Future Questions Without Any Answers

Next year, the Oxford University Press will publish a new gauge to define “economic insecurity.” It consists of one year or more of periodic joblessness, government aid such as food stamps or income below 150 percent of the poverty line. Based on that gauge, economic insecurity rises to 79% by age 60. Based on 2011 Census Figures, that number will become 80% by the time people turn 60.

If current economic conditions are previewing greater economic insecurity in the future, here are some questions to ponder:

What will that mean for housing’s future?

What will that mean for future consumer spending?

What will it mean for future economic conditions?

How will the U.S. need to change its economic model to adjust for higher savings and less spending?

Again, the word “deleverage” comes to mind.

--Robert Michaels



Will the Next Fed Chairman be the Devil?

I don't really believe in how organized religion defines Heaven and Hell, God and the Devil. I see them more as metaphors to positive and negative worlds with good and evil within all of us. Some people, however, may be more evil than good. I do believe in good and evil, and I have no problem saying that Larry Summers is a person living in the United States closest to actually being the Devil.

The reason is because he's a person in power who calls himself a Democrat but truly acts like a Republican. That's just the first reason, but it's an important one because he is hiding behind an agenda that does not favor all people, including the poor and middle class.

When Progressive Democrats saw Bill Clinton become U.S. President, they thought the Reagan legacy was over. When they saw Barack Obama become the first black President of the United States, they thought that the Reagan legacy was over. But economic advisors/leaders like Larry Summers keep Republican economic oppression moving full steam ahead.

Case in point, a bipartisan agreement between the House and Senate to keep student debt rates low unless the 10-year Treasury rates shift higher and have a subprime-like cap on rates for a college graduate without work experience or a full-time job. Six months later, it'll be time to pay the piper. Unless, of course, you become an investment banker at Goldman Sachs earning hundreds of thousands of dollars a year on Wall Street. You can probably pay that loan back in a couple of years.

What about a teacher? Or a policeman? Or a fireman? Or someone else who went to college and decided to fulfill their American Dream by choosing to work in an environment other than Wall Street or Congress? The few and far between in Congress are disliked by nearly 90% of the American people because the system answers to Wall Street rather than the American people. 

 

Larry Summers, the "rebel" Democrat, fought to repeal the Glass-Steagall Act and won. He defeated a very insightful and intelligent woman, Brooksley Born, chair of the Commodity Futures Trading Commission under the Clinton Administration, into not regulating financial derivatives. Thanks to Larry Summers and his determination, depository institutions can have investment houses attached to them and Wall Street Investment Bankers can risk trillions of dollars through unregulated financial derivatives. Even Sandy Weill, on CNBC, said former chairman and CEO of Citigroup, said Banks and Investment Banks should be split apart. http://www.cnbc.com/id/48315170.

Despite the Dodd-Frank Act, Investment Bankers are still risking the nation's financial health by trading with financial derivatives. Of course, Larry Summers may not have listened to Brooksley Born because, as president of Harvard University, he admitted that women were not as good at math and science. We want this guy as the new Federal Reserve Chairman?

Boy, that Larry Summers. What a smart guy! He fought to repeal Glass-Steagall and kept financial derivatives deregulated. It only opened the doors to the 2008 financial crash. Now, we still have major Banks--supposedly too big to fail--completely insolvent with underwater commercial and residential mortgages on their balance sheets. However, thanks to leaders like Larry Summers and former Treasury Secretary Tim Geithner, we're helping Banks cover up their losses. We're bailing out the failed banks. An accounting rule change following the 2008 financial crisis gave Banks the leeway to account for assets as "mark-to-model" rather than "mark-to-market." That means that accountants at Banks can assume the assets, such as underwater houses, will actually be worth something more in the future and banks hold these assets on the books waiting for valuations to increase. Investors are not acquiring these assets to rent, some have been sold in short sales--many to investors--and some have gone to foreclosure, later acquired by investors for rental purposes.

But, if the money's not right, the Banks will continue to hold these assets on their books because they don't have to show their losses. Thank you Tim and Larry for kicking it down the road.

Larry was on Obama's economic advisory committee, and he figured out that we can change the accounting rules in the middle of the game. His Wall Street CEO cronies were able to stay in charge and keep their power over the Federal Government. Treasury Secretary Tim Geithner helped, of course, and so did Congress. As always, most members of Congress need lobbyist funds for reelection to keep their cushy jobs and receive a horrible approval rating from the public.

Five years after the 2008 financial crisis, more than 60% of Americans in a CBS News poll said the economy is "in bad shape."And the President would still nominate Larry Summers to Federal Reserve Chairman?  Will the President continue to blame Congress and the Republicans while nominating Larry Summers to the Fed Chair position?

It's hard to believe Larry Summers is actually in the running for Federal Reserve Chairman. And it's hard to believe that Larry Summers is acting like he's going to try and help the middle class. In December, the Boston Globe reported Summers would co-lead an advisory group from the Center for American Progress "to examine how a stronger middle class serves as an engine to economic growth, as opposed to the trickle-down or supply-side economics" as subscribed to most Republicans. The think-tank has just been formed six months from conception. It's really like saying Karl Rove will co-chair an advisory group to examine how to help the Democratic Party win the next election.

Unless Larry Summers has had a complete philosophical change in his own economic theories of prosperity from the past 30 years or more, most Americans should see this as a problem. If 60% of Americans think the economy is in "bad shape," how much worse will it get under Larry Summers returning to perpetuate the current economic path we're on?

 

As the Fed head, Larry Summers and his Wall Street buddies will continue receiving their golden parachutes. He'll keep printing the money--the new pusher man--feeding addicted Wall Street Investment Bankers with cheap cash. The Investment Bankers will  help the economy through their reckless spending habits. That's been America for the past 30 years! We don't save--we spend! And M.B.A. graduates from the past 30 years just think that this is the only economic model in town.

 

But, when you don't allow private equity to enter the markets with new and innovative leaders and ideas, whether it's in FAILED Banks or FAILED multi-national corporations, then the old guard's FAILURE simply prevails as success. As a result, the old guard in Wall Street lines their pockets with free cash. Meantime, Larry Summers continues his behavior of political and financial cronyism and deceit of the financially unsophisticated American public.

 

Don't you just love watching greedy businessmen control the Federal Government and take over the country? It's so wonderful that Congress--like the current and possibly future Federal Reserve Chairman and, yes, very possibly the President of the United States--continue to banter as the United States falls into the widest wealth gap since the founding fathers brought black slaves to the country?

How ironic! With Federal Reserve Chairman Larry Summers, the first black President will go down as leader of the largest wealth gap in the modern era! His legacy will be widening the gulf between the middle class and the extraordinarily affluent. The high-class gamblers who use the numbers in their head to calculate the best bets on Wall Street derivatives will continue to receive free money given to them by the Federal Reserve.

What would you do if someone gave you millions of dollars to gamble each day to make more money? And, your bonuses are based on how much money you can make. You'll risk it because the alternative is no longer playing at the table. That's today's America. And, when Quantitative Easing makes all your bets and dreams come true, why stop? Keep the party going!

 

The big party consists of Larry Summers and his disciples calling winners and losers in this society because they decide who's going to get free cash. Give free cash to consumers to spend? No way. The decision makers--the lawmakers--no longer focus on free enterprise. Now, someone calls the game in favor of the Wall Street Investment Bankers. As for consumers, good luck, go to work and earn low wages, hope you don't lose your job to office politics,  and have a nice day.

The Federal Reserve is deciding who scores the touchdowns. It's choosing the penalties and putting in new rules so that the Wall Street team wins the game. It's like the prisoners versus the guards in The Longest Yard when the warden wants to fix the game. So, we know that the manipulation in Quantitative Easing is keeping Wall Street on track for record numbers in the Dow and S&P. What's keeping the American consumer on track for prosperity? Corporations holding billions of dollars in capital, pretending to hit earnings by taking on more debt, and not hiring more staff? Today's companies are loading on more responsibilities to the workers and keeping wages stagnant.

You see, when the Federal Reserve, the Federal Government and the Banks work together so that Investment Bankers can rob the banks, then you're really not robbing the banks. The robbers come in and the management says, "take the money, you need it more than anyone else." And, the consumers keeping their own money in the Banks are left working, struggling and even muckraking through their lives trying to put more of their money into savings. That money is not making more money and is even at greater risk due to Wall Street's greed and recklessness. But, the Investment Banks keep making the big money. If Occupy Wall Street was about anything, it was about this hypocrisy.

The are still many smaller banks in really bad shape. Some get shuttered and/or sold off to the highest bidder. However, if the Federal Government has slowed the process of shuttering small banks. They continue to slowly determine who is going to win, how long they'll succeed and who will eventually lose.

If Wall Street Investment Banks fail again, who will be bailing them out? Guess who? US! No, not the United States. The me and you of the United States. The taxpayers. The Federal Government and Federal Reserve have already bailed out the Too Big to Fail Banks and Wall Street Investors. It'll be up to you and me. The American taxpayers. So, what now? .

Prior to the 2008 financial crisis, with easy and cheap debt provided to consumers through equity loans, credit cards and an overheated housing market, we were all able to spend money. The Stock Market soared so high that it hit a new record. And then, there was one big crash.

The Stock Market has soared again to a record high and vulnerable to the Fed tapering Quantitative Easing (QE)--the Federal Reserve purchases Mortgage Backed Securities and Treasury bonds to lower interest rates. A pull back on QE causes withdrawals by the addicts...and likely, the withdrawals will take down the stock market.

Under a greed and power-inspired economy (Charles Ferguson's film "Inside Job" already provided proof of a revolving door between academia, Wall Street and the Federal Government, (http://chronicle.com/article/Larry-Summersthe/124790/) we start to see a psycho-sociological change take place in our environment. The rich spend to keep up the affluent lifestyle, remain within the revolving door and eventually get called back as a guest "expert" to comment on an economy that they totally screwed up. Some even marry top correspondents from major news networks!

They are. of course, optimistic that Quantitative Easing, housing investors and new accounting rules with lift middle-class spending and debt to bring the economy back and add much-needed jobs. Can I ask where the middle class is getting the money and/or debt to spend frivolously? The upper class will be able to spend money on items outside of the necessities. I'm not sure about anyone else.

The gulf between affluent and the middle-class widens to the point of demoralization within the poor and middle class. The gap makes the road to success miles longer. This month, the Federal Reserve of San Francisco reported economic recovery for four years and unemployment declining considerably, but wage growth continued to slow down.

A Pew Research Center report of Census Bureau data--released in April of this year--found that the mean net worth of households in the upper 7% of the wealth distribution rose by an estimated 28%, while the mean net worth of households in the lower 93% dropped by 4% from 2009 to 2011.

Rick Newman, chief business correspondent at U.S. News, wrote a story in March that said "financial assets are mostly held by the wealthy." Data from G. William Domhoff of the University of California at Santa Cruz showed the wealthiest 20% of households owned 95% of all financial assets.

In the United Kingdom, the Bank of England reported that "The benefits of loose monetary policy have not been shared equally across all individuals...By pushing up a range of asset prices, asset purchases have boosted the value of households’ financial wealth held outside pension funds, although holdings are heavily skewed with the top 5% of households holding 40% of these assets."

Don't even get me started on Europe because they're much worse off than the United States.

If you believe the Bureau of Labor Statistics (BLS) from June--and we will in this case--14.5% of the country has a part time job and is frustrated because they're looking for full time work. How much spending can you do with a part-time job? How much more debt will you take on?

Wages are not rising for a majority of the country, and the BLS does not take into account people who have left the workforce. The overall unemployment number is 7.6%. According to Gallup, it's 7.8% and underemployment is 17.2% for June.

The families who decide to stabilize and improve their credit will deleverage out of debt. They won't spend outside of priority items--food, clothing and shelter--and put their saved funds toward paying down debt. They might not be able to afford many more luxuries other than family necessities of smartphones and Internet access. That's only good for Verizon, ATT and other phone carriers. As consumer spending slows, so does economic growth.

We, the people, have already paid off the big-screen televisions and furniture from last decade's home purchases. Now, the majority of mothers and fathers need their jobs to support their families and pay those mortgages. And, the bosses know it. So, mothers and fathers are working harder for the same wages. Stress and demoralization likely increases in these households under this burden. That can't be a couple's relationship and it's not good for the children of this country.

Because, in addition to paying off student debt, future college graduates will have more money taken out of their paychecks to pay taxes on increasing U.S. debt. The money left will hopefully be enough for food, clothing and shelter, not to mention necessary car payments.

The future workforce will stop seeing U.S. growth ahead with perpetual QE ahead. That's what we're getting with a Larry Summers nomination. The future will just be in trying to survive. We'll see stagnation due to slower growth, less spending and future, higher unemployment levels. We're already seeing it. Look at Japan's "lost decade" following their housing crisis. Their answer was to save the Banks, face slow growth and enter into new recessions.

Without change for future growth, demoralization destroys the human spirit. Once a country that proposed "life, liberty and the pursuit of happiness" becomes a country that proposes "life as a debt-slave and the pursuit of survival." The true non-profits give out $50,000 grants for new ideas. The for-profit Investment Banks give out $1 million bonuses for the same old economic activity we've seen in the past 30 years. And, it keeps getting worse. This is the result of the Alan Greenspan/Ben Bernanke/Larry Summers economic theory of recovery.
 

So, how is it that Barack Obama feels more comfortable with Larry Summers? Clinton liked this guy, too. Why would a political Progressive still be a member of the Democrat party? Today's Democrats, with few exceptions, have no clue about new ideas and change for economic prosperity.

Here's a New Rule for Bill Maher--New Rule: the real Progressive Party will be known as the Common Sense Party but for political reasons, the acronym will be the Progressive Party--PP--because CSP looks too much like an acronym for the Communist Party. Not that PP is much better since the public will think of urine the first time they see it. It's either Communism or Urine. Either way, society will refuse a common sense party with this negative connotation. It's probably because they fear any change from the right-leaning Democrats and the contrarian yet morally crazed Republicans. A third party? That's like adding a third network to CBS and NBC during the 1960's. What next? A fourth network like Fox? A fourth party? How absurd! This country can only handle two political philosophies. Let's not make us have to think!

Barack Obama, the President who once ran on hope and change will decide the new Federal Reserve Chair. In this week's economic speech, the President said the rest of his term will be devoted to raising the working class. Politico reported that President Obama "spent a significant portion of the speech talking about how wages have grown for top earners but not the middle class, and rising stock prices don’t translate to widely shared prosperity."

If hope and change is synonymous to Larry Summers, then that guy's really changed his economic philosophy from the past 30 or more years. A little time off may have made him reflect on his poor choices and now he's decided to alienate his Wall Street cronies in favor of John Q. Public. Nah!

Perhaps Barack Obama's idea of hope and change is hope and change for himself. He does have hope because he's the President of the United States and his future looks awfully good. His life has certainly showed change for the good. So, maybe he was just talking about himself.

But, if we're talking about hope and change for all American people--Black, White, Hispanic, Asian, Muslim, Men, Women, Gays, Native Americans, Fat, Thin, Poor, Rich, Young and Old living in the USA--then Janet Yellen, former head of the Federal Reserve Bank of San Francisco, would be the logical candidate.

 

If the public has no need for common sense, then we'll sit back and watch the nomination of Larry Summers and think--as Kevin Bacon's character thought during the parade finale and its mayhem in the film Animal House--"all is fine." Any negative psycho-sociological behavior in the United States is just the result of a few "crazies"-- or, worse, "terrorists" -- who never should have been able to make a bomb or get hold of a gun.

Who are these culprits? Disaffected members of a society where the needs of the few outweigh the needs of the many. Where greed and political cronyism are blind to gender, race and the true USA spirit. As Martin Sheen said in Wall Street, "The rich have been doing it to the poor for thousands of years, only the poor didn't have unions." Well, neither does the United States. Look around. Anyone see Detroit lately? How are those unions doing?

At the end of his second term, Barack Obama may be able to sit back and say his legacy was that the economy never crashed on his watch. But he played not to lose rather than to win--something he never would do in a game of basketball. That same legacy would leave a wealth gap with a gulf the size of the Grand Canyon. Maybe Barack Obama can live with that, but it was something Martin Luther King, Jr. fought against to the point of self-sacrifice.

Legacy is about character and the remembrance of that character is an achievement in itself. Of course, in a world where people praised Richard Nixon at his death, anything is possible. The American people have such a short attention span, they probably forgot that Congress, under George W. Bush, created a three-page bill in a matter of days that became law to give $800 billion in cash to big banks--too big to fail. Some Republicans are still blaming that on Obama. In the meantime, Congress takes months on a gun control bill for background checks that can't pass the House.

If the American people are too young or stupid to recognize revisionist history, then we must question ourselves and our education system. If good character for a political leader means better character than Hitler, then we all must question ourselves and our moral judgment. If we don't have the common sense to appreciate great character from leaders like Mother Theresa helping the poor, Martin Luther King, Jr. sacrificing for equal rights and economic equality, Anwar Sadat for the courage to promote peace amongst belligerent nations and Abraham Lincoln freeing the slaves from bondage, then we must question our own integrity. Were these leaders perfect human beings? No. Were their principles in tact despite external dangers and obstacles along the way? Absolutely. That means they had great character and there is good that lies within the human condition.  

 

As for Larry Summers, his new powers will keep the cheap money flowing, kicking the proverbial economic can down into the future with a total disregard for the mass republic and the future of the United States of America--at least the people who are not making hundreds of thousands of dollars.

My goodness. Who does he think he is? God. Maybe. But you know what I think. He's really...oh, I forgot, I don't believe in how organized religion defines it. 

 

--Robert Michaels

Fed Changes Job Numbers

Here we go again.

I once remember that it took 250,000 jobs added per month to remain level for unemployment. Now, I'm reading it's 150,000 jobs per month to maintain employment stability. However, today's CNBC article states that the number of jobs needed to show job stability will become 80,000 per month. That's based on aging baby boomers--who are working much longer--and a decline in the population.

We can just forget about the fact that the demographic that the Millenials are as large a population since the Baby Boomers. We can also forget about immigration's effect on adding to the population.

Basically, it's another nice tool from that bottomless toolbox that our Federal Reserve and Treasury Department use to create the illusion that everything's fine. (Think Kevin Bacon at the end of "Animal House" before he gets flattened).

That's right. "Remain calm. All is well." Don't worry about the rise in unemployment from 7.5% to 7.6%. According to financial media, the numbers are not good, but they're not that bad either. No, they're that bad. Unemployment didn't go up because more people are looking for a job and there are fewer disgruntled workers out there. No. Much of it has to do with the budget sequester and more layoffs will be coming down the road because of the sequester. It's the austerity, stupid!

While we watch the game of chicken played out in tapering QE3 and the stock market--taper and the market falls, don't taper and the market rises, bad economic numbers and there's no taper and the market rises, good economic numbers and there might be tapering and the market falls--we need to realize the core economic truth. If there's high unemployment, nobody is spending and companies are not making any profit. If they're not making a profit, there's no need for more inventory, no need for more production and no need to hire more people. That, my friends, is a recession.

Now, why do these companies like Best Buy or any insolvent bank look like their quarterly books are slightly down, flat or even better than expected? Because they can still borrow money given to the banks at exorbitantly low interest rates and loaned at higher rates. That money goes into the company as revenue and it looks like they're surviving. Once things begin to spiral downward, the CEO takes his or her golden parachute along with any other C-level executives who can make the jump and leave the ship as it sinks far faster than the Titanic.

For banks, it's much easier. The accounting rules changed so that banks no longer need to mark-to-market their loans. That would make the banks insolvent. Instead, they mark-to-model--whatever their model might be. With mark-to-model accounting and the Fed pushing cheap money to the banks, it's changing the rules of the game to give an illusion of semi-prosperity.

Meanwhile, the banks are selling their distressed properties to institutional investors at prices reasonable to the banks. If they can't sell distressed, underwater properties, the banks keep them on their books and account for them through the new mark-to-model accounting rules.

The Fed continues to purchase mortgage-backed securities, keep mortgage rates artificially low and hope that the housing market heats up with low foreclosure inventory, high consumer demand and artificially inflated prices. The only problem is that credit remains tight, shadow inventory remains and rising mortgage rates have already stifled the refinance market. As investors shy away from the REO-to-Rental purchases, supply will continue to increase (particularly in judicial states that are delaying eventual foreclosures), consumer demand will soften because of high unemployment (despite artificially low numbers from the new 80,000 job rule the Fed is devising) and home values will eventually decline.

But it's all just one bubble to pop in a series of bubbles that include 15,000+ in an inflated Dow Jones Industrial Average and the bond bubble, which is bound to pop.

The bond market, already in decline, will eventually result in rising interest rates. As we've seen, rising interest rates just happen--and they rise quickly. The refinance market is already drying up with simply a 1% increase in a housing market with still historically low interest rates. The stock market deception will likely decline as the Fed tapers on QE3. The Fed will also start increasing those record low bank rates--0 to 25 bps--because of those artificially low unemployment numbers. At 6.5% unemployment--right, sure--the Fed said it will start to increase rates.

Whatever happens, the public will not know the truth unless the stock market crashes. Only, why would the Fed taper QE3, 4 or 5 if they know the stock market is going to crash? Will the public be aware of a bond market collapse? Does the public know that there is a bond market? Will the public focus on low unemployment even though friends and relatives are out of work?

Or, will we start to see stores like Best Buy with more people in the return lines than the buying lines? Will we start seeing some restaurants abandoned on a Friday and Saturday night and ask, 'How does this place stay open?' Will we begin to wonder why so many homes are up for rent or for sale? Will we question the amount of office space for lease in commercial properties? And, will we begin to ask why everyone in this civilized society can fail except financial institutions?

One of these days, Toto's going to rip open that curtain and we'll see some Fed chair standing behind it. At that point, we'll all need to use our brains, heart and courage to get through the aftermath.

A Global Bankruptcy

"The Illusion Becomes Reality"

-- Gordon Gekko, an investor from the film Wall Street, 1987

Let me start by referencing this article, an interview with Egon Von Greyerz. Von Greyerz is an investment advisor who's banking on gold and hyperinflation: http://bit.ly/117vtgL

I prescribe to the fact that this world is bankrupt and central banks are creating trillions of dollars to create an illusion that we're not in global bankruptcy. Note Gordon Gekko's quote above that the illusion becomes reality. Indeed it's true that we'll determine value even on a painting with one stroke of yellow paint and one stroke of brown paint on it. Wow! Get a few art critics to like it and it becomes valuable. So, we live in this illusion that our money has value to it because it buys food, gas and houses--all rising in price. And, of course, stocks--rising in costs even though consumer spending is flat. The illusion is based on the fact that the Federal Reserve can print trillions of dollars in currency. We don't see it, but the big banks, investment banks, recipients of investor cash and shareholders can see it in their shareholdings and bank accounts.

What do we see? A financial media pushing economic recovery, albeit a slow one. Blogs that are undermining the national media with a logical streetmap and directions toward economic reality.

A slow housing recovery with ridiculously low mortgage rates. They've risen to 4% and that's the end of the refinance wave. If they hit 6%--a record low 15 years ago--will anyone purchase a home? The illusion of the housing recovery lies in the fact that banks are holding onto foreclosed properties. Remember, banks on no longer have a mark-to-market accounting system. They're on a mark-to-(make up a) model accounting system. That means that trained accountants will make up what they think the value is at this time based on future value and whatever other creative methods they use. The bottom line is that home values are rising but only because investors are buying properties and causing low inventory in the housing market. There's no home construction, in fact it fell last month. There is low supply, higher demand with mortgage rates at 4% and increasing and it gives the banks reason for hope that the housing values will be come back on those valueless loans they still have.

However, banks are going to hold on to properties from investors and anyone else until the price is right. Investors plan to turn homes into rentals and wait for values to increase. The only problem is that some investors are already dropping out of the market. http://cbsn.ws/XXuFL3. The next question will be the time factor for those home prices to rise before they drop.

As mortgage rates increase and (investor) buying slows down, we'll likely see one bubble start to pop. Heidi Moore, editor of The Guardian explains it best in this article/video from Yahoo! Finance. http://yhoo.it/12pz4yh. It's not about negativity, positivity, doom or gloom. It's about what makes logical sense. If everyone won the lottery and was ready to spend like it's 2006, I'd disagree with Heidi Moore. But consumer spending fell in April for the first time in nearly a year. http://nyti.ms/17bJQJt Why are people going to spend thousands of dollars to buy a home? Because mortgage rates are at all time lows? Possibly--yes--for awhile--but how many homebuyers are there if no jobs are available?

We'll find out about May's unemployment numbers this Friday, June 7, but even the President said that the numbers can fluctuate. When people stop looking for work, the unemployment percentages go down. The unemployed are not counted but they're certainly not spending money either. Unemployment for April was at 7.5%, but the civilian labor force participation rate was 63.3 percent in April, down 0.3% from the prior month or relatively unchanged. It's a fact that 4.4 million people have not had work for six months or longer. How many of those people have stopped looking for work? With 835,000 discouraged workers not currently looking for work because they believe no jobs are available for them and the remaining 1.5 million persons marginally attached to the labor force in April who had not searched for work in the 4 weeks preceding the survey for reasons such as school attendance or family responsibilities, it means more than 2.3 million people are not included in the unemployment numbers. So, add 2.3 million to the unemployment numbers or people who aren't going to be spending alot of money on items other than necessities--gas, food, clothing and auto repairs. The U-6 number--people without work seeking full-time employment and 'marginally attached workers and those working part-time for economic reasons'--is at 13.9%, an increase from the previous month. Note that some of these part-time workers counted as employed by U-3 could be working as little as an hour a week. And the "marginally attached workers" include those who have gotten discouraged and stopped looking, but still want to work.

Tack on student loan payments and the number of people spending significant sums of their income becomes even fewer than before. And, those numbers also don't represent people hit by the budget sequester--some have been hit by layoffs, some lose money in furloughs and some agencies had Friday, May 24th off with no pay, including the Department of Housing and Urban Development, the Internal Revenue Service, the Environmental Protection Agency and the White House Office of Management and Budget. http://bit.ly/1324C8n Those are facts--not illusion. Should we really expect consumer spending to rise?     

And yet, the stock market is another phenomena. Quantitative Easing, three times now, has moved the market up to a record high 15,000+ on the Dow. When the Fed prints money or looks like they'll continue to print money and purchase bonds and treasuries, investors get excited and the stock market rises. It means Wall Street investors, bankers and publicly traded companies start to make money. The only problem is that the capital is an illusion and none of that illusion trickles down to the workers. Executives get most of this illusion and also have most of the stock options in the companies. The mid-to-low-level workers are just making ends meet, hoping to keep their jobs because no other jobs are available. They may even become victims to layoffs. Layoffs, by the way, don't necessarily translate into large severance packages for these workers.

It's a bit of irony that Japanese brand Panasonic will lay off 5,000 workers from its auto/industrial plants: http://reut.rs/19nIlqN. It was Japan that had a housing crisis and, like the U.S. years later, printed money to prevent an economic collapse. It led to a "lost decade" of economic growth. The U.S. is currently half-way there in its lost decade of economic growth. And, look at Japan today. Granted, they may be coming out of another of their many recessions, but their economy remains unstable--and it's the third largest economy after the U.S. and China. http://nyti.ms/11A6LFS. We're not Japan, granted, but we are going through a time of manipulated rules and interest rates to try and prop up the banking system only to see extraordinarily slow economic growth for five years, still relatively high unemployment and sluggish consumer spending.

But then there's Europe. Portugal, Ireland, Greece, Italy and Spain facing staggering unemployment figures are borrowering money, cutting budgets and still will likely face ongoing economic crises until they denounce the Euro. The Associated Press reported in the economically flailing newspaper, The Washington Post, that "the Organization for Economic Cooperation and Development said that protracted economic weakness in Europe 'could evolve into stagnation with negative implications for the global economy.'"

I would say the U.K., France and Germany will be three countries left standing, but even they face economic traumas. And yet, Fed Chair Ben Bernanke keeps printing the money and will likely continue because U.S. manufacturing showed weakness in May--a four-year low. http://reut.rs/19CnnVa. That's no illusion. That's reality. And yet, because of this statistic, the stock market goes up because it adds hope that the Fed will continue printing money and keep interest rates at all-time lows. That's a reality. That's Wall Street. That's investor mentality in today's world. And, they're the moneymakers--creators of debt--who cheer on recovery and attempt to spark the weak U.S. economic engine into a consumer spending blaze of glory. Good for them.

The only problem with the Fed's illusionary tools--manipulated accounting rules, printing money for investment bankers, low interest rates to push higher debt--is that they can't prop up unemployment, nor can they improve recent consumer spending and manufacturing numbers. Those numbers are the true engine to the U.S. economy. The tools are only good enough to sew together the Emperor's New Clothes and keep the lights on at J.C. Penney's. The question is--for how long?

We can only live in illusion for so long before somebody realizes there's just this old man behind a curtain trying to manipulate something awesome and powerful for the few wealthy and powerful people among us. In reality, there is no money of any value and someday that reality will come to fruition. Be assured, though, that when it does, the U.S. will truly show that it is a great country of people--the masses will band together in self-reliance--in spite of a Federal Government polarized by greed, selfishness and foolish politics. In spite of false hopes, an illusory sense of wealth and inherent bankruptcy, the U.S. will continue to survive.

Boston's Reality and Our News Marathon

Once again, the CNN, MSNBC, Fox ABC, CBS, NBC and a bunch of other news channels riveted us--at least me--last week with coverage of the manhunt for the Boston marathon bombers. I didn't like the sensationalizing of murderers who killed three and injured over a hundred at the Boston Marathon. I didn't like the sensationalizing of Newtown either after the killing of innocent children and adults. But one thing is true--I watched it intensely because these networks do it well. They, indeed keep us riveted to our seat. 

 

I watched it like I watch a movie or a special two-hour television show. We have over-the-top television coverage that makes everything a horrible and grotesque traffic accident that we can't help but look at. It's awful, it didn't happen to us but we just have to watch it.

 

Basically, Watertown, Mass. became an all-day reality show on Friday, with drama in the morning, a mystery during the day and a happy ending on prime time Friday night. The President was excellent in his role of the nation's leader who showed the world what happens if you try domestic terrorism in the United States during the 21st Century. You get alot of television coverage, but you also get caught and killed. In this case, the 19 year-old kid influenced by his older brother's delusional thinking will now have a life in prison. He's already been tried and convicted by a jury of his televisiion watchers.

 

We don't know the details yet of a 19-year old who committed evil and contributed to the murder of three young people and injuries to more than a hundred. The killer at Newtown killed himself. The Aurora, Colorado theater shooter is in trial and the Virginia Tech shooter who killed 32 killed himself. Here's one common theme about all of these killers. They're all mentally ill. But most mentally ill young people are not going to commit violent acts. Most mentally ill people who suffer from bipolar illness, depression, schizophrenia, generalized anxiety, paranoia and panic disorder do not kill other people. So, there's something more than just mental illness. There is evil that exists in this world. Clearly, when someone is directly responsible for another person's death, it's evil.

 

We currently combat mental illness through much-improving medication and therapy. How do we combat evil within individuals? Well, first, we live in a bankrupt world with a relatively few rich and powerful people telling everyone else how we're going to handle the crash of a global economy. How do you think these people will handle it? Probably by helping themselves first and worrying about anyone else later. Therefore, the rich get richer and the poor either get poorer or try to keep their head above water. When there's an economic upheaval and the rich keep getting richer, the future becomes bleak for the poor and middle-class. It makes people vulnerable to evil influences, like committing terrorist activities by well-funded groups--religious and political.

 

In Boston, two young Americanized young men may have been influenced by a well-funded Muslim group in jihad with the United States. Or, it could have been a statement of universal brotherhood, like the Weather Underground, a group of young people building bombs in their basements for political purposes back in the late 1960s and early 1970s. They were a violent counterculture. But, young people in a depressed economy with a dim future want to blame the establishment. They can't accept their lot-in-life that they won't be the over-achieving success that their family always thought they'd be. Instead, they're unsettled losers, as the uncle to the bombing brothers said last week.

 

But, all future unsettled "losers" shouldn't feel bad. The game's been rigged so it's difficult to say you'll be a huge success unless you know someone who likes you and wants you to be a huge success. If you don't know anyone in powerful political positions, you're outta luck. Even "unsettled losers" don't necessarily kill people. Do people without jobs feel stressed out, depressed, self-hatred? It's very possible. Are people without jobs scared for themselves and their family? I would think so. Can they count on their Congress to make the best decisions for them and their country? Not really--see gun control vote on background checks and a budget sequester.

 

So, mentally ill, suicidal young men decide they're going to kill themselves with the evil legacy of bringing others with them--see Virginia Tech and Newtown, Connecticut. Both incidents had about a week of news coverage from the site of the crime. We all remember it. Why decide on evil? 

 

A young, mentally ill man shoots up a movie theater of people in Aurora, Colorado, when he discovers life was not all it's cracked up to be. Another incident with a week of coverage and dubious fame he may never have had anyway. But why choose evil?

 

And two mentally ill young brothers, perhaps vulnerable and susceptible to a good payday, were accepted by a religious group's ideologies and maybe enough money to give them that paycheck. After all, money is always a big motivation for all of us...isn't it? But why choose evil?

 

Finally, 54 Senators are bullied by a large and powerful special interest group to vote against a watered down bill for background checks prior to buying a gun. Most of the people in the country agree to this legislation because of Virginia Tech, Newtown, Connecticut and Aurora, Colorado. The special interest group helps support reelection campaigns by giving money. Why choose evil? 

 

Maybe money is the root of all evils. And, maybe feelings of a bleak future, a meaningless existence or a fear of failure make humanity more inclined to sell their souls.

 

And maybe, it's not about guns, mental illness, domestic or foreign terrorists or 15-minutes of fame. Maybe it's simply a fight in this world against good and evil and, for that, we need to define good and evil. Murdering innocent people and injuring innocent people under the name of political and religious ideologies is evil. Justice, fairness and helping others in the pursuit of life, liberty and happiness is a good thing.

 

It's time to break out the moral compass here in the United States and watch a new reality show. We need to examine good and evil within our society. Just examine it. There's no need for action. And, in the end, justice can and should only be defined by the essence of brave and good natured people. Nature will determine justice. Throw the political and religious ideologies out the window. Forget about the money...it's mostly fake, printed, paper money anyway The world is bankrupt.

 

Ignore the pundits and the numerous opinions about why meaningless events happen each day and why the U.S. Congress is broken. This is simply a battle between good and evil.        

 

Choose good. Expose evil. And vote for the good people who vote with their heads and hearts--not with their wallets. 

Uptight, Scared and Attention Deficit Disorders

As I sat in my comfy chair watching what likely looked to be a great college basketball game Friday night, Kansas vs. Michigan, I thought about the country--a bankrupt result of greed and corruption. But, the world is, indeed, a grand illusion (pardon the Styx reference). Let me explain. Most people in this country suffer from at least one of three flaws but I'll generalize and say they define all of us:

1, We're all uptight. That's right ladies and gentlemen. We are probably the most uptight group of people on the face of the earth. As I watch the game early, referees at the beginning of a game huddle and talk about some foul because there's so much money on the line for this NCAA Basketball corporation. Obviously, the kids who simply graduate won't make enough money to send back to the college. But the athletes! The professional athletes will make enough money to send hundreds of thousands of dollars back to the college. The short and long-term prospects are tremendous! But what does that say about the nature of our educational system? Kids are under extreme pressure from parents to get the best grades possible to get to the best college, which is extraordinarily expensive, are going into the first corporation. The first company to "hire" a college student will provide an education, biased by poltical philosophies from professors that may or may not coincide with student values. And, are these professors able to subdue their egos to give college students their own individual viewpoints if backed up by reasonable argument? Or, is it for the students to answer questions the way professors want them answered? So, besides the fact that we're all a bunch of uptight white and black people--and brown people--we're also failing in our individualism. And, what does it say about our education system in the USA?. Which is why...

2. We're all stupid. If you believe what I saw last Friday night on The Nightly Business Report about "America's Economic Recovery," well...let's just say I saw more bull than a good ol' fashion cattle-call! It came from a stupid chief economist at Chase and one rich stupid ancient relic from the Federal Reserve who helped send us into bankruptcy. And I should be listening to these guys? The dumb guy at Chase--someone titled senior vice president because he was smooching his boss' behind--white or black, man or woman, brown or green or adrogynous--this man was smooching a grown man's behind for position, income and status inside a community! How disgusting! The Larry Tate of the 21st Century. Actually, Larry Tate (from Bewitched) kissed the client's behind. That's understandable. But to kiss behind of a boss one must question how insecure that boss must be to like getting their behind kissed. I mean, Darren never kissed Larry Tate's behind, right? But I digress. The Chase SVP/Chief Economist has the nerve to tell a sparse Nightly Business Report audience on Good Friday that consumers feel wealthy! Why? Because equity in our homes and in the stocks we own make us feel wealthy. Let's hear it for equity and false promises! I'm equity rich and cash poor, so I'm going to go out and buy a new luxury item that I don't really need...right? What a jerk! Anyone that believes and/or understands him is an idiot. And, sorry, I didn't really have the money to get an M.A. from Harvard so I can then kiss behind on Wall Street for the rest of my life. The Chase corporation, like the other Fab Five TBTF Banks, is an ice-cold corporate prison that contributed into sending the world into bankruptcy. Anyone who clearly doesn't see that is blind. The stupid live in their information-laden smartphones thinking they have a million friends who care about them or they're uptight, self-absorbed individuals who don't allow business to wait for another day We work longer and harder than before and yet pay stays the same. We think we have so many Facebook friends who want to hear what we have to say every moment of the day. People wish us all "Happy Birthday" online as if they've been friends with us forever. Meantime, it's a complete diversion from a real life taking place with family and real friends who support you in bad times and share the good times. There's really nothing productive about Facebook. Twitter, maybe, if you can come up with some good quips and someone's reading. The scared lose themselves in watching television--the illusion within a grand illusion. The TV lies (i.e. the guy from Chase and the relic from the Fed on the Nightly Business Report). Once, Nightly Business Report was a boring show that few ever watched. It came from a trusted source of business information--a white, old aristocrat who was boring. But Wall Street's no longer boring and neither is Nightly Business Report. CNBC now produces Nightly Business Report, so whatever NBC Universal wants us to think about business, we'll see it on CNBC and on Nightly Business Report. The stock market is building a paper money monopoly of successful corporations in the short-term while playing a waiting game with Europe. Central banks in Europe, the U.K. and the USA are handing out newly made paper money to anyone who'll take it. But, how long can paper printing--money only seen on a computer screen--substitute for cold-hard cash in a consumer's pocket? Does anybody in this country think about it this way or are they saying the economy is in recovery because the stock market is high, more equity is in our homes and "experts" are telling us that we're in recovery. If we really were in recovery, wouldn't company CEOs with millions of dollars in their future golden parachutes give the word to start hiring workers because everyone's spending? As a CEO, I would say, "My gosh, so many people are spending and feeling wealthy now that I'm confident they'll continue to buy our products. We need more people to help us with this business because we have so much work to do because they're paying us so much money. And they're not shareholders either! They real consumers!" How many CEOs and company presidents are saying that today? Or, are they saying, "We're busy, we're making money and we can't afford any more people because we don't see this thing continuing." Or, are they saying, "I'll answer this Business Confidence Survey in a positive way--to add confidence for the country--but I'm not hiring anyone because this thing just ain't workin'." Does anyone really think in terms of decision-maker actions or do we believe what we hear them say on TV, radio and newspapers? Do we simply accept unemployment below 8% (14.5% for part-timers who'd like to be full time) because that's the number given in a complex survey by the Bureau of Labor Statistics with an illogical methodology? Then, are we supposed to rely on corporate-owned chief economists paid to present the best picture for consumers and small-business audiences? We're really not watching or listening to the truth. We're working hard at our jobs, getting our kids to school to study and hope no harm comes to them so that someday they, too, can be prosperous. We hope our children will have a good college education, perhaps move on to graduate or work their way up to buying a home and having a family. That's the American Dream, and it's up to the current generation to not forsake that Dream for the children of today. But, wars that cost $6 trillion, bank bailouts, CEO and investor privileges and a false confidence for consumers is causing that Dream to fade. We are seeing a New Normal in favor of the American Dream. And, while this transition takes place, the American Dreamers are trying to find things they enjoy in their lives for escape. They escape to political discourse, as if we have any power in this discussion. We watch sports, movies, television for entertainment and read for either enjoyment or to gain insight into other people's lives. Some of us try to educate ourselves by paying attention to free thinkers without agendas. Some of us play golf, write on social media pages and try to find meaning and happiness in life rather than enjoying the life itself for enjoyment's sake. And, even if it's clear as day and we all know we're in a bankrupt world of computer/paper money illusion, loaded debt and a future world without a material American Dream, we'll accept it. The material world for all of us is evaporating and replaced by the American Dream of material wealth for only a select few. For the working middle class, the American Dream is simply life itself with hopes of winning a Powerball lottery to get rich, of keeping a job to pay for the house, the family and the health-care costs. At the same time, however, we're losing our integrity. The middle-class workers of this world will not and should not speak up for their slice of American materialism. Why? Because...

3. We're scared.  Wouldn't you be? Imagine you're not an executive with a major bank or investor who spouts comments on television that don't make sense. Rather, you have a job that may or may not be there in the future and your wife is in the same boat. That's if you do have a wife. If you're divorced, you probably pay alimony and/or child support, so you're already in financial straits.  People who actually think for themselves are so cautious that they don't need a frggin' loan, Mr. Corporate Banker. They need lower food prices, they need more employment opportunities, more income and more cash on hand to pay for food, gas, clothing and necessary supplies. They need these multi-million dollar politicians pretending to be CEOs to let it trickle down. The current trickle-down effect is a CEO depriving the working class--the ones scared of losing their jobs and working extra hard by doing the job of two or more people without benefit. Nobody needs a loan for anything but an education in this country...and maybe a car...and, of course, a mortgage for a home. Thank goodness we have investors with fake, paper money out there able to give their fake, paper money to the banks so the banks can get underwater houses off their books at a more mild loss and investors can rent the house out until it increases in value. Investors can then sell it for more and keep the difference. Great investment for them. No investment for the working middle class. Oh, by the way, I wouldn't be surprised if the banks and investors created a contract that provided banks with a percentage of monthly payments to make the banks even. It's great! Let's get these stupid middle or lower class consumers out of the real housing market. They still have to buy the more expensive homes that might appreciate a little more in the next 7 to 10 years. But the real money will be made by investors--and possibly the big banks--buying homes low, renting for awhile, and selling them high. The investors need homes not only to make money but because they didn't do their due diligence and were ripped off by banks and Wall Street when they were selling subprime securities. But, since CEOs at investment companies are also the extreme wealthy and affluent, we need to put these "Humpty Dumpty's" back together again. Filthy rich CEOs and Corporate/Wall Street cannot fail in America. Only middle-class and lower-class men and women who lose their jobs can fail. And when there's talk of a bailout to the unemployed, Republicans call it welfare. And then, Congress cuts spending with a budget sequester, it delays and forgets about the hundreds killed in mass shootings due to one financially powerful gun lobby. And, non-income producing jobs like policemen, firemen and teachers are cut in order to preserve Wall Street wealth for investors and large, out-of-control banks tied to investment firms like Merrill Lynch and Morgan Stanley. Members of Congress, always concerned about reelection, need that special-interest money so they, too, are scared of losing their jobs. They'd rather cater to special interest, the needs of the few and vocal rather than the country as a whole. If anyone tries to "fight City Hall," they are pariahs--personas non-gratis--and thrown under a bus at first chance with a one-way ticket to failure. Oh, and rich people thrown under a bus might fail, too. But probably not because they're rich and they can pay their way out of anything. They're still in the "rich" club. Other rich people might look down on a CEO thrown under a bus. But the CEO can write a book, make television appearances and become a financial "expert" again. He or she can be a top lobbyist for financial interest groups in Washington, D.C. Or, if they can't find their way into the media, they'll be able to teach at one of our country's top colleges. They'll make money there, demand a large six-figure income that the college will accept so that everyone can say the former Federal Reserve Chairman (or some former Treasury Department Assistant Secretary or former Wall Street CEO) teaches at their school. And then, for that distinction, the school endowments can rise, more students will try to get into the school. If costs are higher to enter the very competitive school, there are student loans to get kids that education from a former Federal Reserve Chairman (or some former Treasury Assistant Secretary who helped Congress pass the Troubled Asset Relief Protection (TARP) bailout for banks). He'll explain the reasons why the TARP bailout was crucial to saving the U.S. economy. Will that person say that TARP was a bank bailout to save very large corporate bankers from failure? Will there be a philosophical discussion about failure in corporate America? Perhaps, there might be a classroom discussion on why some businesses can fail and others cannot. Is there a new definition of success if the government determines the successful companies from the failed ones? But if you're going into politics, pick a side because there's no gray--it's Democrat or Republican. The parties no longer have room for moderates to speak for the country as a whole--only for special interests and a small, vocal, wealthy few. For those outside of politics, with business degrees, they will reside in the world of corporate politics and accept the rules of the C-suite and executive lunches without questioning policy. For the future middle class just trying to earn a decent living, they can only speak their mind at home about the rights and wrongs of politics and corporate America. And then, they'll escape because student loans need to be paid back, families need health care, bills and the mortgage need their monthly payments. And, of course, food, clothing, gas and the necessary essentials. Yes, at one time about six years ago, we were able to buy the big-screen TVs, take the nice vacations, make the luxurious home improvements and still have money for essentials. We were on borrowed time and borrowed money-- from home equity loans and a false wealth effect in an overbloated stock market to job security and personal demand from employers. We were entertained with home improvements, wide screen TVs and political and business leaders saying that the good times will never end. Now, we think the good times are coming back and almost real again. That's just one reason we're stupid. But, the scared have a higher priority. They have a family, children, kids that need a college education at the highest cost EVER for colleges because college is a business and they only care about the bottom line, too. College--a business? Shouldn't that be illegal? Education as a business. Learning is a business? That's stupid. But, what's worse, is that student lending volume is nearly $1 trillion and more than 30 percent of those loans are in default. But, today, learning is a business and now, towards the end of the game, five referees have interrupted the momentum to spend 20 minutes figuring out the exact seconds on the time clock. With this much money on the line, it makes us uptight, stupid and scared of making mistakes. Well, don't worry. We need March Madness to take away from the other madness in our lives. The country is in debt and households are having money issues. How much is the average American family in debt? We need to divert attention from this stressful scene. A stressful household stresses out children. Stressed out children don't concentrate as well. Sometimes, they act out in class. Then, parents are too busy because they need their jobs because they're in debt because their mortgage is expensive and they can't buy a cheap house because investors are buying them up or banks are holding onto them because big banks can't fail--only the "mildly" wealthy can fail because they're not getting paper money from the Federal Government and they're not getting millions of dollars to take away on a golden parachute. So, when their kids are stressed out or acting out in class, we call it ADHD and start putting underage kids on drugs--psychiatric drugs. If the families had hundreds of thousands of dollars, they can survive on that and maybe even take the time to concentrate on home life. But how many people make hundreds of thousands of dollars without ambition to move up in the rankings at all costs? How can we trust the judgement of these ambitious people? Who's really calling the shots on our deposits and investments when paper money is thrown around in an artificial stock market? The country looks like this description and yet we're at record highs? Are you kidding me? I mean, when the housing market was red hot and the Dow was at record highs, at least people were temporarily, literally wealthy and everyone was spending--yes, there was artificial prosperity. As I explained, we were buying and confident in our employment. But now? There's prosperity only for the minority group of people making, maybe, $250,000 or more. They're the same people who generate money for a company and corporation. It's very important to be either a money generator or a problem solver in a company--sometimes both because they can't afford both. Most people, artificially or superficially, have either no job, a part-time job, a job paying under $100,000, a job and thousands of dollars in student debt, a good paying job with a husband or wife who have a two-child family (more or less) with a mortgage payment, perhaps one car payment, electricity bills, cell phone bills, TV and Internet bills, taxes, clothing, food bills going up, gas costs up. The man and woman get healthcare for their children through work. They get their salaries funneled into a 401K with all that retirement "wealth." Along with that home equity "wealth." Yeah, when you're a baby-boomer, that money becomes very real. And that paper money will be there for those baby boomers. Forget about the rest of us. But those boomers need to keep their jobs no matter what because without that job, without the healthcare, without the fixed income of Monopoly money every two weeks that declines in value, it's scary to think about being out in the street, with no paper money, no healthcare, no roof for your child or children and the lowest quality of life you've ever experienced. Yes, that's scary and nobody wants to go near that. So, we sit quietly, keep it all in, watch the rich get richer and poor get poorer. And we do nothing. If we don't think about it, maybe we don't get  depressed. We keep positive so our kids only protest a little in our bankrupt nation. Notice how they protest more in European nations? Notice how they bailout every European loser country with paper money and the money isn't going anywhere in productivity? Why? Because European banks can't fail either. Just like Japan's banks couldn't fail. And yet, they're all bankrupt and scared that they'll lose their high-paying jobs and people will see the reality of global bankruptcy. It's not just the poor who can be scared, or the middle class in fear of being poor. Even the rich are scared that they'll be poor. Nobody wants to be poor and if they have to lie, cheat and steal to not be poor--even break the rules to maintain their positions--under the guise that the rich will help the poor, well, why shouldn't we believe them? It's almost like believing that our Facebook friends will take us in if we lose our homes and they'll give us a car if ours break down. No, only family will do that and maybe not even then. And, if you're that close to moving back in with your family? Under their rules? Yeah, you're scared.

The problem is that if the people working in this country are scared, or stupid, or uptight, or all of the above, then we don't see a grand illusion, we don't speak about the grand illusion and we don't want to hear about the grand illusion. But you can read, so read this: We are in global bankruptcy--right now--and the Wizard of Oz hides behind the curtain with his or her numbers, statistics, wordplay and white papers giving an illusion of educated, heartfelt courage and confidence. In fact, there's even an economic recovery. The business programs support it, the politicians support it, the investors support it and the banks, of course, support the illusion. The numbers support it in a record high stock market. And, we're in no place to question that illusion. But I am. So, ignore this and put your head in the sand--if you want to put your head in the sand. If not, look at this world for what it is...look at the cold, hard truth beyond entertainment and false television commentary. Look around at you and your neighbor to determine the country's economic scenario. And ask about how much of the things we have as a country, state and municipality are paid in full.

Why are we uptight? Why are we stupid? Why are we scared? Have we always been that way? No. We were young. Now, we're adults and connected to the global economy because we hope that our children will have a good education and grow to be happy in a prosperous world. In a Peter Pan world, we ignore debt. Rather, we applaud the illusion.

But economics--the global economy--is a real world event. We need to wonder why China is trying to hack Google, banks or financial institutions if not for military secrets. Are we in an economic war and is the world actually bankrupt? Has the U.S. been for sale? Are there any buyers? Is the West buying and the East selling? Or, is the Federal Reserve and European Central Bank buying? Of course, they're making up this money--more of the illusion--by printing it. Well, when I buy something, it's with the money I earn. I don't make money that I didn't earn. That just makes it paper money without any value. The West--U.S. and Europe--have little value in their currency. Some might say no value. But the East is selling, maybe selling their money (also known as lending) for interest. What's their currency looking like? Probably alot like U.S. currency since they get all of our money from the products we purchase. We send jobs to other places like India, Thailand, etc. so that fewer people here can work. We get our products from the East and buy with U.S. money of little value back there.

So, their money has no value, our money has no value and yet, we believe it does, therefore it is. What happens when we no longer believe anymore in the dollar's value? What then? What will motivate humanity to work if not for the almighty valuable dollar? Will man and woman see the realities for himself and herself? Will the illusion shatter when we wake up to the truth that shows us we were living in a 30-year American Dream? The good news is that the American Dream is not over. It's only changing and we'll make it into a new dream. I mean, as a people--can we ever give up illusion? It's a part of American Civilization--World Civilization--and it won't end until creation ends.

Now, seeing a Michigan comeback against Kansas and an easy win against Florida on Sunday, it's also refreshing to know that humans do compete and create magnificent achievements for themselves and for the love of the game itself. The students don't get paid for the win, they don't get promoted for the win and yet, the University of Michigan and the students--not far from the dilapidated, economic hazard called Detroit--earned dignity. The team cameback on Friday night and played at their best on Sunday so that they, the students and the school can call themselves the best in college basketball. And, perhaps, at the end of this tournament, Michigan will be able to say that. We'll see.

We can also learn--as all but one team in the NCAA Tournament learns--even playing at our best doesn't always means success. The pressure of March Madness can make players uptight, scared of losing and sometimes they make stupid plays. But thank goodness for the game's uptight officials for a fair game and making sure the game is played without changing the rules in the middle. They may have taken too much time to review the clock but they had good intentions. They were doing their jobs given the resources they were provided. They made sure Friday night--and in every game--that the games are won and lost in a fair manner. They don't make the rules, they don't make as much money as the coaches and they probably don't make as much money as NCAA executives, but they do enforce the rules to make it a fair game.

Can multinational banks and investment firms and lawmakers say the same thing?

Twinkies vs. Unions: A Struggle for Survival

There was a discussion between the union leader for Hostess workers and Greg Rayburn, CEO of Hostess, right before Rayburn and nine other executives received raises prior to bankruptcy. See "Hostess Twinkies CEO tripled salary to $2.5m while preparing to file bankruptcy." 

 

Here's a transcript of that private discussion between the Union Leader and Greg Rayburn:

 

Union Leader: "There came into Egypt a Pharaoh who did not know."
Greg RaybuNorn: I beg your pardon, is that a proverb?
Union Leader: No, a prophecy. The rich have been doing it to the poor since the beginning of time. The only difference between the Pyramids and the Empire State Building is the Egyptians didn't allow unions. I know what this guy is all about, greed. He don't give a damn about Hostess or the unions. He's in and out for the buck and he don't take prisoners.

 

Actually, that's dialogue from the 1987 film Wall Street, when Carl Fox, played by Martin Sheen, hears Gordon Gekko's plan for Bluestar airlines. In this case, life imitates art. The Hostess Twinkie and Ho-Ho hostage situation is just that--holding these sugar-filled treats hostage from kids and overweight adults who don't need them in the first place.

 

Still, the Twinkie and Ho-Ho are not dead. When another company purchases Hostess and moves the assembly line and recipes overseas for the benefit of cheap labor and more profit, then we will once again see the Twinkie and Ho-Ho. Even if these jobs are not sent overseas, we'll still see the Twinkie and Ho-Ho again with even greater popularity from the current events taking place. The true death we are seeing is in the ongoing decimation of unions.

 

I'm not going to sit here and say unions are right or wrong. But when you have a choice of being overworked and underpaid in poor working conditions and having your job sent overseas--well, I guess it's good to be overworked and underpaid.

 

The NFL Players Union had to disband in favor of bringing their case to court. Perhaps we'll see unions replaced with class-action lawsuits. For teachers, well, you can't send those jobs overseas--at least not yet.  But when jobs are scarce and unions go on strike, executives can give themselves raises before filing bankruptcy. Then, as more jobs go overseas, the union goes down with the workers.

 

If the union does go by way of the Arabian Sea to India or China, then what's left for the overworked and underpaid worker trying to hang on to a job in a malfunctioning economy? To me, any lawsuit against an employer is at risk of losing a job and, therefore, a house and mortgage that turns delinquent. Hiring a lawyer--for a limited time--to go up against the corporate attorneys who will outlast the hopeless employee is a losing proposition for said employee.

 

With the demise of unions--as we have seen in this Hostess debacle--the only way the President can build up the middle class in this country is to enforce extremely rigorous taxes on companies that send jobs overseas for cheap labor and create significant incentives for companies that keep jobs in this country. It's all about greed and it needs to be profitable to run a company in the U.S. Otherwise, the unempowered, union-less worker will have fewer and fewer alternatives. Wages will only remain low unless there are enough jobs for competitive salaries. The middle-class will be pinned against a wall of mortgage, student loan and credit card debt without higher wages. And, the economy will continue a slow recession-like recovery.

 

At this point, the jobs need to be here in the U.S., not overseas, if we want a true recovery in housing, the economy and overall productivity in this country. Here's another way that Washington can make a difference and keep this country from going over a "fiscal cliff." But, will Washington recognize this angle for driving in revenue? Let's wait and see....