Bureau of Labor Statistics
The real wages of the typical working man in the US have gone down for the last 60 years. In terms of his time, his most important purchases are more expensive today than they were in 1950. How did American workers survive with lower real wages and higher living costs? First, they began to work longer hours. Wives went to work. Husbands worked a second job. Now Americans work more hours than any other group. Second, and most importantly from our point of view, they began to borrow. Aided, induced and bamboozled by the feds’ EZ credit policies... they went deep into debt to keep up with their own standards of living.
Elliott Management's 22-page letter to investors has something for everyone as Paul Singer ascribes his uniquely independent wisdom. From the fragility of the financial system to the hubris of academic pretenders; from inflation's various devious impacts on assets and reality to the floundering of the world's bankers; from America's "cooked data" to the pending social unrest in Europe and the perils of centralized power, Singers stresses "the temptation to debase fiat currencies... means owning claims on paper money is an act of either faith or denial." Recent market movements, Singer warns "indicate a world on life-support," and "for every day, month and year that policymakers try to substitute failed, inappropriate and risky QE policies for pro-growth policies, the debt mounts, as does resentment among middle-income families that their situation is not improving." The fact of the matter is that "no government has ever reached fiscal 'nirvana,' yet our central bank (and its peers) continues to push the envelope of risk, confidence and inflation." Despite the confident and brave words in which they are wrapped, central bank actions currently seem underscored by quiet panic.
Obama wants to give middle-class Americans a ‘grand bargain’. Roll up! Roll up! You won’t believe your eyes.
When Bad Government Policy Leads to Bad Results, the Government Manipulates the Data … Instead of Changing PolicySubmitted by George Washington on 07/30/2013 14:09 -0500
Problem ... What Problem?
If we analyze inflation by these two metrics (purchasing power - which declines as real income stagnates and prices rise - and by exposure to real costs), we find the middle class is increasingly exposed to skyrocketing real-world prices. Pundits in the top 5% have the luxury of pontificating on the accuracy of the CPI while those protected by government subsidies and coverage have the luxury of wondering what all the fuss is about. Only those 100% exposed to the real costs experience the full fury of actual inflation.
The corrupt edifice that has propped up the US big banks and financial system is beginning to crumble before our very eyes.
After every non-farm payroll report we provide our own breakdown of what the real unemployment rate is in a country in which the labor force participation rate has not been adjusted to normalize for the Second Great Depression. In the most recent such endeavor we found the "Real Unemployment Rate" to be 11.3%. Today, courtesy of the Post's John Crudele we find that our estimate was spot on not just from anyone, but the former head of the BLS himself: Keith Hall.
The mainstream media is claiming that "The aggregate amount of money in paychecks is increasing about twice as fast as GDP." Rising aggregate household income doesn't tell the real story, which is: 1. Most of the income gains flow to the top 10%; and 2. Thanks to rising taxes, healthcare and other costs, household net income for the bottom 90% is declining. The mainstream media's parroting of aggregate household income increases is used to suggest the economy is improving. But the truth is the economy is only improving for a thin slice of households.
The concept we call gross domestic production (GDP) is highly distortive. It obfuscates intelligent debate in economics as the true underlying force for economic growth, capital accumulation, is seen as detrimental to prosperity
One minute we hear that Quantitative Easing is going completely, then it’s going a bit and withdrawing in side-steps and little paces and then it’s going to carry on. Where do we stand?
As the EU agrees to fund another bailout deal to help Greece rise from the ashes, providing them with another $8.7 billion in financial aid, the question that begs an answer is: will this have any effect on the austerity that is being imposed on the country. Throwing good money after bad?
Benjamin Strong was near the end of a long stint as head of the New York Federal Reserve Bank (he passed away in October 1928), where he enjoyed the same immense power that Ben Bernanke has today. The economy had just begun to recover from a recession in December 1927, and there was much unemployment and spare capacity.... Agriculture was booming during and immediately after World War I, based on thriving exports to Europe. Overinvestment during the boom then gave way to stagnation in the 1920s. Europe was in a bad state in the late 1920s, just as it is now. What’s more, two of the world’s three largest economies are now in Asia, and these economies face similar challenges to those of 1920s Europe. While analogies are never perfect, the parallels with early 1928 are troubling. When the world slipped into depression in the late 1920s and early 1930s, it was on the back of imbalances and debt overhangs that are oddly similar to those that we face today.
When enough of us realize the extent of inflation, bond buyers will likely demand higher coupon rates; the government's cost of debt service could soar.
The Consumer Metrics Institute is generally a pretty subdued bunch, as befits their job interpreting economic statistics for money managers and other economists. But lately they’ve been increasingly vocal about the farce we are witnessing: "From time to time we may quarrel with the quality of the BEA’s deflaters. And frankly we may even find that at face value the lackluster numbers amount to nothing more than a sham “recovery.” But the most shocking part of this report is glaringly obvious from the real per capita disposable income numbers: all of the unprecedented fiscal and monetary stimulus has left American households materially worse off than they were two years ago."
It should be obvious by now that the old adage– study hard, get good grades, go to a good school, get a great job, and work your way up the ladder– really doesn’t apply anymore. And it’s time to re-invent the model. Based on the eight reasons below, it’s no wonder they call them the “Boomerang Generation”, and that 45% of college grads aged 18-24 in the United States were still living with Mom and Dad...