Ship of Fools

Is there intelligent life in Washington, DC?  Not a speck of it.

The US economy is imploding, and Obama is being led by his government of neoconservatives and Israeli agents into a quagmire in Afghanistan that will bring the US into confrontation with Russia, and possibly China, American's largest creditor.

The January payroll job figures reveal that last month 20,000 Americans lost their jobs every day.

In addition, December's job losses were revised up by 53,000 jobs from 524,000 to 577,000.  The revision brings the two-month job loss to 1,175,000.  If this keeps up, Obama's promised three million new jobs will be wiped out by job losses.

Statistician John Williams (shadowstats.com) reports that this huge number is an understatement.  Williams notes that built-in biases in seasonal adjustment factors caused a 118,000 understatement of January job losses, bringing the actual January job loss to 716,000 jobs.

The payroll survey counts the number of jobs, not the number of employed as some people have more than one job.  The Household Survey counts the number of people who have jobs.  The Household Survey shows that 832,000 people lost their jobs in January and 806,000 in December, for a two month reduction of Americans with jobs of 1,638,000.

The unemployment rate reported in the US media is a fabrication.  Williams reports that "during the Clinton Administration, 'discouraged workers' those who had given up looking for a job because there were no jobs to be had--were redefined so as to be counted only if they had been 'discouraged' for less than a year. This time qualification defined away the bulk of the discouraged workers.  Adding them back into the total unemployed, actual unemployment, [according to the unemployment rate methodology used in 1980] rose to 18% in January, from 17.5% in December."

In other words, without all the manipulations of the data from a government that lies to us every time it opens its mouth, the US unemployment rate is already at depression levels.

How could it be otherwise given the enormous job loss from off-shored jobs?  It is impossible for a country to create jobs when its corporations are moving production for the American consumer market offshore.  When they move the production offshore, they shift US GDP to other countries.  The US trade deficit over the past decade has reduced US GDP by $1.5 trillion dollars.  That is a lot of jobs.

Why bail out GM and Citibank when the firms are moving as many operations offshore as they possibly can?

I have been reporting for years that American university graduates have had to take jobs as waitresses and bartenders.  As over-indebted American consumers lose their jobs, they will visit restaurants and bars less frequently.  Consequently, Americans with university degrees will not even have jobs waiting on tables and mixing drinks.

US policymakers have ignored the fact that consumer demand in the 21st century has been driven, not by increases in real income, but by increased consumer indebtedness.  This fact makes it pointless to try to stimulate the economy by bailing out banks so that they can lend more to consumers.  The American consumers have no more capacity to borrow.

With the decline in the values of their principal assets--their homes--with the destruction of half of their pension assets, and with joblessness facing them, Americans cannot and will not spend.

Much of US infrastructure is in poor shape and needs renewing.  However, infrastructure jobs do not produce goods and services that can be sold abroad.  The massive commitment to infrastructure does nothing to help the US reduce its massive trade deficit, the financing of which is becoming a major problem.  Moreover, when the infrastructure projects are completed, so are the jobs. 

At best, assuming Mexicans do not get most of the construction jobs, all Obama's stimulus program can do is to reduce the number of unemployed temporarily.

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