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No Economy ForAmericans by PAULCRAIG ROBERTS | INFOWARS.COM | SEPTEMBER 8, 2014 The job picture of “the world’s only superpower,” is the picture of employment in a Third World country. The Dow Jones stock average closed Friday at 17,137, despite the fact that the payroll jobs report was a measly 125,000 new jobs forAugust, an insufficient amount to keep up with the growth in the working age population. The low 125,000 jobs figure is also inconsistent with the Bureau of EconomicAnalysis’second estimate of second quarter 2014 US GDP growth of 4.2 percent–a figure beyond the capability of the present-day US economy. Clearly, the economic numbers are out of sync with one another. They are also out of sync with reality. One of the reasons the stock market average is high is the massive liquidity the Federal Reserve has pumped into the banking system since 2008. Instead of going into consumer inflation, the money went into stock and bond price inflation. Another reason for the artificial high stock market is the multi-trillion dollar buy-back of their own stock by US corporations. Many of these corporations have even borrowed from the banks in order to drive up their share prices with heavy purchases, thus maximizing executive bonuses and the values of stock options for board members. In effect, they are looting their own firms by loading the companies with debt in order to drive up executive and board incomes. The stock market’s rise is not because consumer incomes and real retail sales are growing. Real family median incomes have been falling, and real retail sales, at best, are flat. Let’s look at the composition of the pathetic 125,000 new jobs, and then we will examine whether these jobs are real or make-believe. (Keep in mind that payroll jobs include part-time jobs and that the number of payroll jobs is not the number of people employed, because manyAmericans make ends meet by working two and even three jobs.) As I have reported for many years, the US economy no longer is capable of creating goods producing jobs. The Bureau of Labor Statistics August payroll jobs report shows zero manufacturing jobs. I read the other day that the US now has four or five times more people on food stamps than in manufacturing jobs. The jobs of the New Economy are in lowly paid, nontradable domestic services–the jobs that characterize a Third World Economy. Perhaps reflecting the collapse of retail sales, retail trade lost 8,400 jobs inAugust. “Professional and business services” accounted for 47,000 or 38% ofAugust’s new jobs. Of these 47,000 new jobs, 49% consisted of “administrative and waste services,” largely temporary help services. “Health care and social assistance” accounted for 42,700 or 34% of the new jobs of which 53% consists of “ambulatory health care services.” Waitresses and bartenders accounted for 21,100 or 17% of the new jobs. There were 8,000 new government jobs or 6% of the 125,000 new jobs. That’s it. That is the job picture of “the world’s only superpower,” “the world’s largest economy,” “the world’s richest people.” It is the picture of employment in a Third World country. And now for the real question:Are those 125,000 new jobs really there, or are they a statistical mirage. Statistician John Williams (shadowstats.com) says the jobs are a mirage produced by “the changing seasonal adjustments within the concurrent-seasonal adjustment process used by the Bureau of Labor Statistics” and by the birth/death model, which assumes that many more unreported new jobs are created each month by new start-up businesses than are lost from unreported business closings. Williams says that without the gimmicks used by BLS to create jobs that are not there, the actual change inAugust payrolls “was a solid contraction in excess of 125,000 jobs.” In other words, the economy did not gain 125,000 jobs. It lost 125,000 jobs. Beginning with the Clinton regime, theAmerican economy has only worked for the One Percent, and it only works for them because the government makes the 99 percent bail out the One Percent. The American economy is anAristocratic Economy that works for the government-privileged few, but not for anyone else. To understand this hard fact, read Nomi Prins book,All The Presidents’Bankers. Of course, the real figures are more like the Ten Percent and the 90 percent. The One Percent caught on, because the upper reaches of that one percent are all multi-billionaires with more money than a family could spend in multiple lifetimes. The time has passed when American corporations had a sense of social responsibility. Two distinguishedAmericans writing in Daedalus, one of the few remaining publications not (yet) under corporate control, show that US corporations have become socially dysfunctional because they only serve shareholders and executives. http://www.amacad.org/pdfs/Sylla_Gomory.pdf Historically in the US, corporations had responsibilities to their customers, employees, communities, and owners. In recent years this has been changed. Today corporations only have responsibilities to their shareholders. If profits go up, executives receive performance bonuses for serving shareholders. Reducing executive success to one indicator has has enormous negative consequences for everyone else. Americans are suffering in many ways. Their jobs, both manufacturing and professional tradable services such as software engineering, have been moved offshore and given to foreigners.Americans have been deprived of interest income so that the former bank officials in charge of the US government can save the banks that deregulation permitted to over leverage with debt and risk. The costs of customer service has been shifted to customers who lose large amounts of time waiting to connect with a live person who can correct the mistake the company has made. The unleashing of greed as the only business virtue and pressure from Wall Street for greater profits has caused many service providers, such as telephone and Internet, to forego maintenance and upgrade of facilities in order to hold down costs and boost profits. My telephone ceased to work on September 3, and my service provider lacks sufficient work crews to repair my line prior to the evening of September 8. Last year my Internet provider could not reestablish my Internet service for 10 days. If you call about a bill or a service problem, the companies keep you on the line forever awaiting a real person while they try to sell you new services even though the ones you have purchased don’t work. Sufficient service crews to provide satisfaction for customers means higher costs, less profits, less shareholder earnings and less performance bonuses for managers. Guess who pays the price for the large rewards to owners and managers–the customers. I remember the days ofAT&T, a regulated monopoly. Everything worked.Any problem was fixed within two hours, barring a major catastrophe such as a hurricane or tornado. The telephone was answered no later than the third ring by a real person, not a voice recording, and the person who answered could fix any problem. There was no menu of a half dozen or dozen from which to select and to wait another quarter hour while being given sales pitches. Profits made by imposing costs on customers are not legitimate profits. Profits made by relocatingAmerican jobs offshore are not legitimate profits. Profits achieved by bailouts of managerial mistakes by taxpayers who provide the bailout funds but don’t share in the bonuses are not legitimate profits. Profits achieved by monopoly concentration, as now exists in the financial “services” industry, are not legitimate profits. InAmerica, franchises, chains, and big-box stores have destroyed a wide array of independent and family businesses that allowed enterprisingAmericans an independent existence. Deregulated free-marketAmerica has created an economy that serves only the few, which explains the extraordinary concentration in the 21st century of income and wealth in fewer and fewer hands–another defining characteristic of a Third World country. American capitalism has failed. It can no longer produce jobs for the work force, and its profits come from its political ability to impose costs on theAmerican population. Survey: U.S. Workers Face a Dim Future by JOSH BOAK |ASSOCIATED PRESS | SEPTEMBER 8, 2014 U.S. workers face a dim future, with stagnant or falling pay and fewer openings for full-time jobs. That's the picture that emerges from a survey of Harvard Business School alumni. More than 40 percent of the respondents foresee lower pay and benefits for workers. Roughly half favor outsourcing work over hiring staffers.Agrowing share prefer part-time employees. Nearly half would rather invest in new technology than hire or retain workers. At the same time, it's becoming harder for the executives to find skilled workers, according to the survey results being released Monday. Jan Rivkin, one of the survey's lead authors, suggested that a failure by companies to develop a skilled workforce could ultimately hurt those companies and the competitiveness of the U.S. economy. "The bleak picture facing middle and working classAmericans are the canary in our coal mine," said Rivkin, a Harvard business professor. "Eventually, that will come back to haunt business." The survey reflects the unevenness of the recovery from the Great Recession. Since the recession officially ended more than five years ago, many of the gains in employment, income and wealth have failed to circulate through the entire economy. Few workers have received meaningful pay raises. Median household incomes, adjusted for inflation, are below their pre-recession levels, according to estimates by Sentier Research. The median income was $54,045 in July, about 4.6 percent lower than when the recession began in late 2007. The survey suggests that incomes aren't likely to increase much anytime soon. Forty-one percent of respondents see lower wages and benefits ahead; just 27 percent expect pay raises. The survey's responses run counter to some traditional economic models. Historically, a falling unemployment rate — the U.S. rate has dropped steadily to 6.1 percent — tends to spur competition among employers for workers and leads them to raise wages and salaries. The survey found that many companies are reluctant to add jobs if other alternatives exist. Only 25 percent said they preferred investing in employees, compared with 46 percent who would rather spend on technology. Forty-nine percent favored outsourcing work over hiring. The companies have become more dependent on part-timers in the past three years and say it's harder to fill skilled positions. The survey report notes that companies could invest more in education to improve workers' skills. Companies tend to donate to schools for computers, backpacks and scholarships, rather than programs that might better prepare students for careers. Only 27 percent of respondents said their companies have partnerships with community colleges. The survey drew on responses from 1,947 Harvard Business School graduates, ranging in age from 26 to 98. Among the respondents who are working, 40 percent said they had a title of chief executive or its equivalent. The economic recovery has left many executives feeling more optimistic about the competitiveness of the U.S. economy compared with the first survey of alumni taken three years ago. Slightly less than half say the economy is becoming less competitive relative to other countries. That marks an improvement from 71 percent who said so in 2011 and 58 percent who did in 2012. These executives have reasons to be more upbeat. The Standard & Poor's 500 stock index closed last week at a record high. Stock gains have been fueled in part by solid profits from publicly traded companies.And the median compensation for a chief executive at a publicly traded company topped $10.5 million last year, according to an analysis by theAssociated Press. But the survey results indicate that such gains might ultimately be unsustainable. Without educated workers and rising standards of living, the economy faces a greater risk of stagnating. The results indicate that doubts about the economy have faded during the recovery but that the economic divide poses a longer-term challenge to continued growth. "One way to think about it: The ship is sinking more slowly," Rivkin said. Copyright 2014 TheAssociated Press.All rights reserved. This material may not be published, broadcast, rewritten or redistributed. De-Dollarization Continues: China-Argentina Agree Currency Swap, Will Trade In Yuan by ZERO HEDGE | SEPTEMBER 8, 2014 One by one, Russia and China appear to be finding allies willing to 'de-dollarize' It appears there is another nation on planet Earth that is becoming isolated. One by one, Russia and China appear to be finding allies willing to ‘de-dollarize’; and the latest to join this trend is serial-defaulter Argentina. As Reuters reports, China and Argentina’s central banks have agreed amulti-billion dollar currency swap operation “to bolster Argentina’s foreign reserves” or “pay for Chinese imports with Yuan,” as Argentina’s USD reserves dwindle. In addition,Argentina claims China supports the nation’s plans in the defaulted bondholder dispute. Having met ‘on the sidelines’in Basel, Switzerland in July, Argentine and Chinese central banks agreed to a currency swap equivalent to $11b that Cabinet Chief Jorge Capitanich said could be used to stabilize reserves.. (as Reuters reports) Argentina, which defaulted on its debt in July, will receive the first tranche of a multi-billion dollar currency swap operation with China’s central bank before the end of this year, the South American country’s La Nacion newspaper reported on Sunday. The swap will allow Argentina to bolster its foreign reserves or pay for Chinese imports with the yuan currency at a time weak export revenues and an ailing currency have put the Latin American nation’s foreign reserves under intense pressure. La Nacion said Argentina would receive yuan worth $1 billion by the end of 2014, the first payment of a loan worth a total $11 billion signed by Argentina’s President Cristina Fernandez and her Chinese counterpart in July. In adition, Bloomberg reports People’s Bank of China Governor Zhou Xiaochuan expressed his support for Argentina in its legal fight against holdout bondholders * * * Isolated, indeed… as China and Russia roam the world making friends with every nation that the US is “involved” with… What’s The Point Of Hiding ItAny Longer? by ZERO HEDGE | SEPTEMBER 8, 2014 At this point why even pretend there is a "market"? Compare and contrast. From the Chicago Mercantile Exchange 2012 10-K: Customer Base Our customer base includes professional traders, financial institutions, institutional and individual investors, major corporations, manufacturers, producers and governments. And from the Chicago Mercantile Exchange 2013 10-K: Customer Base Our customer base includes professional traders, financial institutions, institutional and individual investors, major corporations, manufacturers, producers, governments and central banks. And there you have it, but in case anyone is still confused, here is some more: • “Cluster Of Central Banks” Have Secretly Invested $29 Trillion In The Market • Bank Of Japan Plunge Protection Team Goes Into Overdrive, Buys Most ETFs Since 2010 • It’s Settled: Central Banks Trade S&P500 Futures At this point why even pretend there is a “market”? The “market”, and by “market” we mean stocks – it has long been known that central banks actively trade bonds, FX and commodities – is whatever central banks say it is. Finally, if central banks are going to be rigging the market as they now conclusively are on a daily basis, perhaps they can disclose ahead of the trading day start to everyone, and not just the primary dealers, what the closing S&P500 price for any given day is. INFOW ARS.COM BECAUSE THERE'SAWAR ON FOR YOUR MIND
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