Posts Tagged ‘Unemployment’

After years of declines, the 11 weeks since President Trump was elected have seen something ‘different’ happen in continuing jobless claims.

 

Despite payrolls and ADP exuberance, the number of people continuing to receive unemployment benefits has risen at the fastest rate since 2008 post-election.

Probably just a coincidence.

Twelve years ago, John Perkins published his book, Confessions of an Economic Hit Man, and it rapidly rose up The New York Times’ best-seller list. In it, Perkins describes his career convincing heads of state to adopt economic policies that impoverished their countries and undermined democratic institutions. These policies helped to enrich tiny, local elite groups while padding the pockets of U.S.-based transnational corporations.

Perkins was recruited, he says, by the National Security Agency (NSA), but he worked for a private consulting company. His job as an undertrained, overpaid economist was to generate reports that justified lucrative contracts for U.S. corporations, while plunging vulnerable nations into debt. Countries that didn’t cooperate saw the screws tightened on their economies. In Chile, for example, President Richard Nixon famously called on the CIA to “make the economy scream” to undermine the prospects of the democratically elected president, Salvador Allende.

If economic pressure and threats didn’t work, Perkins says, the jackals were called to either overthrow or assassinate the noncompliant heads of state. That is, indeed, what happened to Allende, with the backing of the CIA.

Perkins’ book has been controversial, and some have disputed some of his claims, including, for example, that the NSA was involved in activities beyond code making and breaking.

Perkins has just reissued his book with major updates. The basic premise of the book remains the same, but the update shows how the economic hit man approach has evolved in the last 12 years. Among other things, U.S. cities are now on the target list. The combination of debt, enforced austerity, underinvestment, privatization, and the undermining of democratically elected governments is now happening here.

I couldn’t help but think about Flint, Michigan, under emergency management as I read The New Confessions of an Economic Hit Man.

I interviewed Perkins at his home in the Seattle area. In addition to being a recovering economic hit man, he is a grandfather and a founder and board member of Dream Change and The Pachamama Alliance, organizations that work for “a world that future generations will want to inherit.”

Sarah van Gelder: What’s changed in our world since you wrote the first Confessions of an Economic Hit Man?

John Perkins: Things have just gotten so much worse in the last 12 years since the first Confessions was written. Economic hit men and jackals have expanded tremendously, including the United States and Europe.

Back in my day we were pretty much limited to what we called the third world, or economically developing countries, but now it’s everywhere.

And in fact, the cancer of the corporate empire has metastasized into what I would call a failed global death economy. This is an economy that’s based on destroying the very resources upon which it depends, and upon the military. It’s become totally global, and it’s a failure.

van Gelder: So how has this switched from us being the beneficiaries of this hit-man economy, perhaps in the past, to us now being more of the victims of it?

Perkins: It’s been interesting because, in the past, the economic hit man economy was being propagated in order to make America wealthier and presumably to make people here better off, but as this whole process has expanded in the U.S. and Europe, what we’ve seen is a tremendous growth in the very wealthy at the expense of everybody else.

On a global basis we now know that 62 individuals have as many assets as half the world’s population.

We of course in the U.S. have seen how our government is frozen, it’s just not working. It’s controlled by the big corporations and they’ve really taken over. They’ve understood that the new market, the new resource, is the U.S. and Europe, and the incredibly awful things that have happened to Greece and Ireland and Iceland, are now happening here in the U.S.

We’re seeing this situation where we can have what statistically shows economic growth, and at the same time increased foreclosures on homes and unemployment.

van Gelder: Is this the same kind of dynamic about debt that leads to emergency managers who then turn over the reins of the economy to private enterprises? The same thing that you are seeing in third-world countries?

Perkins: Yes, when I was an economic hit man, one of the things that we did, we raised these huge loans for these countries, but the money never actually went to the countries, it went to our own corporations to build infrastructure in those countries. And when the countries could not pay off their debt, we insisted that they privatize their water systems, their sewage systems, their electric systems.

Now we’re seeing that same thing happen in the United States. Flint, Michigan, is a very good example of that. This is not a U.S. empire, it’s a corporate empire protected and supported by the U.S. military and the CIA. But it is not an American empire, it’s not helping Americans. It’s exploiting us in the same way that we used to exploit all these other countries around the world.

van Gelder: So it seems like Americans are starting to get this. What is your sense about where the American public is in terms of readiness to do something?

Perkins: As I travel around the U.S., as I travel around the world, I see that people are really waking up. We’re getting it. We’re understanding that we live on a very fragile space station, and it’s got no shuttles; we can’t get off. We’ve got to fix it, we’ve got to take care of it, and we’re in the process of destroying it. The big corporations are destroying it, but the big corporations are just run by people, and they’re vulnerable to us. If we really consider it, the market place is a democracy, if we just use it as such.

van Gelder: I want to push back on that one a little bit because so many corporations don’t sell to ordinary consumers, they sell to other companies or to governments, and so many corporations have such an entrenched reward system where if one person doesn’t perform by exploiting the earth they’ll simply get replaced with somebody else who does.

Perkins: I’ve recently been speaking at a number of corporate conferences. I hear time after time after time that many of them want to leave a green legacy. They’ve got children, they’ve got grandchildren, they understand we can’t go on like this.

So what they say is, “Go out there, start consumer movements. What I want is to receive a hundred thousand emails from my customers saying, ’Hey, I love your product but I’m not going to buy it anymore until you pay your workers a fair wage in Indonesia, or wherever, or clean up the environment, or do something.’ And then I can take that to my board of directors and my big stockholders, to the people who really control whether I get hired or fired.”

van Gelder: I agree, and those campaigns, as you know, have been going on for decades now, and sometimes they have little incremental changes around the edge. But then we look back on it later and we see that there’s enormous resistance because of the profits to be made in continuing the system.

Perkins: I think we’ve seen tremendous changes, though. Just in the last few years, we’ve seen organic foods become very big. Twenty years ago they couldn’t make a go of it. We’ve seen women having bigger positions in corporations, and minorities, and we need to get better at this.

We’ve seen the labeling of many foods. GMOs aren’t included yet, but nutrition and calories and so forth are. And what we really need to do is convince corporations that they’ve got to have a new goal.

We’ve got to let corporations know what their job is: It’s to serve a public interest, and make a decent rate of return for investors. We need investors, but beyond that, every corporation should serve a public interest, should serve the earth, should serve future generations.

van Gelder: I want to ask you about the Trans-Pacific Partnership, and other trade deals. Is there any way that we can beat these things back so they don’t continue supercharging the corporate sphere at the expense of local democracies?

Perkins: They’re devastating; they give sovereignty to corporations over governments. It’s ridiculous.

We’re seeing terrible desperation from people in Central America trying to get away from a system that’s broken, primarily because our trade agreements and our policies toward Latin America have broken them. And we’re seeing, of course, those similar things in the Middle East and in Africa, these waves of immigrants that are swarming into Europe from the Middle East. These terrible problems that have been created because of the greed of big corporations.

I was just in Central America and what we talk about in the U.S. as being an immigration problem is really a trade agreement problem.

They’re not allowed to impose tariffs under the trade agreements—NAFTA and CAFTA—but the U.S. is allowed to subsidize its farmers. Those governments can’t afford to subsidize their farmers. So our farmers can undercut theirs, and that’s destroyed the economies, and a number of other things, and that’s why we’ve got immigration problems.

van Gelder: Can you talk about the violence that people are fleeing in Central America, and how that links back to the role the U.S. has had there?

Perkins: Three or four years ago the CIA orchestrated a coup against the democratically elected president of Honduras, President Zelaya, because he stood up to Dole and Chiquita and some other big, global, basically U.S.-based corporations.

He wanted to raise the minimum wage to a reasonable level, and he wanted some land reform that would make sure that his own people were able to make money off their own land, rather than having big international corporations do it.

The big corporations couldn’t stand for this. He wasn’t assassinated but he was overthrown in a coup and sent to another country, and replaced by a terribly brutal dictator, and today Honduras is one of the most violent, homicidal countries in the hemisphere.

It’s frightening what we’ve done. And when that happens to a president, it sends a message to every other president throughout the hemisphere, and in fact throughout the world: Don’t mess with us. Don’t mess with the big corporations. Either cooperate and get rich in the process, and have all your friends and family get rich in the process, or go get overthrown or assassinated. It’s a very strong message.

van Gelder: I wanted to ask about your time spent in Ecuador with indigenous people. I’m wondering if you could talk about how that experience has changed you?

Perkins: Many years ago when I was a Peace Corps volunteer in the Amazon with the Shuar indigenous people there, I was dying. I got very ill, and my life was saved in one night by a shaman. I’d come out of business school this is 1968, ’69, and I had no idea what a shaman was, but it changed my life by helping me understand that what was killing me was a mindset—what they would call the dream.

I spent many years studying all this, and working with many different indigenous groups, and what I saw was the power of the mindset.

The shamans teach us—the indigenous people teach us—once you change the mindset, then it’s pretty easy to have the objective reality change around it. So, instead of the kind of economy we have now, a death economy, if we can change the mindset we can very quickly move into a life economy.

van Gelder: So what are the mechanisms by which a change in consciousness actually shifts things on the ground?

Perkins: Well, in my opinion the biggest catalyst that needs to go forward to change this is we’ve got to change the corporations. We’ve got to move from that goal that was stated by Milton Friedman in the 1970s, that the only responsibility of corporations is to maximize profits regardless of social and environmental costs.

We change the big corporations by telling them we’re not going to buy from you anymore unless you change your goal. No longer should your goal be to maximize profits regardless of social and environmental costs. Make a decent rate of return for your investors, but serve us, we the people, or we’re not buying from you.

van Gelder : You quote Tom Paine in your book: “If there must be trouble let it be in my day that my child may have peace.” Why did you decide to use that quote?

Perkins : Well, I think Tom Paine was brilliant in that statement. He understood how that would impact people. And he wrote that statement in December 1776.

Washington had lost just about every battle he ever fought; he wasn’t getting any support from the Continental Congress; they weren’t giving his men guns or ammunition or even blankets and shoes, and he was bogged down at Valley Forge. Paine realizes that he’s got to somehow write something that will rally people, and there’s nothing that rallies people more than to think about their children

That to me is where we’re at right now. I’ve got a daughter and I’ve got an 8-year-old grandson. Bring on the trouble for me, OK, but let’s create a world they’re going to want to live in. And let’s understand that my 8-year-old grandson cannot have an environmentally sustainable and regenerative, socially just, fulfilling world unless every child on the planet has that.

And this is new. It used to be all we had to worry about was our local community, maybe our country. But we didn’t have to worry about the world. But what we know now is that we can’t have peace anywhere in the world, we can’t have peace in the U.S., unless everybody has peace.

 

 

The Invisible American

I’ve been reading a lot about a “recovering” economy. It was even trumpeted on Page 1 of The New York Times and Financial Times last week.

I don’t think it’s true.

The percentage of Americans who say they are in the middle or upper-middle class has fallen 10 percentage points, from a 61% average between 2000 and 2008 to 51% today.

 

Ten percent of 250 million adults in the U.S. is 25 million people whose economic lives have crashed.

What the media is missing is that these 25 million people are invisible in the widely reported 4.9% official U.S. unemployment rate.

Let’s say someone has a good middle-class job that pays $65,000 a year. That job goes away in a changing, disrupted world, and his new full-time job pays $14 per hour — or about $28,000 per year. That devastated American remains counted as “full-time employed” because he still has full-time work — although with drastically reduced pay and benefits. He has fallen out of the middle class and is invisible in current reporting.

More disastrous is the emotional toll on the person — the sudden loss of household income can cause a crash of self-esteem and dignity, leading to an environment of desperation that we haven’t seen since the Great Depression.

Millions of Americans, even if they themselves are gainfully employed in good jobs, are just one degree away from someone who is experiencing either unemployment, underemployment or falling wages. We know them all.

There are three serious metrics that need to be turned around or we’ll lose the whole middle class.

  1. According to the U.S. Bureau of Labor Statistics, the percentage of the total U.S. adult population that has a full-time job has been hovering around 48% since 2010this is the lowest full-time employment level since 1983.
  2. The number of publicly listed companies trading on U.S. exchanges has been cut almost in half in the past 20 years — from about 7,300 to 3,700. Because firms can’t grow organically — that is, build more business from new and existing customers — they give up and pay high prices to acquire their competitors, thus drastically shrinking the number of U.S. public companies. This seriously contributes to the massive loss of U.S. middle-class jobs.
  3. New business startups are at historical lows. Americans have stopped starting businesses. And the businesses that do start are growing at historically slow rates.

Free enterprise is in free fall — but it is fixable. Small business can save America and restore the middle class.

Gallup finds that small businesses — startups plus “shootups,” those that grow big — are the engine of new economic energy. According to the U.S. Small Business Administration, 65% of all new jobs are created by small businesses, not large ones.

Here’s the crisis: The deaths of small businesses recently outnumbered the births of small businesses. The U.S. Census Bureau reports that the total number of business startups and business closures per year crossed for the first time in 2008. In the nearly 30 years before that, the U.S. consistently averaged a surplus of almost 120,000 more business births than deaths each year. But from 2008 to 2011, an average of 420,000 businesses were born annually, while an average of 450,000 per year were dying.

Bottom line: The two most trusted institutions in the U.S. are the military and small business. Most people know about our military’s importance, but not as many appreciate the role small business plays in creating the majority of new jobs and in national security itself.

America needs small business to boom again. Small businesses are our best hope for badly needed economic growth, great jobs and ultimately accelerated human development. When we get small business to boom, we can save America, restore our middle class and once again lead the world.

There are several movies I will watch every time they are aired on one of my generally useless 600 cable channels. They all have the same thing in common – a compelling character portrayal which keeps you riveted and mesmerized by how the protagonist deals with adversity and circumstances beyond their control. The movies I can’t resist include: The Godfather I & II, The Green Mile, Shawshank Redemption, Apocalypse Now, and Patton. Another captivating movie, which didn’t do well at the box office, is Cinderella Man. The portrayal of Depression era heavyweight boxing champion James J. Braddock by Russell Crowe is inspirational, with a rousing and improbable victory by the champion of the common man. While watching this great movie a few weeks ago I found myself equating the themes to the current presidential campaign.

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The Greater Depression

Braddock was an inspiration to all downtrodden demoralized Americans during the Great Depression. The parallels between the 1930’s Great Depression and today’s Greater Depression are uncanny, despite the propaganda emitted by the establishment politicians, media and banking cabal that all is well. The corporate mainstream media faux journalists scorn and ridicule anyone who makes the case we are currently in the midst of another Great Depression. They are paid to peddle a recovery narrative to keep the masses ignorant, sedated, and distracted by latest adventures of Caitlyn Jenner and the Kardashians. An impartial assessment of the facts reveals today’s Depression to be every bit as dreadful for the average American as it was in the 1930’s.

The Obama administration has used the identical failed fiscal policies utilized by FDR. $800 billion stimulus packages, cash for clunkers, payroll tax holidays, student loans for anyone with a pulse, and hundreds of other useless Keynesian claptrap ideas have driven the national debt from $10 trillion in September 2008 to $19.4 trillion eight years later, a 94% increase. The national debt in October 1929 was $17 billion. Eight years into the Great Depression, after billions in wasteful New Deal programs the national debt stood at $36.5 billion, a 115% increase.

The Great Depression lasted from 1929 through World War II despite the tens of billions spent on fiscal stimulus. After eight years of the largest budget deficits in history, the economy is still dead in the water, with GDP barely growing. And its pitiful growth is from the surge in consumer spending due to the calamitous Obamacare program and the continuous wars we wage across the world.

It’s the black and white photographs of disheartened men and hungry children from the 1930’s that define the Great Depression for present day generations. Of course after years of government run social engineering disguised as education, most people couldn’t even define when or what constituted the Great Depression. These heart wrenching portraits of average Americans suffering and in despair capture the zeitgeist of the last Fourth Turning crisis.

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Apologists for the status quo contend the last eight years couldn’t possibly be classified as a depression. The narrative of economic recovery has been peddled by corporate media mouthpieces, feckless politicians, Too Big To Trust Wall Street bankers, Federal Reserve puppets, and government apparatchiks flogging manipulated data as proof of economic advancement. They point to the lack of soup lines as proof we couldn’t be experiencing a depression.

First of all, if there were soup lines, the corporate media would just ignore them. If they don’t report it, then it isn’t happening. Secondly, the soup lines are electronic, as the government downloads the “soup” onto EBT cards so JP Morgan can reap billions in fees to run the SNAP program. Just because there are no pictures of starving downtrodden Americans in shabby clothes waiting in soup lines, doesn’t mean the majority of Americans aren’t experiencing a depression.

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If the country has actually been experiencing an economic recovery for the last seven years, why would 14% to 15% of all Americans be dependent on food stamps to survive? When the economy is actually growing and employment is really below 5%, the percentage of Americans on food stamps is below 8%. If the government economic data was truthful, there would not be 43.5 million people living in 21.4 households (17% of all households) dependent on food stamps. More than 100 million Americans are now dependent on some form of federal welfare (not including Social Security or Medicare). If the economy came out of recession in the second half of 2009, why would 6 million more Americans need to go on welfare over the next two years?

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Federal, state, and local governments will spend approximately $1.08 trillion on welfare programs in 2016, including $600 billion for Medicaid and $480 billion for the rest. In 2009, 18.6% of the population was participating in at least one means-tested benefit program. After three years of “economic recovery” that number was up to 21.3% by 2012. If we were in the midst of an expanding economy why would 41.6% of African Americans and 36% of Hispanics be receiving means-tested benefits each month? The social safety net during the Great Depression was sparse. Spending in excess of $1 trillion per year to sustain over one-third of the U.S. population sure sounds like a Depression to me.

The appalling optics of Americans waiting in food lines and/or living on the streets is not being broadcast by the mainstream corporate media, as their duty is to sustain the establishment narrative of economic recovery at any cost. As I drive to work through West Philly, every Thursday the Grace Lutheran Church at 36th & Haverford Ave. distributes food to the local community and the line at 7:30 a.m. in the morning extends around the block.

This scene is duplicated in crumbling urban enclaves and deteriorating suburban municipalities across the land. Food banks and homeless shelters throughout the country are being inundated by those who haven’t benefited from the Fed’s QE and ZIRP “Save a Wall Street Banker” monetary schemes. One in seven Americans – 46 million people – rely on food pantries and meal service programs to feed themselves and their families.

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There are 600,000 homeless Americans on any given night. In June 2016, there were 60,000 homeless people, including 15,000 homeless families with 23,000 homeless children, sleeping each night in the New York City municipal shelter system. Meanwhile, the sociopathic Wall Street titans pillage and plunder the nation’s wealth on a daily basis with their high frequency trading supercomputers, rigging the game with help of their Federal Reserve benefactors and captured politicians in D.C., and retire to their penthouse suites each night while spending their weekends in the Hamptons.

The divergence between the obscene levels of wealth acquired through illicit means by the chosen few and tens of millions experiencing extreme poverty due to the immoral and illegal actions of those chosen few has only been this extreme once before. It isn’t a coincidence that wealth inequality hasn’t been this high since the Great Depression.

Every monetary and fiscal action taken by the establishment since 2008 has been designed to benefit the rich, powerful, connected crony capitalists. Boosting the stock market to all-time highs, while impoverishing senior citizens and middle class savers, has left a stagnating economy on life support with no hope of revival. The hopelessness, despair, and anger of those not part of the establishment or profiting from establishment schemes is palpable.

The most blatant attempt by the ruling class to subvert the truth regarding our ongoing depression is the despicably absurd propaganda churned out by the government apparatchiks at the Bureau of Labor Statistics. With a working age population of 253.9 million people and only 151.6 million of them employed (27 million part-time, 15 million self-employed, 7 million working multiple jobs and worst of all 22 million government workers), the BLS has the gall to report only a 4.9% unemployment rate. There are 102.3 million working age Americans not working, but only 7.8 million of them are unemployed according to the highly educated establishment lackeys at the BLS. The other 94.5 million non-working Americans must be frolicking in the surf, sipping margaritas and counting the millions they’ve made in the rigged Wall Street casino.

Would the labor participation rate and employment to population ratio be hovering at levels last seen in 1978 if the jobs market was booming? And don’t blame it on Baby Boomers retiring. With 28% of people over 55 years old with no retirement savings and the median retirement savings of those 55 to 61 years old of $17,000, few Boomers can afford to retire on $12,000 of Social Security per year. The percentage of those over 55 years old working is at an all-time high, while the percentage of men 25 to 54 (prime working years) working is at an all-time low. Since 2007 the country has added 5.6 million mostly low paying service jobs, while 15.7 million Americans have supposedly left the labor force of their own free will, and the unemployment rate is virtually the same. Only an Ivy League educated economist or highly paid CNBC pundit would believe such malarkey.

If job growth was as strong as government and corporate media proclaim, how could weekly wages be growing by only 1.5% annually today and averaging only 2% over the last five years. When inflation on things you need to live (rent, healthcare, energy, food, education, autos) tallies in excess of 5% annually, you’re earning .25% if you have any savings and your wages have been going up at less than 2% per year, your daily existence is depressionary. Real median household income is lower than it was in 1989, even using the hugely understated and manipulated CPI.

Back before seasonal adjustments, birth death model phantom excel spreadsheet created jobs, pretending working age people weren’t in the workforce and the existence of government bureaucrats whose job it was to paint a rosy picture, we had actual unemployment figures. Every able bodied American was in the labor force during the Great Depression. The true unemployment rate fluctuated between 15% and 25% during most of the 1930’s. They had to stand in line for their relief checks and food. It wasn’t wired into their bank accounts or downloaded onto an EBT card.

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The government approved false unemployment rate (U3) regurgitated by the corporate mainstream media with no qualifications or clarifications is 4.9%. The U-6 unemployment rate is the broadest unemployment measure, including short-term discouraged and other marginally-attached workers as well as those forced to work part-time because they cannot find full-time employment. It stands at 9.7%, almost double the mainstream media reported rate. You never hear this figure mentioned by the compliant lackey media.

But, if you want the true unemployment rate you must adjust the government figures for the misinformation which began in 1994. Long-term discouraged workers were defined out of official existence in 1994. If you stop looking for a job because there are no jobs available, the BLS pretends you no longer exist and you are dropped from their unemployment calculations. John Williams at Shadowstats rightfully adds these discouraged workers, who are willing to work, back into the calculation and surprise, surprise, the real unemployment rate in this country has been between 18% and 23% for the last seven years. Those rates are identical to the worst years of the Great Depression.

Once you obliterate the false economic propaganda peddled by the purveyors of the establishment, they fall back onto their one remaining false idol – the stock market. How could we possibly be in a depression when the stock market has gone up by 165% since its March 2009 bottom? It’s within 2% of its all-time high. This is after a 55% plunge from 2007 highs to the March 2009 lows. We know history might not repeat, but it certainly rhymes.

The market fell 86% from its 1929 highs to the 1932 lows. Those in control didn’t think to suspend mark to market accounting so the Wall Street banks could falsify their financial statements, like our beloved leaders did in March 2009. But, even though the entire 1930’s constitute the Great Depression, the stock market soared by 260% between 1932 and 1937, making the current cyclical bull seem puny in comparison.

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Did the 260% increase in the stock market over five years in the midst of the Great Depression benefit the average American in any way whatsoever? Absolutely not. They didn’t own stocks. The 0.1% benefitted, just as they benefited from the crony capitalism New Deal programs that poured money into their coffers. Fast forward 80 years to the next Fourth Turning and you have the same dynamic.

The 160% increase in the stock market over the last seven years has enriched the Wall Street sociopaths, billionaire oligarchs, corporate chieftains, and the leeches and cronies who prop up the fetid establishment. The Federal Reserve QE and ZIRP monetary policies, along with the Obama fiscal debt expansion machinations, were solely designed to benefit Wall Street, not Main Street. The beneficiaries in NYC, D.C., S.F. and L.A. are rolling in the dough, while grandmas across the land are forced to eat Friskies for dinner.

Again, we refer to the entire 1930’s as the Great Depression despite the fact real GDP surged by 40% between 1933 and 1937. If today’s mainstream media existed during the 1930’s they would have been proclaiming the “tremendous” GDP growth and “spectacular” stock market gains. They would have really boosted the spirits of the millions receiving government relief and standing for hours waiting for a cup of soup and some stale bread. The real GDP in this country has grown by a pathetic 15.4% since the 2009 low. Using a true measure of inflation reveals we’ve essentially been in recession since the early 2000’s, with a depression since 2008.

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Central bankers around the globe have all implemented identical monetary schemes to sustain the unsustainable. They have always had only one tool in their toolkits – printing money and creating enormous amounts of unpayable debt to prop up crooked corporate cronies, their morally bankrupt banker puppeteers and the slimy snakes slithering within the halls of Congress. Total credit market debt to GDP peaked at 261% in the mid-1930’s as FDR’s debt financed New Deal programs did absolutely nothing to lift the country out of its Great Depression. Obama and his Keynesian acolytes have tried the same solutions since 2009, with an equally dismal result. Total credit market debt to GDP peaked in 2010 at 381%, but six years later still stands at 345% as the stagnant economy grinds to a halt.

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The debt end game approaches. With a national debt of $19.4 trillion (106% of GDP) poised to skyrocket by $1 trillion per year as entitlement programs on automatic pilot explode under the weight of Baby Boomers, interest rates at 5,000 year lows, a willfully ignorant iGadget distracted populace, and spineless corrupt politicians unable or unwilling to address the debt crisis, this depression is poised to go down in history as the Greater Depression.

As the Fed talks as if they have everything under control, their actions and/or inactions reveal an extreme level of desperation. As corporate profits soared to record highs and unemployment fell to 2007 levels, the Federal Reserve discount rate should have been elevated to 4%. Instead they keep it locked at an emergency crisis level of .25%. This proves they are lying about economic recovery narrative.

And now they are pondering negative interest rates, which have failed across Europe already. These academics, who’ve never worked a day of their lives in the real world, impose their demented monetary theories and guesses upon the citizens of the world, leading to havoc, chaos, heartache and ultimately war. When did capitalism devolve from saving and investing to borrowing and spending? Does 1913 ring a bell? Stanley Fischer, the vice chairman of the Federal Reserve revealed his disdain and contempt for the commoners in an interview this week:

“Well, clearly there are different responses to negative rates. If you’re a saver, they’re very difficult to deal with and to accept, although typically they go along with quite decent equity prices. But we consider all that and we have to make trade-offs in economics all the time and the idea is the lower the interest rate the better it is for investors.”

To paraphrase George Carlin, “he doesn’t give a fuck about you”. He knows there are more than 90 million American over the age of 55 in this country who are risk averse. Eight years ago they could earn a relatively risk free 4% in a money market fund. A retired couple with $250,000 could generate $10,000 per year in interest to supplement their Social Security. Today, due to the policies promoted and implemented by Fischer, Yellen and their cohorts, that couple can earn about $600.

And now he wants the elderly to pay him for keeping their money in the bank. These demented Federal Reserve schemes are guaranteed to blow up pension funds, endowments, and any other investor in bonds. The hubris and inhumanity of Fischer and his ilk makes me want to wretch. Fischer’s sole purpose in life is to serve his Wall Street and establishment masters. Screw the peasants. They are expendable.

There are now $11 trillion of negative yielding government bonds floating around the planet. No one in their right mind would buy a negative yielding bond. It’s not an asset. It’s a liability. An investor is guaranteed to lose money. You know the debt endgame approaches when governments issue negative yielding bonds that are then bought by central bankers and the banks that control them. It’s nothing but a stalling tactic to fend off the imminent collapse. Bill Gross, a relatively honest financial titan, contends Yellen and her contemporaries have taken reckless actions which are destroying capitalism:

 “I and others however, have for several years now, suggested that the primary problem lies with zero/negative interest rates; that not only do they fail to provide an “easing cushion” should recession come knocking at the door, but they destroy capitalism’s business models – those dependent on a yield curve spread or an interest rate that permits a legitimate return on saving, as opposed to an incentive for spending.

They also keep zombie corporations alive and inhibit Schumpeter’s “creative destruction” which many argue is the hallmark of capitalism. Capitalism, almost commonsensically, cannot function well at the zero bound or with a minus sign as a yield. This watch is ticking because of high global debt and out-of-date monetary/fiscal policies that hurt rather than heal real economies. Sooner rather than later, Yellen’s smooth shot from the fairway will find the deep rough.”

In Part One of this article I’ve made the case most people in this country are experiencing a Depression, on par with the Great Depression of the 1930’s. In Part Two I will compare and contrast the lives and influence of James J. Braddock and Donald J. Trump, while assessing their impact on the American people during times of economic despair.

In a recent Reason-Rupe Survey, 58 percent of Americans ages 18–24 said they viewed socialism favorably. However, when asked if they favored a free market economy or a government-managed economy, 64 percent of Millennials said they favored the free market. How is it possible for Millennials to favor both a socialist government and a capitalist economy? The answer is simple, Millennials simply do not understand what either of these words really mean, especially capitalism.

The word capitalism is generally unpopular on college campuses around the country. In pop culture, it is rare, though not impossible, to find a story where the capitalist ends up being the hero. All day long we are bombarded with anti-free market propaganda. Oddly enough, most of this anti-capitalist rhetoric is available to us through mediums that exist only because of the free market. For example, every time a young, enthusiastic socialist tweets about the injustices of capitalism from his or her iPhone, they are living proof that Millennials love the free market.

If there is one thing the Millennial generation struggles with, it’s patience. We have grown up in a world where everything has been available to us with the click of the button. We have never had to use encyclopedias or spend hours doing research in a library. Instead, we Google whatever it is that we were looking for and in a matter of seconds, we have a plethora of sources. Socialism is not generally associated with quick results. Instead, extreme bureaucracy usually tends to make things take even longer than they otherwise would, much like a government bread line. Likewise, a government-run healthcare system usually results in longer waiting periods even for simple office visits. Millennials hate waiting. I am willing to bet that if these self-proclaimed socialists were to spend some time in a socialist country, they would not last very long.

Millennials love quality, one-of-a-kind products. Platforms like Etsy have served the Millennial generation as a sort of online farmers’ market where strangers from around the world buy and sell handmade goods from each other. Whether you’re looking for a beard warmer or craft BBQ sauce, Etsy has it. Likewise, we live in a world fueled by Amazon Prime. Not only do we have access to almost anything we could possibly need or want, we are also having these items shipped to our door in two days. Both Etsy and Amazon are wonders brought to us by the free market. So, as Millennials login to Amazon to purchase a copy of The Communist Manifesto, they might want to consider the fact that the book is delivered to them in 48 hours all thanks to capitalism.

Millennials are entrepreneurs. We are using technology to our advantage and making the world run quickly and efficiently. Though some might speak loudly in favor of unions and collective bargaining, on a late night when no cabs can be found, a Millennial knows that a safe ride will be available to us in minutes by opening our Uber App. Apps like Square, Venmo, and PayPal have allowed us to start small businesses and collect payment with ease. Sites like YouTube allow us the opportunity to gain exposure and promote whatever it is we are working on or selling without ever leaving our homes. We have the potential to be the most entrepreneurial generation our country has ever seen.

Millennials love to actively participate in the market process. Active participation is one of the fundamental principles of the free market. If we are not willing to give feedback and review our purchased consumer goods, we will not get the most innovative processes or the best quality products available. Millennials have grown up in a world where every thought and opinion is shared on social media. Platforms like Yelp have become important tools in the hands of young consumers who are either pleased or completely outraged about the goods or services they received. As a result, Millennials, more than any other generation, are reading online reviews of a company or product before making the decision to buy. According to Forbes, 33% of Millennials said that they read reviews of a product before deciding to buy.

Millennials love to learn and have more access to the market of ideas than any other generation that preceded us. Khan academy, YouTube, and Wikipedia offer us a chance to become experts in almost any field we desire. Millennials are using these free market mediums to educate themselves in a way that has never been seen before in our world. We are not relying solely on the opinion of college professors or our parents. We are doing the research and finding new ways to learn. Along those same lines, we also have a natural distrust for authority. We have seen the economy crumble as a result of the poor decisions made by the baby boomer generation. We do not trust others to make our decisions for us. We are coming up with entrepreneurial solutions to government-created problems and we are doing this through online learning.

Yet, in spite of all of these aspects of the Millennial mindset, Millennials still claim to identify with socialism. Growing up in a post-cold war era has jaded our perception of what a pure welfare state really looks like. We have not grown up hearing first-hand accounts of the woes of socialism in the Cold War era. We are living in a technological world brought to us because of the free market’s perpetual triumph over socialism. However, we don’t understand history well enough to realize how fortunate we are to live in a society where the free market is allowed to flourish. Millennials see large unemployment statistics, a struggling economy, and high costs of living and attribute it to the very system that gave us our iPhones, Amazon, Spotify, and Netflix.

The problem at hand is not that too many Millennials are socialists; the problem is that too many Millennials don’t understand that in almost every aspect of their lives, they are capitalists. If Millennials truly want to dedicate themselves to the ideals of socialism, they will have to surrender their iPhones, their Amazon accounts, their Uber accounts, their craft beer, the hipster beard accessories, and pretty much every other aspect of their daily lives.

The welfare state of mind has spiraled out of control in America…

Two recent news stories highlight how pernicious the welfare state has become in America today.

The first was an announcement by the feds that food stamps can be used to have groceries delivered right to a recipient’s door. Service with a smile. The Obama administration says it is too much of a hardship for those on welfare to actually travel to the grocery store. What’s next? Cooking the meal for them? If only the DMV would do home deliveries for drivers licenses.

 

The second story was about the hullabaloo over a proposal by Maine governor Paul LePage to prohibit food stamp recipients from using their food aid to purchase junk foods like sugary soft drinks and candy bars. He says that the state has an obesity problem and he will “implement reform unilaterally or cease Maine’s administration of the food stamp program altogether.” The Obama administration rejected his request and the left activists act as if the idea that a welfare recipient can’t buy a pint of Ben and Jerry’s ice cream at taxpayer expense is a violation of civil liberties.

The welfare/entitlement state of mind has spiraled out of control in America. No one is lifting a finger of opposition. The cost of welfare is now well over $1 trillion a year. Food stamps are so ubiquitous that they have replaced dollars as the new standard currency in many inner cities in America. Even in affluent areas with upscale grocery stores, food stamp recipients fill their carts with everything from cakes to lobster.

Liberals love welfare. It was only a few years ago that Democratic House leader Nancy Pelosi opined that putting more people on food stamps and unemployment insurance is one of the “best ways to stimulate the economy.” Which is more astonishing? That she believes this lunacy or that she would be dumb enough to say it out loud.

We are in the seventh year of a so-called recovery, yet 45 million Americans depend on taxpayers to put food on their table. This is roughly 5 million more than when President Obama took office. Medicaid rolls have exploded by more than 10 million, too, and Mr. Obama openly boasts about how many people he’s moved into the program. Unemployment insurance beneficiaries have fallen, thankfully, but the number of Americans collecting disability has continued to climb. Wow this is some recovery.

By the way, disability rolls are growing even as worker safety has hit an all-time high. Shouldn’t safety and automation mean fewer disabled workers? The reality, as everyone in the welfare industry knows, is that food stamps and disability are the new welfare. Neither one of them requires work in exchange for benefits.

No one wants to admit that the ease of entry into the welfare state and the generosity of the benefits is one big reason why labor force participation has collapsed. Why work?

Welfare expert Peter Ferrara notes that a big instigator for the welfare state expansion has been the decimation of welfare reform laws passed in 1996. “It’s infuriating that a law that worked incredibly well in lowering costs and getting the unemployed into the workforce, has been largely gutted,” he concludes.

As a result, the Census Bureau tells us that most families that are in poverty have no one working. Poverty is still widespread in America not because wages are too low, but that fewer poor people have a job. If there are no wages earned at all, it is impossible to get out of the poverty trap.

Welfare incentivizes non-work in many other ways. Former George W. Bush economist Larry Lindsey reports that welfare recipients generally lose at least 50 cents of every dollar benefit they gain in wage and salary from working. Sometimes the benefits fall by 70 cents per dollar earned. So a $12 an hour job returns as little as $4 an hour of extra income. Why work?

Democrats in Congress have vociferously opposed putting even baby teeth back into work for welfare requirements. Even modest workfare requirements are denounced as anti-poor. So even a proposed federal law mandating work for food stamp recipients who are non-disabled adults without kids got shot down.

We know that changing welfare laws can have a very positive impact on getting recipients back into the workforce and off welfare. In North Carolina when unemployment benefits were reduced and the number of weeks of benefits were limited, entry into the workforce shot up. Entry into the workforce grew by more than nearly any other state in the country. Go figure.

In Maine, we saw a similarly remarkable result from work requirements. According to a Heritage Foundation report: “SNAP recipients in Maine totaled 201,151 in April of 2015 — a decline of more than 28,000 in just one year. The number of ABAWDs — Able-Bodied Adults Without Dependents — in Maine declined about 80 percent” to 2,530 in 2015 from 12,000 prior to the work requirement.

This result was in line with the federal work for welfare requirements enacted in 1996. Caseloads fell by more than half and costs of aid tumbled. So why aren’t Republicans pushing workfare for all federal welfare recipients? Some are afraid that they will be viewed as hard-hearted or even cruel. But getting people off of welfare into a productive job is not just a way to reduce costs, it’s a proven way to rebuild broken lives and move people into the mainstream. There is dignity in work. There is despair in welfare. After three generations of the failed entitlement state, hasn’t welfare done enough harm to the very people it was supposed to help.

Following Minimum Wage Increases, Unemployment Spikes among Black Male Teensas

Perhaps one of the more interesting data points from last week’s Employment Report is displayed in the graph above, which shows that the jobless rate for black male teens (aged 16-19 years) increased to 40.1% in June from 28.1% in May. Except for a slightly higher increase of 12.2 percentage points during the aftermath of the Great Recession, the 12 percentage point increase in June was the highest monthly increase in history going back to 1972 when the BLS starting keeping records for this series. One possible explanation for this spike would be the “midyear burst of minimum-wage increases on July 1” outlined in a recent WSJ article:

 On July 1, 14 U.S. cities, states and counties, plus the District of Columbia, will raise their minimum wage in a mid-year burst that reflects the legislative momentum to boost pay floors across the country while federal legislation stalls. In total, the minimum wage will rise in 15 places: two states – Maryland and Oregon, plus Washington, D.C., Los Angeles County, Calif., and 11 cities. That includes Chicago, eight cities in California and two in Kentucky, according to a new analysis by the right-leaning Employment Policies Institute.

As we learned from Milton Friedman many years ago:

 The minimum wage law is most properly described as a law saying that employers must discriminate against people who have low skills. That’s what the law says. The law says that here’s a man who has a skill that would justify a wage of $5 or $6 per hour (adjusted for today), but you may not employ him, it’s illegal, because if you employ him you must pay him $7.25 per hour. So what’s the result? To employ him at $7.25 per hour is to engage in charity. There’s nothing wrong with charity. But most employers are not in the position to engage in that kind of charity. Thus, the consequences of minimum wage laws have been almost wholly bad. We have increased unemployment and increased poverty.

Moreover, the effects have been concentrated on the groups that the do-gooders would most like to help. The people who have been hurt most by the minimum wage laws are the blacks. I have often said that the most anti-black law on the books of this land is the minimum wage law.

MP: As I commented when I posted the minimum wage chart today on Twitter: “Will a $15 an hour minimum wage make it easier or harder for this group to find a job? Progressives, please discuss.”