My twitter Bio is: Tired of Government lies, cover ups and omission of fact? ME TOO!
(You may follow me on twitter as @Ancient_Warrior)
All we, the American people have heard, from government, politicians, central bankers and the like, since 2008 is how the economy is steadily improving. This is repeated through mimicry by the main stream media who seem to have completely forgotten what investigative reporting means..
This story, in my opinion, provides a seemingly rare peek at what things are truly like in this economy.
And, in my opinion, for the most part we can chalk it up in the "omission of fact" category.
---
TWO years after economists say the Great Recession ended, this is one anniversary few seem like celebrating.
The recovery has been the weakest and most lopsided of any since the 1930s.
After previous recessions, people in all income groups tended to benefit. This time ordinary people, especially in the US, are struggling with job insecurity, too much debt and pay raises that haven't kept up with prices at the grocery store and petrol station. The economy's meager gains are going mostly to the wealthiest.
With rank-and-file workers far more dependent on regular wages and benefits, a big chunk of the economy's gains has gone to investors in the form of higher corporate profits.
"The spoils have really gone to capital, to the shareholders," says David Rosenberg, chief economist at Gluskin Sheff + Associates in Toronto.
Corporate profits are up by almost half since the recession ended in June 2009. In the first two years after the recessions of 1991 and 2001, profits rose 11 percent and 28 percent, respectively.
And an Associated Press analysis found that the typical CEO of a major US company earned $9 million last year, up a quarter from 2009.
Driven by higher profits, the Dow Jones industrial average has staged a breathtaking 90 percent rally since bottoming at 6,547 on March 9, 2009. Those stock market gains go disproportionately to the wealthiest 10 percent of Americans, who own more than 80 percent of outstanding stock, according to an analysis by Edward Wolff, an economist at Bard College.
But if the Great Recession is long gone from Wall Street and corporate boardrooms, it lingers on Main Street.
Kathleen Terry is one of those who had to settle for less. Before the recession, she spent 16 years working as a mortgage processor in Southern California, earning as much as $6,500 in a good month, a pace of about $78,000 a year.
But her employer was buried in the housing crash. She found herself out of work for two and a half years. As her savings dwindled, the single mother had to move into a motel with her three daughters.
They got by on welfare and help from their church and friends. Terry started taking a 90-minute bus ride to job training courses. Eventually, she found work as a secretary in the Riverside County employment office. She likes the job, but earns just $27,000 a year. "It's a humbling experience," she says.
Hard times have made Americans more dependent than ever on social programs, which accounted for a record 18 percent of personal income in the last three months of 2010 before coming down a bit this year. Almost 45 million Americans are on food stamps, another record.
Ordinary people are suffering because of the way the economy ran into trouble and how companies responded when the Great Recession hit.
Soaring housing prices in the mid-2000s made many feel wealthier than they were. They borrowed against the inflated equity in their homes or traded up to bigger, more expensive houses. Their debts as a percentage of their annual after-tax income rose to record highs.
The world recession that began in December 2007 turned into the deepest downturn since the Great Depression.
Economists Kenneth Rogoff of Harvard University and Carmen Reinhart of the Peterson Institute for International Economics analysed eight centuries of financial disasters around the world for their 2009 book "This Time Is Different." They found that severe financial crises create deep recessions and stunt the recoveries that follow.
This recovery "is absolutely following the script," Rogoff says.
US Federal Reserve numbers crunched by Haver Analytics suggest that many have a long way to go before their finances will be strong enough to support robust spending.
Because the labour market remains so weak, most workers can't demand bigger raises or look for better jobs.
"In an economic cycle that is turning up, a labour market that is healthy and vibrant, you'd see a large number of people quitting their jobs," says Gluskin Sheff economist Rosenberg. "They quit because the grass is greener somewhere else."
Instead, workers are toughing it out, thankful they have jobs at all.
The toll of all this shows in consumer confidence, a measure of how good people feel about the economy. According to the Conference Board's index, it's at 58.5 in the US. Healthy is more like 90. By this point after the past three recessions, it was an average of 87.
Source: http://www.news.com.au/business/recovery-turns-2-feel-better-yet/story-fn7mjon9-1226086375573#ixzz1Qz6lVK3f
No comments:
Post a Comment