By George Mantor
It just keeps getting weirder and weirder. Maybe you missed this gem but the economy is about to get a whole lot better on paper.
Too bad the game is played on pavement.
We are about to have a spike in Gross Domestic Product without having to produce any more of anything. Sounds like a real fix for a plummeting economy, doesn’t it?
Too bad the only place this change will be felt will be in the numbers being reported, the veracity of which are already suspect in my opinion. Nah, they wouldn’t lie to us, would they?
Take last week’s jobs report from the Bureau of Labor Statistics or just BS as I like to call them. They reported that 165,000 jobs were created in April and that unemployment had dropped to 7.5%.
The markets which only go up in response to good news …or bad news…or no news naturally responded as though something had actually changed, and the media got right to work declaring the recession/depression officially in the rear view mirror.
Sadly, we’re not going to be going very far because the gas tank is empty. The numbers themselves, even if accurate, are a mere distraction; a sanitized version of reality intended to convince everyone that everything is going to be just fine. These numbers are not signs of a recovery. They only tell us that the hand basket in which we are descending into hell has slowed a tad, albeit immeasurable. That would be if the numbers themselves meant what they want you to think they mean.
Of the 165,000 jobs, not a single one was in manufacturing. That means we aren’t making anything to be shipped to stores and construction sites in the months to come.
Construction lost 6,000 jobs. We aren’t building anything to accommodate future growth, and the immediate result is that unemployment for men over twenty increased. Where will our returning military find jobs?
Even more disturbing is that logging and mining, which are indicators of future manufacturing and construction activity, lost 3,000 jobs.
That means that in the months ahead, Transportation and Warehousing which gained a scant 4,000 jobs will likely to lose many of them.
Where are the bright spots? Cocktail servers? Temporary jobs increased by 31,000. That has been touted as a sure sign of a recovering economy because before employers bring on full time help, they add part-timers to deal with increasing business, and that eventually those workers will become permanent. Fat chance!
Many of these new temp jobs are also part time. Both conditions are related to employers not wanting to provide health care coverage, and that isn’t going away.
The number of employed people who work part-time for economic reasons (slack work conditions or the inability to find full-time work) increased from 7,638,000 in March to 7,916,000 in April—a change of 3.6 percent.
The average weekly hours of all employed persons declined from 36.6 to 36.4, and the average weekly earnings for all workers dropped from $824.52 to $821.13.
So, if you want a temporary, part-time, declining wage job with no benefits, rejoice; the future job market looks super rosy.
Heck, you can get two jobs. The number of people holding multiple jobs has increased over the past year from 6,947,000 in April 2012 to 7,029,000 in April 2013.
Of all of the people ready and able to work, the number of those who are not has risen from 88,879,000 a year ago to 90,436,000 last month. Only 63.3 percent of the civilian labor force has a job. The unavoidable conclusion is that without any real increase in jobs, the number of people who will be unemployed for a very long time will just continue to increase.
Nor can the economy ever begin to improve until all of this wasted human resource is put back into productivity.
Where were the most jobs created? Surprisingly, in Leisure and Hospitality. What does it mean? More people getting drunk, I’m betting.
The plan to get us out of this spiral is for tax payers to continue to buy phony mortgage backed securities from the big banks until the economy recovers. Medically, it would be akin to bleeding a patient until his iron deficiency reverses. This has been the solution of global central bankers, and that is why the world economy is teetering on the brink.
The unsettling news that America’s debt is now 105% of our GDP is addressed by fudging the numbers even more than they were already fudging them.
Debt to GDP above 80% is considered to be fatal to an economy, and we blew past that in 2011.
At 80%, a nation enters a danger zone where such onerous debt burdens cause investors to view the country’s bonds as less desirable, so they demand higher interest rates.
Higher interest rates make the debt even more expensive so investors sell bonds. That leads to inflation which makes the debt even more expensive and default is eminent.
Since the current policies of reduced spending and higher taxes tend to depress GDP, the numbers are going to get worse before they get better.
No problem, in July the Bureau of Economic Analysis will increase the nation’s gross domestic product by 3 percent based on intangibles. Intangibles?
Three percent? Did they just make that up? Yes they did, business pro, yes they did.
And, you probably thought that an intangible was something that by definition could not be measured. That’s what makes it…ya know, intangible.
See how things have changed? Failure is profitable, law breaking is encouraged, and things are actually better than they appear based on intangibles.
I suppose in a world of avatar economies and virtual money where derivatives have leveraged everything on the planet six times over, it’s time to put some more lipstick on this PIIG and start to rate the economy based not on hard cold fact, but on intangibles.
Sort of a Mulligan for the economy. “Don’t worry; it only looks bad until you factor in the bullshit….er, intangibles.”
Where else but the murky world of government analysis could such an idea take form?
In sports, they always talk about intangibles. “Oh yeah, Mel, he’s not just a five skill guy but his intangibles are off the charts. Er…if they had charts for intangibles, Mel, his would definitely be off of them.”
“That’s right, Skip, you couldn’t measure his intangibles even if you knew what they were.”
Former, NFL quarterback, Ryan Leaf, was almost chosen ahead of Peyton Manning in the 2000 draft based on his intangibles. NFL General Managers concurred and one even said this about Leaf over Manning, “More promising, long-term prospect as a franchise-caliber player.”
Intangibles. Manning went on to win four NFL, MVP awards, and Ryan Leaf went to prison.
Intangibles? As long as we’re cooking the books, why not use made up ingredients?
So, in order to show a one quarter increase in the GDP, they have determined that America’s unrealized intellectual property is worth three percent to the economy.
The idea, according to The Ministry of Propaganda, is that movies and plays that are written, but not yet produced, have value and should be added to the GDP, along with the books not published, the songs never sung, the busts never sculpted, and that those non-money generated activities are a solid basis on which to manipulate the truth about massive debt that will soon destroy us.
A real three percent increase in GDP would translate into increased jobs and further spending, but this won’t. Everything remains as it is in the real world, but for propaganda purposes, we have attached a value to time spent without regard to the results obtained.
What next, counting unfunded pension liabilities as GDP? It would be funny if it weren’t true. Actually, it’s still funny; millions of boomers retiring to pensions that won’t be paid, just so everyone can pretend that the rising market is a reflection of a healthier GDP.
And that got me to thinking about former Goldman Sachs trader, Fabrice Tourre, the “Fabulous Fab”, currently awaiting trial for defrauding investors in a CDO known as Abacus 2007-AC1.
Tourre and the bank did not disclose that a hedge fund run by billionaire, John Paulson, helped pick and, subsequently, bet against the underlying securities (AKA sub-prime guaranteed to fail mortgages).
Tourre knew that all that investors were getting were slices of revenue streams which would eventually run dry. He knew it was all just accounting tricks and regarded it thusly, “It’s all just mental masturbation”.
But, what the heck, it added to the GDP. So don’t be surprised if after all the real assets have been rehypothicated over and over again, and all of the virtual assets are over pledged, and all of the stuff that people can imagine is added to the bottom line, if they don’t decide to aid five percent to the GDP for actual masturbation. With anxiety levels at an all-time high, self-pleasure might be just what we need to get back on the road to virtual prosperity.
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