Wednesday, July 6, 2011
An article written today presents a good example. It is entitled "4 Bright Spots for the U.S. Economy" and starts off with this sentence, "Despite the bevy of disappointing economic reports recently, the U.S. economy might be better off than you think."
OK, let's break down each 'bright spot" and see if its accurate:
Bright Spot #1: Job Creation has Nearly Doubled
"After several months of encouraging gains, the economy added just 54,000 jobs in May, falling well short of the 170,000 economists had predicted. The short-term outlook leaves little in the way of a silver lining, but the pace of job creation so far in 2011 is nearly double what it was in 2010. That may be little consolation for the nearly 14 million Americans who are still unemployed, but economists remain optimistic that job creation will pick up again as the impact of temporary economic disruptions diminish."
~ Ugh, where to begin-- Over 2 million jobs need to be created each year (225k/mo.) simply to keep up with population growth. As US News admits, 54k were created in May. a difference of -171k jobs from the minimum where we need to be as a nation. And if not for the 60k jobs hired by McDonald's last month (1 million people applied to flip burgers- Think about that!), the figure would have actually been a net Loss in jobs for May.
The optimism we're supposed to have is that this year is better than last year. Ok.. let's see: In June 2010, the unemployment rate was 8.9%. One year later, its 9.1% That's not 'better'. And when you take into account all those unemployed who've given up looking and other factors intentionally ignored by the Bureau of Labor Statistics in compiling unemployment data, the true figure would be a nation at around 18% unemployed.
So Bright Spot #1 is untrue.. Next..
"An important missing component of the current recovery--borrowing and lending--has also recently emerged... short-term borrowing has been rising steadily since November, a sign that confidence might be building among businesses. Consumers are also feeling a bit more comfortable using credit. After declining continuously from its January 2009 peak, consumer credit has been on the upswing for seven straight months."
~ First, it may be true that businesses are borrowing more, but it is irrelevant to the growth of the economy when the money isn't being borrowed for job creation. As A&G expressed in a previous posting this week, the biggest reason that stocks went up 5% in the first quarter of 2011 was that corporations borrowed money to use to buy their own stocks and inflate the price. This was done to give the illusion of weak companies looking 'strong'. The total in outstanding business loans is $7.4 Trillion. In 2007, it was $6.7 Trillion.
And really, who the hell said credit was a good thing? Credit means debt- means indebtedness. Its bad for businesses and even Worse for individuals. And why are people getting into more credit debt now? Odds are, its not to buy TVs and toys. When you have no job.. when you run out of savings.. one has to live and survive somehow. So they put everything on cards-- food, gasoline, utilities, mortgages, other credit card payments, etc.. To assume credit expansion is a good thing shows incredible naivete and ignorance to reality.. nice job US News.
So Bright Spot #2... Nope. Next..
"Nationally gas prices fell to $3.58 as of July 4, somewhat quelling fears that surging energy costs would send the United States spiraling into another deep recession. To be sure, continuing instability in the Middle East and supply constraints virtually ensure that consumers will see more upticks in energy prices in the future, but for the time being, lower energy prices have given some extra padding to Americans' wallets... That could set the stage for an economic revival during the second half of 2011, economists say."
~ Notice that the author says prices have leveled, not lowered. He/she also admits that it is pretty much a certainty that prices will go up again and it won't take very much to see another spike. Did you know the average price for a gallon of gas during 4th of July, 2010 was around $2.70-$2.80 according to AAA. This 4th of July, the average price per gallon nationally was around $3.60. That's a difference of 80-90cents per gallon. If a person filled their tank with 15 gallons of gasoline today, he/she would be spending $10.50 to $12 MORE per fill up today vs this time 1 year ago!
So Bright Spot #3... Complete BS.. Finally
"Confidence is key and remains perhaps the most insidious hurdle as the economy rolls and pitches through recovery. Are we going to have more soft patches? Absolutely. That's part of recovery... Every ebb doesn't mean we're heading back to second coming of the Great Depression."
~ Ughhh! What fucking nonsense! Here's the truth... As of June 28th when the latest figures were released, the Conference Board Consumer Confidence Index, which had declined in May, decreased Again in June. The Index now stands at 58.5 down from 61.7 in May.
The following is from the Consumer Confidence Board website: "Consumers’ appraisal of present conditions was less favorable than in May... those claiming business conditions are “bad” increased to 38.0 percent from 37.2 percent. Consumers’ assessment of the job market was also less favorable. Consumers’ short-term outlook, which had weakened in May, declined further in June... Consumers remained pessimistic about the outlook for the job market over the next six months..."
So Bright Spot #4.. Um.. no.
We honestly don't have the perfect answer to explain it, though we here at A&G wish we had the power to stop the media from intentionally deceiving others. But since we Do have the power to prevent this site from treating its readers like children, then we'll continue presenting truthful information and seeking nothing financial from the reader in return. We only desire that you continue spreading word of this site to others so we can wake as many people up as possible to the economic realities facing us all.
Posted by Susquehanna at Wednesday, July 06, 2011