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Calamity Economy Strikes Again, But Hope Is Back In Vogue
Wolf Richter www.testosteronepit.com
Hope was once again in vogue Thursday night in President Obama’s acceptance speech, after having gone the way of the green shoots. Hope has been swirling around the financial markets as well as the Fed keeps dangling QE3 out in front of them. And ECB President Mario Draghi injected a mega-dose of it with his bond-buying promise. It goosed the markets even more and powered them to multi-year highs.
Then came the jobs report. Only 96,000 non-farm jobs had been created—assuming that number is credible, despite the statistical cosmetic surgeries that are used to beautify it. Worse, June and July were revised lower by 41,000 jobs. The unemployment rate, which dropped from 8.3% to 8.1%, is just noise, and it remains unclear if it measures anything at all. But it will be THE number, the political number, that President Obama will focus on, and if all goes according to plan, it will obligingly drop to 7.9% before the election.
But the jobs report also contained the Employment-Population Ratio. By comparing the number of employed people to all people over sixteen, it outlines in unvarnished brutality the real employment situation. And it goes back to when dirt was young.
From 1948 through the mid-sixties, it bounced up and down between 55% and 57%. As women entered the workforce in greater numbers, it zigzagged to 64.7% in April 2000. Then it declined, with some ups and downs, to 62.9% by January 2008—and fell off a cliff. In December 2009, it hit bottom at 58.2%.
At the time, the Fed’s printing press had been running white-hot for a year. Congress was shoveling stimulus money in every direction. Federal deficits had ballooned beyond $1 trillion for the second year in a row. The new President had gotten his feet on the ground. Stock markets were rocking higher. But the employment-population ratio hit a low not seen since May 1983.
So then the magnificent jobs recovery started. And in August 2012, when our national debt blew through the $16 trillion mark, the employment-population ratio was ... 58.3%.
Just about where it was in December 2009, when the unemployment rate hovered around 10%—and now it’s 8.1%. Miracles of statistical cosmetic surgery.

It is true, I suppose, that since December 2009, quite a few jobs have been created. I can see that in San Francisco and Silicon Valley. It’s just that the population has grown at about the same pace, and the job market as seen by the average job seeker hasn’t improved much.
The graph is also a visual depiction of what the Pew Research Center calls “The Lost Decade of the Middle Class,” during which “the middle class has shrunk in size” and has “fallen backward in income and wealth.”
It’s convenient to blame President Bush for the precipitous decline of the employment-population ratio under his watch, or President Obama for the continued decline and the long stall. But Presidents don’t have a lot of power in managing the economy—Congress and the Fed are the go-to places for complaints in that department.
Purposefully overshadowed by the jobs report was Intel. After having already dialed back hopes in July, it slashed its third-quarter revenue outlook by 7.7%. Ominously, it saw weakness in the enterprise segment and in emerging markets. On Wednesday, it was FedEx that had cut its outlook due to lower shipping volumes. Last week it was the International Air Transport Association that had gored hope: in July, air-freight was 3.2% lower worldwide than last year, and 3.6% lower for North American airlines. July was also the month when bellwether UPS issued disappointing quarterly results. It appears the “recovery” has run its course.
And that despite the gargantuan stimulus of a Federal deficit that has been over $1 trillion for five years in a row—thanks to our ever so effective Congress, abetted by the Fed. But occasionally, even slick politicians accidentally say something meaningful. This time it was German Chancellor Angela Merkel who’d wondered out loud if politicians can win elections “if we don’t always spend more than we take in.”
The answer, Mrs. Merkel, at least in the US, is no. And so we’re stuck with huge deficits and our calamity economy. But then there’s always the hope that the Fed will print us more moolah so that the financial markets will rock, despite the economy [read.... Monsters With Acronyms: From A Nation of Investors To A Nation of Fed Watchers].
The US is no longer the safest place to invest, as China and India rise to superpower status, says Don Coxe, a strategic advisor to the BMO Financial Group. And financial products based on mathematical formulas are “the equivalent of mixing sewer water with tap water and claiming that because there was more tap water than sewer water in the glass, it was safe to drink.” Read the pungent interview.... “Invest in What China Needs to Buy.”
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Hope & Change.
From:
"Hope & Change."
Into:
Hope to Change.
Or we will have nothing left in our pockets but change!
People (like me) voted for Hope and Change because we Hoped that a guy born into the middle class who elevated himself through hard work and intelligence wouldn't be part of the machine. The two party system is broken and needs to be gutted. You may think (correctly) that O is a complete tool of the banker/elite class, but after decades of oligarch rule and an option that included the oligarch friend's wife or the Admiral's son, many of us Hoped (incorrectly) that he would actually Change the direction of the ship, even just incrementally. We were wrong, but the public is aching for a better choice. The solution is not platitudes and [anti-] slogans or empty chairs at a convention of gears and grease for the machine.
Born into the middle class? He was born into a communist family, rasied in a muslim family, and then dumped on the grandparents, who he ignored to join a stoner group. Like Marx, he might have be supported by middle class money, but he never absorbed the middle class virtues.
2008 offered a miserable choice, but voting for 'hope' is a mugs game. You note that the two party system is broke, and yet hoped that one of the two choices would be different?
The great and glorious 'O' has no history of hard work, and no evidence of intelligence, except the sly wit and well spoken words of a confidence man. What were you smoking in 2008?
The Son of a Bitch phony is from the Chicago Political Machine and you thought what? What has Braack Obama done to uplift anyone besides himself and his pals? After all his "organizing", how is Chicago doing? He IS the fucking machine(well, at least ready to take orders from the smarter politicians for good pay)! You need some help in looking deeper and actually seeing what is plain to anyone willing to suspend their prejudices.
FORWARD SOVIET!
i was just hoping he'd be a fanatical supporter of Chicago "and to hell with all the rest of you" myself. Up here "we call that the New York way." Having lived in that Chitown for a spell all i can say is "AWESOME people." It's not a complaint really but my view is when you get to DC "your goal is to win...not a health care plan." Think Apollo 13 because "your time is limited"..."there are no tools" and "there is no manual." http://www.youtube.com/watch?v=kAmsi05P9Uw
oops
No. He is a Marxist and always has been. One wonders what it was that compelled you to vote for one? I mean with all that baggage?
Born in Africa too, right! Your just a fuck'in racist hiding under the label of birther.
"No. He is a Marxist and always has been."
Nice talking points. You are part of the problem.
The truth hurts, comrade.
Rand, O was the keynote speaker @ the CPUSA.
Commie Party USA.
Community organizing is suddenly "hard work"? What's next in line to qualify as "hard work"? Digging your nose while watching "The Undertaker" beat the crap outta "Sheamus"?
It is ironic that you hate someone who came from modest means and who made his way to Harvard. He is a douche, but he worked hard.
Common sense will not get you anywhere on ZH, knock it off.
BRAVO..............
Common sense will not get you anywhere on ZH, knock it off.
____________________________
Correction:
Common sense will get you on the wrong side among 'Americans'.
This site is just populated with fine 'American' specimens...
@ "he worked hard". Nope. Group Entitlement (plus lotsa golf) all the way.
Check your premises. Being a handled puppet is not "hard work".
Regardless of how hard he worked...
What did he accomplish?
Annenberg gave him 100 million to help kids in chicago.
How are the kids in Chicago?
USA gave him trillions.
How are the people in the USA?
Blame everything on POTUS...........
....43.
Being from Chicago I may have known more about the cesspool this guy bubbled up out of, and therefore didn't vote for him. But, you have to admit the national media did an excellent job of ignoring the many negatives about this guy and propping him up as a 'saviour' of sorts which probably led to a lot of good people hoping for real change to go for him. We still know very little about the guy other than what 'they' want us to know. Have to cut some slack on the one-timers IMO.
one of the biggest surprises actually: "the don't know anything about him." anywho..."how would you like to be anointed as a savior"? i know i wouldn't... and of course "this isn't Woodstock." Well, it kind of was under Andrew Jackson actually...but obviously the folks who like creating the aura of Woodstock "have other designs as well." I find it interesting the number of people who go along with this ethos of policy as well...
Please be more specific, Who is 'they'? Careful now hotshot, your being set-up!
i said "the" not "they." as in "The Media."
"The two party system is broken and needs to be gutted."
Amen to that brother.
Give us all a brief outline of how that can be accomplished, slick!
Government's role is very simple and both parties are equally guilty of ignoring this reality for decades: provide a robust infrastructure for commerce, provide a tax/tariff structure that discourages off-shoring to countries that do not ensure a living wage and basic environmental controls and that encourages local production and a living wage for local workers, provide a tax/tariff structure that encourages competition among trading partners that have like-minded views of providing a living wage for workers and reasonable environmental protections, prevent monopoly (a.k.a. TBTF) formation, eliminate the corporate exception to personal responsibility, and provide a reasonable social safety net that prevents abject poverty while providing opportunity (education, health care) for those who are not the most exceptional among us.
No, the government's role is to protect our rights. That's it.
Sorry LTER but Govt has no role in the economy, nor society for that matter. You are re-arranging deckchairs if you think the political (monopolist) system can resolve anything better than a free market or a free society.
The political class has no management skills whatsoever, they are inept charlatans in it purely for a cushy job living off others backs.
Govt is a sick idea that knows nothing but failure in every facet of its (mis)management over 2,500 years of rock hard evidence with not one redeeming feature that freedom wouldn't better. You can't re-arrange or re-energise this institution of garbage already long past its sell-by-date.
Look at Barney Frank, he's awash in financial crime, fraud, bankruptcy, the trainwrecks of fannae and Freddie etc that he 'overseas' and he still thinks he can pontificate to the masses! Our society is kneck-deep in the garbage Govt produces and it's suffocating us
Game Over Govt
the great utopian anarchy thus awaits us and life will be so Greek there, its a joyful thought to every latrine cleaner in Sweden!