Submitted by Jim Quinn of The Burning Platform

Dude, Where's My Job

The storyline being sold to the American public by the White House
and the corporate mainstream media is that the economy is growing, jobs
are being created, corporations are generating record profits, consumers
are spending and all will be well in 2011. The 2% payroll tax cut,
stolen from future generations to be spent in 2011, will jumpstart a
sound economic recovery. Joseph Goebbels would be proud.

PROPAGANDA MINISTERS

It was another wise old man named Ben Franklin who captured the essence of what those in control are peddling:

“Half a truth is often a great lie.”

The economy is growing due to unprecedented
deficit spending by the government, fraudulent accounting by the Wall
Street banks, the Federal Reserve buying $1.5 trillion of toxic mortgage
“assets” from their Wall Street owners, various home buyer and auto tax
credits and gimmick programs, and Fannie, Freddie, and the
FHA accumulating taxpayer loses so morons can continue to purchase
houses. Jobs are being created. According to the BLS, we’ve added
951,000 jobs since December 2009, an average of 79,000 per month. Of
course, the population of the US is growing at 175,000 per month. It
seems that there are millions of jobs being created, just not here as
shown on these graphs from the NYT.

The storyline of corporate profits is true.
As a percentage of national income, corporate profits are 9.5%. They
have only topped 9% twice in history – in 2006 and 1929. When you see
the paid Wall Street shills parade on CNBC every day proclaiming the
huge corporate profit growth ahead, keep these data points in mind. Do
profits generally rise dramatically from all time peaks?

You might ask yourself, if corporations are
doing so well how come real unemployment exceeds 20%? The answer lies
in who is generating the profits and how they are doing it. It seems
that the fantastic profits are not being generated by domestic
non-financial companies employing middle class Americans producing
goods. Pre-tax domestic nonfinancial corporate profits are not close
to record levels as a share of national income. They exceeded 15% of
national income once in the late 1940s, and repeatedly topped 12% in the
1950s and 1960s; in the third quarter of this year, they were 7.03% of
national income. I wonder who is making the profits.

According to BEA data, financial industry profits and “rest of world”
profits — that is, the money U.S.-based corporations make overseas —
are relatively much higher now than they were in the 1950s or 1960s. And
the taxes paid by corporations are much lower now than they were then,
as a share of national income. The reason that corporate profits are
near their all-time highs is that Wall Street corporations and
mega multinational corporations are making gobs of loot and paying less
of it out in taxes. Isn’t that delightful for the CEOs and top
executives of these companies?

The profits are being generated on Wall Street through collusion with
the Federal Reserve, as the insolvent Wall Street banks accept free
money from the Federal Reserve to generate speculative profits at the
expense of senior citizens earning .20% on their CDs. The
mega-multinationals are ”earning” their profits by continuing to ship
American jobs overseas at a record pace. The Economic Policy Institute, a
Washington think tank, says American companies have created 1.4 million
jobs overseas this year. The additional 1.4 million jobs would have
lowered the U.S. unemployment rate to 8.9 percent, says Robert Scott,
the institute’s senior international economist. “There’s a huge
difference between what is good for American companies versus what is
good for the American economy,” says Scott. The hollowing out of the
American economy has been going on for decades and despite the usual
rhetoric out of Washington DC, it continues unabated today.

But consumer spending has surged, so the recovery must be solid and
self-sustaining say the brainless twits on CNBC. Consumer spending is
rising because the top 1% wealthiest Americans are doing splendidly as
they are now reaping 20% of the income in the country, levels last seen
in 1929. The Haves have more, the Have Nots have less. The top 10%
wealthiest Americans own 98.5% of all the stocks in the country. They
feel richer because Ben Bernanke has propped up the stock market with
trillions of borrowed money from future generations. The other 90% of
Americans have stagnant or non-existent wages, rising costs for fuel and
food, falling home prices, rising debt levels and little hope for the
future. They have been thrown a bone of extended unemployment bennies, a
temporary payroll tax cut, and extended tax cuts. Any spending they are
doing is on credit cards as the austerity deleveraging storyline is
another big lie by the MSM.

Greater Depression

The figure of 15 million unemployed reported by the government and
regurgitated by the corporate media is one of the biggest lies in the
history of lies. The real figure is 30 million and I will prove it using
the government’s own data. I created the chart below from BLS data (ftp://ftp.bls.gov/pub/suppl/empsit.ceseeb1.txt) to
prove that we are in the midst of a Greater Depression and no amount of
spin by politicians and the media can wish it away. When we look at
jobs in America across the decades, a picture of a country in decline,
captured by financial elites, reveals itself. In 1970, America still
produced goods, ran trade surpluses, and paid wages that allowed
families to thrive with only one parent working. Only 34.6% of the
population was employed, with a third of these workers producing goods.

One of the most discouraging things about the last two years was seeing swing voters in focus groups, when asked what President Obama's economic strategy was, repeat different versions of "Well, I know he said we needed to save the banks. Beyond that, I'm not sure." When Obama in his first State of the Union gave a vigorous defense of bailing out the banks, saying he knew it about as popular as a root canal, and saying "I get it", it was very memorable to voters. But when his predictions about what would happen when the banks were stabilized -- they would start making loans to businesses, and businesses would start hiring -- didn't happen, and instead the banks gave themselves record breaking bonuses, voters turned on Obama fast. In exit polls on Nov. 2nd, when asked who was most to blame for the bad economy, voters by a wide margin said Wall St. was most to blame, and the voters who said that went Republican by a 14-point margin.

Obviously, saving the banks hasn't been the President's only economic strategy. The stimulus bill, while too small, was an important job creator/saver. Saving the American auto industry was an incredibly important thing to do. Health care reform was in part a long term economic strategy. The infrastructure bank idea is a great potential job creator. Extending unemployment insurance helps keep money in the economy. And all the tax cutting going on is clearly meant to have some stimulative effect, although how much is highly debatable.

However, there have certainly been times where Secretary Geithner, who has been the main driver of the economic strategy, seems to think and act as if helping the big banks and helping the economy amount to the same thing. The tepid reaction to the foreclosure crisis has sure felt that way -- apparently we can't freeze foreclosures or do much to help homeowners because it might "endanger" the banks. In fact, I would argue the exact opposite: that our number one economic strategy right now should be to shift money from the big banks to the real economy, to Main Street businesses and workers and consumers. The big banks are hoarding extraordinary amounts of money, and they are clearly not investing it in job creating businesses. They are speculating with it, they are trading with it, they are investing in complicated financial instruments that do nothing to create jobs- in fact, they are sucking capital out of the real economy that might actually create jobs. These massive financial conglomerates have way too much concentrated wealth and market power, and that is weakening the rest of the economy.

This is one reason why, as I wrote a couple of times last week, it is so important to write down the mortgages of homeowners who are underwater. Taking that money out of the bankers' hands and putting it in the hands of the hard pressed middle class would do more to stimulate the economy than any other thing the President could do right now. This is also why the Federal Reserve's new proposed rule, out last week, on swipe fees is so good. It would generally limit swipe fees to 12 cents per transaction. Right now the average is 44 cents, and with most small businesses it's quite a bit higher. If this rule is upheld, this is money that will go straight from the big banks' profit margins into the main street economy -- all told, probably a $15 billion boost going back to retailers, restaurant owners, taxi cab drivers, and hopefully consumers. $15 billion going from Wall Street, speculative economy into the real economy is a nice lift right now. This is why I have been working with retail business leaders and consumer groups to support this new regulation.

Unfortunately, not all Democrats see it this way. Tom Carper and Mark Warner tried to head off the amendment that made this regulation happen in the Senate, and have been lobbying the Federal Reserve against a strong regulation on the subject ever since they lost the legislative fight. And Barney Frank, who is a great liberal on social issues but spends way too much time with bank lobbyists, was whining on Friday how unfair the proposed rule was to the poor bankers.

Barney, you got this one wrong. Democrats should not be looking out for the bankers, we should be looking for every single opportunity we can to drain the Wall St. swamp. The big banks are hoarding money. They have way too much market power, and when their profits expand, they put that money into the speculative economy rather than the real economy that manufactures goods, sells products and services, and creates jobs. When we take a dollar away from them, and put it into the real economy, there is actually a multiplier effect as people on Main Street spend or invest the money in real products. When mortgages get written down, it helps the real economy. When swipe fees on credit or debit card transactions get lessened, it helps the real economy. If we instituted a transactions tax on every trade made on Wall St, and put that money into a jobs program, that would help the real economy.

The big banks are hoarding our money. Our best economic program right now is to shift money from the banks, and put it into the hands of consumers who might actually buy products and businesses who might actually hire more workers.

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Monday, January 10, 2011

Making Money Job

PROPAGANDA MINISTERS

Greater Depression

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