by Ed Naha | March 15, 2008 -dit_title=Mission accomplished: FUBAR 'R' us digg_skin=’compact’;
Which one of these headlines scares you the most? “Recession fears rise on more job cuts.” “Fed takes new steps to boost cash for banks.” “World markets slide as US economy groans.” “Housing market spirals, no end in sight.” “Consumer confidence at lowest since 2002.” “Studies: Iraq costs US $12B per month.” “Gas prices rise to new national record.” “Consumers increased their borrowing by $6.9 billion in January.” “Bush says no recession in sight.”
Yeah, I know. It’s not even close. Once again, our President emerges victorious.
Over the years, Bush has acquired many critics. Some think him as being arrogant, stubborn, ill informed, short-sighted, paranoid, clueless and out of touch. Others consider him an ideologue, an overgrown frat boy with a warped sense of entitlement, a dry drunk, a sociopath, a fascist, a belligerent blow-hard, a monarch wannabe with the inherent intelligence of a kadota fig and a total failure. To be fair to Bush, he is all that and more – an unprecedented Black Hole in the history of American governance.
Our president, who believes in the piss on ’em, I mean, er, trickle down theory of economics and who has made a practice out of robbing the poor to give to the rich, is now faced with his latest monstrous creation: an American economy that has gone bust. The only reason there aren’t Hoovervilles popping up around the country is that nobody can afford the cardboard.
The sheer madness of King George has been highlighted in the past week by dire financial headline after headline and Bush’s reaction, or lack of it, to the consequences of his “let them eat caca” economic policies.
Last week, the Labor Department announced that 63,000 non-farm jobs were lost in February, following January’s 22,000 goners. February’s figures were the worst in five years. In addition, 450,000 folks bade adios to the labor force. They just stopped looking for jobs that weren’t there. (As a result, our unemployment rate eased to 4.8% from 4.9%, a fact Bush actually bragged about.)
The real job loss for February is a tad higher than the official number. Construction lost 39,000 posts. Manufacturing took a 52,000 hit. Retailers cut 34,100 jobs. Financial companies slashed 12,000 positions. Even temp agencies reported 27,600 jobs cut. The total job loss number was offset by the creation of new jobs in such sectors as government, service, prostitution and television punditry. (Okay, I made some of that last stuff up.)
Consumer confidence sank to a new low of 33.1%.
“We’ve gotten to a point where there’s very little for the consumer to cheer about. Everywhere you look – homes, grocery stores, gasoline stations – there are things that are all weighing on consumer attitudes,” said Richard Yamarone, economist at Argus Research. “You have soaring energy and food prices, rising home foreclosures and uncertainties about the jobs climate. When you mix it altogether it is a recipe for miserable consumer sentiment.”
Adding to the hilarity, the dollar slid to record international lows this past week. It’s right down there with colored beads, trinkets and beaver pelts.
Oil soared to a new high, just about $110 a barrel. Gas prices hit an all-time record, with regular unleaded going for $3.2272 a gallon, a figure that doesn’t accurately reflect what’s happening at the pump. In California, for instance, a gallon of unleaded averages $3.50, with one station in the northern part of the state pumping it up to $5.19! In other words, gas is now almost as costly as a D.C. hooker.
The amount of consumer credit owed to banks and credit cards rose to $6.9 billion this year because people are now using their credit cards to survive.
Probably not coincidentally, a survey measuring an individual’s outlook about their personal financial standing as well as that of the country’s came up with a resounding NEGATIVE 41.6%
Think of this way: all those folks who wanted to have a beer with Bush can no longer afford the beer. (Nor can they afford his policies.)
Bush’s King Midas in reverse financial touch is spreading across the land. Retail sales in January fell at the fastest pace in the last five years.
Retailers including AnnTaylor Stores Corp., Talbots Inc. and Pacific Sunwear of California Inc. have closed hundreds of stores so far this year. Gadget seller Sharper Image filed for bankruptcy protection last month and plans to shutter nearly half of its 184 stores.
That, along with the Chapter 11 bankruptcy of catalog retailer Lillian Vernon Corp., could mark the beginning of a wave of retail bankruptcies that’s expected to go well beyond the home furnishings stores hurt by the housing disaster.
Unless the economy dramatically improves, retail bankruptcies this year could reach the highest level since the 1991 recession. More closings could leave gaping holes in the nation’s retail centers, which have already seen average vacancy rates creep up to between 7 percent and 8 percent from 5 percent over the last six months.
David Solomon, president and CEO of ReStore, NAI Global’s retail division, expects the vacancy rate could hit 10 percent by the end of the year. Suzanne Mulvee, senior economist at Property & Portfolio Research, figures that vacancies could rise as high as 12.5 percent this year. Her figure includes retail spaces where tenants have defaulted on their rents.
Part of the problem, according to Mulvee, is that more retail space is coming to the market just as consumer demand is falling. Another 130 million square feet of retail space will become available this year, she predicts, on top of last year’s 143 million.
Another reason malls are being hit hard is that, despite dwindling business, landlords are raising rents, driving a lot of small stores out. Clearly, landlords subscribe to Bush’s sunny economic views. Either that or Helen Keller’s.
U.S. home foreclosure filings jumped 60 percent and bank seizures more than doubled in February as rates on adjustable mortgages rose and property owners were unable to sell or refinance amid falling prices.
More than 223,000 properties were in some stage of default, or 1 in every 557 U.S. households.
About $460 billion of adjustable-rate mortgages are scheduled to reset this year and another $420 billion will rise in 2011, according to New York-based analysts at Citigroup Inc. Homeowners faced higher payments as fourth-quarter home prices fell 8.9 percent, the biggest drop in 20 years as measured by the S&P/Case- Shiller home price index.
Foreclosure filings are likely to be “explosive” in May and June as more payments jump Rick Sharga, executive vice president of RealtyTrac, said in an interview. There may be between 750,000 and 1 million bank repossessions in 2008. Bank seizures rose 110 percent in February from a year ago, he said.
Even interest rates on 30-year fixed-rate mortgage are rising. Why? The mortgage market is short by roughly $1 trillion in capital.
Despite BushCo.’s efforts to make it nearly impossible for regular folks to declare bankruptcy, an average of 4,000 bankruptcy filings were made PER DAY in February.
Meanwhile, hidden bank fees are on the rise, with consumers paying over $36 billion in 2006, the last year on record.
Americans are getting slapped around worse than Curly of The Three Stooges. The official government response? “I’m not saying there’s a recession,” insists Edward Lazear, chairman of the White House Council of Economic Advisers. (Bush has Council of Economic Advisers??? One that even has a president??? Who knew?) Ever the realist, Lazear stated: “We have definitely downgraded our forecast for this quarter.”
That sort of thinking is akin to the National Weather Service forecasting “drizzle” before Katrina hit New Orleans.
The Ponzi Schemes run by unregulated lenders while Bush was asleep at the wheel has resulted in a housing credit mess that is almost unparalleled in American history.
For the first time since the Federal Reserve started tracking the data in 1945, the amount of debt tied up in American homes now exceeds the equity homeowners have built.
The Fed reported last week that homeowner equity actually slipped below 50 percent in the second quarter of last year, and fell to just below 48 percent in the fourth quarter.
Economy.com estimates 8.8 million homeowners, or about 10 percent of homes, will have zero or negative equity by the end of this month. Even more disturbing, about 13.8 million households will be “upside down” if prices fall 20 percent from their peak. Again, U.S. home prices plunged 8.9 percent in the final quarter of 2007, so that 20 percent figure isn’t all that far-fetched.
So far, the government has stepped in with a number of half-assed measures to contain the housing fallout. Last month, Congress passed a $168 billion economic stimulus package with provisions aimed at helping homeowners refinance into more affordable loans. The Federal Reserve has also slashed interest rates in hopes of spurring growth.
Fed Chairman Ben Bernanke suggested lenders reduce loan amounts to provide relief to beleaguered homeowners. (The lenders are sure to cave. That “pretty please with sugar on top” negotiating style has worked so well nationally during the last seven years.) Most economists believe that it’s all too little too late.
Peter Morici of the University of Maryland School of Business stated, on CNN: “This is a wholesale meltdown… Across the board the economy is shrinking. Over 600,000 Americans left the labor force. The labor department reports that unemployment is falling. That is simply because so many people have quit the labor market. They only count those that are looking for a job, not all those that are discouraged and decided to stay at home.
“We need 115,000 jobs (created a month) to break even. We lost over 100,000 jobs (in February). So, by all rights, the unemployment rate should have gone up to over 5 percent. The labor department only computes it on the basis of people that are actually participating, those that are employed and those that are looking. Those that quit looking don’t count in their mind. If we counted all the people that have quit, if we adjusted it for the labor force participation rate we had seven or eight years ago, the unemployment rate would be near 7 percent.”
As for Treasury Secretary Henry Paulson and Fed chief Ben Bernanke insisting that the sun will come out tomorrow, betcha bottom dollar that tomorrow, there’ll be sun, Morici was less than impressed.
“If you look at the (Congressional) testimony last week, Ben Bernanke’s testimony and Paulson’s speech in Chicago, according to Paulson, our manufacturing sector is just plain healthy, and there is nothing to worry about, even though it lost 50,000 jobs last month and over 3.5 million jobs during the course of the Bush administration. As for Bernanke, he keeps cutting interest rates thinking that is going to push the economy forward. But as he cuts interests rates credit card terms are becoming more difficult. Housing loans have all but dried up. The reason is that we have a wholesale breakdown in the credit markets.
“Normally, banks loan money to homeowners and they turn around and turn them into bonds and sell them to insurance companies. Because of the sub prime meltdown and all of the bad bonds they wrote, all of the bogus securities that are melting away in value, the fixed income buyers, the insurance companies, large private buyers, foreign governments and investors are no longer willing to accept paper that Citibank and the other large banks create. Bernanke has showed no recognition of this problem. He is not addressing it, instead he tells the banks to mark down the debt a bit. The credit markets are not functioning. Cutting the Fed rates will not help.”
But surely, our fearless leader has planned for such an economic emergency! Surely, he can face down a recession. Uh, not really. In fact, he doesn’t even think we’re in a recession. We’re experiencing a “slowdown.” And, once again, he’s on the case. (Uh-oh.) He’s administered, what he calls, “a booster shot.”
Bush addressed the economy in-between FISA snit-fits and anti-Cuba rants. “Losing a job is painful,” he imagined, “and I know Americans are concerned about our economy. So am I. It’s clear our economy has slowed, but the good news is, we anticipated this and took decisive action to bolster the economy, by passing a growth package that will put money into the hands of American workers and businesses.”
Unfortunately, Bush was not done in his speechifying: “I signed this growth package into law just three weeks ago, and its provisions are just starting to kick in. First, a growth package includes incentives for businesses to make investments in new equipment this year. These incentives are now in place, and they are starting to have an impact. My advisors tell me that investment in new equipment remains solid thus far in the first quarter.”
So, lets review. Businesses are going belly up. What’s the first thing on their minds? “Hey, we’re going under! Let’s expand and upgrade.” Note to whoever is advising Bush. Hide the bong when Cheney shows up.
Bush summed up his sunny views with a succinct: “So my message to the American people is this: I know this is a difficult time for our economy, but we recognized the problem early (Note: what tipped you off? The quiche lines in Kennebunkport?), and provided the economy with a booster shot. We will begin to see the impact over the coming months. And in the long run, we can have confidence that so long as we pursue pro-growth, low-tax policies that put faith in the American people, our economy will prosper.”
In other words, we’re fucked until a new president takes over.
The checks that Bush is sending out to some Americans are in the $600 to $1200 range. (“Look, ma! Now we kin buy ourselves that terlet paper we’ve been a’ hankerin’ for.”) Bush sincerely believes that these checks will perk up the economy. Why? Because, with all that dough burning a hole in their pockets, Americans will spend like drunken sailors.
Theorized Bush: “The purpose is to encourage our consumers. The purpose is to give them money — their own to begin with, by the way — but give them money to help deal with the adverse effects of the decline in housing value. Consumerism is a significant part of our GDP growth, and we want to sustain the American consumer, encourage the American consumer and, at the same time, we want to encourage investment. So we’ll see how the plan works.”
In other words: lost your home, your job, and your health insurance? Buy shit! You know like you did after 9/11! Buy lotsa shit! “When the money reaches the American people, we expect they will use it to boost consumer spending,” Bush fantasized.
Clearly Bush has his pulse on the upraised finger of the nation.
Why else would he be moved towards such profundities as: “I’m concerned about the economy because I’m concerned about working Americans, concerned about people who want to put money on the table and save for their kids’ education.”
If you’re like me, you put that money right next to the mashed potatoes on your table. Yum. Pass the unpaid mortgage, please. I’m saving bankruptcy for dessert!
One day after “The Wall Street Journal” ran the results of a survey wherein 71% of economists polled thought we were in a recession now, Bush gave a speech devoted to our current crises. “I’m coming to you as an optimistic fellow,” he golly-geed. “I’ve seen what happens when America deals with difficulty. I believe that we’re a resilient economy, and I believe that the ingenuity and resolve of the American people is what helps us deal with these issues.”
If you’re religious by nature, that nails it. All gods have officially abandoned us.
Probably the most telling reflection of America’s current Bizarro state of affairs can be found in the story headlined: “Dr. Death to run for US Congress.”
It seems that assisted-suicide advocate Jack (“Dr. Death”) Kevorkian has decided to throw his cowl into the ring and run as an independent in Oakland, California’s 9th Congressional district. Kevorkian spent more than eight years in jail for the murder of a man whose videotaped assisted suicide was aired on national television. He claims to have helped 130 folks kick the bucket.
In a sense, Bush has fashioned a political career doing what Kevorkian does but on a much larger scale. Unlike Bush, Kevorkian was always upfront with his patients as he ended their suffering.
With Bush, all you get is: don’t worry, be happy.
And don’t worry about that dirty needle.
It’s good for you.