The Economy Didn't Grow, It Hemmoraged Money
By Elaine Meinel Supkis
Stocks shot up and everyone celebrated the startling news that the economy "grew" fast last quarter especially after hurricanes devastated a huge part of the country. This isn't a healthy sign, the spending was a loss, jobs are down and pay is way down.
With hourly wages falling in real terms, the only way working families can raise their incomes is by working more hours-certainly not the path to improving living standards that we would expect in an economy posting strong productivity gains.When an economy is healthy, wages go up, worker's share rises due to the fact that employment is high and thus, they can bargain for higher wages. This hasn't been true for years, indeed, since the tidal wave of red ink has hit America, wages stagger along and employment barely grows!
This 2.3% rate is a slight tick down from the 2.4%--the previous historical low--that prevailed for the last four quarters. Compensation-wages plus benefits-also grew more slowly in the third quarter of this year, up 3.1% over the same quarter last year, the slowest yearly growth in six years.
The minute I saw the news that America's economy grew over 3% this last quarter, I frowned. If this last quarter which saw economic destruction of huge proportions, was good, then maybe all out nuclear war is a great way to grow. Geeze. This is open insanity. The stockmarket was gliding downwards as expected with raging energy hikes and rising unemployment and other signs of a bad economy, but this "news" caused a huge surge in stock buying.
Bizarre, no? We also learned the dollar is weaker. And this is another good sign? What? Maybe we want to have the dollar drop so low in value, no one will sell to us any more! Yup. A great way to close the trade deficit! Stop all trade by making money worthless!
These sorts of "solutions" are poison pills!
I notice that many professionals writing about the economy have decided to go along with the flow. Party on, dudes! This is why stocks rose when the new Greenspan clone was chosen to lead the Fed deeper into the red. He wasn't going to change anything so the wild spending will continue! He even stated he was totally blase about the wild spending in Congress as well as consumer debt rises. He just doesn't give a hoot. It is all OK so pay no attention to the sea of red ink, it doesn't matter and besides, the Chinese will bankroll us forever and forever. Lalalala.
This stupidity doesn't astonish me. Indeed, this is the historic norm which is why all empires collapse into economic malasie.
I keep challenging the "economy is doing great" people by asking them to raise taxes on the rich and corporate America. Hey, they are doing great, right? Instead, Congress is chopping away even more at the social safety net. Basically, they said to us all, if the south gets hit by hurricanes, Uncle Sam will foot the bill totally, but if any other parts of the country have anything go wrong, sorry, buddy, you are on your own.
In fact, the aid flowing to the poor in the south who were very hard hit by the hurricanes, will also cease soon enough, as soon as the eye of the media moves on to other matters. Meanwhile, the poor in Pakistan, our "ally", are now freezing and starving to death because of the earthquakes and we don't give a hoot and we are very surly about giving them any more money which we don't have anyway because, as I keep pointing out and virtually no one in the media or economic blogs are saying, the Chinese are no longer extending us eternal open ended credit.
Note that the yen dropped in value because the Japanese bought more of our debt this quarter but the yuan rose in value because the Chinese are now refusing our debts we offer them. The Chinese know the Japanese can't absorb half a trillion in American debt every year forever. They have decided to sink both the Japanese and American nuclear ships.
Oh well. When the obvious happens, and it will happen, at least I can use my cartoons to illustrate "The Decline and Fall of the American Empire."
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