Irony defined by a generation.
A top White House financial advisor, Ed Lazear, commented to CNN on Sunday, “We are seeing what anyone would characterize as a recession in some parts of the country” [emphasis mine].
Oh, REAL-ly? I haven’t heard that from the lips of GW Bush, or Hanky Paulson, or Bennie Bernanke. In fact, the White House has tried for months to assure the country that we are NOT in a recession. On Main Street, however, we’ve known better. Yet, stop the presses! The White House is admitting that we are just now seeing what can be “characterized” as a recession in certain parts of our economy! Come on! Give it to us straight! While it is obvious that they are attempting to deter a sudden and complete economic meltdown by not letting the majority of Americans know the reality and magnitude of the problem, it is downright deceitful to sugarcoat it. They’ve known for months this whole thing is tanking, and while they lie to the American people and make citizens feel better about carrying on with their daily lives, these politicians have been making plans to keep themselves and their families safe during the coming months – you can be SURE of it!
Recession – Just what the hell is it?
The National Bureau of Economic Research defines recession as: “a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP [gross domestic product], real income, employment, industrial production, and wholesale-retail sales.”
“Anyone” with half of a brain sees that there has been a very significant decline in economic activity over the past year, in terms of unemployment rates, retail sales, and industrial production. But, just how bad is it?
Here are some striking figures:
1. The estimated national unemployment rate is now at 6.1%, the highest in five years, but this figure does not accurately reflect the true number of jobless persons. Official figures from the Department of Labor show a 10.6% unemployment rate through September 2008, when factoring in all “marginally attached workers” (including “discouraged workers”) and those “employed part-time for economic reasons”. As you can see, anyone who has been out of work for over a year falls off any unemployment graph. That 10.6% could actually be much higher.
2. Since the beginning of 2008, the United States has lost 760,000 more jobs than it created, an average of 84,000 jobs lost per month. September was the biggest month in over 5 years, with 159,000 jobs lost.
3. Lehman Brothers and Bear Stearns accounted for tens of thousands of lost jobs.
4. Bank of America, as well as Chase/WAMU have reported many job cuts on the way.
5. General Motors is planning to close three plants in Michigan, Wisconsin and Deleware, for a total of 4,000 lost jobs.
6. PepsiCo announced October 14th that they are trimming 3,300 jobs.
7. Danaher, a manufacturer of Craftsman tools, will close 12 plants and shed 1,000 jobs.
8. Best Buy announced that it will cut 10,000 seasonal jobs this year.
9. 29,000 companies filed for bankruptcy in the first half of 2008. According to Jack Williams of the American Bankruptcy Institute, two to three businesses fold for every one that files for bankruptcy protection. That means the realistic number is 60,000-90,000 businesses have folded this year alone. Williams also explained that bankruptcies lag behind current economic indicators, and, as such, will be likely to “continue to increase at least for the next year to eighteen months at the rate that we’re seeing right now”.
10. Circuit City is in plans to close 150 retail stores and 1,000’s of jobs nationwide to avoid bankruptcy. Circuit City is the largest retailer in recent years to seek bankruptcy protection. Other retailers filing for bankruptcy this year include, Linens n’ Things, Hollywood Video, Mervyn’s, and Sharper Image. Other large retailers like Home Depot and Starbucks have closed locations and dramatically scaled back new growth plans.
11. The pending merger of GM & Chrysler could mean a loss of half of Chrysler’s 66,000 employee work force.
12. Michigan (one of the last states with vestiges of the American auto-industry intact) has lost tens of thousands of auto-industry jobs in recent years, with GM, Chrysler and Ford cutting over 100,000 jobs since 2005.
13. Michigan is also ranked as the 4th highest foreclosure state at 13,605 foreclosures in September.
14. California posted unemployment figures of 7.7%, ahead of the national rate of 6.1%. California is third behind Michigan and Rhode Island for unemployment rate. California boasts 11% of the nation’s jobs. An estimated 10,000 jobs per month are lost in California alone. 1,425,000 are believed to be unemployed, up 400,000 from last year or 40%.
15. The unemployment rate at the height (or low, whichever way you look at it) of the Great Depression was 24.9%. While many economists speculate that the unemployment rate will not get above 7 or 8% this time around, it is interesting to compare historicals. In 1929, the unemployment rate was 3.2% just before the start of the depression. This number grew 5.5 points to 8.7% in 1930. One year later, in 1931, that rate was 7.2 points higher, or 15.9%. That rate increased to 23.6% in 1932 and 24.9% in 1933. Just last year, arguably before the current recession kicked in, our nation’s unemployment rate was 4.7%. Today, the number being released is 6.1% – the highest in five years, but certainly a rate that we’ve seen many times over the past few decades. It is an election year, however, and our talking heads have tried their best to assure us that things aren’t as bad as they really are, so I suspect that number is artificially low. That number could very well be in the year 1930 figures of 8.5%. What will the coming months bring? Did the citizens of 1930 believe a depression was on the way? Did they forecast a 7.2 point increase in the unemployment rate between 1930 and 1931? That is doubtful!
Why should all this concern you?
The figures above, coupled with the very dismal economic forecast for the holiday retail season, means that we could very well see depression-level unemployment rates, which will ripple through the economy and create even more devastation. During the Great Depression, household incomes fell by 53%. Could your budget sustain a hit like that and still cover necessary expenses like food, water and medicine?
It is time you are prepared now. Invest all of your leftover funds to purchase storable foods, medicines and personal hygiene products. Cash in your 401(k). Start planning or planting your gardens now. Buy water filtration/procurement supplies. Self-reliance in the coming months will assure that you and your family aren’t waiting in government bread lines. Don’t wait to see what will happen. Get prepared NOW. You can always save money later by eating the stored food when it is apparent that a depression has been avoided.
Filed under: Current Political News, government, politics , bailout, banks, business, depression, economy, foreclosure, government, politics, recession
