Saturday, January 30, 2010

US announces $6.4 billion in arms sales to Taiwan

My.Freeze.com
(AP) By FOSTER KLUG Associated Press Writer






The United States is planning to sell $6.4 billion in arms to Taiwan, a move that will infuriate China and test whether President Barack Obama's efforts to improve trust with Beijing will carry the countries through a tense time.



The notification to Congress, posted Friday on a Pentagon Web site, includes Black Hawk helicopters, Patriot Advanced Capability-3 missiles, mine hunter ships and information technology. Congress has 30 days to comment before the plan goes forward; senior lawmakers traditionally have supported such sales.



Taiwan is the most sensitive matter in U.S.-China relations, with the potential to plunge into conflict two powers increasingly linked in security and economic issues. China claims the self-governing island as its own. The United States is Taiwan's most important ally and its largest arms supplier.



The United States, which told China of the sale only hours before the announcement, acknowledged that Beijing may retaliate by cutting off military talks with Washington, which happened after the Bush administration announced a multibillion-dollar arms sale to Taiwan in 2008.



The U.S. is "obstinately making the wrong decision," China's Foreign Ministry said in a statement Saturday after Vice Foreign Minister He Yafei warned Ambassador Jon Huntsman the sale would "cause consequences that both sides are unwilling to see." The vice minister urged that the sale be immediately canceled, it said.




Wang Baodong, a spokesman for the Chinese Embassy in Washington, said Beijing will lodge a formal protest against the U.S. decision. Asked if China would halt military talks, he said, "Let's wait and see."



"We strongly request that the U.S. side correct the wrong action, so as to avoid further damaging Chinese-U.S. relations," Wang said. "The Taiwan question and the arms sale issue bear on China's sovereignty and territorial integrity, so this is a very serious problem."



Though Taiwan's ties with China have warmed considerably since Taiwanese President Ma Ying-jeou took office 20 months ago, Beijing has threatened to invade if the island ever formalizes its de facto independence.



Ma told reporters Saturday that the deal should not anger the mainland because the weapons are defensive, not offensive.



Despite its size, the U.S. weapons package dodges a touchy issue: F-16 fighter jets that Taiwan covets are not included. Senior U.S. officials said they are aware of Taiwan's desire for F-16s and are assessing Taiwan's needs.



The arms package includes 114 PAC-3 missiles and other equipment, costing more than $2.8 billion; 60 UH-60M Black Hawk helicopters, costing $3.1 billion; information distribution systems and other equipment, at $340 million; two Osprey Class Mine Hunting Ships, at a cost of about $105 million; and other items.



The sale satisfies parts of an $11 billion arms package originally pledged to Taiwan by former President George W. Bush in 2001. That package has been provided in stages because of political and budgetary considerations in Taiwan and the United States.



U.S. officials say the Obama administration's China policy is meant to improve trust between the countries, so that disagreements over Taiwan or Tibet do not reverse efforts to cooperate on nuclear standoffs in Iran and North Korea, and attempts to deal with economic and climate change issues.



China aims more than 1,000 ballistic missiles at Taiwan; the U.S. government is bound by law to ensure the island is able to respond to Chinese threats.



Obama's national security adviser, Jim Jones, said Friday that both Washington and Beijing do things "periodically that may not make everybody completely happy."



But Jones told an audience at the Center for Strategic and International Studies think tank that the United States is "bent toward a new relationship with China as a rising power in the world."



___



Associated Press writers Robert Burns, Desmond Butler and Lolita C. Baldor contributed to this report.



IMF gives thumbs up to China, thumbs down to U.S.



UncommonWisdom
The International Monetary Fund just released its Global Economic Update, and it expects the global economy to grow by a healthy 3.9% in 2010.




Some countries, however, are going to prosper more than others. The big winners will be China, India, and its Asian neighbors, according to the IMF report. The big losers? Japan, Europe, and the United States.



Click here to hear how some of the brightest hedge fund minds are positioning their portfolios to be market neutral but profit ENORMOUS!

Best wishes,



Tony



P.S. All week we've been asking you how YOU plan to build the optimum portfolio in 2010. We still have more asset classes to cover! Your answers will go a long way toward helping us build you a more profitable portfolio. Click here to share your thoughts with us ...



Friday, January 29, 2010

Letter to the Editor

SIC SEMPER TYRANNIS!!!
Article By Robert Owens



To the Editor:






Our nation’s Constitution grants only a few powers to the federal government. These powers are enumerated in Article 1, Section 8. If the Constitution were fully enforced today, the federal government
would be 20 percent of its size and 20 percent of its cost. There wouldn’t be deficit spending that invites inflation and federal incometaxes could be abolished. As it stands, every single penny collected in income tax goes to China, David Rockefeller and the like - just for interest. Not a penny goes to the military, roads or to repay then early bankrupt social security “trust” fund.


When many citizens actually realize the strict limitations placed on
the federal government, there is often an ensuing misunderstanding as
to the proper role of government. Should not the government have a
role in education, energy and the like? Yes, but not the federal
government. Items such as education are forbidden to the federal
government but are in the domain of the state governments. Our
founding fathers understood this concept – called federalism – and
made it a cornerstone of good government. It should be noted that
this concept is borrowed directly from scripture, Exodus 18:13-27.


When our Constitution was drafted, Ben Franklin commented that the
document was only as good as the citizens that would enforce and
protect it, that otherwise it would be little more than what George W.
Bush would later call it, “A G.D. piece of paper.” Today, citizens
must not only understand what our government is supposed to be,
citizens must recognize the enemies of limited government and their
motivations.


In “The Art of War” Chinese philosopher Sun Tzu explains that if you
know yourself and know your enemy, you need not fear the result of a
hundred battles. Having identified what our government is supposed to
be – a republic – let me identify the enemies of our republic. The
Council on Foreign Relations (CFR) is the outstanding but not only
organization that actively seeks the destruction of the United States.


In 2002, David Rockefeller, Chairman Emeritus of the CFR, authored his
autobiography “Memoirs” wherein, on page 405, Mr. Rockefeller writes:
“Some even believe we are part of a secret cabal working against the
best interests of the United States, characterizing my family and me
as "internationalists" and of conspiring with others around the world
to build a more integrated global political and economic structure -
one world, if you will. If that's the charge, I stand guilty, and I am
proud of it."


CFR members include George H.W. Bush, Bill Clinton, Condoleeza Rice,
John Kerry, Newt Gingrich, Ted Turner, George Soros, Rupert Murdoch,
Pastor Rick Warren, Dan Rather, Katie Couric and approximately 4,000
other high ranking officials in government, media, industry, academia
and religion. The vast majority of this group seeks individual glory
and gain with only a few fully versed in what Mr. Rockefeller calles a
“conspiracy.” A high-ranking FBI agent named Cleon Skousen wrote a
thorough exposé of the CFR in a book called “The Naked Capitalist”
available on amazon.com. Glenn Beck has heavily promoted Mr. Skousen
lately, and Skousen’s book “5000 Year Leap” has been a best seller on
amazon.com.


There are free resources to fulfill Sun Tzu’s charge to know thyself
and know thy enemy. To understand what our government is supposed to
be, watch a short 30-minute video by going to youtube.com and
searching “Overview of America.” To understand the enemies of our
liberty, go to TheNewAmerican.com and search for “CFR”.


When you are ready to actually do something to defend our nation
against enemies foreign and domestic (we have far more to fear from
enemies domestic) join us at our monthly “Freedom Forum” held each
Thursday at 7:00pm at the Delaware Old Bag of Nails. Our next meeting
is Thursday, February 4. Our main speaker will be Beth Lear formerly
of the Buckeye Institute and past legislative aide to a State
Representative. Beth will explain exactly how legislation is made and
how the machine of government works in Columbus. This is a great
opportunity for home schooled children and adults alike. For more
information, check out www.meetup.com/centralohiojbs.




Robert M. Owens


Delaware County Chapter Leader of the John Birch Society


Delaware, Ohio




--


Robert M. Owens


Owens Law Office LPA


46 North Sandusky Street


Delaware, Ohio 43015


(740) 368-0008


(740) 368-0007 - Fax


http://www.owenslawoffice.com/

Thursday, January 28, 2010

Media Ignore Contradiction between Obama's Middle Class Giveaways, Spending 'Freeze'

With State of the Union address imminent, the press downplays costs, finds little economic criticism of proposals designed to recapture middle class support.



By Julia A. Seymour

Business & Media Institute
1/27/2010 1:43:43 PM






In an attempt to boost flagging approval ratings, President Barack Obama announced a series of initiatives aimed at helping out the middle class on Jan. 25, two days ahead of his State of the Union address.





The networks, which have protected him from public outrage for months, praised the initiative. NBC heralded the move, giving Obama credit for “getting the message” Jan. 25. CBS’s Katie Couric said the same thing that night.




“Good evening, everyone. He got the message: it’s the economy middle-class voters are most worried about. And with critical congressional elections coming up this year, President Obama today rolled out a series of proposals designed to show he’s on the case,” Couric said as she teased White House correspondent Chip Reid’s story.

On Jan. 25, Obama announced several proposals targeting the middle class including:

  • Double the child care tax credit for people making less than $85,000 per year.
  • Expand tax credits for retirement savings
    $102.5 million spending on elder care
  • Lowering the cap on federal student loan payments to 10 percent of income above a basic living allowance and the number of years payments must be made before loans will be forgiven. That would cost taxpayers $1 billion
  • Require employers set up individual retirement accounts for workers if they don’t offer retirement plans
  • Add $1.6 billion to child-care funding assistance



    All three evening newscasts failed to mention costs of those proposals on Jan 25, while national newspapers downplayed the price tag.



    The New York Times called the proposals “modest initiatives” and described the elder care spending as a “pittance,” while The Washington Post described the list as “relatively inexpensive initiatives to help middle-class families.”


    The network and print media included some political critics, but should have included reactions from economists about the so-called “modest” initiatives and their impact on the economy.


    Business & Media Institute adviser and Hillsdale economics professor Gary Wolfram said, “It’s definitely an attempt to see if the middle class will buy into proposals which may benefit them in the short run, but harm the economy in the short and long run. In the end, the middle class is going to be worse off under these things than if none of them pass.”


    Specifically, Wolfram said the student loan changes would bid up the price of college tuition and the employer mandate for individual retirement accounts would increase the cost of hiring (leading to fewer hires).


    A Spending ‘Freeze’ that Would ‘Barely’ Dent the Deficit


    In an apparent contradiction, Obama is reportedly going to propose a freeze on discretionary spending during this SOTU speech.


    Reuter’s said on Jan. 26 that “Obama is seeking a three-year freeze on some domestic programs in his 2011 budget that would save $250 billion by 2020.”


    According to The Washington Post, the spending freeze “would affect only about one-eighth of the nation’s $3.5 trillion budget, the bulk of which is devoted to entitlement programs such as Social Security, Medicare and Medicaid.”


    Yet CBS “Morning News” said it would be a freeze on “most domestic spending.” NBC’s “Today” mentioned that (if passed) it would save $250 billion over 10 years. But neither program provided the context of how large the deficit really is. And the CBS “Early Show” touted it as a “big spending freeze.”


    This year the U.S. is facing a $1.35 trillion budget deficit in 2010 according to the Congressional Budget Office. The entire national debt is more than $12.3 trillion.


    Daniel Mitchell, a CATO senior fellow and BMI adviser, wrote that “Many critics will correctly note that this is like going on a drunken binge in Vegas and then temporarily joining Alcoholics Anonymous. Others will point out that more than 80 percent of the budget has been exempted, which also is an accurate criticism.”


    Mitchell said the freeze would be “semi-meaningful” if it’s a “genuine” spending freeze, rather than a make-believe one but that it is not clear yet, which the White House is proposing. CATO also has a graphic illustrating recent growth in discretionary spending and the proposed freeze on its blog.


    Alison Fraser wondered if the freeze was a “fakeroo” on Jan. 26. She pointed out a potential problem with the freeze for Heritage Foundation’s blog: The Foundry.


    “If it applies to last year’s supercharged spending on stimulus steroids baseline, it’s no freeze at all, but a locking in of spending that was supposed to be temporary,” Fraser wrote.


    While the network evening reports Jan. 27 did make it clear that the freeze would have little impact on the enormous deficit, they didn’t explain Fraser’s point – that the freeze would come after a year of “supercharged” spending. The Washington Post explained that December spending bills already approved a 4.1 percent increase in “discretionary spending” and an 8.2 percent increase for federal agencies unrelated to defense.


    The Post also acknowledged that “the freeze would shave no more than $15 billion off next year’s budget – barely denting a deficit projected to exceed $1 trillion for the third year in a row.”


    The networks also failed to tell viewers that Obama’s call for an across the board spending freeze is an about face from his 2008 campaign. He campaigned against such a spending freeze when Sen. John McCain proposed it in the first debate. Obama declared that it would be a “hatchet,” when what was needed is a “scalpel.”


    What about Jobs?


    With the national unemployment rate resting at an exorbitant 10 percent, Obama will also be focused on jobs during his SOTU speech. So far the media have allowed the president to continue to claim that his actions during the past year have “created or saved” million of jobs.


    In last year’s address (which was not called the State of the Union), Obama promised millions of jobs would be “saved or created” through his proposals. Despite a $787 billion stimulus package, and other spending packages and bailouts the national unemployment rate soared to 10 percent and only November 2009 saw the addition of new jobs – 4,000 of them.


    Obama told ABC viewers Jan. 25 that the stimulus “created or saved” “several million” jobs, while his advisers and press secretary used three different numbers of the Jan. 24 Sunday talk shows.


    In many cases the networks haven’t held Obama accountable for rising unemployment. With the exception of a single CBS mention, the networks’ job reports from Jan. 8-12 failed to inform their viewers that 2009 had the highest yearly job losses on record (more than 4.1 million). And when Katie Couric did address the historic nature of the job losses, she underreported the number of jobs lost in 2009 by 700,000.


    Associated Press reported that the $20 billion in stimulus funds specifically designed to create jobs with infrastructure projects was a “failure” because it did not impact local unemployment rates. They also said it is “impossible to quantify exactly what effect the stimulus has had on job creation.” So the administration can claim it created or saved any number of jobs because there will be no way to prove or disprove it.


    But only one network story cited AP’s findings.


    Throughout 2009, the networks fell for Obama’s created or saved rhetoric. NBC praised the “hope” generated in one community because of an $8.5 million spending on a bridge that would “create or save” 240 jobs. ABC touted a White House report claiming early success of the stimulus package twice in three days, repeating the phrase “save or create.” The three broadcast networks even failed to hold Obama accountable for his own claim that the stimulus would stop unemployment from rising above 8 percent.


    Surprisingly, on Jan. 25, 2010 CBS’s Chip Reid made it clear that the proposals to “relieve” the middle class “are not designed to create jobs, but to ease the pain.”


    According to Wolfram, Reid was correct. Those proposals wouldn’t create jobs. In fact, at least one of them would discourage hiring.


    If Obama requires employers to set up individual retirement accounts for all employees, as the Jan. 26 Washington Post reported, the national unemployment rate may very well go even higher.


    “If the purpose is to get the unemployment rate up to 12 percent, then this is a great idea,” Wolfram said. “It will increase the cost of hiring people and fewer people will be hired. And more people will search for jobs.”


    What should be done? Wolfram offered a couple of suggestions for getting the national economy back on track. First, “establish rule of law.”


    “No one knows what the rules of the game are. Anything can happen. Obama can come up with a tax on banks one day, middle class benefits another day, and the next he could replace the Fed chairman,” Wolfram said. The rules need to be consistent or businesses will just continue to wait things out.

    Wolfram continued: “Unemployment is so high right now because you don’t know if cap and trade is going to pass, raising electricity rates, or a health care bill that has an unknown cost, or that tomorrow you might have to create IRA’s for anyone you hire. You’re going to wait to hire until you figure out what’s gonna happen.”


    Second, Wolfram said corporate tax rates need to be cut in half. The U.S. has a production problem, not a demand problem and currently it is too expensive to produce in the U.S. The Hillsdale professor admitted that this isn’t a popular idea, but insisted that with the second highest corporate tax rate in the world it needs to be chopped in order to fix the lack of production.




Wednesday, January 27, 2010

Last Chance to Block Bernanke's Nomination as Fed Chairman!

The John Birch Society
Standing For Family and Freedom
January 27, 2010

It's your last chance to register your opposition to Bernanke's nomination as Fed chairman. The Senate will have a procedural vote regarding Bernanke's nomination tomorrow which will require 60 votes in order to clear the way for a final simple majority vote on his confirmation (click here to see how your senator intends to vote). The final vote could also occur as soon as tomorrow.



Contact your senators and let them know they should oppose the reappointment of Ben Bernanke as Chairman of the Federal Reserve. Click here for your senators' phone numbers. Click here to send an email to your senators.


Thanks.


Your friends at The John Birch Society


                                                                       *************

Senate Vote on National Debt Increase Tomorrow!






Here's your last chance to tell your senators to vote NO on a $1.9 trillion national debt limit increase.



The Senate is planning to vote on this tomorrow. There is sufficient opposition to this size of debt increase that could lead to its defeat and force the Senate to approve a much smaller increase. Whatever the Senate approves will have to be approved by the House also. The advantage of forcing Congress to approve a much smaller increase is that they will be forced to come back to this issue more often which in turn will help generate awareness of and opposition to the extraordinary level of fiscal irresponsibility exercised by Congress.




Contact your senators and representative and tell them to oppose any increase in the national debt limit unless there is a corresponding requirement for Congress to balance the federal budget in 2011 and each succeeding year. Click here for your senators' and representative's phone numbers. Click here to send an email to your senators and representative.



Thanks.



Your friends at The John Birch Society








International Holocaust Remembrance Day Marked By Netanyahu

The Post Chronicle
Published: Jan 27, 2010


Netanyahu marks International Holocaust Remembrance Day - The Jewish community must continue to fight anti-Semitism, Israeli Prime Minister Binyamin Netanyahu said Monday.




Speaking in Jerusalem at Yad Vashem, Israel's official memorial to the Jewish victims of the Holocaust on the eve of International Holocaust Remembrance Day, Netanyahu said, "There is an evil that can spread and threaten the security of Jews," The Jerusalem Post reported.

"We know that this just begins with Jews, and then continues on to the rest of the world," Netanyahu continued. "There are today new people who hate Jews, with new reasons for (wanting) the destruction of the Jewish state. This is our concern."




The prime minister referenced a Jewish Agency report released Sunday noting a rise in anti-Semitism and called for world powers to act quickly to stop the continuing spread of Holocaust denials.



"This is a test for humanity," the Post quoted Netanyahu as saying, "and we will see in the coming weeks how the international community

stops this evil before it spreads."



Tuesday, January 26, 2010

States Can Tell Feds to Shove It

Sheriff Richard Mack (Ret.)


Infowars.com

January 26, 2010




By now we have all heard the cliches and seen the posters from the “Tea Parties” espousing freedom, less government, and perhaps most of all, how the federal government had better back off trying to shove their national health care down our otherwise healthy throats. The truth of the matter is all the slogans of “Don’t Tread On Me” or “Give Me Liberty Or Give Me Death” or “We’re Mad As Hell And We’re Not Taking It Anymore,” don’t mean a thing when compared to the real and actual answer to all the protests, marches, and outrage.

The answer is in our own backyards! The States can stop every bit of it! That’s right, the individual States can stop “Obamacare” and all other forms of out-of-control federal government mandates and “big brother” tactics. If Arizona, Hawaii, New Hampshire, Texas, etc. want nothing to do with National Health care as proposed by Barack Obama or Congress, then all they have to do is say “No!”
 
Read the entire story.

Tea Partiers shaking up races across country

Myfreeze.com
(AP) By BETH FOUHY Associated Press Writer




A once-dismissed loose confederation of Tea Party activists opposed to big government, bailouts and higher taxes is causing heartburn for establishment candidates across the country.

They swept into Massachusetts with lightning speed when polls began to show that the eventual winner of last week's special election, Republican Scott Brown, had a shot at upsetting Democrat Martha Coakley for the Senate seat that liberal lion Edward M. Kennedy had held almost 47 years.

Relying on Internet tools like Facebook and Twitter for communications, tea partiers have organized meetings, marches and protests almost overnight, often catching establishment politicians off guard. They've put together a Capitol Hill rally hours before President Barack Obama's State of the Union speech Wednesday to protest his health care plan.

Tea partiers boast that they are a leaderless, grass-roots political army not beholden to either party, even though some of them acknowledge that Republican candidates who share their conservative fiscal views are most likely to benefit from the movement's efforts.


About 50 activists from 30 states gathered in Washington over the weekend for a conference that former House Majority Leader Dick Armey, R-Texas, helped put together. Armey, a lobbyist until late last year, has made it clear he doesn't want to be the face of the movement.


Some of those attending were equally resolute that their marching orders will continue to come from the grass roots, not political professionals in Washington.

"We get people who call us all the time, politicians or other organizations, and they say, 'Hey, we need you to do a protest across the country on this date.' And we just laugh because it's a fundamental misunderstanding of the movement," said Mark Meckler, a California lawyer and board member of Tea Party Patriots, an umbrella group.

Tea parties began cropping up around the country last February, responding with anger to the government's bailout of banks and insurance giant AIG, then Chrysler and General Motors. They then took on defeating Obama's health care overhaul, showing up at and often disrupting lawmakers' town hall meetings in August.

Democrats and some Republicans dismissed them as "Astroturf," or fake grass roots, loud but ineffective. Few in either party now doubt the tea partiers' legitimacy. And woe to Democrats and Republicans alike who don't recognize their power.

After winning the endorsement of national Republicans, Florida Gov. Charlie Crist was once thought to be a shoo-in for the GOP nomination to take over the Senate seat vacated by Republican Mel Martinez.

But Crist's support for last year's nearly $800 billion federal stimulus plan cost him support among conservatives and he's now in a tight primary battle with a Tea Party-backed rival, former state House Speaker Marco Rubio.

FreedomWorks has formed a PAC on behalf of several Tea Party groups for pouring money into a number of races. Besides helping Rubio, the PAC is working to oust Senate Majority Leader Harry Reid, D-Nev., and is backing Republican Pat Toomey's challenge to Republican-turned-Democratic Sen. Arlen Specter in Pennsylvania.

In Kentucky, their political money is going to Rand Paul against the GOP's candidate, Secretary of State Trey Grayson, for the nomination to take over the seat of retiring Republican Sen. Jim Bunning. Paul is the son of Republican Rep. Ron Paul, who won a small but devoted following when he ran for the 2008 GOP presidential nomination on an anti-tax, anti-Iraq war platform.

The movement's far-flung nature has led to some growing pains and disagreements.

Demands for ideological purity from Tea Party activists forced a moderate Republican out of a special House race in New York last year, handing Democrat Bill Owens a seat the GOP had held for decades.

"The GOP got this one wrong, plain and simple," Mark Williams, a California radio host and head of the Tea Party Express, said at the time. "We have said all along that our fight was over principles, not party affiliation."

Many activists have complaints about the so-called National Tea Party Convention scheduled next month in Nashville, organized as a for-profit venture by Tennessee lawyer Judson Phillips. Balking at the $550 ticket price and the $100,000 speaking fee being paid to former GOP vice presidential candidate Sarah Palin, some are boycotting it.

"We try to avoid these high-dollar price tags that you're seeing. A lot of the blowback is simply that it's expensive and real people can't do that," FreedomWorks President Matt Kibbe said.

Phillips did not immediately return a request for comment.

There are also disputes about whether social issues like abortion, gun rights and illegal immigration should be part of the movement's agenda.

"That's what's a good thing about having separate groups," said Lynn Brannon, a hospital workers and leader of the Delaware 9-12 Patriot Organization, a Tea Party group. "We decided as a group that we wanted to focus on immigration. We don't want another organization to say, 'You can't get in on doing that.'"

Brannon's group has worked to recruit a candidate to challenge Republican Rep. Mike Castle, the leading candidate to win the Delaware Senate seat held for years by Vice President Joe Biden. Castle voted for a bill aimed at reducing global warming. Tea partiers view the legislation as a job-killing energy tax.

In many ways, the Tea Party movement mirrors the anti-tax insurgency of the early 1990s led by Texas billionaire Ross Perot.

Running for president as an independent in 1992 on a platform of balanced budgets and fiscal restraint, Perot captured 19 percent of the vote in an election in which Democrat Bill Clinton took the White House away from Republican President George H.W. Bush.

Sensing opportunity with Perot voters, Republicans at the time led by party chairman Haley Barbour and Georgia Rep. Newt Gingrich smartly coaxed them into the GOP fold. Republicans enacted the Contract With America, a 10-point plan that promised smaller government and lower taxes. The effort helped Republicans recapture both the House and Senate in the 1994 midterm elections _ a scenario not impossible again this year.

At Monday's FreedomWorks briefing, tea partiers said they are readying a Contract "From" America that will be driven by local organizations.





Monday, January 25, 2010

The Rise of the Cashier and Retail Salesperson Economy - Employment and the Evolving Job Market of the United States - 8 Million Jobs Lost in this Recession but Deeper Financial Changes are Coming.




MyBudget360.com
Posted: 23 Jan 2010 12:41 PM PST




The recession that started in December of 2007 is still causing jobs losses even after 25 long and agonizing months. Most Americans still feel that the economy is deep in the midst of a serious correction. Since the recession started non-farm employment has shrunk from 138.152 million to 130.91 million. Officially over 7.2 million jobs have been lost but a coming revision next month will show that 8 million people have fallen off the non-farm payroll figure. Many are trying to figure out how the bailout of Wall Street and the banking sector has improved the underlying system holding up the economy. Recent political movements show that Americans are still not satisfied with how the economy is being handled. One thing not being covered by the media is that anger among the population is coming from the poor state of the economy. Other factors are important but the economy is the number one topic on the minds of most Americans.



If we look at where the jobs losses are coming, we will see that manufacturing has taken another major hit in this contraction:





Every industry has seen significant job cuts. It is interesting to look at the financial sector and see how well it has done in comparison to other sectors. No wonder why Wall Street since March of 2009 has been on a historic rally. Fascinating how in the last few days when mention of breaking up the too big to fail banks was brought about that we had our first major correction in nearly a year. Could it be that the only way banks are making money in this current economy is by gambling in the stock market? Absolutely. In fact, most of their profits aren’t coming from making loans to average Americans but by trading and acting like pseudo-hedge funds except the banks are using taxpayer money as their safety net. If you truly believe in capitalism then you understand that too big to fail should not even exist. Creative destruction is part of a capitalistic system. Right now banks are operating in a system that offers them different rules from typical Americans who are seeing their jobs disappear. It is a two-tiered system.




It may also be the case that the system is learning to make do with part-time employment:





You rarely here that employment is a lagging indicator from reputable sources because of the cynical nature of this old economic mantra. This line is as old as saying real estate prices never go down. Sure, in previous recessions you would see the economy bounce right back up after a correction but this isn’t one of those typical recessions. This is a generational correction and old rules of economics don’t play anymore. Temporary help hiring has increased but the system isn’t hiring any full-time workers either on a net-basis. In other words, we are still losing full-time jobs. Businesses have learned to tweak their employment base to a much finer degree so the need for full-time workers with all additional benefits and compensation may not make financial sense. In the end it is the average American that is thrown under the bus.




Our employment base has also shifted to a major focus on service orientation. If we rewind to the 1940s and 1950s a large part of our economy revolved around manufacturing. This isn’t to say that having a large manufacturing base is necessarily good or bad but a large part of Americans had a job that was stable and also provided an income that would make it easy to pursue the American dream. What did this mean? Being able to buy a home and support a family without going into massive debt that would put you at risk for bankruptcy and foreclosure down the road. The rise of the two income household is a positive but it is also an economic necessity for many. The typical American household brings in $52,000 per year. Considering this is the median for a household, you can see how quickly losing one job can send a family into a financial tailspin.



And if we look at the top jobs in our country, we realize that we have replaced manufacturing with a near obsession with service oriented jobs:








I find it amazing that the two biggest occupations include retail salespersons and cashiers. If you consider that a family might have one worker in each of these fields, they wouldn’t even come close to meeting the median annual household income of $52,000. And go down the list. The vast majority of the jobs above pay slightly above the federal poverty level if someone were to have a family. It is no wonder that many households went into debt using toxic credit cards that change fees at the drop of a hat. I find it amazing how quickly some people are to judge these people for financially mismanaging their budgets but at the same time, remain silent on the financial shenanigans of the banking sector that is largely responsible for this financial mess. The cognitive dissonance is palatable but it is clear that the vast majority of Americans see this distinction and are lashing out at Wall Street and rightfully so.




And when we say Wall Street, we mean the financial sector. Keep in mind that what I would view as core capitalistic companies like Google or Apple actually provide a service and added value products and these companies aren’t even asking for a government handout. In fact, they are adding real wealth back into the economy instead of siphoning it off. How many companies failed trying to be like Google or Apple? Remember the search engine Alta Vista? It once reigned supreme and is no longer here. Companies come and go and that is part of our system. The idea that banking is somehow immune to this is troubling. And that is exactly what we did. Well, not exactly “we” per se because the vast majority of American don’t support the bailouts but this is what was done by those representing us. What we have now is a full functioning corporatocracy. The recent Supreme Court ruling allowing corporations to contribute to candidates unlimited sums of money only cements this structure further.



If we look at the S&P 500 and compare it to companies back in the 1950s, approximately 50 companies still remain on the top 500 list. Many have failed or dropped out or have simply been surpassed by companies that are fairly new (i.e., Google, Apple, Microsoft, etc). This is the beauty of our system. Ideally we wouldn’t favor one industry over another. Yet our slow process into favoring the banking sector is disturbing because we are allowing the financial sector to govern our country. And clearly we are seeing that what is best for Wall Street isn’t best for Main Street. Even Henry Ford despised Wall Street and it should be clear to most Americans why. Wall Street has its place but when it starts becoming a revolving door to D.C. and has Congress on speed-dial we have bigger issues.



44 states recorded increases in their unemployment rates last month. And what is even more troubling is the length of time people are remaining unemployed:






Nearly 6 million Americans have been unemployed for over 27 weeks, the highest number we have ever seen on a percentage basis. But on the other side of the coin, we have seen part-time employment for economic reasons spike to over 9 million during this recession. This group is made up of people looking for full-time work but only being able to find part-time employment. Add these two together and you start getting a sense of where our economy is heading if things don’t change. Japan during their lost decade(s) followed a similar path to the one we are going down. They bailed out their banking sector allowing zombie banks to remain and slowly over a grueling generation, one-third of their population was classified as part-time workers. Japan also had major fiscal programs but nothing has helped. Just look at the Nikkei average over this time:





The Nikkei is down 71 percent over 20+years. So the banks are still there in spirit but what about the overall economy? Japan has been lagging over the past two decades and bailing out the banks had a lot to do with this. It is no coincidence that their part-time employment sector makes up one-third of their employment base.




And tying this all together including with the commercial real estate bust, we see that demand for commercial space is absolutely at the bottom:





Source: Atlanta Fed




And why would you expect this number to be anything else? Banks needed more and more demand even if the market didn’t demand it so they could keep on expanding and making further and further bad bets. What did they care? Ultimately they were bailed out by the taxpayers and government. Yet we are now seeing deep anger in our country because nothing infuriates a society more than having a large unemployed population especially when aid was given to the banking sector that actually created this employment disaster in the first place. Apparently Americans are still hungry for change.




WHO slams swine flu critics as 'irresponsible'


(AP)



The World Health Organization has rejected as "irresponsible" allegations that swine flu is a fake pandemic.



WHO also dismissed claims it colluded with drug companies to bring economic benefit to the industry by playing up the danger of the new H1N1 influenza strain.



WHO officials will meet with the Parliamentary Assembly of the Council of Europe on Tuesday after the watchdog body questioned whether the U.N.'s health agency acted under undue influence.



Spokesman Gregory Hartl says WHO has always been "very measured and sober" in describing the outbreak as causing overwhelmingly mild disease.

Hartl said Monday that from a scientific point of view "this is plainly a pandemic and for people to not describe it as a pandemic is irresponsible."





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