James K. Galbraith: Our Sinking Ship

[Dudley_DUright]

Aren't you glad you get your economic news from Salon? You expected this. You were warned. Unlike almost everyone else, you were not "surprised," "shocked" or "stunned" by July's jobless jobs report. Back in April, you knew that the jobs surge wouldn't last four years. Four months, you read then, might be believable.

For the good ship Recovery, July had a sinking feeling. Early in the month, we learned that second-quarter growth had already fallen sharply -- to just 3 percent compared with 4.5 percent in the first quarter and about 8 percent in the third quarter of 2003. Then personal income growth fell to 0.2 percent; personal consumption expenditures also fell, by 0.7 percent. Housing starts were off 8.2 percent. New-home sales fell 0.8 percent. Industrial production fell 0.3 percent. And now we have the July jobs report, showing just 32,000 new jobs and a cut of 34,000 in the estimates previously released for June.

Except for July's jobs, all of this had already happened before Alan Greenspan started raising interest rates at the end of June. Greenspan and his colleagues acted from fear of an overheating expansion and accelerating inflation -- or so they said. Now Greenspan says we're in a "soft patch." He doesn't explain why he didn't see it coming. He doesn't say why he thinks it will soon end. It makes you wonder why we need him. Understandably, the stock market is wondering too. Stocks fell by over 300 points in July. They fell again last week, when the awful jobs news hit home.

Meanwhile inflation, which the Federal Reserve claims to be fighting, fell by half -- from 0.6 to 0.3 percent monthly in the Consumer Price Index -- before rates rose. Producer prices actually fell in June. Import and export prices were down 0.2 and 0.6 percent, respectively. And the employment cost index -- the much-feared barometer of labor power -- was decelerating, from 1.1 percent to 0.9 percent.

more (reg. or ad view req.)...

http://www.salon.com/opinion/feature/2004/08/10/jobs/index.html

[Spinzonner]

1. And, like he always does, Bush rewards incompetence

by keeping Greenspan

[indepat]

3. My guess is that Greenspan kept his job by announcing social security

benefits will have to be slashed to pay for GWB's tax cuts which benefit mostly the most affluent, so those who paid relatively little of their income in payroll taxes will therefore, in effect, have their tax cuts funded by raiding the mythical "lock box." By robbing the poor to pay the rich looks like a Robin Hood scheme in reverse, but there I go being cynical again.

[ladjf]

2. America is a colony of the global Corporate interests.

Colonies never prosper until they throw off the yoke of colonization.
Currently, the corporations are exploiting American labor and natural resources. And in order to pull this off are seeing to it that our liberties are being curtailed in the name of "security".

Bush talks about "ownership". What a cruel joke. How are you going to own anything substantial when you are either unemployed or over worked and under paid?