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Archive for January, 2010

In a good sign for the economy, and a bad sign for the hopes and dreams of Republicans, the economy grew at an annual rate of 5.7 percent. Historically, that is fairly average coming out of a recession, but it is better than negative growth. This suggests the stimulus plan of President Obama is working.

The growth does not necessarily mean a net number of jobs are being added to the economy, although at 5.7 percent, it strongly suggests it.

On the other, the economy has been gutted by free trade policies and is floating largely on trillions of dollars created out of thin air by the government, along with debt. So the question will be: What will occur when the stimulus funds are spent in the summer of 2010?

All indications are that the Obama Administration has enacted policies that shift more income and wealth from working people and the government to rich, mostly unproductive, people. This weakens the demand for goods and services and suggests this business expansion, if we have left the recession behind, will be short and puny.

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Unemployment Claims Fall–January 28, 2010

Unemployment claims fell last week, but it is a meaningless statistics. What is important? The number of people out of work. See the latest news at the link below.

http://money.cnn.com/2010/01/28/news/economy/initial_claims/index.htm

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There was an article in the Oregonian Newspaper on January 10, 2010 in which UCLA Professor Raul Hinojosa-Ojeda claimed his research showed that wages in the United States went up after amnesty for undocumented workers was granted in November 1986. Apparently the good professor didn’t know that real private sector hourly wages began rising earlier than that, in January 1986. Real wages reached $7.99 an hour during November 1986, and then immediately began a seven and a half year decline starting in December 1986. Real wages didn’t reach that November 1986 level again until February, 1999.

If there is a link between amnesty for undocumented workers and real wages, as Hinojosa-Ojeda claims, it is that granting amnesty will lower the standard of living for everybody for years and maybe even decades to come.

I don’t know where Hinojosa-Ojeda got his numbers, but I got mine in less than ten minutes, on-line, at the United States Bureau of Labor Statistics.

Real wages measure the true standard of living. When wages rise, inflation is subtracted from it, and that is the real wage. For example, if your wage is ten dollars an hour and then it rises during a twelve month period to $10.20, your wage went up 2 percent. However, if inflation went up 5 percent, you lost fifty cents of spending power out of that $10.20. Therefore, your real wage declined because you need to subtract that fifty cents from your $10.20. Your spending power is only $9.70. Your real wage declined.

Real wages dropped like a rock for seven and a half after the last amnesty. Although it is conjecture, as illegal workers acquired a path to citizenship, the legal labor force swelled and depressed wages.

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See link below. Make sure you scroll down.

http://rawstory.com/2010/01/daily-show-slams-obama-for-not-keeping-promises/

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Economy Loses More Jobs In December 2009

The unemployment rate would be 10.4 percent if the work force of the United States had not dropped nearly 700,000 discouraged workers who fled their job searches. Currently, the rate is 10 percent. The economy lost nearly 90,000 jobs in December, but because of the great number of people tired of looking for work that have decided to give up their job searches, the unemployment rate was officially listed at 10 percent. The real unemployment rate is probably closer to 20 percent. Some sources have it hovering around 15-17 percent.

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Goldman Sach’s Gives More in Executive Bonuses than It Earns

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