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Monday August 19th 2019Tim Candler9

 

    Might be worth reminding myself what the Fundamentals of the Economy actually means, because there's a possibility a number of our political leaders might soon be confidently announcing things like "The Fundamentals of The Economy are Strong," before sliding off into the sunset. Gross Domestic Product is considered a big deal economic fundamental by many, the more cynical might suspect it's about as far as they go economics-wise, and well worth noting that at the end of 2008 GDP had, following two quarters of very poor, almost negative growth, started to grow a little, it was looking at 3%, very encouraging. Unemployment levels are considered a fundamental of the economy, and while there all sorts of ways of determining unemployment levels, some ways always put the figure higher and some ways always put the figure lower, so it's boondoggle of complexity just waiting to be abused. In my understanding, the lower unemployment figure is people who have been actively looking for work in the previous 4 weeks. Actively looking for work figure comes from the pledge a person makes when they apply for an unemployment benefit. Always a suspicious number, because if you're looking for work but haven't claimed an unemployment benefit you're not unemployed. The deeper dive figures attempt to include people actively looking for work in the past 4 weeks, as well as people who been looking for work for months and months, as well as people who have given up looking for work. Meanwhile, the way the figure's calculated at this lower and lower rate of unemployment it's possible we'll get negative numbers, which will be embarrassing for what remains of the Labor Department. In 2008 unemployment was at between 6% at the low end and 10% if you included those who had been looking for work for 15 whole weeks and still actively attempting to claim benefits. Both figures were at their highest level since 2003.

Past

    Another Fundamental is Real Median Income, the actual buying power of a person's income, and in 2008 real median income had gone down about 320$ since 2000, and this was the first period of negative growth for real income since 1969. In 2008 Consumer Confidence was at its lowest level since 2003. Annual Inflation in 2008 was getting on for 6%.  In 2008 the Stock Markets had been in decline for well on a year, and the crash that occurred in 2008 resulted in the markets loosing 30% of their value and with stock markets it's the percent of value, rather than the points, which a person has to watch. And finally there was a time when Deficits mattered. In 2008 the annual government spending deficit was huge 389 Billion Dollars, it had doubled since the previous year. In 2008 the US Trade Deficit had grown to 62 Billion Dollars. It was this collection of figures which in 2008 were deemed worthy of "The Fundamentals of the Economy are Strong." Guess what they really meant was that the State and her tax payers would bail out Capitalist errors rather than face the consequences on the populace of letting Banks and Businesses fail. Back then of course the State had the capacity, the knowledge and the willingness to save us from ourselves. Oddly it was the bail out of banks and big manufacturers that inspired those first Tea Party supporters, there was a speech on the floor of a Chicago stock market, a cable TV personality called Rick Santelli who for all I know is still ranting away about the error of messing with the purity of the market place, then it all started getting weird with people dressing up in 18th century military uniforms and talking about being 'revolutionists,' a tricky word for the market orientated, yet it was 'revolutionist' tendencies, rather than market orientated tendencies that kind of led to our current predicament, dear democratically elected leader-wise. And it's always the case, the money class reckon controlling tyrants is a short cut to controlling us people.

 

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