Says Ethan Harris, the chief United States Economist at Lehman Brothers, “We’re likely to go through an extended period of slow economic growth, We’re likely to to see a further drop in the job market, a further rise in the unemployment rate, and, ultimately the fed will come back again and cut interest rates.”
So there you have it, expectations of more bad news and hopes for another intervention by the Fed. These experts quoted in the stories actually contradict the upbeat tone of the stories and their headlines. Next month’s Jobs report will have to factor in the l00,000 plus jobs lost in finance and housing which have already occurred but are not yet reflected in the statistics.
In other words, these report, like the coverage that say the surge is
working in Iraq are selective and inflated. They are aimed more influencing perceptions than providing truth.
My questions: how do they get away with this? Why does the market buy it? Why does the press do it? And what are they leaving out?
Businessman and financial analyst Eric Janszen says our economy is increasingly showing the features of a Banana Republic with low-paid government and service jobs for all. He writes on his website iTulip.com that the private goods producing sector so vital to a sound economy is shrinking:
Construction firms cut 14,000 jobs in September, Factories slashed 18,000. Retailers got rid of just over 5,000 jobs. Financial services companies eliminated 14,000 slots.
However, gains in education and health services, professional services, leisure and hospitality, and in government work more than offset those losses, leading to a net gain in new jobs in September.</blockquote>
Jobs in government now parallel jobs in the good producing sector, he reports, as the dollar is being depreciated.
“The magic of a depreciating currency is working,” he writes. “Foreign investors are buying UBRA (United Banana Republic of America) stocks and other assets at fire sale prices. Tourism is up as visitors from Asia, Europe, Canada and all other countries whose currencies have appreciated … visit the US for a cheap UBRA vacation, driving leisure and hospitality jobs within the service sector where most of the job growth occurred.
And wages? They are not rising as fast as prices. His conclusion:
“Suppression of wage increases has been the centerpiece of monetary and government policy to manage inflation in the Production/Consumption Economy since 1980. Given the difficulty in acquiring legitimate measures of actual inflation rates in the US economy, there is no way of telling whether these wage increases translate into increased purchasing power. Given the rise of oil and other commodity prices, it seems doubtful. In fact, it looks like the UBRA is going full-bore banana republic, including wage and price inflation to maintain employment going into an election year.”
So there you have it: politically influenced numbers, another reason not to trust the mainstream media and search out more thoughtful analysis elsewhere.
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