I was told that I should offer a light at the end of the tunnel, but I can't. I wish that the news was good. I wish, I could hold out an optimistic hope but until we begin to move forward in this country, we face only black days.
The Federal Reserve has passed out to the banks more than $800 billion for one quarter of one percent interest. The interest owed by the American taxpayer is 2.625 percent. Each million dollars lent to the banks is lent at $24,000 below the cost to the taxpayer. $24,000 times a thousand million, times 800 or $20 billion dollars. What do we get for all that money? Nothing!
See any Republican's on the floor of the house apoplectic with outrage? See any signs at tea bagger rallies saying, "cut free money to banks?" Have you heard President Obama say this "grand give away to the banks must stop!"
The banking industry is puffed up full of bad paper and bad debt and rather than addressing the situation. The Fed gives them free money so that they can generate huge profits to hide the costs of all these bad debts. Its pumping up a tire with a leak, it works temporarily but fails to address the leak. Three years in and the numbers are still pointing down.
We are approaching our ten millionth home foreclosure since the mortgage crisis began. Ten million families out in the street, do the math, Mortgage lenders predict that mortgage lending will drop below one trillion dollars for the first time since 1996. Half a trillion dollars below this years $1.4 trillion and just how low is that? In 2003 there were 3.8 trillion dollars lent on home mortgages. Real property values have dropped 30 percent and yet the politicians have the nerve to try and tell you that this crisis is over.
Sweet flipping Jesus, this is a disaster! The numbers are all pointing down and the politicians are telling you its getting better. Meanwhile, aliens from some cosmic outer space science fiction movie are eating American's brains and they follow mindlessly waving bags of tea. Mutants of Democrats are calling for budget cuts and cuts to Social Security while Republican Zombies want to repeal the minimum wage? Give me a club and call me Grog if we're going back to the stone age!
Profits at Proctor & Gamble the worlds largest maker of consumer products declined by 6.8 percent in the third quarter. Why does that matter? Because unlike Ford or Microsoft Proctor and Gamble is a bell weather, they manufacture products that people use daily. They make soap and laundry detergent and toothpaste, things people just can't do without. Kimberly-Clark Corp., the maker of Kleenex, Huggies diapers and Scott toilet paper, posted a 19 percent drop in third-quarter profit yesterday.
New Jersey Governor Chris Christie has ended work on a new rail tunnel to New York. Christie argued the the project was too expensive at $8.9 billion dollars. The cost of the project would have been shared by New Jersey, New York and the Federal Government. Instead of a tunnel, New Jersey will have to repay $350 million dollars to the Federal Government and fill in the big hole in the ground. The new tunnel would have doubled the capacity for rail commuters to New York not to mention that the old tunnel is 100 years old. It's a clear case of don't just do something, stand there! New Jersey lost over 20,000 jobs last month and now will lose 6,000 more.
The major banks are forecasting reduced profits next year because of fewer homes loans, fewer consumer loans and millions of American who no longer even have a checking account. You can't fill the bucket out of a dry well, those ten million American families who have lost their homes have also lost their credit and most will never get it back.
Maytag plans on laying off five thousand workers due to reduced sales which will ripple out as fewer purchases made by the former Maytag workers. California Governor Schwarzenegger's furloughs of state workers cost the workers 15 percent of their income. It might have helped the state but it clobbered the Sacramento economy. We can't cut our way out to prosperity. Somebody has got to have a job and every job cut only adds to the misery vortex.
In Berlin at the end of World War 2 the provisional government paid women, old men and boys to clear rubble from the streets with their bare hands. The economy was crushed flat, the choice was clear, either feed the people or put them to work. Feeding them solved the immediate problem but did nothing to rebuild the economy. It is unconscionable to do nothing and absurd to pretend the problem doesn't exist
U-1 Persons unemployed 15 weeks or longer, as a percent of the civilian labor force.
September 2009, 5.3 percent September 2010, 5.5 percent
U-2 Job losers and persons who completed temporary jobs, as a percent of the civilian labor force.
September 2009, 6.0 percent September 2010, 6.1 percent
U-3 Total unemployed, as a percent of the civilian labor force (official unemployment rate)