Friday, July 25, 2008

Ted Rall - AP: Recession, Year 8

Recession? We've been in one since 2000.

Forget the experts. They think telling the grisly truth about the state of the U.S. economy could make things even worse--and they're probably right. But Americans know the truth.

Every major indicator--jobs, wages and cost of living--has trended downward since the dot-com crash of 2000. Since then it has nearly impossible to sell a home, find a job, or get a raise. Rising inflation is tightening the squeeze. Whoever becomes president next year will inherit an economy beginning its ninth year in a downward spiral.

The official inflation rate of two to three percent is a lie, and it has been for years. Presidents Reagan and Clinton ordered the Bureau of Labor Standards to change the way it calculates the Consumer Price Index. Previously they compared the prices of the same items from one year to the next. Now, in order to cheat senior citizens out of cost-of-living increases on their Social Security payments, the government uses a "substitutions" analysis. "The consumer price index assumes that if prices get too high, consumers will start buying cheaper products," reports The San Diego Union-Tribune. For instance, if steak gets too expensive, they will switch to ground beef."

Steve Reed, an economist the Bureau of Labor Standards, freely admits the change makes inflation looks lower than it is. He also admits its motivation: "Even if the CPI was one percentage point higher, it could cost the government hundreds of millions of dollars."- Ted Rall

It's Always Darkest Before the Dawn...of a Economic Depression
The financial system will collapse before "zero-hour" actually occurs. I think we are seeing signs of it in the desperate measures being employed to nationalize companies which trade on market exchanges as private enterprises. There is simply no way to defend the SEC's decision to selectively enforce the prohibition of naked short selling for 17 ‘fragile' financial companies and to not enforce it for the over 5000 other companies which trade on US stock market exchanges. And plans to rescue Fannie Mae and Freddie Mac breathe of a sort of corporate nationalism. Over time this will deal a massive psychological blow to financial markets. They are currently rallying on the sense of relief that the efforts to prevent Fannie and Freddie from dragging US financial markets into the abyss have succeeded and the inevitable day of reckoning has been postponed once again. - The Market Oracle
You know, I am starting to feel the same way about economic news that I was feeling pre-Iraq invasion. I am shouting in the darkness pointing to news our traditional media is ignoring and meanwhile we are fast approaching the cliff. I was right then and I fear I am right again.



Matt Bramanti said...

Every major indicator--jobs, wages and cost of living--has trended downward since the dot-com crash of 2000.

Rall's logic is a bit off. He's claiming that the cost of living is trending downward while claiming inflation is rampant.

Furthermore, the facts simply don't bear out his claims. The jobs claim is simply untrue. The following is the total number of non-farm employees at the end of the last few years, rounded to the nearest 100,000:

2001: 130.7 million
2002: 130.2 million
2003: 130.3 million
2004: 132.4 million
2005: 134.9 million
2006: 137.0 million
2007: 138.1 million

As you can see, that's an increase every year except 2002.

BThomas said...

Matt, you must live on a different planet,
did you not read `the article?

one of the main themes was the fact
that this administration continually LIES to we the people,

particularly about economic data,

however has decided that the administration is completely honest when it comes to employment statistics.


Gary said...

Since 2001 the BLS looks to be overstating new jobs by around 30%,

The number of full-time workers 25 - 54 has gone from 95 million to 100 million.

Year Annual
1998 95258
1999 96228
2000 98292
2001 97948
2002 96823
2003 97178
2004 97472
2005 98517
2006 99672
2007 100450

How much has the population increased to account for Matt's claim of employment growth. The best statistic to use should be civilian rate of employment ages 25 - 54. It has gone from 81.3% January 1999 to 79.4% January 2008. The ratio of people employed is down about 2% 1 out of 50 people no longer have jobs.

That was not a very correct way for Ted to phrase it. The cost to live is higher - is that better?

Gary said...

Oh, BTW, I didn't want to use this statistic because it overstates the case but Matt's 8 million new jobs compares to a U.S. population increase of 30 million.


Matt Bramanti said...

but Matt's 8 million new jobs compares to a U.S. population increase of 30 million.

Seems to me that population growth comes from two sources only -- births and immigration.

I'm constantly told that immigrants are hard-working and that they do the jobs Americans won't, so they can't be the ones whose growth is outpacing job growth.

So how many children age 0-8 do you think should have gained employment in the past eight years?

Gary said...

Bush had the lowest rate of job creation in the last 50 years AND at the end of his term there was an increase in the number of workers 25 to 54 without jobs amounting to one out of 50 newly unemployed.