OpEdNews - Article: There's No U in Recovery

OpEdNews - Article: There's No U in Recovery

For OpEdNews: David Glenn Cox - Writer

I'm sure that you've seen the headlines, Ford racks up $2.7 billion in profits for the year. That's great news, that's wonderful news, see, the economy is turning around. Ain't that great? That's the headlines, good news, it's all getting so much better now. Only how did Ford become so profitable? They did it by reducing their North American workforce by 47%.
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Jan. 29 (Bloomberg) -- "The economy in the U.S. expanded in the fourth quarter at the fastest pace in six years as factories cranked up assembly lines and companies increased investment in equipment and software.

"New York University Professor Nouriel Roubini said more than half of the 5.7 percent expansion reported yesterday by the government was related to a replenishing of inventories and that consumption depended on monetary and fiscal stimulus. As these forces ebb, growth will slow to just 1.5 percent in the second half of 2010, he said."
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So rising profits have little to do with employment numbers; on the contrary employment hurts profit numbers. Yet the numbers are proclaimed as good news, yes, good news, the economy is turning around.

"News Release: Personal income Rises by .4 Percent in November.

"Private wage and salary disbursements increased $16.1 billion in November, compared with an increase of $3.2 billion in October. Proprietors' income increased $12.3 billion in November, compared with an increase of $14.8 billion in October." Dept. of Labor

So, with a private labor force of 154,235,000 we divided $16.1 billion between us, while "proprietors," (you know, the boss) proprietors divided $12.3 billion between themselves. You got one buck and how many proprietors are there? They don't say and it's not a number that I found readily available, so let's guess. If the number were one million proprietors, that's $1,542.35. Two million? Divide it in half. Ten million? That's $154, but you got a buck!

We're not done yet! "Rental income of persons increased $1.7 billion in November, compared with an increase of $2.2 billion in October. Personal income receipts on assets (personal interest income plus personal dividend income) increased $6.7 billion, compared with an increase of $6.6 billion. Personal current transfer receipts increased $11.3 billion, compared with an increase of $2.8 billion." Dept. of Labor

So, if you're a "proprietor" with rental income and other personal assets, then by God this economy is doing great! If, however, you work for a living, then not so much. The civilian labor force declined by 661,000 in December, but those "proprietors" are rocking out!

"Sales of new homes in November took an 11.3% plunge, a sign of just how dependent the fragile housing recovery has become on government subsidies. Sales of new single-family homes stood at a seasonally adjusted annual rate of 355,000 units, the Commerce Department said Wednesday, a 9% drop from the same month a year earlier." Los Angeles Times, December 24, 2009

So, when we compare this month to last month, 355,000 units isn't such a bad number. In 2008, however, new home sales were at 525,000 annually, and the worst year on record was in 1981 at 338,000. So the $8,000 tax credit is life support for the home industry. We spent $15 billion to keep the home building industry at 17,000 units above worst year ever. Does that sound like a recovery to you? ...