Are you more pessimistic about the economy than most?

[Logan]

Recent headlines

EMC's 2Q net more than doubles as firms stock up
Apple Smashes Expectations With FQ3 Earnings Report
Intel's Best Quarter Ever? Yes, Indeed!
AMD Profit, Revenue Easily Beat Wall Street Expectations\
Delta Reports Best Quarter in 10 Years
United Technologies 2Q net income rises

[Xue]

http://uspoverty.change.org/blog/view/want_to_be_poor_work_one_of_these_8_jobs

[Xue]

The Jobless Effect: Is the Real Unemployment Rate 16.5%, 22%, or. . .?

07/16/10

Raghavan Mayur, president at TechnoMetrica Market Intelligence, follows unemployment data closely. So, when his survey for May revealed that 28% of the 1,000-odd households surveyed reported that at least one member was looking for a full-time job, he was flummoxed.

"Our numbers are always very accurate, so I was surprised at the discrepancy with the government's numbers," says Mayur, whose firm owns the TIPP polling unit, a polling partner for Investors' Business Daily and Christian Science Monitor. After all, the headline number shows the U.S. unemployment rate today is 9.5%, with a total of 14.6 million jobless people.

However, Mayur's polls continued to find much worse figures. The June poll turned up 27.8% of households with at least one member who's unemployed and looking for a job, while the latest poll conducted in the second week of July showed 28.6% in that situation. That translates to an unemployment rate of over 22%, says Mayur, who has started questioning the accuracy of the Labor Department's jobless numbers.

Even Austan Goolsbee Has Been Skeptical

Mayur isn't alone in harboring such doubts, nor is he the first to wonder about inaccuracies. For years, many economists have pointed to evidence that the government data undercounts the unemployed. Economist Helen Ginsburg, co-founder of advocacy group National Jobs For All Coalition, and John Williams of the newsletter Shadow Government Statistics have been questioning these numbers for years.

In fact, Austan Goolsbee, who is now part of the White House Council of Economic Advisers, wrote in a 2003 New York Times piece titled "The Unemployment Myth," that the government had "cooked the books" by not correctly counting all the people it should, thereby keeping the unemployment rate artificially low. At the time, Goolsbee was a professor at the University of Chicago. When asked whether Goolsbee still believes the government undercounts unemployment, a White House spokeswoman said Goolsbee wasn't available to comment.

Such undercounting of unemployment can be an enormously dangerous exercise today. It could lead to some lawmakers underestimate the gravity of the labor market's problems and base their policymaking on a far-less-grim picture than actually exists. Economically, and socially, that would make a bad situation much worse for America.

"The implications of such undercounting is that policymakers aren't going to be thinking as big as they should be," says Ginsburg, also a professor emeritus of economics at Brooklyn College. "It also means that [consumer] demand is not going to be there, because the income from people who are employed isn't going to be there."

Indeed, it will add additional stress to an already strained economy. Businesses that might start ramping up after seeing the jobless number drop could set themselves up for disappointment when customers don't appear or orders don't flow in.

College Grads Serving Fries

Plus, having a job today is quite different from what it was just a few years ago: Many Americans have had their hours cut and are working for less pay. A Pew Research survey found more than half of all adults in the labor force had either lost a job or suffered a reduction in income because of the recession.

Ginsburg says the biggest source of undercounting comes from people who can't find a full-time job that they're qualified to do, for instance recent college graduates who take part-time jobs at fast-food joints or retail stores. Today, the Labor Department estimates that 8.6 million people are in this category.

The federal government counts such people as employed. However, polls show that these folks actually consider themselves "unemployed" and "looking for a job," and probably accounted for a large chunk of TechnoMetrica's respondents.

Jobless Workers Who Disappear

Another major source of undercounting is the unemployed who've given up looking for jobs. The Bureau of Labor Statistics headline number counts as unemployed only people who have actively looked for a job in the previous four weeks. About 2.6 million people had pursued jobs in the past 12 months but, discouraged by the lack of opportunity, had stopped looking altogether.

"Isn't it interesting that if you stopped looking for a job, you evaporate as a jobless person and are just not counted," says Gerald Celente, director of Trends Research Institute in Kingston, N.Y. Celente believes this kind of undercounting has suited the government politically. "It's what government does: Downplay disasters and amplify success."

According to the Pew Research Center, a large number of people are out of jobs for a longer period during this economic downturn. The typical unemployed worker today has been out of work for nearly six months. That's almost double the previous post-World War II peak for this measure, which was 12.3 weeks in 1982-83.

Indeed, if all of the truly unemployed were counted, the rate would be significantly higher. The BLS, in a data point titled "U-6," says it counted the total unemployment rate in June at 16.5%.

Misreading Americans' Anxiety

However, John Williams, founder of Shadow Government Statistics, says when accounting for the long-term unemployed, the jobless rate runs up to as much as 22% currently. Williams's newsletter, which analyzes flaws in government economic data, points out that such a rate isn't that far from the 25% it hit during the Great Depression.

Both Celente and Ginsburg believe lawmakers' not-dire-enough view of unemployment is one reason why they didn't extend federal unemployment benefits. Of course, party politics is another deterrent. Ginsburg says the Administration's decision to tackle the health care reform over unemployment reflects its lack of priority.

By taking his eye off one of the most fundamental issues affecting the country, President Obama has seen his popularity sink. The most recent Public Policy Polling survey says 45% of voters approve of the job he's doing, while 52% disapprove -- the first time Obama's disapproval ratings have exceeded 50% in this survey.

It's obvious that Americans view unemployment more urgently than either lawmakers or the president. And if pollsters like Mayur or economists like Ginsburg and Williams are right, it will take longer to fix this hole because it's already bigger than Washington thinks.

Source:

http://www.dailyfinance.com/story/careers/what-is-the-real-unemployment-rate/19556146/

[Xue]

I am assuming that the vast majority of us here are going through or have been through a bankruptcy. Most of us have been severely affected by the awful economy -- since you have been so negatively affected by the economy, are you more pessimistic about the economy/recovery than people you know that haven't been affected?

I am - I absolutely believe that the economy will continue to tank and that this will eventually be declared a depression.

I have family members and friends who haven't really been affected thus far (no pay cuts or job losses for them), and they seem to be in denial about how bad it really is. Just curious about your thoughts ...

Yes, I am very upset and worried and allowing all of this to stress me out. People like Luna and Celente say to start a business in this economy: hot dog stand, some niche...I'm just not seeing it. What is really upsetting is living in a college town where housing prices do not fall down because parents of the students are continually buying and selling and the students spend money like crazy on booze and clothes and restaurants and I just don't know where their parents get all this money.

[AbbeyA]

The one thing that I learned in my economic classes is that there will always be someone who predicts doom and gloom and that there will always be someone who will predict a rosy future. The truth is somewhere in between.

We are in a slow recovery, despite what some kool-aid drinkers think about us being in a depression, one that could get tanked by people being overly pessimistic.

Given the forum that we are posting on, it doesn't surprise me that there is a lot of pessimism here and doom and gloom.

But I'm just not seeing what they are. The company that I work for has expanded a lot in the last 2 years and is showing a healthy profit. And we are looking to expand even more. Will there still be businesses who go out of business? Yes, but there were businesses who go out of business even when we are in a fast upswing instead of the slow one we are in now.

That's my point - given what most of us have been through to bring us to this forum, I would think that most of us are pessimistic about the economy. We have been flushed out and experienced the worst, with the big job of slowly and SMARTLY rebuilding our financial wealth. It's a task ahead of all of us that needs to be done with careful precision. It's just hard to have a whole lot of optimism when we are continuing to see reports of job losses/foreclosures and regular families being destroyed by the economy. Having been affected by a business failure or job loss makes it all the more real and scary that it could happen again.

I am optimistic about my family's future, I am happy we were flushed out now rather than in a few years. We are lucky that we are young and have many more years ahead of us to rebuild. I am hopeful that the economy will head in the right direction, but I personally think it is going to get worse before it gets better.

[Logan]

Yes, I am very upset and worried and allowing all of this to stress me out. People like Luna and Celente say to start a business in this economy: hot dog stand, some niche...I'm just not seeing it. What is really upsetting is living in a college town where housing prices do not fall down because parents of the students are continually buying and selling and the students spend money like crazy on booze and clothes and restaurants and I just don't know where their parents get all this money.

XUE,

Most people I work with never saw the affects of the recession. Unemployment is normally around 5% and it jumped up to almost 11% at one time. That means only 6% more people were out of a job than normal so that means 94% are with jobs. I also know a few people who lost their jobs and went off traveling and were happy not to work for a while and they are included in this number.

I lost my job in 2004 (3rd job loss in 10 years) and I was in a recession then. I made it through the last few years in great shape thanks to my BK and that I have remained employed. Like I said before, perception is everything. Every time I turn on the news I see recession and that affects my spending. If I never turned on the tv I would think everything was great and I would spend more money which in turn would put more money into the economy and in turn create more jobs.

When this country believes we are out of the recession then we will be out of the recession!

Logan

[nc73]

For those unemployed yes the world is coming to an end and the great depression is upon us. I'll probably think the same if I lost my job but until that time comes the world is fine and dandy.

[banca rotta]

XUE,

When this country believes we are out of the recession then we will be out of the recession!

Logan

This has been the case for a while, probably since WW2, but it isn't that simple now I'm afraid.

The debt load of all western nations including private debt, public debt, and ponzi scheme unfunded liabilities total more money then the world even has at it's disposal.

http://www.usdebtclock.org/

All of the social programs created during the last great depression such as social security, FDIC, Fannie Mae, etc. are not only bankrupt, but they are being bailed out by our bankrupt government. 48 states are in the red and have unfunded liabilities and neither side is willing to give an inch on this.

I am generally positive but happy thoughts will not get us out of the above dire situations I mentioned.

You will most likely see the programs either abolished and major defaults which will cause a much greater depression or massive stimulas, money printing and hyper inflation which is not only more likely going to happen but it's far worse.

[banca rotta]

For those unemployed yes the world is coming to an end and the great depression is upon us. I'll probably think the same if I lost my job but until that time comes the world is fine and dandy.

The problem with that are all of the unemployed drawing more from the social safety net and our tax base is already stretched too thin.

Then there's crime. With more bankrupt municipalities and less law enforcement combined with more poor people this one will definitely bite us all in the @$$.

This really is everyone's problem or at least it will be soon enough.

[Logan]

This has been the case for a while, probably since WW2, but it isn't that simple now I'm afraid.

The debt load of all western nations including private debt, public debt, and ponzi scheme unfunded liabilities total more money then the world even has at it's disposal.

http://www.usdebtclock.org/

All of the social programs created during the last great depression such as social security, FDIC, Fannie Mae, etc. are not only bankrupt, but they are being bailed out by our bankrupt government. 48 states are in the red and have unfunded liabilities and neither side is willing to give an inch on this.

I am generally positive but happy thoughts will not get us out of the above dire situations I mentioned.

You will most likely see the programs either abolished and major defaults which will cause a much greater depression or massive stimulas, money printing and hyper inflation which is not only more likely going to happen but it's far worse.

Why is Germany in such good shape when they have many more social programs and pay much higher taxes?

My wife is from Germany and her family lives well and they say they live better than us. They do pay higher taxes but they actually get something for their taxes and there is much debate as there is here about the level of taxes.

If your taxes went up 1% how would it affect you?

We certainly are told by the media and the conservative right how bad taxes are and we may find out.

Logan

[Logan]

Todays news...Once again, I'm not advocating higher taxes but there are countries with higher taxes than us that do just fine.

It will be ok...stop watching Glenn Beck--he is an entertainer not an expert.

Germany's economy is rebounding from the global downturn much faster than many analysts expected. Growth rates are beating predictions, export orders are up and the jobless rate is down.

[Logan]

More good news:

Ford posts another quarterly profit as sales climb

[Xue]

...if you want a picture of the future, imagine a boot stamping on a human face—forever.

-1984

U.S. bank failures reach 103 so far this year

http://www.guardian.co.uk/business/feedarticle/9188092

Excerpt:

U.S. bank failures reached 103 so far in 2010 on Friday as regulators seized seven small banks, a faster pace of closures than last year when the century mark was not reached until October. Bank failures are expected to peak this quarter...

U.S. money wasted on Afghanistan projects, auditor finds

http://articles.latimes.com/2010/jul/22/world/la-fg-afghan-buildings-20100723

Excerpt:

A federal auditor complained in a report that the buildings constructed by the U.S. Army Corps of Engineers for the Afghan national police represent an "outrageous waste of taxpayer money." He said the problems are representative of a "regular negative pattern" in overly complex construction in the country.

"Why in the world are we continuing to construct facilities all over Afghanistan that we know, and the Afghans know, they will not be able to sustain once we hand the facilities over?" asked Arnold Fields, the special inspector general for Afghan reconstruction.

His critique comes at a time when the Obama administration is funneling billions of dollars into projects as part of its efforts to strengthen the country's central government and security forces.

So, $12 billion a month for the War, when teachers and police officers in the USA cannot get jobs.

Positive thinking alone cannot change what we are in.

Simon Black suggests looking outside the USA:

I think the illusion that you can have some grassroots campaign and change the system and fight the man is frankly bull****. I just don’t see it being possible. It really is counterproductive and at the end of the day, you have yourself and your family to worry about.

And there’s literally an entire world of opportunity out there – whatever the problems you might have, there are limitless options and solutions out there to improve your life, whether it be a personal situation or a professional situation.

One of the things we do is get people to think globally. People in the United States, they’re out of a job, they can’t find work – well, where are you looking? Are you trying to find work in Fort Myers, Florida, the epicenter of the real estate collapse? Probably not a good idea. You have better chances of finding a job in different places in the world.

People get so focused on their country, they became a slave to their geography, and it’s just completely senseless...Unfortunately, as the prevailing trend seems to be increased government control over the economy, the only direction, at least for now, is down. This is a rigged game, and I think it won’t be long now before productive citizens finally realize it… and stop participating.

For many, this may mean leaving the game altogether and heading overseas where they can exist outside of this corrupt system.

It’s true that no place is perfect, but I’m convinced that a well-prepared expatriate can find far greater personal and economic opportunity with minimal disruption and interference overseas… and that is the whole nature of our ongoing conversations.

http://www.bravenewtraveler.com/2010/02/03/interview-simon-black-the-most-free-man-in-the-world/

http://www.sovereignman.com/expat/jobs-in-amerika/

Twenty Reasons Why The U.S. Economy Is Dying And Is Simply Not Going To Recover

http://www.miatoday.com/TwentyReasonsWhyTheU.S.EconomyIsDying.asp

Excerpt:

It is getting really hard to find a job in the United States. A total of 6,130,000 U.S. workers had been unemployed for 27 weeks or more in December 2009. That was the most ever since the U.S. government started keeping track of this statistic in 1948. In fact, it is more than double the 2,612,000 U.S. workers who were unemployed for a similar length of time in December 2008. The reality is that once Americans lose their jobs they are increasingly finding it difficult to find new ones.

How can I not get upset reading this:

It is estimated that the top 1% of Americans control roughly 40% of the nation’s wealth. In other words, 3 million people own $21,400,000,000,000.00 ($21.4 trillion) in net private assets, while the other 305 million own the remaining $32,000,000,000,000.00 ($32 trillion). 77,000,000 (77 million) Americans (the lowest 25%) have mean net assets of minus $2,300 ($-2,300.00) per person; they live from paycheck to paycheck, or on public assistance. The lower 50% of Americans own mean net assets of $27,800 each, about enough to purchase a modest car. Obviously, it would be impossible to retire on such an amount without significant government or other assistance. Meanwhile, the richest 10% of Americans possess mean net assets of $3,976,000.00 each, or 143 times those of the bottom 50%; the top 2% control assets worth more than 1,500 times those in the bottom 50%. When you combine these facts with Wall Street’s typical multi-million dollar annual bonuses, you get an idea of wealth inequality in America. Historically, such extreme inequality has been a well-documented breeding ground for totalitarianism.

America's Impending Master Class Dictatorship

http://www.miatoday.com/AmericasImpendingMasterClassDictatorship.asp

[Xue]

Poor economy boosts military recruiting in R.I., nationallyPoor economy boosts military recruiting in R.I., nationally

http://www.projo.com/news/content/MILITARY_RECRUITING_07-04-10_72J1TBS_v34.15a8043.html

When the recession began in December of 2007, the official unemployment rate was 5.0%, but by the end of 2008 the official unemployment rate soared 48% to 7,4% In 2009 the unemployment rate jumped to 10%, which was another 35% increase. A lot of people feel like the BLS's "unemployment rate" doesn't accurately represent the sad state of affairs. For example, in January 2010 we lost jobs from December 2009, yet the unemployment rate went down? In February 2010 we lost jobs again yet the unemployment rate stayed flat? It's because of the funny ways the BLS counts the unemployed. So what about the MBA that's waiting tables, or the part time worker, the guy working at Wal-Mart (WMT), or the person who quit their job search? You don't think underemployment matters?

It has to remind you of the 1930s. It wasn't just one big recession, the Depression was marked by ups and downs, and had recessions within the Depression.

It wasn't just an American or European thing, but a global thing marked by Central Bank printing, over building, over consumption, too much money, leverage and too much debt.

So what happens when government spending is increasing, militaries are increasing, politicians from one country are blaming the citizens of one country and the politicians from another country are blaming the citizens from another country? Or in Germany's case in the 30s when their leader was blaming a domestic small ethnic group? War.

The oversupply, over consumption, over leverage of the roaring 20s gave the world a "New Normal" in the 1930s that they then tried to prop up but that ended in the ultimate destruction of lives, wealth, resources and nearly a group of people. They tried countless government programs to add demand, like the New Deal, but none of it stopped the deflationary Depression. Many of their government programs just made it worse. For example they tried having the government pay farmers to burn crops and kill livestock while people were starving to death. The Depression of the 30s didn't really end until the citizens of the developed world got out of breadlines and picked up military uniforms.

I hope it doesn't happen again.

Military Recruitment, Unemployment, And War

http://seekingalpha.com/article/192422-military-recruitment-unemployment-and-war

Obama is Preparing to Bomb Iran

http://tarpley.net/2010/07/22/obama-preparing-to-bomb-iran/

N Korea Threatens US with Sacred War

http://www.usanewsweek.com/news/North-Korea-Threatens-Sacred-War-Against-US--S--Korea-1280028009/

US Troops, Patriot Missiles in Poland Spark Russian Concern

http://www.globalsecurity.org/space/library/news/2010/space-100527-voa01.htm

A flotilla of 46 United States Navy warships capable of carrying 200 helicopters, along with 10 Harrier vertical take-off and landing fighter jets, and 7,000 combat ready marines available for land based operations is on its way to this Central American country with no standing army.

http://military.einnews.com/costarica/

http://www.examiner.com/x-10438-Human-Rights-Examiner~y2010m7d21-Censored-Gulf-military-news-Costa-Rica-occupation-warning-Full-Spectrum-Dominance

http://www.globalpost.com/webblog/costa-rica/7000-us-marines-landing-the-beaches-costa-rica

[Logan]

XUE,

My entire life we have been in some sort of war or conflict. This has not changed nor ever will change. Please tell me a time period when we were not at war? I remember when I was a kid we had oil rationing due to difficulties with the middle east. Do you remember the cold war?

You can fixate on whatever you want. My life is great because I choose not to worry about the things you just posted. If a bomb is dropped on my head today would I have been better of worrying about it yesterday or off playing with my child? I try to live my life like today is my last day. I am off for a 30 mile bike ride followed by a 5 mile run. When I get tired (and I will) I will think about my friend who is stuck in a wheel chair and would give anything to be able to walk again and that will drive me.

As far as the recession--it is over. It's not up to the government, me or anyone else to find you a job---It is up to you! I've been there and it is not easy but when I look back on some of the experiences during those rough times I don't think I would change anything!

Good luck!

Logan