Summers: ‘Statistical Recovery and Human Recession’

Neal Lipschutz
The Wall Street Journal
January 30, 2010

Key Obama economic adviser Larry Summers coined a telling way to look at the current American economic state of play. He said the U.S. is experiencing a “statistical recovery and a human recession.”

It is a phrase that should resonate through much of the industrial world, where high and long-standing unemployment is increasingly becoming a huge domestic political issue.

Speaking on a panel at the annual meeting of the World Economic Forum in Davos, Summers said one in five American men aged 25 to 54 are unemployed. He said given a “reasonable recovery,” that rate could improve to one in seven or one in eight. That still contrasts with a 95% employment rate for that group in the mid-1960s.

Full article

Game Over for the American Middle Class – MYBUDGET360

JAN-28-2010 – Game Over for the American Middle Class – Inflation Adjusted Wages up 20 Percent in Last 20 Years While Housing Costs are up 56 Percent and Healthcare Costs are up 155 Percent.

The struggle for average Americans to keep up is largely becoming an act of will power and force in this current grand recession.  Now you wouldn’t think that there is a definite war raging against the middle class if you simply follow the mainstream media but the facts speak to a more distilled and corporatized method of debt slavery.  Americans are working more hours trying to stay in the same place that they believe would keep them on pace to having the American Dream.  And this dream is merely the ability to afford a home, provide your children with a good education (public or private), and save enough to have a retirement that doesn’t require you to eat cat food after a lifetime of working.  That is at the root of what most average Americans would want after a full working career.

But we are at an inflexion point and the middle class is largely being squeezed out.  A recent study from the Commerce Department shed some light on an issue that we already know.  Over the past 20 years the middle class has been falling behind:

middle-class-costs

Everything is relative in this world.  Incomes have gone up during this time but the cost of housing, healthcare, and access to education have outpaced income gains in some cases by four to one.  Money is only worth what you can buy with it.  The grand housing bubble of this decade lured many into buying homes that they simply could not afford.  Banks and Wall Street were more than willing to provide access to this dream since they knew if all bets crashed, and they did, that they would call on their connected politicians to bail them out and send the bill to taxpayers for their adventures in finance.  Take a look at the chart above closely.  Housing price changes have wiped out any gains in income.  The relative amount of income needed to buy a home has put many two income households on the brink of bankruptcy.  And the 4 million foreclosure filings in 2009 alone tell us that many Americans are unable to hold onto one cornerstone of the American Dream.

The middle class is absolutely vital to having a sustainable and flourishing economy.  The massive debt machine coming from the big banks has created a new form of debt servitude.  Some would argue that this is a personal responsibility issue and I will be the first to agree with that.  People should live within their means.  But think of the FICO score that has become like a permanent financial report card.  Some employers actually screen for credit scores before hiring applicants.  Want to rent a home because you don’t want to over extend and buy a home?  You better hope that FICO is up to par.  And many insurance companies base their analysis on this score.  So even if you never had a credit card or any debt, you would be in a bad spot because so many people rely on this number.  This is only one example of how people are actually forced to use debt simply to pursue the avenues of the middle class.

In fact, we have many more people simply trying to stay afloat let alone pursuing the middle class ideal.  Over 37 million Americans are now part of the food stamp program, not only is this the highest number ever but also the highest percentage of Americans ever to be on food assistance:

food-stamps

I sometimes read gut wrenching stories from the Great Depression where people would wash and reuse paper towels or have soup for weeks on end just to keep their families fed.  37 million Americans would be one step away from that existence if it weren’t for some basic safety nets.  It is troubling to say the least that this patch is what is keeping this great recession from being a profound depression.  Yet I think the 27 million underemployed Americans are already in that state of mind.  The idea of a middle class life is slowly drifting away as each and every day we realize that our nation is becoming more of a corporatacracy.

The housing nightmare really played on both ends of this middle class dream.  Banks were more than willing to lend trillions of dollars to people that really could not afford the homes they were buying.  This created the biggest housing bubble the world has ever witnessed and the bursting ramifications are being felt throughout the economy.  Yet if you look at the equation, who is really being punished?  Average Americans are being punished as they have their homes foreclosed on.  Yet banks who are in the supposed position of financial experts, have not only garnered trillions in bailouts but are now back to their speculative ways.  This is disturbing because it is highlighting a marked shift and a near game over for the middle class.

Think of the rise of our economy in the 1940s and 1950s.  Many returning GIs had access to affordable education through new programs and grants.  It is the least you can offer to someone defending this country.  Next, it was possible to support a family with one income because we had a strong and sustainable manufacturing base.  Now, we have families with two incomes in the service sector trying to piece things together.  Throw in a child, and that second income evaporates through childcare costs and educational fees.  In other words, just because people have more income their buying power has collapsed.

And this fact is revealed in the data that two-income households are more of an economic necessity:

two-income-households

So of married couples with two children 76 percent have two earners.  The average American is simply working to stay on track or face being thrown off the treadmill.  Jobs are so important to keeping a solid middle class.  This should be obvious but current policy being driven by thecorporatacracy is simply focusing on keeping prices inflated for the big ticket items (i.e., housing and healthcare).  At this point in the game, housing values have gone up to points that are clearly unsupportable:

the-cost-of-homeownership1

This being the biggest budget item for most households, you would assume that lower prices would be welcomed from the government seeing that many Americans are underemployed and those with jobs have seen stagnant wages.

The middle class dream is at risk.  This is a question of what we want out of our country.  Are we simply obsessed on keeping home values inflated so banking giants could keep gaming accounting rules and claim billion dollar profits?  If we want to prosper in the next decade, there will need to be a radical change to preserve what once was envied by the world.  Otherwise, you can expect banks and their political allies to keep selling away the middle class of America.  On the path we are traveling on the middle class is largely at risk for a big game over in the next decade.

China suspends US talks over Taiwan arms deal – Shanghai Daily

U.S. Treasury Secretary Timothy Geithner and President Hu Jintao in June 2009

U.S. Treasury Secretary Timothy Geithner and President Hu Jintao in June 2009

Full Article

China announced yesterday it will postpone bilateral military programs and security talks and impose sanctions against companies in response to the US government’s planned US$6.4 billion arms deal with Taiwan.

A Foreign Ministry announcement said China had decided to partially halt exchange programs between the two countries’ military forces, as well as vice-ministerial talks on strategic security, arms control and anti-proliferation, scheduled to be held soon.

China will also impose sanctions on US companies involved in the arms deal to Taiwan, the press statement said.

The Obama administration advised US Congress on Friday of the proposed sale to Taiwan, a potential US$6.4 billion package including Black Hawk helicopters, Patriot “Advanced Capability-3” anti-missile missiles, and two refurbished Osprey-class mine-hunting ships.

The Chinese Defence Ministry also lodged a stern protest yesterday afternoon.

Qian Lihua, the Defence Ministry’s Foreign Affairs Office director, summoned the defence attache of the US Embassy in Beijing to lodge the protest, according to a press statement.

In a similar warning lodged with the US ambassador to China, Jon Huntsman, Chinese Vice Foreign Minister, He Yafei, said the country was “strongly indignant” about the proposed sale of weapons.

The US decision “constitutes a gross intervention into China’s internal affairs, seriously endangers China’s national security and harms China’s peaceful reunification efforts,” He was quoted saying in a Foreign Ministry statement.

“The US plan will definitely undermine China-US relations and bring about serious negative impact on exchanges and cooperation in major areas between the two countries, and lead to an aftermath both sides would not prefer,” He said.

He urged the US side to “fully recognize the gravity of the issue, revoke the erroneous decision on arms sales to Taiwan and stop selling weapons to Taiwan.”

The sale is viewed as a serious contravention of three joint communiques between China and the United States, especially the “August 17” communique agreed on in 1982.

The United States said in the 1982 agreement that “it does not seek to carry out a long-term policy of arms sales to Taiwan” and “intends to reduce gradually its sales of arms to Taiwan, leading over a period of time to a final resolution.”

In 2008, China curtailed military exchanges with the United States after the Bush administration approved a US$6.5 billion Taiwan arms deal, including 30 Apache attack helicopters and 330 Patriot missiles.

Read more: http://www.shanghaidaily.com/article/?id=427454#ixzz0e9FTdAO1

FACTBOX-U.S. companies involved in Taiwan arms sales

Boeing China Airliner

Boeing China Airliner

Jan 30 (Reuters) – China said it would impose sanctions on companies involved in a planned $6.4 billon arms package for Taiwan that the Obama administration sent the U.S. Congress on Friday.

Here are the main arms included in the package, and the companies that make them. Other weapons systems are to be opened to bid.

* Sikorsky Aircraft Corp, a unit of United Technologies Corp (UTX.N), would supply 60 UH-60M Black Hawk utility helicopters. The estimated cost is $3.1 billion. United Technologies sells Otis elevators and Carrier brand heating and air-conditioning in China.

* Lockheed Martin Corp (LMT.N) would build 114 Patriot Advanced Capability-3 anti-missile missiles for Taiwan. Raytheon Co (RTN.N) would integrate the systems. The deal’s estimated value is $2.8 billion. Neither of these companies is believed to do major business with China.

* Boeing Co (BA.N)’s McDonnell Douglas unit builds Harpoon Block II Telemetry missiles. A proposed sale of 12 of them to Taiwan would be worth about $37 million. Boeing sells commercial aircraft to Chinese airlines. (Sources: Reuters, U.S. Defense Security Cooperation Agency) (For more on U.S.-China relations, click [ID:nCHINA]) (Reporting by Ralph Jennings and Jim Wolf, editing by Anthony Boadle)

State Council: U.S. planned arms sale to Taiwan runs counter to sound development of cross-Strait relations

English.news.cn

BEIJING, Jan. 30 (Xinhua) — The Taiwan Affairs Office of the State Council said Saturday that U.S. planned arms sale to Taiwan was in violation of its commitment to supporting the peaceful development of the cross-Strait relations.

The move ran counter both to the sound development of the cross-Strait relations and to the fundamental interests of the Taiwan people in the long run, said a spokesperson for the office.

The official said the fact that the U.S. side announced plans to sell advanced weapons to Taiwan in disregard of strong opposition from China would only instigate the pro-independence forces in the island and hamper the peaceful development of the cross-Strait relations.

The spokesperson also said the improved cross-Strait relations were in the common aspiration of the people on both sides of the Strait and had won support from the international community.

The current situation did not come easy, and therefore should be cherished, the spokesperson added.

World Trembles As US Prepares New Quake Test

Written By: Sorcha Faal, and as reported to her Western Subscribers

The reason for this new American quake test, these reports say, is due to the ‘catastrophic failure’ of their previous ones that have so destabilized our Earth’s inner magnetosphere that more earthquakes have been reported in the past 30-days then in the first 90-days of 2009 (including over 600 alone at the potentially catastrophic Yellowstone volcanic caldron) and that have caused more loss of life than in the previous 5-years all put together.A most grim report from Russian Space Forces (VKS) monitoring the United States High Frequency Active Auroral Research Program (HAARP) is warning today that the Americans are preparing for another potentially devastating earthquake test on a scale comparable to the one that destroyed the Caribbean island Nation of Haiti, and which we had previously reported on in our January 14th report titled “US Quake Test Goes “Horribly Wrong”, Leaves 500,000 Dead In Haiti

For the purposes of the Americans conducting these most dangerous of quake tests, these reports continue, is for their use against the Persian Nation of Iran which the United States Military has concluded can only be destroyed by a ‘severe disruption’ to their society caused by a massive earthquake which would leave the Iranians with ‘no excuse’ to retaliate against the West.

Full Article

Osama bin Laden is ‘worth more alive than dead’, declares his son – UK TIMES ONLINE

Osama bin Laden is worth more to the United States alive than dead because his death could unleash “very,very nasty” attacks by militants, his son has claimed.

In an at times rambling interview with Rolling Stone magazine, which was conducted in part in a Damascus strip club, the terror leader’s fourth-eldest son, Omar Osama bin Laden, said that his father had already won the War on Terror because he had achieved his aim of humbling the US and would probably not feel the need to launch more big attacks.

However, he said that President Barack Obama’s decision to increase troop numbers in Afghanistan was a big mistake that would damage the US economy.

“It is like adding water to sand, as we say in the Arab world. It only makes the sand heavier,” Mr bin Laden told the magazine.

“If I was in his position the first thing I would do is make a truce. Then, for six months or one year, no fighting, no soldiers. Afghanistan can never be won. It has nothing to do with my father. It is the Afghan people.”.

“It is going to be worse when my father dies,” he added. “The world is going to be very, very nasty then. It will be a disaster.” Mr bin Laden, whose autobiographyGrowing Up Bin Laden detailed his childhood growing up in militant camps in Sudan and Afghanistan as his father pursued his jihadist plan, left bin Laden in Afghanistan shortly before the September 11 attack in 2001.

He has since married a British woman almost twice his age whom he met on a trip to the Giza pyramids in Egypt. He makes a living as a scrap metal merchant in the Saudi city of Jeddah. He has been banned from entering Britain with his wife, Zaina, over fears that his presence would cause “considerable public concern”.

He said that he respected former president Bill Clinton for his “smart” decisions to attack his father’s training camp with cruise missiles in retaliation for attacks on US interests in Africa.

“He didn’t get my father but after all the war in Afghanistan, they still don’t have my father,” he said. “They have spent hundreds of billions. Better for America to keep the money for its economy. In Clinton’s time America was very, very smart. Not like a bull that runs after the red scarf.”

He said that his father was delighted when George W. Bush was elected president. “My father was so happy. This is the kind of president he needs — one who will attack and spend money and break the country.

“I am sure my father wanted McCain more than Obama. McCain has the same mentality as Bush. My father would be disappointed because Obama get the position.” The failure of the huge intelligence and military effort to find and kill bin Laden was a piece of luck for America, Mr bin Laden said, because his father’s followers killed for killing’s sake while bin Laden was so controlled that he would only kill if he felt it was necessary.

“People were always asking my father to attack more,” he said of the militants with whom he saw his father in Afghanistan. “They would say, ‘Sheik, we must do more’. Crazy things. My father has a religious goal. He is controlled by the rules of jihad. He only kills if he thinks there is a need.”

He said that he doubted bin Laden would order any more mass attacks.

“He doesn’t need to. As soon as America went to Afghanistan, his plan worked. He has already won.”

by Anne Barrowclough – Times Online