Wednesday, February 14, 2018

The Real "State of the Union" Rather Than the Don's Version

Isn't it incredible how Trump said that the Govt's unemployment, inflation, GDP, etc. numbers were all false just before he took office, but not long after he was sworn in, those numbers were all correct.  Plus, he's now claiming that the supposed "recovery" we're in is all due to his Administration's actions in the past year.  What he expects people to believe never ceases to amaze me.  The Corporate Media are every bit as bad in that respect as is Trump.  Let's take a brief look at how things really are in this great Land.
1.   Unemployment---

The Feds have six measures of the unemployment rate and they label them U-1 through U-6.  U-3 is the one used as the "official unemployment rate".  Currently, that rate is 4.1%...but, there's a problem.   U-3 tends to underestimate the “true” extent of unemployment because those who have been unemployed and have given up on finding another job, or those who haven’t searched for a job recently, are not included in this category.

U-6 is closer to the truth.  This number measures not just the unemployed, but also those who would like to work full-time but are stuck with part-time and/or temporary work.  They are barely scraping by.  Since the Crash of 2008, U-6 has been (to varying degrees) over 11%...but, again there's a problem.  U-6 also is incomplete.  It excludes the long-term unemployed, those who have been out of the workforce for a year or more, have not searched for work in the most recent year, but would still like a job.  Many (probably most) of those people are so down and depressed that they've given up the search.

The point here is that the "official unemployment rate" is always incomplete.  The real rate is at least double, and usually higher than that.  Currently, if we use U-6 (which is more accurate, but still incomplete) the true rate of unemployment in the USA is somewhere in the double digits.  The Feds and the Corporate Media always promote the lower U-3 number.  If Trump were really a "rebel", he'd tell the truth; but he's a member of The Establishment.  The only difference between him and the rest of them is that he's unimaginably crass...ignorant, boorish, thoughtless, blundering, and tactless. 

2.  Inflation---

For many years, there has been a huge problem with the measurement of price inflation.  The Feds use something called "core inflation", which excludes the price changes in food and energy.  Hello...those are a fair-sized chunk of most peoples' expenses.  Years & years ago, food and energy were included.  Then the Feds decided that those commodities were too "volatile" to give an accurate picture.  Right.  So now we're stuck with an inaccurate measurement... usually a number that is way too low.

In addition, the Gov't does not include asset inflation...over-valued stocks, over-valued houses, etc.  Currently, both the Stock Market and the Housing Market are in giant Bubbles.  Today, stocks are more over-valued than they were in 2008... or even in 1929.

3.  Bizarre Derivatives---  

Because of a continuing lack of comprehensive Fed regulations & oversight, bizarre Financial Derivatives (such as credit default swaps, CDOs, synthetic CDOs, bespoke tranches, etc.) still threaten our economy & finances, as well as those of the entire world.  While it's true that the number & value of such derivatives most likely has been reduced, the amount still out in the Market is horrendous.  It's difficult to know the exact number because these are private contracts between Casino Capitalists.  Best estimates of analysts as to the amounts in the Market just before the 2008 Crash and now are:  about $1.4 quadrillion, and about  $700 trillion.  $700 trillion is way above the entire world's GDP...which is about $76 trillion.  Derivatives still have a high potential to crash the world.  And yet, there are no serious regulations to prevent that.

Not only are Crony/Casino Capitalists (not genuine Capitalists) still to some degree or another creating bizarre derivatives related to mortgages, but now they're doing the same with car loans and housing rent receipts.  The whole business is just plain nuts...and extremely dangerous.

4.  Stock Buy-Backs---

One reason the Stock Market is so over-valued is because many Corporations are buying back their own stocks.  That falsely inflates their value.  I suspect that will increase now that Trump & Congress have given the Upper Crust an immense, permanent Tax Cut.  [The rest of America received a much lesser temporary Tax Cut.]

5.  The Dollar---

Jim Rickards holds a degree in International Economics, he's an attorney, a former consultant to the CIA and Pentagon on economic matters, and a NYT best-selling author...twice.  According to him and his contacts, the IMF has launched a ten-year plan to replace the Dollar as the world's reserve currency.  Ultimately, that will be extremely bad news for our economy.  The way Trump alienates allies & trade partners, the situation will be even worse.

6.  Infrastructure---

According to the top Civil Engineers, our infrastructure is in dire need of repair/replacement.  During his election campaign, Trump announced he would get Congress to institute a big Infrastructure Program.  Where is it?  He's been in office over a year, already added (he and Congress) a potential one trillion dollars to our insane National Debt, but there's no Program...not even meetings about it.  Meanwhile, our bridges continue to rust, rot, & crumble, our trains run off the tracks, and our roads & highways continue to fall apart.  Not all of them at once, but's a serious problem, and it's killing people.

7.  War & Nukes---

Sometime during the last ten years or so, and right up through the present day, the Powers-That-Be convinced each other that nuclear weapons actually can be used in warfare.  They justify such thinking by telling each other (and us, indirectly) that the weapons will be smaller, "tactical" nukes.  In their minds, that means it's feasible...with no serious, long-term effects.  This is unmitigated insanity.  What they apparently don't understand is that any such use of nukes would be a dangerous experiment with likely disastrous results.

The Obama Administration launched the ten-year Program designed to create these "tactical" nukes, but Trump is exacerbating the situation with his utter ignorance of science and statesmanship.  Not only the people of the USA, but the entire world as well should be protesting this idea in a massive way.

8.  Climate Change and Other Environmental/Health/Safety (EHS) Issues---

Trump & Crew are bound and determined to tear down Fed Gov't Regulations; they've already started that.  Those Regs are not just in the Business arena, but also in the EHS world.  I worked in the field of EHS regulatory compliance for several years, and I'll be the first to admit that some of those Regs are overlapping and need to be tweaked or even eliminated.  A few are not necessary, but most of them (the overwhelming majority) are necessary.  Without them, we'll have more pollution, sickness, injuries, and premature death.

Regarding Climate Change, there are too many variables in that scenario to say that human activity (mainly the generation of greenhouse gases) is the only cause of what's going on; however, there's plenty of evidence to state with certainty that human activity is contributing to the problem...most likely in a major way.  Given that, it makes sense to address the problem of greenhouse gases.  Because Corporation Powers consider such things to be "negative externalities", the only way to address the problem is through Regulations.

As to the Business world, and using only one example, does anyone seriously believe that the Financial Sector doesn't need to be regulated?  I hope no one believes that.

My point under this subtopic is simple:  things are not good, and getting worse every day.
Not only my opinion.  Be Well