Where is the US economy headed?

The problem that banks are too big to fail is nothing beside the problem that they are too big to save.

I won't disagree with the notion, Tak and Cyclo, that the cheap dollar combined with low interest rates have enabled domestic manufacturers and bankers to report huge profits. Yesterday GM said it would pay back $7.5Bn in bailout money to central banks in the U.S. and Canada. They would do so by getting much cheaper loans in the private markets as opposed to paying interest of 14% in the U.S. and 21% in Canada on bailout money.
It pisses me off that the private sector isn't creating jobs and the banks aren't making loans to create jobs. But, without being an apologist for Bernanke et al, I do feel that it was important that the companies get their balance sheets cleaned up before, particularly in the case of banks, the **** hits the fan regarding home foreclosures and the commercial real estate market which will be coming soon to a shopping center near you.

Yeah, but without the jobs, the economy is just going to languish forever.

Cycloptichorn

rjb, All points well taken; with all levels of government laying off workers, any hiring by private companies will be not enough to make up the demand on jobs. This has far-reaching consequences that the US government, banks, and the feds seem too stupid to realize and act upon. They're good at squeezing the middle class, but that will only destroy our economy sooner than later.

We are helpless in how they throw money at the wrong issues in a time of economic crisis.

It won't be long, but everybody will become the loser.

I hate to say you may be correct but is this not the British way of taking down a government that they want to exploit?
I hate conspiracy theories but it does seems as I have seen this in history before!

Oh yes, Cyclo, I can't agree more with you about jobs. Not just with the near term but also with the long term.
I was one of only about 10 people in the world who watched Bernanke's Q&A yesterday. My notes turned out to be echoed by Krugman in his article today.
A lot of time was devoted to the possibility of inflation. There were a couple of questions about the value of the dollar. Nothing was asked about employment - or the lack thereof.
Bruce Springsteen, in a song years ago about his native NJ talked about jobs going away and never coming back. I don't think we comprehend that in this country.
Manufacturers are developing ways to get machines to replace people. Brick and mortar stores like mine can not compete with on line sites. I am 65 so it is fine, I guess, but my business will probably be obsolete in a decade.
Meanwhile, kids go deeply into debt to get a degree in art history or something.
Where will the jobs be in the next decade or generation? I frankly don't know.

16 Amazing facts on the Middle Class Squeeze


http://www.theatlantic.com/business/archive/2011/04/16-amazing-facts-on-the-middle-class-squeeze/237949/

Editor's note: The last three years have decimated the middle class, leaving behind a trail of foreclosures, joblessness and devastated wealth. To illustrate the range of suffering, Michael Snyder, editor of editor of The Economic Collapse blog, assembled a collection of statistics that paint a full picture of the crisis.

33% of Men Don't Have Jobs

Last year, just 66.8% of the U.S. male population was employed. This was the lowest figure on record, the combination of a bad economy and an aging population.

74% of Americans Will Buy Less

Seventy four percent of Americans will slow down their spending in coming months due to rising prices on everything from corn to gas. Food and energy inflation could be one of the major economic issues of 2011.

Gas Up Nearly $1 This Year

The price of U.S. crude oil has risen $20 a barrel over the last two months, and the price of gas has nearly jumped from $3 a gallon to $4 a gallon this year.

Property Tax Creep

In 2005 the median property tax on a home in the United States was $1,614. It's now $1,917, Bloomberg BusinessWeek reported. In 2010, while corporate income taxes fell across the country, total state and local tax revenue actually increased nearly 16 percent.

8 Million Americans Behind on Mortgage

A March 2011 poll found that a third of homeowners owe more on their mortgage than their house is worth.
Typical homeowner in foreclosure hasn't paid mortgage in 17 months.

13% of all houses are empty. Maine leads with 23% of it's housing stock empty. Florida & Arizona are at 17% and 16%.

Children in poverty up 2 million in 2 years.

Half of American workers earn less than $500 a week or less.

Credit card debt is up 800%.

904 billion in student loan debts.

1.5 million more bankrupt.

52 million uninsured up from 38 million a decade ago.

Medical bills behind 60% of bankruptcies.

Household wealth falls 23% from $125,000in 2007 to $96,000 in 2009.

25% of households have zero or negative net wealth.

The news flash is this has been coming for 30 years. Barack Obama is not the cause of all this distress.

You may be correct but crazy old me thinks that this process has be repeating itself even before the pyramids were built!

It may have been started as an ancient pyramid scheme but it seems to have evolved from a known and accepted slave scheme to a clever slavish and capitalistic scheme!

Jobs in Accounting, Health Services, and believe it or not, Leisure Industry, will continue to grow in the future.

Obama will never be the cause of anything, unless he lucks out and does something right.

Give it a break, huh?

A chap called James West has written the following--



I'm not sure what to make of it but the " obsession with microscopic partisan philosophy differences and dogma" is rife on this thread.

Bingo!

We have a winner!

James West or Jim West may refer to:
James West (Australian journalist) (born 1982), Australian journalist and author
James West (antiquary) (1703–1772), English politician and antiquary; president of the Royal Society
James E. West (politician) (1951–2006), American politician; recalled former mayor of Spokane, Washington
James E. West (Scouting) (1876–1948), first Chief Scout Executive of the Boy Scouts of America (BSA)
James Grey West (1881–1951), British architect
James West (football manager), British football manager
James West (Canadian football) (born 1957), Canadian former football player
James Marion West, Sr. (1871–1941), Houston, Texas businessman and political figure
James Marion West, Jr. (1903–1957), his son, Houston businessman
James R. West, American trumpet player and teacher
James Edward Maceo West (born 1931), American co-inventor of the microphone
James T. West, a fictional character on the television series The Wild Wild West and the motion picture Wild Wild West
Jim West (biblical scholar and biblioblogger) (born 1960)
Jim West (guitarist) (born 1953), American guitarist, film and TV composer
Jim West (footballer) Australian former footballer (born 1966)
James West (baseball), American baseball player
James West (musician), drummer for the band Ghostwood

James West, Publisher and Editor of the Midas Letter who believes that most investors are missing the boat on Gold and Silver exploration companies.

I am well aware that as a gold bull he has an axe to grind. He grinds it well though.

Yep, and with the possible exception of the production and sales of firearms and ammunition,
none of Obama's outlandishly expensive emergency actions have resulted in any notable job growth.

Thank you for your reply, I do have to admit that I am more retarded than some people on this subject! Could help me to understand reality better than what I do?

I looked up the word you used and I came up with this!

http://en.wikipedia.org/wiki/Liberalism

What is your definition of liberalism?
What part of liberalism do you hate the most?

I've just read that Bachmann tied the loss of "economic liberty" that Americans face today to the systematic killing of six million European Jews, the Holocaust.
(Bachmann's remarks were made at the We The People First in the Nation Freedom Forum at Southern New Hampshire University.)

I don't know what in particular Springsteen had in mind with respect to his home town, but at the time the song was written we had recently seen the collapse of our steel-making & textile industries as well as a good deal of heavy manufacturing. The process has, of course continued since then.

It is commonplace to see folks assign the cause for this to purely domestic factors; monetary policy, labor unions, greedy industry managers, etc. The fact is that the real driver was the emergence of far cheaper manufacturers in Asia - mostly as a result of the abandonment of socialist economic policies in Indonesia, Malaysia, and China, policies which had formerly locked those countries in low productivity and poverty. Cheaper labor, newly liberated entreprenurship and in some cases more modern & productive plants were their advantage. In a world in which we depend on trade for basic commodities and the export of our products, both manufactured and intellectual, we don't have the ability to erect tariff walls to protect out industries without retaliation by our trading partners. In the 1040s & 1950s we were the only undamaged player in the game and could do as we wished: that hasn't been the case for over 40 years now. The intransigence of American labor unions, which resisted productivity investments by manufacturers that would have lowered employment and labor cost but enabled the industries to compete, hastened the collapse of these industries.

Now we have no choice but to compete. That requires that we adapt; free our labor markets from the asinine constraints of self-serving unions and industries from the growing stranglehold of government regulation. We certainly won't do it by building high speed rail projects under government project labor agreements, or by subsidizing supposedly "green" energy industries. That only produces huge cost overruns, second rate services like AMTRACK and perpetual needs for continuing subsidies. It does nothing whatever to improve our competitive position in international export markets.

However, the current administration doesn't appear to have a clue about this. They are in the grip of their paymasters in organized labor and the liberal champions of a highly top down regulated economy. It is merely ironic that our chief economic competitors in the world - those who are accumulating all of our former wealth - are doing so by abandoning precisely the policies our hapless administration is clinging to.

But George--if Mr West is right and America does consist of 300 million puffed up roosters strutting around indignantly those solutions are not possible. It is precisely that, he presumably would say, that has caused organized labor and the liberal champions of a highly top down regulated economy to be what they are and do what they do and there's no chance of them responding to a finger wagging from you except maybe to look a bit sheepish whilst you're dishing it out. Maybe. Some might laugh.

The "emergence of far cheaper manufacturers" was not an uncaused cause. It was a deliberate policy at this end. And the result highly predictable.

Not that I think America consists of 300 million puffed up roosters strutting around indignantly. There must be quite a considerable number who are not like that.