Archive for the ‘Main Street’ Category
21 Signs That The Once Great U.S. Economy Is Being Gutted, Neutered, Defanged, Declawed And Deindustrialized
Once upon a time, the United States was the greatest industrial powerhouse that the world has ever seen. Our immense economic machinery was the envy of the rest of the globe and it provided the foundation for the largest and most vibrant middle class in the history of the world. But now the once great U.S. economic machine is being dismantled piece by piece. The U.S. economy is being gutted, neutered, defanged, declawed and deindustrialized and very few of our leaders even seem to care. It was the United States that once showed the rest of the world how to mass produce televisions and automobiles and airplanes and computers, but now our industrial base is being ripped to shreds. Tens of thousands of our factories and millions of our jobs have been shipped overseas. Many of our proudest manufacturing cities have been transformed into “post-industrial” hellholes that nobody wants to live in anymore.
Meanwhile, wave after wave of shiny new factories is going up in nations such as China, India and Brazil. This is great for those countries, but for the millions of American workers that desperately needed the jobs that have been sent overseas it is not so great.
This is the legacy of globalism. Multinational corporations now have the choice whether to hire U.S. workers or to hire workers in countries where it is legal to pay slave labor wages. The “great sucking sound” that Ross Perot warned us about so long ago is actually happening, and it has left tens of millions of Americans without good jobs.
So what is to become of a nation that consumes more than it ever has and yet continues to produce less and less?
Well, the greatest debt binge in the history of the world has enabled us to maintain (and even increase) our standard of living for several decades, but all of that debt is starting to really catch up with us.
The American people seem to be very confused about what is happening to us because most of them thought that the party was going to last forever. In fact, most of them still seem convinced that our brightest economic days are still ahead.
After all, every time we have had a “recession” in the past things have always turned around and we have gone on to even greater things, right?
Well, what most Americans simply fail to understand is that we are like a car that is having its insides ripped right out. Our industrial base is being gutted right in front of our eyes.
Most Americans don’t think much about our “trade deficit”, but it is absolutely central to what is happening to our economy. Every year, we buy far, far more from the rest of the world than they buy from us.
In 2010, the U.S. trade deficit was just a whisker under $500 billion. This is money that we could have all spent inside the United States that would have supported thousands of American factories and millions of American jobs.
Instead, we sent all of those hundreds of billions of dollars overseas in exchange for a big pile of stuff that we greedily consumed. Most of that stuff we probably didn’t need anyway.
Since we spent almost $500 billion more with the rest of the world than they spent with us, at the end of the year the rest of the world was $500 billion wealthier and the American people were collectively $500 billion poorer.
That means that the collective “economic pie” that we are all dividing up is now $500 billion smaller.
Are you starting to understand why times suddenly seem so “hard” in the United States?
Meanwhile, jobs and businesses continue to fly out of the United States at a blinding pace.
This is a national crisis.
We simply cannot expect to continue to have a “great economy” if we allow our economy to be deindustrialized.
A nation that consumes far more than it produces is not going to be wealthy for long.
The following are 21 signs that the once great U.S. economy is being gutted, neutered, defanged, declawed and deindustrialized….
#1 The U.S. trade deficit with the rest of the world rose to 497.8 billion dollars in 2010. That represented a 32.8% increase from 2009.
#2 The U.S. trade deficit with China rose to an all-time record of 273.1 billion dollars in 2010. This is the largest trade deficit that one nation has had with another nation in the history of the world.
#3 The U.S. trade deficit with China in 2010 was 27 times larger than it was back in 1990.
#4 In the years since 1975, the United States had run a total trade deficit of 7.5 trillion dollars with the rest of the world.
#5 The United States spends more than 4 dollars on goods and services from China for every one dollar that China spends on goods and services from the United States.
#6 In 1959, manufacturing represented 28 percent of all U.S. economic output. In 2008, it represented only 11.5 percent and it continues to fall.
#7 The number of net jobs gained by the U.S. economy during this past decade was smaller than during any other decade since World War 2.
#8 The Bureau of Labor Statistics originally predicted that the U.S. economy would create approximately 22 million jobs during the decade of the 2000s, but it turns out that the U.S. economy only produced about 7 million jobs during that time period.
#9 Japan now manufactures about 5 million more automobiles than the United States does.
#10 China has now become the world’s largest exporter of high technology products.
#11 Manufacturing employment in the U.S. computer industry is actually lower in 2010 than it was in 1975.
#12 The United States now has 10 percent fewer “middle class jobs” than it did just ten years ago.
#13 According to Tax Notes, between 1999 and 2008 employment at the foreign affiliates of U.S. parent companies increased an astounding 30 percent to 10.1 million. During that exact same time period, U.S. employment at American multinational corporations declined 8 percent to 21.1 million.
#14 Back in 1970, 25 percent of all jobs in the United States were manufacturing jobs. Today, only 9 percent of the jobs in the United States are manufacturing jobs.
#15 Back in 1998, the United States had 25 percent of the world’s high-tech export market and China had just 10 percent. Ten years later, the United States had less than 15 percent and China’s share had soared to 20 percent.
#16 The number of Americans that have become so discouraged that they have given up searching for work completely now stands at an all-time high.
#17 Half of all American workers now earn $505 or less per week.
#18 The United States has lost a staggering 32 percent of its manufacturing jobs since the year 2000.
#19 Since 2001, over 42,000 U.S. factories have closed down for good.
#20 In 2008, 1.2 billion cellphones were sold worldwide. So how many of them were manufactured inside the United States? Zero.
#21 Ten years ago, the “employment rate” in the United States was about 64%. Since then it has been constantly declining and now the “employment rate” in the United States is only about 58%. So where did all of those jobs go?
The world is changing.
We are bleeding national wealth at a pace that is almost unimaginable.
We are literally being drained dry.
Did you know that China now has the world’s fastest train and the world’s largest high-speed rail network?
They were able to afford those things with all of the money that we have been sending them.
How do you think all of those oil barons in the Middle East became so wealthy and could build such opulent palaces?
They got rich off of all the money that we have been sending them.
Meanwhile, once great U.S. cities such as Detroit, Michigan now look like war zones.
Back in 1985, the U.S. trade deficit with China was about 6 million dollars for the entire year.
As mentioned above, the U.S. trade deficit with China for 2010 was over 273 billion dollars.
What a difference 25 years can make, eh?
What do you find when you go into a Wal-Mart, a Target or a dollar store today?
You find row after row after row of stuff made in China and in other far away countries.
It can be more than a bit difficult to find things that are actually made inside the United States anymore. In fact, there are quite a few industries that have completely and totally left the United States. For certain product categories it is now literally impossible to buy something made in America.
So what are we going to do with our tens of millions of blue collar workers?
Should we just tell them that their jobs are not ever coming back so they better learn phrases such as “Welcome to Wal-Mart” and “Would you like fries with that”?
For quite a few years, the gigantic debt bubble that we were living in kind of insulated us from feeling the effects of the deindustrialization of America.
But now the pain is starting to kick in.
It has now become soul-crushingly difficult to find a job in America today.
According to Gallup, the U.S. unemployment rate is currently 10.1% and when you throw in “underemployed” workers that figure rises to 19.6%.
Competition for jobs has become incredibly fierce and it is going to stay that way.
The great U.S. economic machine is being ripped apart and dismantled right in full view of us all.
This is not a “conservative” issue or a “liberal” issue. This is an American issue.
The United States is rapidly being turned into a “post-industrial” wasteland.
It is time to wake up America.
America’s wealthiest 25 percent of households own 87 percent of all U.S. wealth. How the middle class face growing income inequality in the new era of the psychopath corporatocracy.
Posted by mybudget360
A true measure of economic vitality is measured by wealth. We can look at incomes or other measures of productivity but real wealth is measured by net worth. Who controls wealth in the U.S.? According to a study from the Joint Center for Housing Studies the top 25% of U.S. households control 87% of all wealth in the country. That number comes out to a nice hefty sum of $54.2 trillion. If we look even closer at income distribution, we will find that the top 1 percent in our country control 42 percent of all financial wealth. By all measures being able to acquire a piece of financial wealth was the hallmark of the middle class of previous years.
Today we have a society largely in debt to credit cards, auto loans, student loans, and immense mortgage debt. Net worth is measured by looking at assets minus liabilities and many Americans are lucky to break even while many have a negative net worth.
Even after the current wealth destruction of the recession, our country has grown wealthier and wealthier over time and the trend is clear:
Yet more and more of this added wealth is filtering its way to a smaller group and not necessarily the most productive in our country. In the first quarter of 2010 some of the biggest banks in this country made continuous profits without really adding any benefit to our economy or society:
Source: ABC News
In fact, many of these banks simply made money by hoarding money and actually lending it back to the U.S. government (who actually bailed them out to begin with). These weren’t successful companies that produced a solid product. These are the companies that failed but had politically bought out the right connections. The U.S. Treasury and the Federal Reserve are designed to protect the top bracket of our society while allowing the systematic dismantling of the middle class. They call the current process the “free market” but this doesn’t apply to the biggest corporations in our country. In fact, many have leveraged the current recession to squeeze out every ounce of productivity from their current workers. Buying out politicians through lobbyist is merely another line item expense on their balance sheet.
Corporations are holding many working class Americans financially hostage. And if you look at our big trade partner in China, you will see that income disparities are also rising there:
“(China Daily) He said the income difference measured by certain indexes such as Gini coefficient might not reflect the real situation in China as it fails to take the local social welfare system and wealth disparity into account.
“Things could be even worse if we consider all these aspects,” warned Li, citing although the index of the United States is also above 0.4, but expenditure on social security and welfare accounts for about 50 percent of its total fiscal outlay, 40 percentage points higher than in China.
In addition, the assets of the richest 10 percent of the population account for 45 percent of the total residential assets in China, while the poorest 10 percent own just 1.4 percent of the total assets, according to an official report released in 2004.”
Think of those banking profits in the first quarter of this year. It would be one thing if banks were lending to Americans and small businesses making local communities stronger. Instead, they are gambling on the rigged stock market which really has become disconnected from every typical American. Trillions of dollars in bailout funds have been diverted to protecting the banking interest which in turn looks after the interest of the corporatocracy:
Source: It Takes a Pillage
When you break it down like this, you can see why most Americans have felt very little impact from the historical amounts of bailouts that have gone into the system. The quarterly profits from the banks should tell you exactly what is occurring. As local small businesses struggle with the recession and have difficult times accessing loans, big corporations and banks have no problem getting funding because they already have control of most of the wealth in our country.
And contrary to the propaganda out from Wall Street, most Americans earn money from their jobs and not investing or speculating on stocks:
Source: Survey of Consumer Finance
90 percent of all households earn 70 percent or more of their income from wages (presumably from actual work). But take a close look at the capital gains line. The vast majority of Americans get 2 percent or less of all their income from capital gains. You have to get into the top 10 percent to see any sizeable amount. And even here, you would have to break into the top 1 percent to see real sizeable gains. So this idea that the stock market reflects the health of Main Street is bogus but is a form of consumer manipulation to get more people into the rigged stock market to continue to fund the corporatocracy hunger for more capital. Now that they have control of the government, they don’t care if average Americans jump into the game. It is easier to rob it directly from bought off politicians.
Even as the recession has put our underemployment rate to 17 percent and has wiped out trillions of dollars in aggregate wealth, those at the top have actually become richer relative to most Americans. You see many of these banking PR representatives with their sob stories of how much money they have lost. It is nonsense because money is worth what you can buy with it. So now, that millionaire banker won’t have to spend $20 million for that private home, he can have it for $10 million. So his salary might be off by 10 or 15 percent but his buying power just increased because most people are struggling with wealth destruction if they work in the real economy. Or these large banks can hire cheap labor since so many people are unemployed and use bailout funds to turbo-charge their bonuses. This is how America is looted by the corporatocracy.
The corporation in the eyes of the law is seen as a person. Yet it is driven by:
-The bottom line
-Disregard for workers long-term stability
-Ignores long-term objectives
In fact, it is a casebook psychopath. Yet under the law it is treated as a person and presumably, is acting under a moral obligation to society. If you went out and robbed a bank, you will go to prison. If a corporate bank robs the U.S. Treasury, it gets even more money with the threat of “we are too big to fail.” So it should be no shock that banks are raiding the public trust and buying out politicians even though the current Wall Street structure is damaging to the health of America. These people are so delusional preaching their “all things are great” mantra and forget to see that the current structure has led us to the biggest economic calamity since the Great Depression. Clearly something has failed here.
If we keep allowing the current structure to play out the middle class will slowly fade away and be replaced by an even stronger corporatocracy. The growing income disparity should give you a quick hint where things are heading. The fact that you can’t pay for college without going into massive debt through the banks is another hint of where we are going. This falls into the new paradigm of corporate rule because they would love nothing more than a giant population of mindless drones who simply go out and purchase their goods without questioning the system.
In what is the start of the biggest uphill battle in D.C., arguably even bigger than deposing the printing press leprechaun, five democrats are proposing an amendment to reinstate Glass-Steagal, whose repeal, through the Larry Summers orchestrated Gramm-Leach-Bliley Act, in 1999 set the economy on the collision course that culminated with the implosion of every single Goldman Sachs FICC competitor in 2008. The five Democrats who have undertaken the sisyphean task of taking on both Wall Street and their direct boss, are Maurice Hinchey of New York, John
Conyers of Michigan, Peter DeFazio of Oregon, Jay Inslee of Washington,
and John Tierney of Massachusetts.
If adopted, the measure would give banks one year to choose between
being commercial banks or investment banks. The nation’s biggest –
those now commonly referred to as “too big to fail” — would be broken
up. The Obama administration opposes the measure.
Obama, presumably a Democrat, continues to persist in endorsing each and every Republican legacy when it comes to Wall Street’s landed interests (and risk “management” practices). Of course, the last thing the administration needs is for the populace to comprehend the chameleonic nature of the administration’s action.
The act was repealed in 1999 at the urging of, among others, Larry
Summers, now President Barack Obama’s chief economic adviser.
The five congressman all voted against the repeal then — and now they want it back.
Former Federal Reserve Chairman Paul Volcker is one of a number of
financial luminaries calling for at least a partial return to
Glass-Steagall. The Wall Street Journal’s
editorial page also endorsed the concept in a recent editorial as a way
to “reduce moral hazard” and “limit certain kinds of risk-taking by
institutions that hold taxpayer-insured deposits.”
The law’s repeal ushered in an era marked by big banks getting even
bigger. The country’s four largest — Bank of America, JPMorgan Chase,
Citigroup and Wells Fargo – now control more than half of the nation’s
mortgages, two-thirds of credit cards and two-fifths of all bank
And because their deposits are taxpayer-insured, there’s a growing
concern that they will feel overly confident about making risky bets
through their investment arms because they know that should they suffer
huge losses, taxpayers will ultimately be there to bail them out.
The five Democrats face big obstacles, including their own leadership and the Obama administration.
At this point the whole systemic regulation debate is getting glaringly amusing. At the core of every conflict are proposed reforms that are so obvious from a risk mitigation debate: audited Fed, split up banks which are now bigger than ever before, propping a bankrupt FDIC, which in turn is backing up bankrupt institutions, and a bankrupt country which is trying to fool the world into a game of M.A.D. knowing full well if the US taxpayer goes down directly or indirectly, the world, and the proverbial flood, follow after. And the only sensible reforms are those getting the biggest push back from Obama, and of course, Wall Street. How these two seemingly traditional opponents have ended up on the same side of the page is testament enough to the cataclysmic legacy of Bernanke and Summers. Of course, nothing will be done about anything, in tried and true American fashion, until it is too late, and Main Street is left sorting through the rubble of Goldman’s new glass-plated headquarters, even as all inhabitants have long-ago departed the country and left the U.S. with a few quadrillion in I.O.U.’s. At this juncture the best option before politicians is to simply delay for one year until mid-term elections provoke some vestige of sensibility in the ruling class.
Ratigan Grills Propaganda Queen Christina Romer, Demands Windfall Profit Tax Clarity, Gets Blank Stare Response
Ratigan cuts to the chase, bypassing the hollow rhetoric by Administration propaganda queen Christina Romer, who can’t beat enough drums on today’s pathologically ludicrous BLS numbers, yet is completely unwilling to discuss how the White House will proceed to recoup any of the taxpayer-subsidized windfalls at Wall Street firms. Any considerations of windfall tax, be they in the form of a Tobin tax, now openly supported by such people as Warren Buffett and John Bogle, or directly imposed, seems to not be on the White House’s agenda currently or any time in the future. How is it so difficult for Obama to understand that Main Street is demanding some quid-pro-quo of firms like Goldman, whose employees are covertly purchasing Ferraris even as excess bank reserves hit another all time record yesterday, and instead of lending money out the banks continue to collect a risk-free 0.25% on these excess reserves, thereby once again picking taxpayers’ pockets.
Yes, we all know they need the cash as they are well aware their balance sheets are in much more deplorable conditions than loose FASB regulations force them to disclose. However, the animosity is growing, and more and more the anger directed at Wall Street is becoming anchored at Obama and his Robert Rubin (i.e., Goldman Sachs) cronies, who despite their assumed ideological adherence, are seeminly much more pro-Wall Street than even previous Republican administrations. This will be a heated issue for the President, especially once details of individual Wall Street record bonuses become all too public.