The economy is just one speech away from recovery...The Onion
- Last August, I wrote a piece entitled, "The Big Myth: The Economic Recovery." While there has been some tepid improvement in the economy (housing, construction + part-time employment), much of what I wrote last August about the dismal economy remains. In fact, in some areas, it's getting worse.
- For example, this week the Census reported 13.6% of Americans now rely on food stamps. That's up from 11.9% in 2010 and 8.6% in 2008. That's significant.
- The Census also reported the mean household income fell by 4.4% since 2009. To put that in dollar terms, it amounts to a loss of almost $2,500. In addition, as The Wall Street Journal reported several months ago, the people most damaged by Obamanomics were those who voted for Obama. Single women (with or without children) saw their incomes fall by about 7% ($2,300 in dollar terms). African-American households watched their incomes fall by about 11% ($4,000 in dollar terms). Hispanics couldn't dodge Obamanomics either. Their incomes fell by 4.5% or $2,000 in dollar terms.
- As the WSJ also pointed out, these numbers are a stunning reversal from previous years. Census data from 1881-2008 reported the biggest income gains were among black women at 81%, white women at 67%, black men at 31% and white males at 8%.
- Even more disturbing, the Census also reported that those participating in the labor force fell from 65.5% to about 64% now. And even though the unemployment rate fell from 8.1% last February to 7.3% now, most economists (and the Fed) attribute that to Americans simply dropping out of the workforce. In other words, whatever recovery there is, it's a jobless one (77% of the jobs created last fiscal years were part-time jobs). Obamanomics is clearly not creating any full-time jobs.
- And now we have more evidence of the real state of the economy. The Fed announced it would not cut back on securities purchases. In other words, Bernanke feels the U.S. economy still needs the Fed's help. Or to put it in words the layman can understand, the Fed will continue printing more money. In addition. the approaching showdown in Congress over raising the debt limit and the lingering effects of sequestration does not appear to be a good time to end any stimulus, at least according to the Fed.
- All of this still does not bode well for the economy since the price of the dollar continues to fall, and we're experiencing inflation with grocery items as well as fuel prices.
- Wall Street generally likes these moves because they happen to be addicted to cheap money. As John Crudele of the NY Post wrote recently: "The U.S. economy is a lot weaker than Washington has been pretending it is." In other words, the economic recovery remains a myth.