The April jobs report has been released by the US Department of Labor and it is not pretty. According to CCNMoney, a mere 38,000 jobs were created in the US, the lowest monthly rate in six years. To put this into perspective, in the past two years the monthly increased averaged about 200,000 new jobs and the number required just to keep up with new entrants into the job market is in excess of 200,000 monthly.
Commenting on the job’s number, Curt Long, chief economist at the National Association of Federal Credit Unions, correctly said, “It’s a pretty gloomy report, hard to find a silver lining in this one“. Contrast this realistic assessment with the Department of Labor’s unemployment number released indicating that the unemployment rate dropped to 4.7%, the lowest level in 9 years. How does the Labor Department come up with such rubbish? They merely stop counting those Americans who have given up the job search for lack of success. Now that’s banjo accounting!
There are many reasons behind the US economy’s poor performance with government being a major factor. Included in this list is the government’s willingness to create false reports to further its own political and bureaucratic agendas that often in conflict with those of the American people.
The Left and Right both believe they have the answers to America’s economic downward spiral. Those on the Left are sure the problems relate to income inequality, racism and/or too much spending on the military. My friends on the Right are just as strong in their convictions that the problems are caused by an efficient tax system, excess entitlement programs, illegal immigrants, and of course the Left itself.
To this Blogger the cause America’s economic issues, as well as those of the greater world, is government itself, the world’s largest special-interest group. The video below share some facts proffering the danger of the growing government elites and their minions that includes:
- During the past 10 years the number of private sector jobs in America has grown by only 1% while during the same period the number of federal government employees has grown by 15%.
- Prior to the economic meltdown approximately eight years ago, the US Department of Transportation had only one employee earning over $170,000 annually. That number is now about 1,700.
- At the beginning of the economic meltdown the US Department of Defense had approximately 1,700 employees making $150,000 or more annually. That number is now over 10,000.
- During the first two years after the beginning of the economic meltdown the number of federal employees earning in excess of $100,000 annually doubled.
- In 2009 the average compensation package including salary and benefits in the private sector was approximately $61,000 per employee. During that year the average total compensation package for federal employees was over double that or $123,000.
There are currently about 21 million government employees in the United States, approximately 16% of potential voters. This is a huge voting-block, especially considering how few votes often separate winners and losers in important elections. However, add to this number families of government workers and the potential influence this voting-block rose enormously.
There is a growing anger and disillusionment among American voters that has not been seen in many decades. On the Left this is expressed by the surprising strength of Socialist Bernie Sanders in the Democratic primaries. On the Right this is seen through the strength that Donald Trump has within the Republican primaries, even though his views have historically been in conflict with basic Republican ideology.
The electorate’s growing disillusionment has occurred during a time of historic growth in government power and spending. Those who believe that giving more power to government or allowing them to spend more money change this direction ignore historical precedent.
Many Democrats are on enthused by their likely candidate, Hillary Clinton. Similarly, many Republicans are aghast at the thought of Donald Trump being their party’s standard-bearer. Here’s a consolation for both: Not to worry, the special interests groups, including those who make a living on the public payroll, will ensure that the Country continues in the same direction that it has been taking for the last 50 years no matter who is president. Yikes!
In 2008 the world economies encountered the worst financial crisis since the Great Depression. In a supposedly effort to repair the economies, governments transformed them through huge stimulus spending, low interest rate policies and bailouts. These interventions have contributed to the ongoing weakness in economic recovery since.
The main cause of the 2008 meltdown was the subprime mortgage lending practices that led to loans being hustled to millions who could not afford to pay them back. When the housing market slowed leading to depreciated housing values, homeowners could no longer refinance, further eroding housing demand that led to many homeowners owing more on the homes than they were worth. Many walked away from the loans leading to the meltdown, putting at risk nearly most of the world’s largest financial institutions.
Given 2008 is only eight years ago, logic would dictate that we learned a lesson about imprudent financial behavior, at least for a generation. However, once governments intervene, logic and economic reality take a backseat. In fact, we are currently traveling down the same road, again fermented by governmental policies.
News.investors.com reported that the US government is again cajoling financial institutions to give mortgages to those that cannot afford them. Specifically, the Consumer Financial Protection Bureau warned (threatened) lenders that they would be investigated for discriminatory practices if they do not count government assistance payments to lower income individuals as real income. In announcing this policy, Bureau Director Richard Cordray used the following incredible logic:
“The bureau has become aware of one or more institutions excluding or refusing to consider income derived from the Section 8 HCV Homeownership Program during mortgage loan application and underwriting processes.” …. “Consumers should not be put at a disadvantage just because they receive public assistance.”
So, using the government’s logic, individuals who need governmental payment assistance are worthy of obtaining mortgages. Continue reading