department is now discounting over half the population from unemployment eligibility. In addition it continues to equate part-time and temporary jobs the same as full-time jobs with its ’a job is a job is a job’ mentality.
It is absolute folly to point this information out to the Washington/Wall Street insiders. It doesn’t fit the stated goal of ‘Recovery Is Here!’
OK, I won’t tell them. It’ll just be a secret between you and me and the rest of America who can still think on their own, sift data and separate fact from emotion.
Now if only we could harness that misguided emotion and turn it into energy to power our country, we just might be on the path to a solid economic recovery. Does anybody know how to get subsidized by the government if you are a U.S. citizen and not yet a member of ‘too-big-to-fail’?
“I have sworn on the altar of God eternal hostility to every form of tyranny over the mind of man.”–Thomas Jefferson