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Papering Over Disaster

Written by Subject: Economy - Economics USA
Papering Over Disaster

by Stephen Lendman

Fall 2007 began the onset of America's greatest Depression. Europe's in deep trouble. Reckoning day's delayed by bailing out insolvent banks and throwing money at markets like confetti.

What can't go on forever, won't. Progressive Radio News Hour guest Bob Chapman warned investors for years. It's just a matter of time. Houses built on sand collapse. American and European economies are no exception. They're sick and getting sicker.

Another Greek crisis approaches, Chapman warns, whether "via austerity, demonstrations, military coup," or perhaps the worst of all three if public rage erupts in violence.

Ireland, Portugal, Belgium, Spain and italy are next. BRIC giants China, India and Brazil are weakening. Pyrrhic victories conceal core meltdown trouble. Are policy makers "dumb enough to believe that austerity, lower wages and higher taxes bring prosperity?" What's happening in Europe and America looks "surreal." Recovery's an illusion.

Another dirty secret is that France, Britain, and other EU countries also show weakness. "These problems are going to go on and on and on," says Chapman.

Economist David Rosenberg also warns of trouble. Disturbing signs are everywhere. In America alone, consumer spending stagnated. Core capex shipments are down. The trade deficit's widening. Mortgage applications are falling. Mortgage refinancing activity collapsed. Gas prices are heading for $4 a gallon on their way perhaps to 5.

In February, hiring announcements were down 85% year-over-year. Pink slips are rising. JOLTS (Job Openings and Labor Turnover Survey) data showed job openings down 81,000 in January. They've posted declines in three of the past four months. JOLTS hiring numbers also fell 30,000, and dropped in three of the past four months.

Savers are taxed, borrowers rewarded. A rigged system favoring Wall Street punishes most others.

The latest housing numbers are awful. Economist Robert Shiller believes "we will never in our lifetime see a rebound in" suburban home prices. He predicts "perpetual sluggish(ness)." Expect America to have a "Japan-like slump that will go on for years and years."

Rosenberg says "headwinds are so acute that despite" zero interest rate policy for over three years, "trippling the Fed's balance sheet, and four years of trillion-dollar-plus fiscal deficits," a deepening mess remains. Inflation's far higher than official figures. Poverty's at record levels.

Recovery? What recovery! America's 1% never had it so good. Another 10% or so are OK. Most others face harder than ever hard times with no end of misery in sight. Expect no change post-November, no matter who's elected president or controls Congress. Washington's criminal class is bipartisan.

Economist Paul Craig Roberts calls America's economy "dead." Consumer confidence is far below decade ago levels. Housing's on its back. Retail sales are lower than January 2000. So is industrial production. Only markets and rigged GDP numbers are up.

Roberts stresses often that recovery's impossible because troubled consumers account for over two-thirds of the economy. Middle class jobs moved offshore. Trillions are thrown at Wall Street and wasted on imperial wars while domestic needs go begging.

"The consequence of printing money when jobs have been moved offshore is an inflationary depression. This catastrophe" should unfold big time this year or next. "The emperor has no clothes, and sooner or later this will be recognized."

Roberts shares his views with listeners on the Progressive Radio News Hour (PRNH). So does political economist Jack Rasmus. His analysis is cutting-edge. In early April, his newest book's due out titled, "Obama's Economy: Recovery for the Few."

It covers analysis he gives PRNH listeners. He's next scheduled on Saturday, March 31 at noon US Central time. Listen live or archived for his latest economic views and discussion of his new book.

It explains that after trillions thrown at Wall Street, trillions more for imperial wars, and more still in fiscal stimulus (largely for corporations and rich elites), America's economy remains mired in trouble.

At the same time, equity markets more than doubled. Corporate profits hit record highs. CEO pay, bonuses, and stock options are obscenely high, especially for crooked banksters.

At the same time, corporate giants hoard cash and barely loan. Nearly 25 million are unemployed or underemployed. Economist David Rosenberg believes 30 million heading higher.

Home foreclosures exceed 12 million. Many more are coming. Another 15 million homeowners struggle underwater with negative equity. Income levels for 80% of households are stagnating, while state and local governments slash payrolls by hundreds of thousands, cut services, and raise taxes.

Rasmus faults wrongheaded administration, congressional, and Fed policies. Economic growth is illusory. High unemployment and poverty levels explain best.

Rasmus' book followed his 2010 one titled, "Epic Recession: Prelude to Global Depression." Both used reliable data excluded from mainstream discussion. It's bad and getting worse. Expect harder than ever hard times.

Rasmus offers another way. He calls it an "Alternative Program for Economic Recovery." It focuses on job creation, not destruction, housing, and local government. He recommends major structural economic reforms, targeting taxes, retirement, and banking.

He concludes with common sense workable proposals for "fundamental, longer term change necessary to reduce household, small business, and State-Local government debt, and to restore historic rates of income growth for working and middle class households."

Read what others say about his book. Office and Professional Employees Union National President Nancy Wohlforth said it's high time "to seriously begin public discussion and debate of economic alternatives" he proposes. They're cutting edge and vital.

South Carolina AFL-CIO President Donna DeWitt offered praise, saying Rasmus "connects the dots and gives new meaning to common sense economics."

"While working people reel in the downward spiraling economy, (he) analyzes how we got where we are and makes recommendations for sustained economic growth and recovery."

"It's the kind of reading that makes every leader stop and say 'Wow! That makes perfect sense. Why didn't I think of that?' Then ask yourself, 'Why wouldn't our President think of that?' "

"When you've read the book, I'm confident that you will conclude that Rasmus has done a brilliant job of defining the impact of the Obama policies and decisions" that continue crisis conditions without letup.

This writer agrees with others. Rasmus' articles and books are cutting edge. His analysis is some of the best. For years, his predictions proved accurate. Get them monthly on the Progressive Radio News Hour.

His new book offers must read detailed analysis, especially with storm clouds approaching at a time forced austerity's harming growing millions.

It hardly matters whether Republicans or Democrats control Washington. Its criminal class is bipartisan. Public outrage alone can change things. It starts by getting and staying informed.

On America's economy, Rasmus is one of the best. He's honest, accurate, thorough, common sense, and clear. For many, his new book may be a wake-up call.

Read it and spread the word. Our only chance for change is us.

Stephen Lendman lives in Chicago and can be reached at

Also visit his blog site at and listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network Thursdays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.

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