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Global Economic Crisis Deepening - by Stephen Lendman
In the 1960s, economist Arthur Okum began calculated America's Misery Index by adding the unemployment and inflation rates for a sense of public pain or lack of it in good times.
In May, it hit a record high exceeding 25, surpassing the earlier June 1980 21.98 top, based on how both measures were then calculated, not today's methodology, manipulated to hide painful truths.
At issue is:
-- over 22% unemployment, including discouraged workers and the so-called "birth-death model" estimate of net non-reported jobs from new businesses minus losses from ones no longer operating; during hard times, painful truths are hidden by creating non-existent jobs out of whole cloth instead of subtracting them to reflect fewer, not additional new businesses;
-- double digit inflation, including soaring food, energy, healthcare, college tuition, and other costs omitted or understated in core figures;
-- rising poverty, more than one in seven affected according to way understated Census Bureau figures, using threshold measures developed 40 years earlier;
-- record numbers on food stamps;
-- record measures of food insecurity - Feeding America.org reporting one in six American facing hunger;
-- predicted record 2011 numbers of home foreclosures, estimated at 1.2 million after one million lost last year;
-- record homelessness numbers up to 3.5 million on any given night, needing refuge wherever they can find it or face life on city streets; and
-- other measures of worsening conditions during a Main Street depression, affecting Europe, Japan and elsewhere like America.
Economic recovery? Explain how to millions unemployed or underemployed, foreclosed homeowners, bankrupt business owners, impoverished legions, and many others food insecure at a time US and European leaders enforce austerity when massive social stimulus is needed.
Across Europe, large deficits and public debt crises are spreading, an Economist April 29 article highlighting "a moment....when events spiral out of control. As panic sets in, bond yields lurch sickeningly upwards and fear spreads to shares and currencies."
It happened in September 2008, a decade earlier when Russia defaulted, and similar past events. "When the unthinkable becomes the inevitable," contagion and panic follow like a tsunami sweeping away everything in its path.
Numerous European countries are deeply troubled, notably Portugal, Ireland, Italy, Greece and Spain, entrapped in debt, locked in a Eurozone straightjacket. Perhaps heading for default, they've inflicted painful austerity on working households, rallying them en masse in protest.
