The average American family must look at the current stock market rally as some kind of cruel joke. We have people anxiously waiting for government funds or paychecks to clear at the end of the month so they can wait outside of a Wal-Mart shopping center at midnight to buy food once their funds clear. We have nearly 36 million Americans on food stamps and another 27 million unemployed or underemployed. If this is the new recovery, many want very little to do with it.
It is hard to believe in this recovery because the bailout has gone to the financial sector and is reflected in hyper-inflated equity prices. As obvious as it seems, some people don’t make the connection that an unemployed American is a weaker consumer. Consumption as we all know is two-thirds of our economy. Therefore you would assume that investors would make this connection but that is not the case. The banks being the few with any sort of heavy government money, instead of lending to Americans, are once again gambling in the stock market casino. What a sad testimony to our crony capitalistic system that banks instead of believing in the average American, are deciding to double down on Wall Street and trying to recoup their 2008 losses. This on the pretense that banks needed money to get lending going again.
One thing that is clear is the employment situation is in a major funk. 10 states now have underemployment rates of over 20 percent. We are talking about Great Depression statistics here:
The above data is pulled from the Bureau of Labor and Statistics and is an average from the fourth quarter of 2008 to the end of the third quarter in 2009. In other words, the data above is optimistic and doesn’t use the latest data that is even higher. For example, California recently reported their U-6 rate is now up to 22 percent. Michigan? Their U-6 is now closer to 25 percent. There is nothing remotely close to a recovery in the data above. More...
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