Monday, April 11, 2005

Ominous Signs on The Economic Home Front

“The economy has been in recovery since late 2001 and has been creating jobs since the fall of 2003. But despite the upward trend for jobs, the hourly wages of most workers (the 80% of workers who are in manufacturing or non-managerial services) have failed to keep up with inflation over the last two years. In the first quarter of 2005, real (i.e., inflation-adjusted) wages were 0.2% below those of the same quarter a year earlier. Real wages have fallen 0.3% over the last two years after rising by 2.0% over the prior two years starting in early 2001.” Job Watch Bulletin 04-01-05 Economic Policy Institute Washington D.C.

As the corporate mind control apparatus keeps Joe and Jane Sixpack distracted and occupied with Terri Shaivo and her family’s in-fighting, the Michael Jackson trial, sports of all sorts and the death of the Pope, lost in the sauce is any real discussion about the day to day reality of working class folks in AmeriKKKa. This is not coincidental; it is the way the plutocrats and oligarchy want it to be. As Catherine Austin Fitts told me once, “the people who run the government view the citizenry as mushrooms, to be kept in the dark and feed horse manure.” Rarely do you see anything in the major newspapers or network television about how bad the economy really is. Looking at the newspapers and television you would never know job growth in the private sector was so anemic; the worst growth performance since the US Department of Labor began keeping statistics in 1939 following the great depression. Corporate profits are way up, corporate executive compensation is off the hook but for the little guy, things are not so good. The “jobless recovery” continues. In March of 2005 110,000 new jobs were created. That’s the good news. The bad news is 150,000 new jobs needed to be created in March just to keep pace with the potential work force. That means there were 40,000 people in March alone that could not be employed because there were no jobs. This pattern has been consistent since George W Bush was enthroned as President. Not only aren’t there more new jobs, in many instances the jobs that exist aren’t paying wages that keep abreast of the rising inflation rate. An article on the World Socialist Web site (definitely not a cheerleader for monopoly capitalist globalism) dated April 5, 2005 revealed, “The 2.6 percent increase in wages is less than the 3 percent increase in consumer prices over the past year, meaning that for most workers, real wages are declining. In recent months, US consumers have been particularly hard hit by a sharp rise in gasoline prices. Crude oil was trading at over $58 a barrel over the weekend, before falling slightly on Monday. Gasoline prices in many states are soaring above $2 a gallon, with a continued rise expected over the summer as demand increases. One investment firm has predicted that crude oil prices could soar to over $100 a barrel over the next several years. The prices of other critical consumer goods and services have increased sharply over the past year as well, including medical costs (up 4.3 percent) and dairy products (up 5.6 percent). Declining real wages have been translated into depressed consumer spending and slack consumer confidence. The University of Michigan’s monthly measure of consumer confidence, also released April 1, declined from 94.1 to 92.6.” (www.wsws.org) Wages are stagnant and declining. So even if you are working, your paycheck is being stretched and strained to meet the increasing costs of living.
Just because you have a job now doesn’t mean you will have a job tomorrow. Two auto giants, General Motors and Ford are predicting more losses and will have to lay off workers or demand concessions from workers and perhaps bail outs from the government in order to remain in business. The article also noted, “The worsening economic situation will be leveraged by the auto companies to extract new and sweeping concessions from workers in the form of cuts in wages and benefits. The third auto giant, Daimler-Chrysler, has already secured an agreement from the United Auto Workers union to force workers to pay health premiums, a concession that will likely be extended to Ford and GM as well. The service industry in Michigan is also suffering, including at Michigan-based Kmart, which recently agreed to buy out Sears. Kmart will close its corporate headquarters in Michigan, resulting in the loss of thousands of jobs in the state.” (ibid) To make matters worse GM and Ford’s bond rating have slipped to crisis levels due to ongoing losses and their projected 2005 losses which do not bode well for their investors or the long term survival of either company. If GM or Ford crashes (which is unlikely because the government, which is broke itself, will intervene to save them like it did for Chrysler in 1979) it will send a massive tidal wave through the economy swamping the working class in a tsunami of debt and employment chaos. The April 5 online version of Bloomberg reported, “General Motors Corp.'s debt ratings were cut one notch to Baa3, the lowest investment grade, by Moody's Investors Service. The rating company also said it was reviewing Ford Motor Co.'s debt for a possible downgrade. Moody's said the cut at GM stems from ‘an uncompetitive fixed-cost structure’ and ‘steadily declining market share.’ Moody's began reviewing GM's ratings on March 16, when the automaker forecast its biggest quarterly loss since 1992. The review of Ford's ratings was prompted by ‘increasing risk.’ Ford may not meet a 2006 target of $7 billion in pretax profits. Moody's rates Ford debt at Baa1, three levels above non- investment grade. GM and Ford, the two biggest U.S. automakers, have lost market share to Toyota Motor Corp. and other competitors. GM's market share declined to 25.7 percent in the first quarter from 27 percent a year ago while Ford declined to 19.5 percent during the period from 20.4 percent a year ago.” (www.Bloomberg.com ) Bet you didn’t see that on the 6 O’clock news! Couple this news with the escalating personal debt most AmeriKKKan families face, the spiraling federal and US trade deficits, the trillions of tax dollars missing from the Department of Defense, HUD and Iraq, the problems at Fannie Mae and Freddie Mac, the deficit at the Pension Benefit Guarantee Corp, the new bankruptcy laws that were sponsored and written by the credit card companies and Bush’s plan to privatize Social Security, the future is one of debt serfdom and wage peonage. I hate to be the barer of ill tidings but it is much better to be informed a tidal wave is coming than get caught totally unprepared.

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