Part of the Plan
By David Glenn Cox
Why did President Barack Obama choose this week to bring up Israel and the 1967 borders as a basis for peace negotiations? It will raise a lot of hackles, but in the end it will become a tempest in a teapot. Israel will never give up one inch of ground under any circumstances, nor will the US pressure her to do so. This is a diversionary tactic, kicking the cat to cover the truth and the truth is bad. It is as bad as the truth can come.
Boston Globe- Nearly two years after the recession ended, the pace of construction is inching along at less than half the level considered healthy. Single- family home building, the bulk of the market has dropped 11 percent in that time. And there is no sign it will improve soon.
Builders are struggling to compete with waves of foreclosures that have forced down the price for previously occupied homes.
WASHINGTON (Market Watch) – Resales of U.S. single-family homes and condos fell 0.8% to a seasonally adjusted annual rate of 5.05 million in April, the National Association of Realtors reported Thursday.
The drop came as a surprise to Wall Street. Economists surveyed by Market Watch had expected sales to rise to 5.25 million.
Home sales are within 100,000 units of 2008 figures. Home prices have fallen versus last year on average of 6 percent, or one half of one percent per month. This year home prices have fallen on average of over 1 percent per month. There is currently a back log of 5,050,000 homes for sale in the United States. Two million of those homes are in foreclosure and almost one million more are being held off of the market by the banks. The number of bank owned homes has doubled since 2007 while major banks expect several million more foreclosures in the years to come.
“It remains a heavy weight on the banking system,” said Mark Zandi, chief economist of Moody’s Analytics. “Housing prices are falling, and they are going to fall some more.”
Housing prices have fallen steadily each month for over three and one half years. They have fallen longer and farther than they did during the Great Depression. Economists predict a three year back log just in foreclosed homes. Who is going to purchase those homes? You? Me?
John Stumpf CEO of Wells Fargo bank said, “While there are increasing signs of demand for loans from business customers, retail customers are still cleaning up their portfolios.”
Is that what we’re doing? We’re cleaning up our portfolios!
The civilian non-institutional population has added 1.8 million workers to its ranks in a calendar year, but the number of employed Americans has only inched up by 300,000. The participation rate in this economy has dropped from 65.1 percent in April 2010 to 64.2 percent. The employment-population ratio has fallen from 58.7 percent to 58.4 percent, while the numbers of Americans no longer counted in the ranks of the employed has climbed by nearly two million citizens in barely twelve months.
Wages for the average American worker rose forty three cents an hour year to date or $17.20 per week before taxes. Those working in the retail trade saw their wages increase by miserly fourteen cents per hour, a paltry $5.60 cents per week.
Bloomberg- Fed funds, the U.S. overnight inter-bank lending rate, is projected to open in a range of 0.10 percent to 0.12 percent, within the Federal Reserve’s target of zero to 0.25 percent.
The central bank will acquire Treasury notes due from August 2018 to May 2021 as part of its plan to purchase $600 billion more of Treasuries through June and reinvest its maturing mortgage holdings. The Fed expects to reinvest $250 billion to $300 billion from mortgage-backed debt and agency securities into treasuries during that time.
Or more simply, the Federal Reserve is inflating the money supply to cover the losses caused by falling Real Estate values. Workers wages can’t keep up with fuel inflation, let alone inflation over all. Savers with money invested in bank CD’s paying 2.14 percent can’t keep up with inflation. There is seasonal growth in this economy, but there is no actual growth. The economy is foundering and even bank stocks are starting to slide. Even Wall Street, which has soared fueled by free money, is starting to stall out.
Bloomberg- General Electric Co and Intel Corp have devoted a growing pool of their non-U.S. earnings to investments in other countries.
Seven publicly traded U.S. corporations represented on President Barack Obama’s advisory council for jobs and competitiveness – including General Electric Co. and Intel Corp. — have devoted a growing pool of their non-U.S. earnings to investments in other countries.
As a group, multinational companies with current or former chief executive officers on Obama’s jobs council have, over the past four years, almost doubled the cumulative amounts they’ve reinvested overseas, according to data compiled by Bloomberg.
By doing so, companies may be able to take advantage of faster-growing markets or lower production costs, and they can defer U.S. income taxes on profits from overseas sales. Underscoring the difference between corporate interests and the national interest, they’re also investing money elsewhere that could be helping the U.S. economy, said former U.S. Labor Secretary Robert Reich.
“That’s a signal that they are betting less on America,” Reich said. “We’ve got to understand there’s a fundamental difference between the competitiveness of these companies and the competitiveness of America and American workers.”
Robert Reich means well, I suppose, as well as any apologist for this administration can mean well. The Obama administration has no answers for these problems because this is their policy! Let the banks do as they wish, let the Federal Reserve do what ever it wishes. Let millions of American’s be thrown from their homes and let corporate America profit from third world wage scales while trying to work in just one more cut corporate tax rate scam before the elections.
If I were in this White House, I’d want to talk about Israel too. I’d want to talk about anything except this economy. I’d hide my head in shame at the ongoing causal criminality and official negligence.
This administration has no plan to fix the economy because this is part of the plan. Or as Herbert Hoover once put it, “Economic depression cannot be cured by legislative action or executive pronouncement. Economic wounds must be healed by the action of the cells of the economic body – the producers and consumers themselves.”
Let the markets heal themselves. Our leaders live on such a high and mighty detached plain and think in terms of numeric statistics rather than in human suffering. For a President, a Congress or a decent civil government, defending the well being of the people isn’t the main thing, it is they only thing.
There is no excuse that can justify the disenfranchisement of our people. There is no excuse which can justify its failure to educate its children. There is no excuse which can justify planned cuts to social programs while military budgets are still bloated. There is no excuse which can justify sending billions of dollars in foreign aid while our own people suffer, and there is no excuse which can justify American business sending employment overseas without being made to suffer themselves.
This is our country and our home, and when our politicians tell us that these things can’t be helped we cannot accept that excuse. When they tell us free trade cannot be helped we cannot accept that excuse either. If our politicians will not protect us we must change them and when our economic environment becomes toxic and predatory we must change that as well. Systems of government must protect the lives of the citizens from the challenges they face and when the greatest challenge they face is from the economic system itself then the answer becomes obvious.
We cannot save only a selected few in our economy, we must save all or save none. We cannot sit back and tell New Orleans, Tuscaloosa or Joplin that it is in your best interest that government stay out and let the free markets heal your wounds and rebuild your houses or your jobs because this is the only legitimate purpose for government. This position is neither liberal nor conservative, Capitalist or Socialist it is a human position. If we as a people are not committed to our neighbor’s well being, then society is sliding backwards into the abyss.
If our government is not likewise committed, then let’s have the funeral and be done with it. For a government that is not committed to the well being of its people it is unworthy of salvation and deserves burial if only to hide its stench.
Barack Obama chooses to discuss Israeli borders issues and the check’s in the mail but for Tuscaloosa and Joplin and for the millions of unemployed, foreclosed upon and outsourced Americans Barack Obama sends only his condolences.
“How can you thank a man for giving you what’s already yours? How then can you thank him for giving you only part of what is yours?” Malcolm X