– This article says what I’ve been saying for some time.  And, it’s got a lot of good data to support its points. U.S. and multinational corporations in their obsessive quests for maximum profits have gutted this country’s ability to be a net wealth generator. And now we’re locked into a fatal embrace with China in which we have to borrow ever more to maintain the facade that we’re solvent and they have to keep loaning it to us least our failure compromises what they’ve already lent us.  Now, who in their right mind thinks that can go on forever? Nice eh?
– Give this article a good read all the way through – if you care about knowing which way the wind’s blowing – and about your future.
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Truly terrifying data about the real state of the U.S. economy.
I have an unfortunate sense that the “green shoots” in the economy that everyone is talking about are nothing but dandelions. Sure, forcing $1 trillion of taxpayer money—in direct capital, guarantees, and diminished cost of borrowing—into the banking sector has permitted the major banks to claim solvency for the moment. Yet we should not forget that this solvency has come not through a much needed deleveraging of the banking sector but rather from a massive transfer of the obligations of private banks to the public, with the debt accruing to future generations. And overall loan quality at U.S. banks is still the worst in 25 years and deteriorating at the fastest pace ever.
It’s a terrible mistake to confuse the momentary solvency of the financial sector and the long-term health of our economy.
While we have addressed the credit collapse, we have not begun to tackle the far more daunting, and more significant, structural problems in the economy. Instead of focusing on the green shoots, let’s examine the macro data that will determine our national prosperity in the next generation. These data are terrifying.
Start with the job front. Long term, nothing is more fundamental than good jobs to creating the middle-class wealth that must drive the economy. The creation of true middle-class jobs was the great success of our economy from 1950s through the mid-1990s. Consider the job data, in aggregate and by sector, from the past decade. (All data are from the U.S. Department of Labor, Bureau of Labor Statistics.)
| Unemployment Rate by Industry | ||||||
| Year | Unemployment rate | Manufacturing Jobs (in millions) |
Serv. Jobs | Gov’t. Jobs | Total Jobs | Population |
| 1999 | 4.3 | 18.48 | 102.23 | 20.09 | 133 | 272 |
| 2004 | 5.6 | 14.3 | 108.64 | 21.5 | 138.38 | 292 |
| 2009 | 8.9 | 12.4 | 113.82 | 22.54 | 141.57 | 305 |
One-third of our manufacturing jobs have disappeared in a decade! And while population grew 12.1 percent over the decade, jobs grew by only 6.4 percent. The unemployment number, moreover, doesn’t count those who are “marginally attached to the labor force,” because even though they want to work and are available to do so, they have not sought a job in the past four weeks. In raw numbers, the total number of individuals counted as currently unemployed and those who are marginally attached is a staggering 15.8 million. That is an enormous mountain of job creation to climb.