Ben’s Mission Accomplished
And again history is repeating itself, as Big Ben Bernanke declares, "Recession is over" but that more likely is progressing in much the same manner.
According to the papers, the feds have already done it. "Fed says recovery underway," say headlines from last week’s major press reviews.
Another headline tells the feds are considering how and when easing themselves out of their interventions. But what would the economy look like after they stopped the intervention? Just look at auto sales after the cash for clunkers ended. People bought cars when the feds bribed them to do so. When the bribes stopped, so did car sales. Sales fell 38% from August to September, a 28-year low.
House sales too have been pushed up by the feds' tax credits. According to an estimate, 350,000 new house sales since January were assisted by federal intervention - about 80% of the total. What will happen when this program ends in November? Be assured that the housing sale will fall as well.
Speculators already are worried about what will happen when the feds stop their intervention in the financial industry, scheduled for December. Thanks to taxpayer money, the bankers were spared the consequences of their own stupidity. Instead, taxpayers will pay for those mistakes. No one is particularly upset about it. The taxpayers don't know what is going on. And bankers are happy to continue living in the style to which they have become accustomed.
But no matter how damaging and stupid the feds are, the public is supporting them, because people incorrectly think Bernanke has avoided a 'Second Great Depression,' and that the government has rescued the economy, as Obama told the audience in Pittsburgh at the G20. Now they see a clear highway ahead, with not many obstructions.
But wait; what about the potentially huge long-term losses from all the bailouts as for example of the insurance giant American International Group, the mortgage finance companies Fannie Mae and Freddie Mac, and the automakers General Motors and Chrysler? And moreover the Treasury could also take a hit from its guarantees on billions of dollars of toxic mortgages!
Most likely taxpayers aren't going to get their money back, and the government has done exactly nothing to force the disclosure of losses that are currently being hidden by accounting manipulations, which are an outright fraud.
This sort of misleading "reporting" is an outrage. It is one thing to be hopeful, but it is entirely different to publish things that are either known or should have known and are absolutely false in an attempt to present the impression that the Administrations in Washington DC and that of other Governments around the world along with their agencies do everything to solve the financial crisis.
Never before have major central banks reacted so recklessly to a market correction. Never before has the monetary base exploded so violently. Never before have so many people with so many bills to pay had to face such a downturn. And what about the numerous jobless* that still are continuing to join the doles? Without paying down all the debt in the financial system, without companies that make healthy profits, don’t count on much of a recovery, unless being a wishful thinker.
* The official unemployment rate is 9.7%. However the real numbers of unemployed that not actively have looked for a job in the last four weeks, but would like one, are not counted as unemployed. About one-third of marginally attached workers actively want jobs but have not bothered to look because they believe there are no jobs in their area, at least not for them. When added that extra 758,000 to the unemployment data, the total is 10.2%. When all marginally attached workers are counted the unemployment number is 11%. And when the part-time unemployed are added, the total number rises to 16.8%. (Source: Bureau of Labour Statistics.)