Friday, August 01, 2008

Tricky Dismal Economics

The reason the US isn't officially in a recession? The little noticed inflation adjustment to the GDP. Nice to know that officially inflation was only 1.1% last quarter. A higher realistic inflation number would have knocked out the weak official growth. "Payrolls have contracted every month this year and are expected to register another dip when the Labor Department releases the July employment report today." Wouldn't be prudent to have an official recession right now before the election, would it? How many items did you notice being over 1% higher last quarter?

Wal-Mart instructs workers it would be bad if they vote Democratic. The Democrats would make it easier to unionize which would be counter to everything Wal-Mart stand for.
The meeting leader said, 'I am not telling you how to vote, but if the Democrats win, this bill will pass and you won't have a vote on whether you want a union,'" said a Wal-Mart customer-service supervisor from Missouri. "I am not a stupid person. They were telling me how to vote," she said....

Twelve years ago, 98% of Wal-Mart's political donations went to Republicans. Now, as the Democrats seem poised to gain control in Washington, 48% of its $2.2 million in political contributions go to Democrats and 52% to Republicans, according to the Center for Responsive Politics, a nonpartisan organization that tracks political giving.
Wal-Mart denies allegations, may be on thin ice.

Think Progress had this response: "It should be no surprise that Wal-Mart would stretch the limits of the law in an attempt to deny their workers' rights and kill the Employee Free Choice Act. The company knows what all union workers know: workers in unions earn 29 percent higher wages on average, are 62 percent more likely to have employer health coverage, and four times more likely to have a pension."

How long a bad market for labor? - Mandel wonders. Last time the downturn in jobs was two years.
This morning’s employment report shows the unemployment rate now up to 5.7%, while the private sector lost 76K jobs. Outside of health and social assistance, the loss was 110K.
Jobless rate highest in four years, employers cut jobs for seventh month.

Economic models predict clear Obama win in November

GM's spectacular $15.5 billion loss.

Citigroup and others threatened with state and federal lawsuits over fraudulent auction rate security sales.

Consumer Federation of America: U.S. Oil Drilling Increases Exxon Record Profits Without Decreasing Consumer Costs
The U.S. Department of Energy has analyzed the amount of resources that might be found in off limits areas and concluded that there is not enough there to significantly change the world price. It estimates a decrease of less than three cents per gallon of gasoline ten years from now....

Exxon Mobil cannot absorb all of the money it is making now. Exxon Mobil spent 46 percent more money buying its stock back in the first half of this year ($18.2 billion) than it did on exploration and capital expenditures ($12.5 billion).
HOUSTON CHRONICLE: Politicians fume as Exxon profits soar to U.S. record
"They tell us they want to do more domestic production," said Sen. Charles Schumer, D-N.Y. "They tell us they need to drill offshore. They tell us that they can find oil on the mainland. And what do they do with their profits? They buy back stock, simply to increase their share price."

Ken Cohen, the company's vice president of public affairs, repeatedly told reporters the company would increase domestic production if Congress would lift its ban on drilling in areas that have been off-limits for more than 25 years.

"We want to do more," Cohen said. "Congress needs to give us access."

Democrats argue that producers already hold 68 million acres of federal lands on which they are not producing oil or gas....

Exxon Mobil said its decrease in production stemmed largely from its decision last year to walk away from its Venezuela operations rather than agree to terms giving majority control to that country's government-owned oil company, Petroleos de Venezuela. Other factors included a Nigerian labor strike and lower entitlements under production-sharing contracts with other countries.
The real budget deficit is $789 billion if you include the war and the borrowing from the Social Security fund.

NYT - The hidden employment secret - cut to part time jobs.
The number of Americans who have seen their full-time jobs chopped to part time because of weak business has swelled to more than 3.7 million — the largest figure since the government began tracking such data more than half a century ago.
Bush Calls for New Highway Tolls, More Private Funding of Roads

What Hugely Profitable Energy Company could be behind denying global climate change?
WHEN the tobacco industry was feeling the heat from scientists who showed that smoking caused cancer, it took decisive action.

It engaged in a decades-long public relations campaign to undermine the medical research and discredit the scientists. The aim was not to prove tobacco harmless but to cast doubt on the science.

In May this year, the multibillion-dollar oil giant Exxon-Mobil acknowledged that it had been doing something similar. It announced that it would cease funding nine groups that had fuelled a global campaign to deny climate change....

The funding of an array of think tanks and institutes that house climate sceptics and deniers also worried Britain's premier scientific body, the Royal Society. It found that in 2005 Exxon distributed nearly $3 million to 39 groups that "misrepresented the science of climate change by outright denial of the evidence that greenhouse gases are driving climate change".
For the fourth time this summer alone, Senate Republicans blocked any consideration of extending renewable energy tax credits. The Congressional GOP held a fake PR rump session of Congress to protest not giving more concessions to oil companies.

Congress and Federal Reserve rescuing those financial institutions that caused the mess with tax payer dollars. Bailing Out the Bad Guys.

Radio Nation - Naomi Klein asks if the economy is at risk, or if it's really capitalism?

The Last Hurrah of the American Banking System.

Bloomberg: U.S. Recession May Have Begun in Last Quarter of 2007

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