While I write mostly about the need for jobs and long term un and underemployment, there are always a number of related issues bubbling just below the surface for me. The past couple of days, I’ve seen a few articles that are seemingly unrelated but are probably more closely related than most folks realize.

The first article was from today’s (Friday 1/28/11) NY Times on Standard & Poors downgrading Japan’s Long Term Sovereign debt.

S.& P. lowered its sovereign credit rating for Japan to AA- from AA. That is three levels below the highest possible rating, and S.& P.’s first downgrade of Japanese government debt since 2002. With the lower grade, Japan’s debt rating is now on par with China’s, which last year overtook Japan as the world’s second-largest economy, after the United States.

S.& P.’s move came just weeks after both it and its rival ratings agency, Moody’s, cautioned that they might take a more negative stance on the United States. It highlighted just how deeply indebted many of the world’s developed economies remain — despite concerted efforts on the parts of governments to improve their balance sheets.

Yesterday was this from Reuters on Moody’s considering downgrading the ratings for states:

(Reuters) – Some U.S. states face so much pressure to fund pensions for public employees that it could hurt their credit ratings, Moody’s Investors Service said on Thursday.

As concerns grow over the financial health of many states after the 2007-2009 recession and how they will cut spending to cope, the ratings agency combined pension and debt data to rank the liabilities of each state.

In the past, Moody’s evaluated credit risks from pensions and debt levels separately. Lower credit ratings could raise the costs to states of borrowing money.

Interesting isn’t it how suddenly Moody’s has to change how they figure things for rating the states and combine debt AND pension liabilities all of a sudden. One might think they have an ulterior motive in doing so.  . . . Read the rest of this entry →

Today’s (Thursday, December 23) NY Times has an article that tells me the future has arrived and it is not going to be pretty. The pundits and those who want to destroy all aspects of public service have been calling and complaining for years that public pensions are going to destroy the universe. Never mind that those public employees have often foregone higher salaries in order to have those pension plans. Never mind that it is the elected officials who failed to properly fund those public pension plans, it will be the retired police, trash collectors, fire department employees and all the other municipal and state employees in their greed that are going to be the end of civilization. (That’s snark for the snark deficient)

But regardless of all the calls for austerity, and all the calls and drum beating about things needing to be done to “rein in out of control pensions,” it is not civil servants that caused the meltdown to the world economy. Civil servants have not been the people who took tax cuts and placed the bets in the Wall St casino. They did not commit the fraud in mortgage processing.  . . . Read the rest of this entry →

So the President gave his Labor Day speech and he gave some ideas for what he thinks people need (or want to hear).

I want to highlight a couple of pieces of this "talk." President Obama goes down the standard list of administration "accomplishments" (though many of those "accomplishments" are subject to debate as to how truly effective they are in helping those in need today). But the following just struck me as wrong on a lot of levels.

That’s why we’re making it easier for workers to save for retirement, with new ways of saving their tax refunds and a simpler system for enrolling in retirement plans like 401(k)s. And we’re going to keep up the fight to protect Social Security for generations to come.

[rant]

Mr. President, I am 58 years old. I have been un- or under-employed for six years now. I do not need a "simpler system for enrolling in retirement plans like 401(k)s" nor do I need a "new way of saving my tax refund."

I NEED A FUCKING JOB THAT ALLOWS ME TO PAY MY BILLS.

I NEED A FUCKING JOB THAT WILL CARRY ME UNTIL I AM ELIGIBLE FOR SOCIAL SECURITY.

AND I NEED TO KNOW THAT SOCIAL SECURITY WILL BE AVAILABLE TO ME, MY SIBLINGS AND COUSINS AND FAMILY OF ALL AGES.

Right now, your Catfood Commission is looking for ways to cut Social Security, not "protect" it. And yes, raising the retirement age is a cut no matter how many ways you may attempt to spin it otherwise.

I’ve had to spend what retirement savings I had in 401(k)s these last few years in order to survive. What I need now is a job and I’ll take care of whatever savings I can from that going forward. But thanks to your bankster friends and catfood commissioners, all I get is words and platitudes, not actions.

So, Mr President, on this Labor Day Weekend of 2010, I hear your words but I’ve seen you parse your words before. At this time, your words do not match your deeds.

I can take care of the savings part on my own as long as you and the banksters don’t blow the economy up again.

But I do need the decent paying job to do this on my own and so far your words are doing nothing for that need for me and millions of other Americans who are un or underemployed today.

Address the issues at hand Mr President, not the issues you wish were at hand.

[/rant]

My apologies for not writing any posts for a while but I do get tired of having to repeat myself so frequently.

Once again we see the cluelessness of the financial reporters in a couple of articles from the past few days. First up was an AP story (via MSNBC) which reported on an analysis from Fidelity Investments on people raiding their 401Ks due to "hardships." This came on top of the Weekly New Unemployment claims report showing (Reuters via CNBC):

New U.S. claims for unemployment benefits unexpectedly climbed to a nine-month high last week, yet another setback to the frail economic recovery.

Initial claims for state unemployment benefits increased 12,000 to a seasonally adjusted 500,000 in the week ended August 14, the highest since mid-November, the Labor Department said on Thursday.

Analysts polled by Reuters had forecast claims slipping to 476,000 from the previously reported 484,000 the prior week, which was revised up to 488,000 in Thursday’s report.

But today’s (Sunday, August 22) NY Times really steps in it.

Renewed economic uncertainty is testing Americans’ generation-long love affair with the stock market.

Investors withdrew a staggering $33.12 billion from domestic stock market mutual funds in the first seven months of this year, according to the Investment Company Institute, the mutual fund industry trade group. Now many are choosing investments they deem safer, like bonds.

If that pace continues, more money will be pulled out of these mutual funds in 2010 than in any year since the 1980s, with the exception of 2008, when the global financial crisis peaked.

Small investors are “losing their appetite for risk,” a Credit Suisse analyst, Doug Cliggott, said in a report to investors on Friday.

Now, there is obviously some validity to this but buried three quarters of the way down in the article is a far more likely reason:

And the flight from stocks may also be driven by households that are no longer able to tap into home equity for cash and may simply need the money to pay for ordinary expenses.

Five hundred thousand new jobless claims the past week. The rolling four week average at 482.5K (highest since December ’09). Unemployment hovering between 9.5 and 10%. Underemployment added in basically doubling that.

I’m one of the lucky ones as I’ve mentioned before. I cashed out my 401K/SEP-IRA and such in order to survive a few years ago. Even with paying the early cash out penalties, I still got to spend more of it on myself than those folks who watched theirs swirl down the drain as the market crashed in 2008.

So as we watch the politicians come scrounging for votes this November, here’s a few things to think about.

1) President Obama’s "Deficit Commission" is looking at things such as raising the retirement age and use "Social Security’s in crisis" as a theme to avoid paying back Special US Treasury Bonds.

2) People like Mitch McConnell like to go on shows like Meet the Press and talk about how Social Security is in crisis even though those Special Treasury bonds are "pieces of paper sitting in a filing cabinet somewhere."

3) Raising the retirement age keeps older people (those still fortunate to be employed that is) in the work force longer

4) Keeping older people in the work force longer keeps younger people from getting the entry jobs in the work force.

The economic world in the United States and worldwide is not a vacuum. All the pieces of it intersect and interact. At some point the so-called political, business, and TradMed elites are going to have to admit to themselves that the world is not as they envisage it. People all over the country are scared and angry. They see bleak futures for themselves and their children and grandchildren. Empty platitudes and simplistic slogans are not going to mollify people any longer. We see it in the demonizing of the "others," be they brown people, gays, or whatever the minority group du jour.

And because I can:

Cross posted from Just A Small Town Country Boy