How does the unemployment rate go down when the number of unemployed grows larger?

The United States Bureau of Labor Statistics reported a few days ago that the U.S. economy added 2.5 million jobs in May 2020. This hardly seems likely. As you can see from the graph above, over 8 million people filed for unemployment insurance during the four weeks of May. If the U.S. economy added a total of 2.5 million workers, that means more than 10.5+ million of the unemployed returned to their jobs since you would need to add the 8+ million to the 2.5 million to get 10.5+ million. 10.5 million people would have needed to get back to their jobs after the last 1.8 million filed for unemployment insurance during the last week of May. It looks like the government is saying roughly 10.5 million people returned to work on May 30th and May 31, which is possible, but hardly likely.

The official unemployment rate is 13.3 percent when the majority of economists expected it to be closer to 20 percent.

You got to wonder about the corruption going on in government to come out with these numbers, which look like a lie. Some experts wondered what could have caused this increase in jobs.

Bloomberg news reported that, “Michelle Meyer, head of U.S. economics at Bank of America Corp., pointed to the 1.4 million jobs added in the restaurant industry and said, “maybe this is an indication that PPP (Paycheck Protection Program) is working and it’s being distributed to small businesses — restaurants — and they’re using it to bring workers back.”

And maybe not.

“Another issue is that some workers are being counted on payrolls even if their hours or pay are minimal, said Betsey Stevenson, a University of Michigan economist who was the U.S. Labor Department’s chief economist in the wake of the 2007-2009 recession.

“The problem is that Wall Street is used to predicting job loss due to a typical recession, not one in which people are temporarily sent home en masse,” Stevenson said.”

While millions of people are heading back to work in the coming weeks, the damage to the economy is likely to last a while. Sometime in the late summer or early Autumn, we will have a real idea of how badly this recession is. Unemployment should go down from here, but it will still be abnormally high since we will be in a recession that began in March.

Expect the stock markets to continue upward as the economy stays mired in recession since the government authorized the Federal Reserve to give away (officially loan) some $6.6 trillion to the rich via their major corporations. Don’t expect the Fed to carry a lot of these loans on their books. (See The CoronaVirus Stimulus Bill: The Rich Get 5 Trillion, We Get Crumbs.)

It used to be that corporate profits drove the stock markets up, but for the last ten years it has largely been the Federal Reserve and the U.S. government and corruption that has done this. The Fed printed up and handed out $26 trillion to twelve banks to cover the losses the billionaires suffered in 2008-09 (See The $26 Trillion Bailout). The bankers withheld millions of houses off the market in a clear act of conspiracy in restraint of trade that the Obama Administration turned a blind eye to since their Wall Street benefactors were cashing in on the corruption (Click here for that story). Meanwhile, corporate profits peaked in 2014 and therefore clearly have not been pushing the stock market up during the last six years; corruption has been pushing the market up.

The United States continues to see government corruption at all levels rise. The U.S. saw it drop out of the top twenty least corrupt nations for 2019, and that most likely understates how corrupt the U.S. has become. This corruption is caused by income and wealth inequality. The rich want more for themselves and less for you and corruption is part of the cost of doing business and achieving their goals.

 

 

 

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Happy Labor Day! But Here Is Some Sobering Information

For the past several years, US job growth has been weaker on a monthly average than when Jimmy Carter was US president. There’s a reason for this and a lot has to do with US corporations exporting jobs. Click here for that story. This brings us to former President Obama.

As a United States senator, Barack Obama demanded President George W. Bush do something to counter Chinese currency manipulation. As president, Obama mentioned Chinese currency manipulation one time. Then some politically powerful billionaires likely placed their arms over Obama’s shoulder and probably said something like, “Don’t mention that again, or we’ll take you behind the wood shed.”

Notice President Trump railed against Chinese currency manipulation as a candidate and hasn’t said a word about it as president. It’s likely some of his fellow billionaires threatened to take him behind the woodshed too if he ever mentioned the issue again.

This is because millions of US jobs have been exported to China; and US corporations have created millions of jobs over there rather than here thanks to President Bill Clinton and President George W. Bush, both of whom gave China “most favored nation trade status,” and which allowed US corporations to export US jobs and create jobs in China rather than here.

When China manipulates its currency vis-a-vis the US dollar, it increases the profit margins of US corporations manufacturing in China and exporting to the US, while simultaneously decreasing the profit margins of companies manufacturing in the US and exporting their goods to China. This is why all those Nike, Dell, Apple, Treetop, Campbell’s Soups, and thousands of other things are made nowadays in China and exported to the US rather than in the United States. See the-trans-pacific-partnership-the-op-ed-the-liberal-and-conservative-corporate-media-doesnt-want-you-to-see–JohnHively.wordpress.com

This is one of the reasons why income and wealth inequality has grown so great during the last thirty-five years. In the US, the top 1 percent own more wealth nowadays than the 90 percent lowest Americans, and that gap is growing.

The Federal Reserve Bank and the US Treasury could easily counter Chinese currency manipulation, but those organizations work for the billionaires and not for the rest of us. In the meantime, the US economy weakens over the long haul. That’s because workers wages now represent a smaller portion of US gross domestic product since 1947. That’s because when jobs are exported the difference between the old higher US wages and benefits and the new lower foreign wages with no benefits goes straight into the fat wallets of the billionaires via higher corporate profits, rising dividends, and surging share prices. Trade agreements, nice scams huh?

This is precisely why the rich are now stealing about 37 percent of all income produced in the United States, compared to 8 percent when Carter was president in 1980. This is why job growth was greater under Carter on a per monthly basis than nowadays even though the US economy was only about 40 percent the size of today’s US economy, and the population was only 60 percent the size of today’s US population.

This is something to reflect on when some Wall Street US Senator like Ron Wyden says we need more trade agreements to create more jobs. When Wyden, or Wall Street Senator Mitch McConnell says crap like this, you know it’s a lie.

 

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Whirlpool asks Trump administration for import barriers on washers

The appliance maker Whirlpool has asked the U.S. government to impose trade barriers on washing machines imported from South Korean companies, escalating a trade dispute that has been ongoing for years.

Anybody with half a brain could see this coming before President Obama and his henchmen and henchwomen, like Wall Street Senator Ron Wyden, signed the South Korea Free Trade Treaty. Yet, Obama and his sleazy corporate Demorats, like Wyden, pushed for this scam anyway, mainly because it redistributes income from US workers to billionaire US investors, hedge funds and other finance types that finance the Demorat Party.

With headquarters in Benton Harbor Michigan, Whirlpool Corporation is the world’s largest home appliance maker. In the U.S., Whirlpool has eight manufacturing facilities: Amana, Iowa; Tulsa, Oklahoma; Cleveland, Tennessee; Clyde, Ohio; Findlay, Ohio; Greenville, Ohio; Marion, Ohio; and Ottawa, Ohio. Whirlpool has five factories in Mexico. Whirlpool has over 28,000 employees in the United States and Mexico. Those jobs are at risk.

USA Today reports that “In filing a petition to the U.S. International Trade Commission Wednesday, the Benton Harbor, Michigan-based manufacturer is seeking remedy from U.S. regulators on its claim that Samsung and LG are selling their washing machines in the U.S. at prices that are below the prices charged by American companies or below their cost of production.”

The U.S. government has twice found that Samsung and LG were selling in the U.S. at unfairly low prices. But Samsung and LG responded by “relocating their production facilities to other foreign countries in order to circumvent the U.S. government’s rulings,” Whirlpool says.

Whirlpool is a supporter of free and fair trade. According to company’s website, “We believe competition is healthy and breeds innovation. That’s why we support free and fair trade and promote an open global trading system that benefits our consumers, employees and the entire home appliance industry. Enforcing open, rules-based trade policies ensures the highest level of investment, innovation and choice for consumers around the world. Supporting free and fair trade increases industry access and incentivizes innovation globally, helping us to protect jobs and ensure continued innovation and investment in the appliance industry.”

Obama and Wyden supported the South Korea Trade Scam, and US citizen’s and now paying the price. Click on the following link for more on the story, whirlpool-files-complaint-samsung-lg-dump-washers-us–USA Today

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Trump and the Republican Party Establishment’s Biggest Lie

President Donald Trump is proposing more tax cuts for the rich. He claims there will be no loss of federal revenue with his tax cuts. This is the standard Republican Party Establishment lie.

Given that Trump’s plan is similar to what Trump proposed on the campaign trail, the Committee for a Responsible Federal Budget (CRFB) did a rough cost estimate of his latest ideas and concluded they could cost $5.5 trillion in lost revenue during the first decade.

CRFB estimates the overall cost could go as high as $7 trillion if limits on tax breaks that the plan suggests apply only to high earners. Or the cost could fall to $3 trillion “assuming credits and exclusions are eliminated as well as deductions.”

This means sharp cuts to programs the middle class and poor need, while, no doubt, keeping welfare programs for the rich, such spending more on the military than the next 25 nations combined, 24 of whom are US allies. Corporate subsidies are also welfare for the rich since they help keep corporate profits and the stock market bubble growing, all of which mostly redounds to the rich.

Oh, and we can’t forget the next biggest lie; tax cuts for the rich trickles down the the 99 percent in the form of jobs. There is not one shred of evidence that giving tax cuts to the rich has created a single net job. There is plenty of evidence, on the other hand, that tax cuts for the wealthy have destroyed millions of US jobs.

That’s because the rich usually invest their tax cuts gains in the stock, bond and political markets. They buy up politicians by the barrel full and then have their politicians pass legislation that will keep inflating their stock, bond and housing bubbles, which means exporting millions of jobs overseas and then redistributing the difference between the old higher US pay and the new lower third world slave labor pay to the rich via higher corporate profits, surging stock and bond markets, and rising dividends.

In the meantime, due to the reduced tax revenue, our roads and bridges will continue to crumble, our public schools will continue to be financially gutted, the cost of entering a public park will continue to rise, the unemployment rate will rise, and so on and so forth.

Don’t be fooled by the same lies President Ronald Reagan and Dick Cheney and Arthur Laffer fed us. Tax cuts for the rich will not pay for themselves, nor will they create jobs, but they will corrupt your government more, and it is already the most corrupt in the developed world. Both major political parties are corrupted to the core.

 

This suggests that any working class concerns addressed by Trump during the campaign has been rendered moot. Trump, in other words, is now completely owned and 100 percent influenced by Wall Street and the Republican National Committee and their corporate owners.

By the way, a story in Newsweek puts it a little less scary than I. “‘…while major tax cuts have been enormously beneficial to the wealthy by reducing their taxes and increasing their incomes the most, the distribution of benefit for working people has been comparatively negligible. That is not the argument of some liberal politician—it was the finding of Martin Feldstein, the chief economic adviser to President Ronald Reagan, in his analysis of the Tax Reform Act of 1986.'”

Feldstein, in other words, said the creation of jobs by tax cuts for the rich “has been comparatively negligible.”

Click here for the full Newsweek story.

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Declining Wages and Salaries Show The Bachelor Degree Ain’t What It Used to Be!

The Great Recession came and went, and so did salaries and other compensation for people graduating with four year college degrees. The corporate news media continues to shower us with propaganda about why this has occurred.

Bloomberg news claims “technology and automation” have caused this decline. Only in the United States does there appear to be a problem with automation. It is strange how there is an overabundance of US manufacturing jobs in China, Vietnam and elsewhere. Those factories employ accountants, bookkeepers, managers, attorneys, and many more white collar employees. Those factories also purchase things from other local businesses that supply materials and designs and other things that employ white collar workers. Those factories used to be in the United States. And now they’re not. See https://www.bloomberg.com/news/articles/2017-03-30/u-s-college-grads-see-slim-to-nothing-wage-gains-since-recession

Those H1-B visa’s are also putting downward pressure on wages, as well as exporting high tech jobs to India and other nations.

Exporting jobs overseas by the tens of millions is why wages have declined on average for new college graduates, and why compensation has stagnated for older workers, and why wages have declined over the last thirty-six years. There are other reasons, but automation is not one of them. See Jobs: The Largest US Export Product–JohnHively.wordpress.com

As for those declining wages for new college graduates, what you study matters for your salary, the data show. Chemical and computer engineering majors have held down some of the best earnings of at least $60,000 a year for entry level positions since the recession, while business and science graduates’s paychecks have fallen. A biology major at the start of their career earned $31,000 on an annual average in 2015, down $4,000 from five years earlier. Some majors, such as petroleum engineers, have seen a bump in earnings for those just coming into the job market.

On the other hand, people with graduate degrees are still getting a bump in their salaries upon graduation.

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US Workers Training Their Mexican Worker Replacements

Rexnord Corporation is closing its ball bearings plant in Indiana, laying off its 350 workers, and exporting those jobs to Mexico. In addition, as part of its US workers severance package, many of those workers are training their Mexican replacements, who will $3 an hour with no benefits. John Feltner is a machinist earning $25 an hour in the Indianapolis, Indiana plant. He resents having to train his replacement, but he’ll lose his severance package of $5,000 if he refuses.

Most of the difference in pay between US and Mexican workers will go straight into the pockets of wealthy shareholders. Rexnord’s share price peaked at $30.82 in April 2014. It’s been dropping ever since. It hit a low of $14.72 on January 15 2016, rose a tad, and has stayed stagnant since, hovering around $22. No doubt CEO Todd Adams is hoping that exporting jobs to Mexico will increase its bottom line and attract investors to bid up the share price and his compensation. His CEO pay is tied to the share price thanks to legislation signed by then President Bill Clinton.

Exporting jobs and CEO pay tied to corporate share price are two of the biggest factors in the widening gulf between the 1 percent and everybody else because they redistribute income and wealth from one group to the other. Currently, six individuals own more wealth than the bottom 50 percent of humanity, while the 1000 richest individuals own more wealth than the bottom 70 percent. Currently, in the USA, the 1 percent steal 35 percent of all income every year, compared to 8 percent in 1980, thanks to their ownership of such politicians as the Clinton’s, Wyden, Mitch McConnell and Orrin Hatch.

John Feltner and his 350 fellow workers lost their jobs thanks to Bill Clinton, who signed legislation deregulating Wall Street, as well putting his signature on the North America Free Trade Agreement (NAFTA. NAFTA was negotiated by Clinton’s representatives with an eye to getting US corporations to export US jobs to Mexico in order to boost their bottom lines. After he left the presidency, Wall Street rewarded the Clinton’s for their service to the tune of tens of millions of dollars. The Clinton’s are still faithful servants of Wall Street in their war against the middle class, such as the workers at the Rexnord plant.

We also can’t forget Democratic Wall Street Senator Ron Wyden has continuously supported redistributing the income of the middle class to billionaires. The Democratic Party is corrupted to the core by big money, though maybe a bit less than the Republican Party. But then again, maybe not.

“The big picture is that American jobs are leaving this country to exploit cheap labor,” Feltner said. “When you start taking away the middle class, what do you have left?”

This is the sentiment that President Donald Trump played to so effectively during the 2016 presidential campaign. It spoke to John Feltner somewhere down deep.”

“He’d been a loyal union man for years, been raised on the notion Democrats were the party of the working man and made calls for Democrats from union phone banks. But after the trade agreements that Bill Clinton and Barack Obama signed, and after Trump spoke to the plight of workers at places such as Carrier, John Feltner broke ranks.

With the layoff fresh on his mind, he cast his November vote for Trump. He says most of his rank-and-file union members did the same.”

And what were those workers supposed to do? Support Hillary Clinton who aspired to export millions of US jobs to China via the Trans Pacific Partnership (TPP), which was being negotiated on behalf of Wall Street by then President Barack Obama?

Feltner and his fellow employees don’t know what they’re going to do once their jobs are gone. Thank you Bill Clinton. Thank you Barack Obama.

For more on this story, click the following link, Rexnord’s Indiana Plant Exported to Mexico–USA Today

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Tell Congress to Stop Subsidizing Corporate Jobs Exporters

When a U.S. company closes an American plant and builds one overseas, the U.S. tax code allows the expenses incurred in both activities to be written off it’s taxable income.

Under Current US Tax Laws Businesses Are Allowed To Deduct Operating Expenses. Which Include The Cost of Moving Jobs In The U.S.A. Overseas. (Internal Revenue Code)

Companies That Create Jobs In The U.S.A. Should Receive Tax Breaks. Companies That Send American Jobs Overseas Should Not. In fact, US corporations that export jobs overseas should be taxed on any products they export to the USA from their factories overseas, like president-elect Donald Trump promised he would do.

Tell Congress To Stop Using Our Tax Dollars To Fire American Workers

Contact Congress
http://www.contactingthecongress.org/

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Ford Scraps Plans to Export Jobs to Mexico, and Part of the Untold Real Story

This week, the Ford Motor Company announced that it was no longer going to export all small car production to Mexico, which meant exporting US jobs. The company will invest $700 million in Michigan, instead, and create another 700 jobs in the process.

Ford CEO Mark Fields said this move was a vote of confidence in Donald Trump. “We didn’t cut a deal with Trump. We did it for our business,” Fields told CNN’s Poppy Harlow in an exclusive interview Tuesday.

During the election season, Trump repeatedly slammed Ford for exporting tens of thousands of US jobs to Mexico.

Now here’s what you haven’t been told. Ford’s share price dropped from a recent high of $17.72 in 2014 to $11.34 on November 2016. Then came the election on November 8, and a subsequent rise in the overall price of corporate shares. So far, Ford’s share price has risen to $13.17 since November 4. Would Ford have kept the jobs in the USA if its share price was heading in the other direction. Not likely.

The billionaires, Wall Street investment corporations and hedge funds are taking cash out of the bond markets and stuffing that cash straight into the stock markets, thereby expanding the bubble, which will soon pop.

When the bubble pops, share prices will fall, and you can bet your bottom dollar that Ford will soon be exporting as many jobs as possible to enhance its bottom line and prop up its failing share price.

The economy should hit the recession by June of this year. Expect the stock and housing market bubbles to pop shortly afterwards.

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Accomplishments of President Obama, Part 2, And Some of His Terrible Decisions

Official portrait of President Barack Obama in the Oval Office, Dec. 6, 2012. (Official White House Photo by Pete Souza)

This is the second in a series of the accomplishments and the worst of President Obama. Click here for Part 1.

1. Obama normalized relations with Cuba after sixty years of trade embargo. Now Cuba can upgrade its economy, and the US has a new trading partner. There are a ton of people who opposed this move, but those are the same corporate hacks who support exporting US jobs to Mexico, China, Vietnam and elsewhere. I had a friend a long time ago who said he opposed the Vietnam War. This was back in 1980 or so. “If we hadn’t gone in there,” he said, “they’d be capitalists by now.”

2. Obama authorized the raid that killed Osama Bin Laden. He announced the terrorist leader’s death in a live speech to the country saying, “Last week, I determined that we had enough intelligence to take action and authorized an operation to get Osama Bin Laden and bring him to justice.” The Republican president before Obama was such an incompetent he couldn’t figure out where Bin Laden was, much less kill him.

3. He helped stimulate the auto industry after the financial crisis. Chrysler and GM have created 250,000 jobs since then. Of course, many of these new jobs are in Mexico.

4. He signed the Dodd-Frank Act, which holds Wall Street accountable a little bit in the event of another financial crisis. In reality, the Dodd-Frank Act doesn’t regulate hedge funds even a little, and the act was heavily watered down by Wall Street lobbyists. So Dodd-Frank wasn’t much of anything, except that it included a provision for the establishment of the Consumer Protection Agency, which Wall Street executives and billionaire investors feared because it meant they couldn’t cheat and lie to the common folk as easily as before.

5. Obama backed down like a whipped dog when Wall Street billionaires and executives demanded he not appoint Elizabeth Warren to head the new Consumer Protection Agency. This turned out to be a good thing, even if by accident. Warren later became a US senator and is likely to be the next president of the United States in 2020.

Among Obama’s worst decisions:

He appointed Arne Duncan to be US Secretary of Education. Duncan is a firm believer in using every child possible to enhance the profits of the testing industry, especially Pearson Limited, a long time financial sponsor of the Democratic Party. When Duncan announced his resignation the president of the AFT teachers union said, “there’s no question that the Department of Education’s fixation on charter schools and high-stakes testing has not worked.” US K-12 public education students are the most tested in the world, and by a wide margin. It’s all about the money folks, that’s what US educational reform means. Obama’s education policy was a complete, or nearly complete, failure.

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Something Smells Fishy About Trump’s Carrier Deal

Something stinks badly.

We’re supposed to believe that President-elect Donald Trump negotiated with United Technologies (UT) management to give them $700,000 in state tax cuts for each of the next ten years in exchange for not exporting roughly 730 jobs in Indiana to Mexico. Exporting those jobs would have saved the company roughly $32.5 million a year. So management gives up $32.5 million for $700,000? Not likely. Something stinks here, as in, we’re not being told the whole story by anybody. Not by the news media, not the twin political parties, not by anybody.

What did Trump really promise UT? Am I right to be suspicious?

Could Trump have promised UT something of much greater value than $32.5 million a year, or at least the same, when he becomes president? UT owns Pratt and Whitney, which manufactures aircraft engines, including US military aircraft. Assuming a 10 percent profit margin, Trump would’ve had to promise a minimum $325 million a year in additional government business to compensate UT for $32.5 million.

If he did this, then he wheeled and dealed with taxpayer money, and he didn’t do a very good job with our money. He got screwed. It appears UT CEO Gregory Hayes took Trump to the back of the shed, slapped him around, and stole the lunch money we’d entrusted Trump with.

It’s difficult to believe UT management would give up $32.5 million a year in exchange for $700,000 a year. Are they really that stupid? What we know about the deal is that Trump caved in to management and failed to use any leverage against UT, such as having the US government cancel a few of those UT contracts if those jobs are exported to Mexico, or threatening to tax the products UT makes in Mexico when they come into the USA. Trump promised he would do this during the presidential campaign, but he didn’t have the courage to do it once push came to shove.

That’s why something tells me this deal is quite a bit shadier than we have been lead to believe.

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