Yes, these are dire political times. Many who optimistically hoped for real change have spent nearly five years under the cold downpour of political reality. Here at CounterPunch we’ve always aimed to tell it like it is, without illusions or despair. That’s why so many of you have found a refuge at CounterPunch and made us your homepage. You tell us that you love CounterPunch because the quality of the writing you find here in the original articles we offer every day and because we never flinch under fire. We appreciate the support and are prepared for the fierce battles to come.
Unlike other outfits, we don’t hit you up for money every month … or even every quarter. We ask only once a year. But when we ask, we mean it.
CounterPunch’s website is supported almost entirely by subscribers to the print edition of our magazine. We aren’t on the receiving end of six-figure grants from big foundations. George Soros doesn’t have us on retainer. We don’t sell tickets on cruise liners. We don’t clog our site with deceptive corporate ads.
The continued existence of CounterPunch depends solely on the support and dedication of our readers. We know there are a lot of you. We get thousands of emails from you every day. Our website receives millions of hits and nearly 100,000 readers each day. And we don’t charge you a dime.
Please, use our brand new secure shopping cart to make a tax-deductible donation to CounterPunch today or purchase a subscription our monthly magazine and a gift sub for someone or one of our explosive books, including the ground-breaking Killing Trayvons. Show a little affection for subversion: consider an automated monthly donation. (We accept checks, credit cards, PayPal and cold-hard cash….)
To contribute by phone you can call Becky or Deva toll free at: 1-800-840-3683
Thank you for your support,
Jeffrey, Joshua, Becky, Deva, and Nathaniel
CounterPunch PO Box 228, Petrolia, CA 95558
The Economy is in Big Trouble
Imagine the reaction at the White House when the Department of Labor released its weekly unemployment figures on Thursday. Jobless claims rose by 12,000 to 500,000 in the second week of August. There’s been no improvement in the jobs market in 9 months and now unemployment is edging upwards again. This wasn’t supposed to happen. The Obama administration had bet everything that the economy had turned the corner and would gradually get better. Many economists saw less than a 10 per cent chance that the economy would tip back into recession. After all, double dip recessions are "extremely rare". Now more people are losing their jobs and Team Obama is caught in the headlights. There is no back-up plan, no Plan B. The Democrats will face the midterms with no stimulus to create new jobs and with an economy that is steadily deteriorating. It’s going to be a massacre and they know it.
Obama and his lieutenants have stopped talking about austerity measures. The plan to dismantle Social Security has been put on hold,( though the Commission headed by the appalling former Senator Alan Simpson grinds on with its mission of destruction.) No one wants to hear about belt tightening when the future is uncertain and they’re worried about losing their jobs. Obama will have to shift-gears again; switch from promoting the elitist "privatize everything" agenda to his "I feel your pain" routine. He might want to dig up some archived video of B. Clinton chewing his lip and blinking back the tears.
All of the economic data is being revised downwards. The economy is in big trouble and the politicians are just starting to catch on. Stocks fell sharply on Thursday (Dow down 144 points) on news that manufacturing (Philly Fed Index) shrank in August beyond analysts expectations. Nearly every category fell including shipments and new orders. The Dow Jones is off 10 per cent since April 23, more than a 1,000 point loss in the last 4 months. Also, Moody’s reported that commercial real estate prices slipped another 4 per cent in June. According to Calculated risk website, "Commercial real estate values are now down 41.3 per cent from the peak in late 2007." It’s a bloodbath.
Bond yields on US Treasuries continue to tumble as investor pessimism grows and increasingly bleak news feeds the fears of another slump. The two-year note has been setting records nearly every day. The benchmark 10-year which peaked at 3.99 per cent in April has since descended into Bernanke’s inferno. It was last seen parachuting to terra firma at 2.61 per cent. If it continues to plunge at this rate, it will be below 2 per cent by year-end. Welcome to Japan.
Try to grasp the significance of bond yields. The business media spins the news and tries to dress up the data with all kinds of happy talk. Bond yields reflect cold hard reality. Investors only plunk their money into low-yielding liquid assets when they’re sure things are going to get worse. Much worse. The rumors of a "bond bubble" is all nonsense. These aren’t leveraged assets; there’s no risk. People accept modest returns because they’re afraid to put their money anywhere else. It’s a referendum on failed monetary policy.
30-year mortgage rates are pinned to the 10-year which is why rates are lower now than any time in history. Still, housing inventory continues to build. Realtors are finding that they can’t giveaway homes at any price. So much for the American dream.
Policymakers at the Fed, the Treasury, the White House and the Congress now look on as the foundations of the so-called recovery crack before their very eyes. Many of their careers will undoubtedly follow the economy down the drain. As the stimulus runs out, unemployment will rise, deleveraging and debt liquidation will gain momentum, and the economy will succumb to a second vicious contraction. Digging out will not be easy.
MIKE WHITNEY lives in Washington state and can be reached at email@example.com.