Thanks, Obama…with U.S. trapped in depression, it’s starting to feel a lot like 1932 again

The US workforce shrank by 652,000 in June, one of the sharpest contractions ever. The rate of hourly earnings fell 0.1pc. Wages are flirting with deflation.

By Ambrose Evans-Pritchard

Published: 9:33PM BST 04 Jul 2010

“The economy is still in the gravitational pull of the Great Recession,” said Robert Reich, former US labour secretary. “All the booster rockets for getting us beyond it are failing.”

“Home sales are down. Retail sales are down. Factory orders in May suffered their biggest tumble since March of last year. So what are we doing about it? Less than nothing,” he said.

 California is tightening faster than Greece. State workers have seen a 14pc fall in earnings this year due to forced furloughs. Governor Arnold Schwarzenegger is cutting pay for 200,000 state workers to the minimum wage of $7.25 an hour to cover his $19bn (£15bn) deficit.

 Can Illinois be far behind? The state has a deficit of $12bn and is $5bn in arrears to schools, nursing homes, child care centres, and prisons. “It is getting worse every single day,” said state comptroller Daniel Hynes. “We are not paying bills for absolutely essential services. That is obscene.”

Roughly a million Americans have dropped out of the jobs market altogether over the past two months. That is the only reason why the headline unemployment rate is not exploding to a post-war high.

Let us be honest. The US is still trapped in depression a full 18 months into zero interest rates, quantitative easing (QE), and fiscal stimulus that has pushed the budget deficit above 10pc of GDP.

The share of the US working-age population with jobs in June actually fell from 58.7pc to 58.5pc. This is the real stress indicator. The ratio was 63pc three years ago. Eight million jobs have been lost.

The average time needed to find a job has risen to a record 35.2 weeks. Nothing like this has been seen before in the post-war era. Jeff Weninger, of Harris Private Bank, said this compares with a peak of 21.2 weeks in the Volcker recession of the early 1980s.

“Legions of individuals have been left with stale skills, and little prospect of finding meaningful work, and benefits that are being exhausted. By our math the crop of people who are unemployed but not receiving a check amounts to 9.2m.”

 Republicans on Capitol Hill are filibustering a bill to extend the dole for up to 1.2m jobless facing an imminent cut-off. Dean Heller from Vermont called them “hobos”. This really is starting to feel like 1932.

Washington’s fiscal stimulus is draining away. It peaked in the first quarter, yet even then the economy eked out a growth rate of just 2.7pc. This compares with 5.1pc, 9.3pc, 8.1pc and 8.5pc in the four quarters coming off recession in the early 1980s.

The housing market is already crumbling as government props are pulled away. The expiry of homebuyers’ tax credit led to a 30pc fall in the number of buyers signing contracts in May. “It is cataclysmic,” said David Bloom from HSBC.

Federal tax rises are automatically baked into the pie. The Congressional Budget Office said fiscal policy will swing from a net +2pc of GDP to -2pc by late 2011. The states and counties may have to cut as much as $180bn.

Investors are starting to chew over the awful possibility that America’s recovery will stall just as Asia hits the buffers. China’s manufacturing index has been falling since January, with a downward lurch in June to 50.4, just above the break-even line of 50. Momentum seems to be flagging everywhere, whether in Australian building permits, Turkish exports, or Japanese industrial output.

On Friday, Jacques Cailloux from RBS put out a “double-dip alert” for Europe. “The risk is rising fast. Absent an effective policy intervention to tackle the debt crisis on the periphery over coming months, the European economy will double dip in 2011,” he said.

It is obvious what that policy should be for Europe, America, and Japan. If budgets are to shrink in an orderly fashion over several years – as they must, to avoid sovereign debt spirals – then central banks will have to cushion the blow keeping monetary policy ultra-loose for as long it takes.

The Fed is already eyeing the printing press again. “It’s appropriate to think about what we would do under a deflationary scenario,” said Dennis Lockhart for the Atlanta Fed. His colleague Kevin Warsh said the pros and cons of purchasing more bonds should be subject to “strict scrutiny”, a comment I took as confirmation that the Fed Board is arguing internally about QE2.

Perhaps naively, I still think central banks have the tools to head off disaster. The question is whether they will do so fast enough, or even whether they wish to resist the chorus of 1930s liquidation taking charge of the debate. Last week the Bank for International Settlements called for combined fiscal and monetary tightening, lending its great authority to the forces of debt-deflation and mass unemployment. If even the BIS has lost the plot, God help us.

From:  http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/7871421/With-the-US-trapped-in-depression-this-really-is-starting-to-feel-like-1932.html

Jobs Advisor to Obama-messiah says “White males need not apply”

Ha…ha…ha…ha…ha…ha…ha…ha! 

He hasn’t even been in office a few days, and all of that talk about “We Are One” is right out the window.

 

All of the stupid white males (and females for that matter) who voted for Obama-messiah are now going to find out what “Change we can believe in” really meant.

 

According to Obama-messiah’s chief economic advisor Robert Reich, it means your skin color is either going to be your ticket to government largesse (if you’re an unskilled, victim-mentality welfare minority) or your ticket to grinding poverty and unemployment (if you’re the family of an out-of-work, skilled white laborer). 

 

Things are almost always the exact opposite of what they appear to be.  Everybody thought that Obama-messiah was going to help make this nation a place where all races could come together in color-blind harmony and sing “We Are the World.” 

 

But what Lord Obama has in mind is quite different than what dumb white bleeding heart liberal darlings thought.  Instead of a color-blind utopia, Obama-messiah is going to make this nation a place where his own kind (victim-mentality minorities) come to the front of the line, and everybody else (particularly out-of-work skilled white males and their families) can just sit on a stick at the back of the bus, and spin.  

 

As Michelle Malkin puts it in the article below, under Obama-messiah the wealth (read: your taxpayer money) is going to be spread out solely to those with the right “chromosomes and (skin) pigment.” 

 

In other words, victim-mentality minorities get the goods, and skilled white labor gets the proverbial “wish sandwich.”  (What’s a wish sandwich?  As the infamous Blues Brothers once explained in the song Rubber Biscuit, “A wish sandwich is where you have two slices of bread, and you wish you had some meat.”) 

 

I’m sorry.  But everybody – and by that I mean everybody but the victim-mentality welfare class —  who sat around whining about how much they “hate Bush” is going to find out just how truly good they had it under Bush.  They have no idea what’s coming down the pike.  In six or eight or nine more months, they won’t give a damn about whether or not the U.S. “waterboards” terrorists at the detention center in Guantanamo Bay, or whether the FBI listens in on overseas phone calls.  It will be the furthest thing from their minds, because, as Obama-messiah’s chief economic advisor Robert Reich and liberal Rep. Charles Rangel point out in the article below, they will be too busy scrambling to put food on the table and find school clothes for their children. 

 

Idiot white liberals are expecting utopia because they elected a self-described “victim” to the highest office of the land.  Now they are about to learn what happens when so-called “victims” rule.  Unfortunately, the rest of us now have to put up with it, too.  That’s okay.  It’s no big step for a stepper. But is sure pisses me off that we have to go through this so dumb white liberals can finally learn a lesson.

 

– Steve

 

 

Obama adviser: White males need not apply

http://www.worldnetdaily.com/index.php?fa=PAGE.view&pageId=86827

 

Robert Reich tells House panel stimulus package should emphasize ‘social return’ over worker skill

 

——————————————————————————–

Posted: January 22, 2009

12:17 pm Eastern

 

© 2009 WorldNetDaily

 

 

Obama economic adviser Robert Reich

 

A top economic adviser to President Obama has told a congressional panel the billions of dollars in the proposed economic stimulus plan should be allocated with social issues in mind, to make sure the money doesn’t go to just “white male construction workers” or the highly skilled.

 

Robert Reich, who served as labor secretary under President Clinton, was speaking to the House Steering and Policy Committee Jan. 7 about funding infrastructure projects across the nation.

 

“It seems to me that infrastructure spending is a very important and good way of stimulating the economy. The challenge will be to do it quickly, to find projects that can be done that will have a high social return, that also can be done with the greatest speed possible,” Reich said.

 

“I am concerned, as I’m sure many of you are, that these jobs not simply go to high skilled people who are already professionals or to white male construction workers,” he said.

 

Reich’s statements were highlighted in a video by NakedEmporerNews, which is embedded here: http://www.worldnetdaily.com/index.php?fa=PAGE.view&pageId=86827

 

The hearing took place two weeks before Obama was inaugurated.

 

“I have nothing against white male construction workers,” Reich said. “I’m just saying there are a lot of other people who have needs as well.

 

“There are ways in which the money can be, criteria can be set so the money does go to others, the long term unemployed, minorities, women,” he said.

 

Rep. Charles Rangel, D-N.Y., appeared to agree, suggesting federal money be directed to specific groups of people.

 

The federal government, he said, must “remove the discretion” about where the funds go, or what projects would be involved, even to the point of eliminating any input from governors or state legislatures.

 

Reich agreed: “Governors ought to be, should be given a choice of signing on the bottom line or not.”

 

Then Rangel noted the “middle class” would be unlikely to create any opposition to funds directed to minorities.

 

“One thing that you can depend on, you don’t have to be worried about what the middle class is going to do. Things are so bad, they have to put food on their tables, get clothes for their kids, get them in school,” he said.

 

Commentator Michelle Malkin said Reich’s statements expose “the lie that the Obama administration is actually interested in revitalizing basic infrastructure for the good of the economy.”

 

“No, what Team Obama really wants is to ensure that the least skilled, least qualified workers get jobs based on their chromosomes and pigment,” she said.

 

Malkin cited Reich’s own blog, where the Obama adviser wrote of the economic stimulus plan: “I’d suggest that all contracts entered into with stimulus funds require contractors to provide at least 20 percent of jobs to the long-term unemployed and to people with incomes at or below 200 percent of the federal poverty level.”

 

This, Malkin wrote, is “spoken like a true-blue wealth redistributor. The ‘needs’ (read: demands) of politically protected minorities trump the need for competently build roads and bridges.”

 

On his blog, Reich makes his case for, “The Stimulus: How to Create Jobs Without Them All Going to Skilled Professionals and White Male Construction Workers.”

                                                                                                                                                                                        

“At least 2 percent of project funds should be allocated to such training. In addition, advantage should be taken of buildings trades apprenticeships — which must be fully available to women and minorities,” he wrote.

 

Race already has become an issue several times in the Obama administration.

 

As WND reported, Democratic Party strategist Donna Brazile admitted she swiped Obama’s complimentary blanket from his inauguration ceremony and then joked it was not a criminal offense because, “We have a black president … this was free.”

 

Outrage also erupted over the inauguration benediction by Rev. Joseph Lowery, the 87-year-old civil rights pioneer, for asking God to help mankind work for a day when “white would embrace what is right.”

 

Obama reacted to the benediction with a smile.