Austerity Comes to America

By George W. Mantor

Just when I thought things couldn’t get any worse it has now become clear what the real endgame is, and it’s really bigger and more sinister than I ever imagined.

Never mind any of that talk about a return to prosperity, welcome to Austerity American style.  We’ll get to that “rosy” jobs picture in a moment, and I assure you that it is all spin. In fact, the March report from the Bureau of Labor Statistics simply presents selected facts.  And then, the news agencies tell you what to think about it.

The second paragraph of the Bureau’s report sums it all up with the simple truth. “The number of unemployed persons (13.5 million) and the unemployment rate (8.8 percent) changed little in March.”

Yes, that’s the bottom line…little change, less hope.

The fact that we are experiencing record foreclosures and high unemployment while productivity and corporate profitability are producing record setting Wall Street bonuses is a clue.  How is it that Wall Street is an Island of prosperity in a sea of poverty?

But, what we are experiencing are only the symptoms of something that would have been unimaginable to me a few years ago.  I thought Wall Street could steal more from a prosperous country, but that wasn’t the plan.

America is systematically being driven over a cliff by a world banking elite with a very simple and so far unstoppable agenda, to seize all wealth and power for themselves.

I know, send me the tin foil hats and call me a conspiracy theorist, but I have been to the bottom of the rabbit hole on this four year voyage into the world of corporate banking and, as a reasonable person, I am left with but one conclusion.

There can be no other explanation for where we find ourselves, and we are not alone. Countries all over the world are a year ahead of us and we can learn much by watching what plays out there.  This is the $1,000 Trillion Dollar Question coming home to roost.

When you eliminate every other possible explanation, whatever you are left with, no matter how improbable, is the truth.

Stay with me for a second here and ask a question or two from an investigative journalist perspective.  You arrive at the scene of the train wreck and you start to ask questions.  Everything is cause and effect.

Families who worked hard all of their lives and played by the rules are losing everything. Why?

If the economy is good enough to produce record bonuses for CEOs, why are we talking about cutting programs for the elderly, the unemployed, and our returning veterans?

Why do 83 of America’s most profitable companies pay no taxes and get government subsidies?

Why do we spend tax payer’s money to train foreign workers to take American tax payers’ jobs without putting anything back into the system?

Austerity is the pretext under which our government is about to break its most fundamental compact with its people, and there will be no promise too sacred to break.

We are apparently too ill-informed or too fat to riot in the streets.  And, in the last California Primary election, only a third of registered voters bothered to cast a ballot. “I know, but like Dude, everything is going so well.”

While everyone was celebrating the “explosion” of jobs here is what slipped by without comment.  It’s all about Austerity.

The State of Michigan, hard hit by manufacturing job losses, is planning to reduce unemployment benefits. That can’t turn out well.

In the meantime, our federal reps, locked in a theatrical Kabuki dance pretending to care about the budget, are talking about withholding a cost of living increase from social security recipients when food and energy prices are rising. One can only wonder about the dark consequences of that.

And, the military wants our returning service people to be responsible for their own health care. Yes, that also includes those wounded in action.

Social Security had been producing a surplus every year, but they just spent that on whatever they wanted.

So, there you have it and no one is safe.  The elderly, the unemployed and returning military are the first targets.  Who is next?

In the style of Pastor Martin Niemöller:

When they came for the trade unionists, I was glad because those trade unionists put pressure on employers to share the wealth and that robs us of our freedom.

When they came for the unemployed, I thought it was about time that these freeloaders and deadbeats got what is coming to them for ruining America.

When they came for the defaulters, it confirmed my suspicion that many people were buying homes they didn’t deserve.

When they came for the sick and injured, I viewed it as a necessary “thinning of the herd”.

When they came for the elderly, I figured, well, they’d have to come for them eventually anyway.

When they came for the single moms, I didn’t speak out because I wasn’t a single mom.

So, when they came for the apathetics, there was no one left to speak for me.

Folks, it’s all gone. And, all of that money that Bernanke is printing and giving to the banks under the bogus title of “quantitative easing” is just being piled on top of the $13.8 trillion of national debt. The interest alone exceeds our entire gross domestic product.

And, that’s the real problem. Financing these unending wars and the interest on the money we borrow to do that is now all that we can afford.

They weren’t satisfied spending all of the money we generously gave them; they spent money we don’t even have.

As for those 216,000 “new jobs” created in March, when you apply that against the current 13.5 million unemployed it would take 15 years.  Not mentioned was the fact that every month 130,000 new workers enter the work force.  So, the net gain is actually 86,000.

It’s not enough just to get back the 8.36 million jobs that were lost, the US also needs to create about 15 million more jobs over the next 10 years in order to stay even with population growth and return to full employment.  That’s about 23 million all together.

It is also important to note what kinds of jobs are being created. The Bureau of Labor Statistics reports, “In March, employment in the service-providing sector continued to expand, led by a gain of 78,000 in professional and business services. Most of the gain occurred in temporary help services (+29,000) and in professional and technical services (+35,000).”

Unfortunately, the word temporary gives away an important truth. This category always spikes this time of year because it’s tax season. The rest are mostly entry level low wage jobs.

The report made no mention of construction gains where we desperately need jobs. Until we start to build things, our economy cannot improve. If you know another way, please share it.

The report notes that the unemployment rate has fallen to 8.8 percent.

However, when one looks at the bigger picture, it is clear that this number actually represents only part of the true unemployment crisis.  Large categories of people aren’t counted in the total because they do not meet the Bureaus definition of “unemployed.”

In the graph below, U6 unemployment includes those marginally attached to the labor force and the “underemployed,” such as those who have accepted part-time jobs when they are really looking for full-time employment.

Also not included are those who have exhausted their benefits and those who did not qualify, such as the self-employed or those who used to have a business, like real estate and mortgage professionals, construction workers, artisans, retail shop keepers, and all the former owners of all the businesses that used to operate out of all of those now vacant storefronts and industrial parks.

When you include everyone who isn’t earning a living and isn’t paying taxes or spending money, the real wasted labor is probably somewhere around 40%.

Those people are already experiencing their own personal version of austerity.

But, at least it’s going in the right direction for those 216,000 families.  For them, there is a light at the end of the tunnel.

For the rest of us, it’s just a high-speed bullet train bearing down on us.

Maybe I’m wrong.  I hope I’m wrong.  I don’t think I like austerity so maybe if I just crunch the numbers one more time…let’s see, carry the nine, hit the total…aw, geez.  My calculator doesn’t have enough zeros to calculate how much money has been looted from us. And all we have to show for it is the Austerity.

George W. Mantor
The Real Estate Professor
Founder, American Foreclosure Resistance Movement

“First they ignore you, then they ridicule you, then they fight you, then you win.”  —  Mahatma Gandhi