Free Markets, Free People

Economy

Don’t Tell Anyone, But The Recession Is Still With Us

Despite all the happy talk from the administration and the lap-dog press eagerly parroting the “good news” that the recession is over, the numbers just don’t support the talking point.  Liam Halligan delivers the news:

So I was pleased last week when I heard that, after four successive quarters of contraction, America’s economy grew by an impressive 3.5pc between July and September, compared to the quarter before. “The US is out of recession” numerous newspaper headlines screamed. No wonder share prices surged.

As ever, the numbers warrant a closer look. For one thing, this is annualised data. So the US economy actually expanded by only 0.9pc during the third quarter – a fact most newspaper reports ignored. What growth we did see resulted from a 3.4pc annualised rise in US consumption between July and September, which was in turn caused by a 22.3pc spike in spending on consumer durables.

As mentioned here that “spike” was driven by “cash for clunkers” and the $8,000 first time homeowners tax exemption. Halligan agrees. It wasn’t a trend, it was exactly what Halligan reported – a spike. So digging into it, what are the real numbers?

In other words, this latest US growth spasm stemmed from one-off government “giveaways” – with the public only able to take advantage of such gimmicks by going deeper into debt. The rise in US consumption coincided with a 3.4pc fall in household disposable income and a plunging savings rate too. With government and household debt spiralling anew, America’s so-called “return to growth” is nothing but a return to higher leverage. [emphasis mine]

Not quite what the administration cracked it up to be, is it? And Halligan reminds us:

Over the last 40 years, all US slumps have been interrupted by at least one quarter of positive growth, followed by a renewed downturn.

Of course, with an administration desperate for any good news, ignoring history is to be expected. After all, they’re quite the masters at ignoring the laws of economics and expecting results which run counter to them, aren’t they? Why shouldn’t they believe that one quarter of government give-aways equals pulling out of the recession? Can’t wait to hear the excuses when we’re back in the negative GDP growth trend next quarter. And you can also expect to hear the inevitable cries for a second stimulus (Porkulus II) crescendo.

~McQ

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White House Stuck On Stupid

Well, über defensive and stupid, to be more accurate. At least with its war on Fox News there was some calculated ability to garner sympathy and support from the fevered progressive masses. Taking on one of the most reputable reviewers of the car industry, when it’s giving you good news, is just plain idiotic:

It is an odd, and we’d say regrettable, pattern of this White House that it lets itself get dragged down into fights with specific media outlets.

[...]

But in addition to Fox News, now The White House is going after highly-respected and influential car site Edmunds.com.

They’re actually using The White House blog to dispute the site’s analysis of Cash-For-Clunkers (via Detroit News).

The post is snarkily titled: “Busy Covering Car Sales on Mars, Edmunds.com Gets It Wrong (Again) on Cash for Clunkers”

For its part, Edmunds.com responded with a sober yet forceful smackdown. After pointing to the obvious flaws in the White House’s (defensive) thinking, they put the once-venerable office to shame:

With all respect to the White House, Edmunds.com thinks that instead of shooting the messenger, government officials should take heart from the core message of the analysis: the fundamentals of the auto marketplace are improving faster than the current sales numbers suggest.

Isn’t this a piece of good news we can all cheer?

I’m not sure which is more pathetic: the fact that the White House clearly lost a blog war, or that it is stupid enough to get involved in one in the first place.

Venezuela – Hugo’s New Shower Rules

Hugo Chavez and his socialist government have handled everything so well that they’ve decided to go green and show the world how it is done:

Turn out the lights, shorten the shower to three minutes, buy a portable generator.

That is President Hugo Chávez’s message to the citizens of energy-rich Venezuela, where the “socialist revolution” has brought power cuts, water shortages and collapsing public services.

Heh … Chavez actually did try to push the green theme in his radio address discussing showering and turning off the lights. But it was a facade designed to hide the fact that the infrastructure is collapsing. As you might imagine, that’s sparking more than a little unrest:

“We’re accused of wasting electricity, but the fact is the government didn’t plan, didn’t invest and didn’t carry out maintenance,” Aixa Lopez, president of the Committee of Blackout Victims, told the TV news channel Globovisión.

In fact, as with all marginal leaders, Chavez blames all of his problems on others:

In early 2007, after winning re-election, Chávez decreed the nationalization of those parts of the electricity industry still in private hands — notably the Caracas power company EDC. Since then, there have been seven national power outages. In most parts of the country, weary consumers have grown used to frequent, unscheduled blackouts lasting hours.

This month, the president admitted there was a crisis in both the power and water industries. This came on the heels of a similar admission regarding healthcare. He put the blame mainly on the El Niño phenomenon for producing drought — Venezuela is 70 percent dependent on hydro power for its electricity — and on consumers for their wasteful habits.

Much of his ire was aimed at shopping malls because, he said, they foment capitalist values. “They’re going to have to buy their own generators,” he threatened, “or I’ll cut off their electricity.”

Ordinary Venezuelans have been urged to use less water and turn off the lights. “Some people sing in the bath for half an hour,” Chávez told a recent cabinet session, broadcast live. “What kind of communism is that? Three minutes is more than enough!”

Formal water rationing has now been introduced, government departments have been told to reduce their electricity consumption by a fifth, and the president has created a new Electricity Ministry in a tacit admission that the state has failed to manage the power industry correctly.

In fact, both the Water and Electricity Ministry are in a shambles:

According to Víctor Poleo, who was deputy minister for electricity at the beginning of the Chávez era, despite huge sums of money allocated, little has actually been done.

“My guess is that of every $100 pumped into [electricity] generation and transmission since 2003, $75 has been stolen by the politicians,” Poleo said.

Venezuela is a oil rich state from which 90% of its foreign earning are garnered. Chavez called his socialist economy “bulletproof”. However, it is now deep in recession:

Worse still, its shrinking economy has done little to blunt inflation, which is running at close to 30 percent a year — around three times the regional average. And the economic downturn is having a predictable effect on the government’s popularity, just as it gears up to fight crucial legislative elections next year.

The latest data from polling company Datanálisis shows voters evenly split, for the first time since mid-2004, over whether the president has been good or bad for “national wellbeing.” Only 17.2 percent say they would vote for him if the presidential election were imminent — down from over 31 percent in September.

Of course, as the article points out, the opposition is “incoherent” and unable to provide unified opposition at this point. But those sorts of things have a way of rectifying themselves if the economic and infrastructure problems continue. Chavez may have figured out how to position himself to be president for life on paper, but remaining president for life with the problems Venezuela is now beginning to face (and may see compounding) may be tougher then he thought.

~McQ

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GDP Growth – Real or Memorex?

My guess is you’re looking at GDP numbers that are about as accurate as the stimulus saved and created job numbers the administration put out recently.  Or perhaps a better way of saying it is they’re as deceptive as those job numbers.

The GDP is the combination of consumer, investor and government spending.  We know pure consumer spending is down.  We know that investor spending is down.  And we also know that government spending is way up.  That spending has spending has urges some consumers to spend – cash for clunkers and the $8, 000 incentive for first time home buyers.  But a spurt of government spending which encouraged a spurt of consumer spending does not a recovery make:

The nation’s gross domestic product expanded at an annual rate of 3.5 percent in the three months ending in September, matching the economy’s average annual growth rate from the last 80 years. But the end of government programs to encourage spending on things like cars and houses, alongside employers’ continued reluctance to hire more workers, means the recovery may not last, economists say.

The recovery will happen when investors invest, businesses hire and finally, consumers buy – not for a quarter, but in a constant and increasing manner. Until that happens, until we see the job numbers begin to lessen considerably, this is just a lot of hoopla over a quarterly blip driven by government spending.

~McQ

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India: We’re Not Hurting Our Economy For “Climate Change”

The Copenhagen summit is in December and yesterday UN climate chief Yvo de Boer said he didn’t expect a binding agreement to come out of the meeting, dashing the hopes of environmental extremists that the nations of the world would agree to binding reductions of so-called greenhouse gas (GHG) emissions. Today India, apparently speaking for, or speaking with the approval of, the world’s developing nations (of which China considers itself one):

Indian Prime Minister Manmohan Singh said Thursday that the world’s poor nations will not sacrifice their development in negotiations for a new climate change deal.

The issue of how to share the burden of fighting global warming has divided the developing and industrialized worlds as they prepare to negotiate a replacement to the 1997 Kyoto Protocol at a December summit in Copenhagen.

“Developing countries cannot and will not compromise on development,” Singh told an international conference on technology and climate change.

Naturally he threw a little diplospeak out there to soften the refusal to play the game:

However, even poorer countries need to “do our bit to keep our emissions footprint within levels that are sustainable and equitable,” he said.

Riiiight. And that means they’ll decide what constitutes “sustainable and equitable” as it applies to their economy, not the targets some world body wants to put on them. Both India and China, two of the largest emitters of GHGs in the world have repeatedly said no to binding reductions and international monitoring. But they’re up for a little friendly looting:

Developing countries want financial aid for their climate change efforts, and Singh said wealthy nations have an obligation to ensure they get access to new, clean technology that will cut emissions and increase energy efficiency.

“We need technology solutions that are appropriate, affordable and effective,” he said.

I certainly don’t blame them a bit for refusing to hurt themselves economically in the name of specious “science” (thankfully, Americans are beginning to figure out the scam). And the fact they won’t do so should confirm to even the most fanatic global warmist that attempts to cut GHGs will indeed cause major economic distress. Additionally, as pointed out here and elsewhere, cap-and-trade attempts in Europe and elsewhere have been a disaster with no net reduction in such emissions observed.

I look for Copenhagen to be a bust and am quite happy about that, frankly. The US will show up empty handed with nothing but promises (Waxman-Markey thankfully not having passed yet), the UN will play the international “Chicken Little”, 3rd world “developing” countries will have their hands out as usual and industrialized nations won’t be able to agree on much of anything.

Perfect.

~McQ

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Spinning A 1.4 Tillion Dollar Deficit

The Washington Post is just shameless. How else would you describe this:

The federal budget deficit soared to a record $1.4 trillion in the fiscal year that ended in September, a chasm of red ink unequaled in the postwar era that threatens to complicate the most ambitious goals of the Obama administration, including plans for fresh spending to create jobs and spur economic recovery.

Still, the figure represents a significant improvement over the darkest deficit projections, which had been as much as $400 billion higher earlier this year, when the economy was wallowing in recession.

Or said another way, 1.4 trillion in new debt isn’t so bad – some guy earlier this year thought it would be 1.8 trillion.

Here, let’s do the graphics and decide how much of a “significant improvement” this is:

budget deficit

A few paragraphs later after trying to sell everyone on how this chasm of difference has actually ended up being beneficial, the Post mentions:

At about 10 percent of the overall economy, the gap between federal spending and tax collections is the largest on record since the end of World War II, and bigger in nominal terms than the past four years of deficits combined. Next year is unlikely to be much better, budget analysts say. And Obama’s current policies would drive the budget gap into the trillion-dollar range for much of the next decade.

Geithner is mentioned saying that “deficits are too high” and Peter Orszag is quoted saying:

“The president recognizes that we need to put the nation back on a fiscally sustainable path.” As Obama draws up his second budget blueprint, due to be delivered to Congress in February, Orszag said, “we are considering proposals to put our country back on firm fiscal footing.”

Are “we”? Cap-and-trade. The take-over of the health care system. Government owned auto companies. Trillion dollar deficits for at least a decade. A doubled money supply and $533,000 jobs?

The Post manages to destroy all the happy talk, though, in what must have been an inadvertent fit of journalism contained in one sentence:

Orszag has already instructed federal agencies to identify spending cuts for next year’s budget, but the report comes as lawmakers contemplate proposals that would drive spending even higher.

And, of course, the guy right smack dab in the middle of encouraging all of that higher spending is the same guy Orszag is claiming wants to put the country back on “firm fiscal footing”.

If double-talk were money, this administration would be running a surplus. And the Washington Post isn’t so bad at it either.

~McQ

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Your Government BS Statistic Of The Day – “Saved” And Created Jobs

The Magic Unicorn and Snake Oil show that is the federal government has invented a new statistic for your entertainment, because it certainly has no real meaning. Why do I say that, you ask?

Well read this and tell me what you think:

The first direct stimulus reports showed that stimulus contracts saved or created just 30,083 jobs, prompting more Republican criticism of the $787 billion package.

The data posted Thursday was the result of the government’s initial attempt at counting actual stimulus jobs. Obama administration officials stressed that data was partial — it represented just $16 billion out of the $339 billion awarded — but they said it exceeded their projections.

Two points – we have no idea, given that number, what percentage were “saved” and what percentage were created. But it is clear that the claim of saving a job is a useful tool to pad the total. Even then, however, that means that each “saved” or created job cost you, Mr. and Mrs. Taxpayer, $533,000 per job. And yes, that’s for those “saved” as well.

Doesn’t government efficiency just dazzle the heck out of you?

Fear not, though, you haven’t seen all the magic unicorns or snake oil yet. Feast your eyes on this:

“All signs — from private estimates to this fragmentary data — point to the conclusion that the Recovery Act did indeed create or save about 1 million jobs in its first seven months, a much needed lift in a very difficult period for our economy,” said Jared Bernstein, the chief economist for Vice President Joe Biden.

According to the White House recovery office’s rough calculations, the 30,083 jobs number projects out to a total of 1.2 million jobs saved or created by the stimulus through September.

Yessiree – when they get into the projecting business, why it’s even better than they thought. It seems – according to those wonderful projections – that we’ve been able to “save” or create 1.2 million jobs, at least in the world of statistics. Again, how many are “saved” vs. created seems to be an unknown. But whatever the mix, 1.2 million seems to be the number they’ll be crowing about.

Of course what they’ll be trying to forget are those other numbers they originally promised when they were selling the magic unicorns and snake oil called “the stimulus”. Seems the rubes were told that passage of that fantastic piece of legislation would most certainly “save” or create 3 to 4 million jobs.

Oh … that and keep unemployment under 8%.

Drink up folks – Dr. Obama’s elixer is guaranteed not to slip, rip, tear,  get rusty or roll down the hill sideways. Helps your wallet, does you good and makes child birth pleasant, besides the benefit you get from it. Now who’ll have another bottle of Dr. Obama’s Magic stimulus tonic?

Ah, Dr. Krugman wants more, doesn’t he?

~McQ

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CBO Outs Cap-And-Trade Lies – Democrats Don’t Care

Which lies?  Well in this case I’m talking about the lie that cap-and-trade will be a green job bonanza and an overall job producer and that it will stimulate the economy. Not so says the CBO:

So, instead of stimulating economic growth, it will slow it and instead of creating net jobs, it will be a job killer. Tell me again how that’s a “good thing” in a recession?

A House-passed bill that targets climate change through a cap-and-trade system of pollution credits would slow the nation’s economic growth slightly over the next few decades and would create “significant” job losses fr-om fossil fuel industries as the country shifts to renewable energy, the head of the Congressional Budget Office told a Senate energy panel Wednesday.

CBO Director Douglas W. Elmendorf emphasized that his estimates contained significant uncertainties and “do not include any benefits from averting climate change,” but his message nevertheless contrasted sharply with those of President Obama and congressional Democratic leaders, who have suggested that a cap on carbon emissions would help revive the U.S. economy.

How much will it slow the economy? Elmendorf’s estimates:

Elmendorf testified before the Senate Energy and Natural Resources Committee that the cap-and-trade provisions of the House bill — in which emitters of greenhouse gases would be able to buy and sell pollution credits — would cut the nation’s gross domestic product by 0.25 to 0.75 percent in 2020 compared with “what it would otherwise have been,” and by 1 to 3.5 percent in 2050.

That in the face of growing skepticism over the science supporting the premise that a) man is causing the climate change problem and b) that man can actually “change” nature’s direction in that regard.

But that doesn’t matter. Reps Waxman and Markey have decided that it is necessary regardless of the science, cost or what you want. They have a planet to save you see and it’s all our fault we’re in the situation we’re in now:

“The harsh reality is that America’s global warming and energy challenges are just too important for us to keep mailing it in by not enacting a comprehensive energy and global warming bill.”

So they plan on passing this tax which will slow growth, increase joblessness and impact most those who can afford it the least. Why would they concern themselves with that when the possibility exists they might be able to save a couple of polar bears.

Congress’s approval ratings effectively reflect their priorities – and as you can tell, constituents have figured out their priorities have nothing to do with the needs of constituents or the nation.

~McQ

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Massachusetts – The Shape Of Health Care To Come?

As the Magic Unicorn and Snake Oil Show moves on to the full Senate after passing out of the Senate Finance Committee on a majority vote, Massachusetts gives us a peek at what we can really expect, should this all pass, at a national level:

The state passed a prototype for ObamaCare in 2006 on the same cost-control theory as Senate Finance, only to see spending explode. So now Beacon Hill is contemplating far more drastic spending-control measures, such as a plan to “require residents to give up their nearly unlimited freedom to go to any hospital and specialist they want,” as the Boston Globe reported on Sunday. Paul Levy, the CEO of Beth Israel Deaconess Medical Center, told the Globe that “You can’t reap these savings without limiting patients’ choices in some way.”

Of course you can’t – savings come from what? Spending less money. That means those that are claiming you can have something for nothing are – surprise, surprise – lying to you. And you’d think adults of voting age would have realized that by now. But if not, then I suggest two words to you – see Massachusetts.

The government solution – they’ll decide for you because they believe their decision will cost less. And since you’ve put them in charge, what ‘choice’ have you (remember this national plan is all prefaced on the lie that you’ll benefit from “choice and competition”):

A 10-member commission is trying to impose a new “global payment” system on the top-notch Massachusetts health system. Doctors and hospitals would be forced to join large networks and be paid a set rate for each patient. The idea is to make providers live within a fixed budget and cut down on expensive treatments.

Now you can add four more words to your analysis which best reflect the above. See Canada. See UK.

Any guess where “top-notch” doctors will go if this plan is enacted? Two more words – somewhere else.

And the lie about “choice”? Well there’ll be a choice, but it won’t have anything to do with you:

But if patients are allowed to receive care outside of whatever network they end up in, this new jerryrigged cost-control would break down, or not produce the desired “savings.” You know who wins when the interests of government conflict with those of patients to choose a doctor or treatment.

So in addition to taxes on “Cadillac” plans, taxes on medical device industry (which will stunt innovation if not kill it outright) and taxes and jail time for those who “choose” not to buy insurance, the bulk of the so-called “savings” will be imposed by limiting choices for patients (both in who they see and what those they see can prescribe for treatment) and payments.

Does it really take a rocket-scientist to understand where that will all end up?  The only place you’re ever going to see unicorns and magic rainbows is on Saturday morning kid’s shows.  What is being cobbled together by our political leaders comes under the title of” Dr.” Obama’s Snake Oil Show and Magic Act, where smoke and mirrors are used to sell the rubes something that isn’t at all what he claims.

Certainly, and I’ll say this for the umpteenth time, there are “reforms” to the health care industry which would be both beneficial and cut costs.   But almost none of them are included in this package being touted as “the answer”.  It’s not the answer, it is a concoction that promises all of the worst of existing government run health care systems with very little of whatever benefits they might offer.

This needs to be stopped, scrapped and revisited.   If it isn’t, we and our economic well-being as well as our health will suffer as a result.

~McQ

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Cracks in the Edifice

For the most part, both the Fed and the Obama Administration have been publicly confident of a number of things. They’ve assured us that the bailouts and stimulus spending, along with the great monetary expansion we’ve had since last October, were necessary to stave off economic collapse.  They’ve also assured us that they have an end game for unwinding these policies when necessary.

But, Federal Reserve Bank of St. Louis President James Bullard is now warning that the negative results of the monetary expansion imposes more risk of inflation than generally believed.

I am concerned about a popular narrative in use today … that the output gap must be large since the recession is so severe … [and] any medium-term inflation threat is negligible, even in the face of extraordinarily accommodative monetary policy. I think this narrative overplays the output-gap story.

Take away Pres. Bullard’s Fed-speak, and what you have is a Federal Reserve bank president warning that the Fed’s accomodative policy runs a very real risk inflation when the economy picks up.  Naturally, to fight this ionflation, the Fed will need to raise interest rates.  With a doubling of the monetary base in the past year, that implies the possibility for raising rates quite substantially, which could strangle any nascent economic recovery in the cradle.

So, while Pres. Bullard also says that moderate economic growth for the end of the year is possible, we probably shouldn’t get our hopes up for a while.

Meanwhile, all of the extra dollars floating out there, combined with extremely large federal budget deficits for the next several years, is having an effect on the dollar.  Not only has the number of dollars vastly expanded, the deficits require greatly increased bond sales, which encumber the federal government with a long-term debt obligation that will be harder and harder to meet.  This is making the dollar…unattractive to heathen foreigners.  Not only in terms of dollar-denominated investments, but also in making the dollar fundamentally unattractive as  the world’s reserve currency. The rumblings about dumping dollar continue.

[T]he United Nations itself last week called for a new global reserve currency to end dollar supremacy, which had allowed the United States the “privilege” of building up a huge trade deficit.

UN undersecretary-general for economic and social affairs, Sha Zukang, said “important progress in managing imbalances can be made by reducing the (dollar) reserve currency country’s ‘privilege’ to run external deficits in order to provide international liquidity.”

Zukang was speaking at the annual meetings of the International Monetary Fund and World Bank, whose President Robert Zoellick recently warned that the United States should not “take for granted” the dollar’s role as preeminent global reserve currency.

You cannot simultaneously have your currency act as the global reserve currency while deflating the currency to uselessness by using foreign investment in dollars to maintain huge current account deficits.  The foreigners may talk funny, and have quaint ways, but they’re not big enough hayseeds to recognize who ultimately gets the short end of that deal if it continues.

Still, our government’s response has been heartening.

Following the summit, US Treasury Secretary Timothy Geithner repeated Washington’s commitment to a strong dollar.

At this point, I suspect that the international financial community takes this commitment as seriously as the attendees of the local junior college take my commitment to have sex with barely legal teen girls.  Actually, my commitment probably has a better chance of coming to fruition, since the international financial community doesn’t have “daddy issues”.

Meanwhile,  all of the teachers, cops, firemen, DMV workers, etc., who thought taking a relatively low-paying government job now in return for really good retirement benefits, may need to rethink that strategy.

The upheaval on Wall Street has deluged public pension systems with losses that government officials and consultants increasingly say are insurmountable unless pension managers fundamentally rethink how they pay out benefits or make money or both.

Within 15 years, public systems on average will have less half the money they need to pay pension benefits, according to an analysis by Pricewaterhouse Coopers. Other analysts say funding levels could hit that low within a decade.

After losing about $1 trillion in the markets, state and local governments are facing a devil’s choice: Either slash retirement benefits or pursue high-return investments that come with high risk.

In other words, start stocking up on Alpo for those hearty retirement meals, or hope that the pension fund’s investment in fur-bearing trout farms come through big-time.

But it’s not just government workers who may be looking at a bleak future.  The government’s actions since last October are also having unintended consequences on the domestic economy that affects all of us–although I should point out that these unintended consequences were entirely predictable.

The Fed’s policy of essentially free money means that household savers get no return at all on CD’s, T-bills, Money Markets, etc., while speculators can borrow money at no cost, and toss them at any speculative investment that promises any return at all.  So traditional savings are being gutted.

Excessive government borrowing is sucking the air out of the private credit markets.  While goverment borrowing is proceeding at a $1.9 trillion annual rate, private credit is collapsing.

Last year, banks provided new credit at the annual pace of $472.4 billion in the first quarter and $86.7 billion in the second. This year, on a net basis, they’re not providing any credit whatsoever. In fact, they’re actually liquidating loans at the rate of $857.2 billion in the first quarter and $931.3 billion in the second.

Ditto for mortgages. Last year, mortgages were being created at the annual clip of $522.5 billion and $124 billion in the first and second quarters, respectively. This year, they’ve been liquidated at an annual pace of $39.3 billion in the first quarter and $239.5 billion in the second.

This lack of credit means that businesses have been unable to expand or hire–or even maintain their workforce.  As a result, 7.2 million jobs have been lost in the last 21 months, compared to the 2.7 million jobs lost in the 30 months of the last recession.  The official unemployment rate of 9.8% hides the effect of discouraged job seekers, or the under-employed, which means the actual unemployment rate, as it was calculated prior to 1973 is 17%.  Shadow Government Statistics places the actual unemployment rate at an even worse 21%.

And now, after all the unintended consequences of our past actions, some in Congress are now calling for Stimulus II.  Apparently, Stimulus I did such a bang-up job, that they want to double down on two sixes.

Hop.  Hop.  Hop.

the United Nations itself last week called for a new global reserve currency to end dollar supremacy, which had allowed the United States the “privilege” of building up a huge trade deficit.

UN undersecretary-general for economic and social affairs, Sha Zukang, said “important progress in managing imbalances can be made by reducing the (dollar) reserve currency country’s ‘privilege’ to run external deficits in order to provide international liquidity.”

Zukang was speaking at the annual meetings of the International Monetary Fund and World Bank, whose President Robert Zoellick recently warned that the United States should not “take for granted” the dollar’s role as preeminent global reserve currency.