Posted by Leonard Steinberg on November 20th, 2013
Federal Reserve Chairman Ben Bernanke said the Fed will probably hold down its target interest rate long after ending $85 billion in monthly bond buying, and possibly after unemployment falls below 6.5%. Yellen told lawmakers last week that job-market gains would arise from stronger economic growth, which was running at a 2.8 percent rate last quarter. Fed officials forecast a 2 percent to 2.3 percent expansion for 2013, compared with a 1.7 percent estimate released yesterday by the Organization for Economic Cooperation and Development. How realistic is it for unemployment to drop and are the unemployment figures really accurate?
The Government and the Press has agreed an age-old axiom: If you keep repeating a lie, that lie becomes truth in this electronic age of saturation. 7.3% unemployment may be the perfect example: The Government uses this distorted benchmark as a trigger for economic direction. We know that government subsistence for the poor has increased more than the Great Depression. 50 million are receiving some form of assistance from the US Government. That signifies real unemployment as something closer to 25% and underemployment near another 22%. Isn’t that a total of 47%?
Large private corporations relocated much of their manufacturing in the 1970’s and early 1980’s offshore: They refuse to come back with real manufacturing jobs to the USA privately pointing to even larger and oppressing Government policies and highly restrictive government Agencies. Technology has replaced (and continues to replace) many jobs: those jobs are not coming back either. Some argue that these jobs are being shifted into the technology arena, but our education system is lagging in this arena and most of these tech jobs are going overseas.
President Obama’s delivery of dollars through the Federal Reserve and government is incurring massive debt ($17+ Trillion) that will dwarf all other debt in our history. All of the Keynesian philosophy discounting the effects of this debt is very questionable.
Why are commodities like food and fuel rising dramatically against the purchasing power of the US dollar? There has been an approximate 20% increase in prices per year on average since fall 2008: That’s an over 100% increase in a few years! In the fall of 2008 a hamburger cost $1.29, fuel was $1.80/gallon. Now it’s $3.59 for hamburger and $3.65 for fuel. A car that cost $10,000 in 2008 costs $18,000 today. The purchasing power of the US dollar where it counts is going down and nobody is talking about that.
I think we may need to get comfortable with significantly higher levels of joblessness. Its the new normal. The levels of unlemployment will NEVER drop unless we seriously re-tool and become more competitive via less restrictive, complex government regulation (the bad kind), lower wages and lower taxes. QE has been partially effective, but not enough to offset the painful massive restructuring that is required.
Is it possible the Fed, the government and the US population in general are ignoring the big, huge elephant in the room?