KEEPING THE COUNTRY FLOODED WITH ILLEGALS
HAS BEEN VERY EFFECTIVE IN KEEPING WAGES
DEPRESSED.... Legals still get the tax bills for the LA RAZA
welfare state and anchor baby breeding for welfare and as well
as the Mexican crime tidal wave!
"This is also not taking place. The 2.5 percent annual growth
in average hourly earnings is no higher than this time a year
ago and well below the growth of 3.5 percent before the
financial crisis."
America’s Looming Economic Armageddon
– Can the Rich Get Even Richer During the Meltdown? Haven’t they looted us into
bankruptcy?
AMERICA'S ROAD TO REVOLUTION
“Our entire crony
capitalist system, Democrat and Republican alike, has become a kleptocracy
approaching par with third-world hell-holes. This is the way a great
country is raided by its elite.” ---- Karen McQuillan THE AMERICAN THINKER.com
Uncertainty grows over US
Fed’s interest rate moves
By
Nick Beams
6 June 2017
While it remains very likely that the US Federal Reserve will lift
its base interest rate by a further 0.25 percentage points when it meets later
this month, there is growing uncertainty about where monetary policy might be
headed after that.
The Fed’s agenda is to return to a more “normalised” policy after
almost nine years of ultra-low interest rates and the pumping of trillions of
dollars into the financial system following the crisis of 2008. However,
conditions in the US and the world economy are far from what was considered
previously to be the norm.
This is clearly evidenced by the fact that the
economic “model,”
on which the Fed and other
capitalist economic institutions have based their
decisions in the past, has to all intents and purposes
broken down.
One of its key components was the so-called Phillips curve, first
advanced in 1958. It maintained that there was a relationship between the level
of unemployment, wages and inflation. When near-full employment conditions were
reached, the model held, this led to an upward movement of wages and prices.
Consequently, monetary policy should be directed to ensuring that
interest rates were kept at low enough level to ensure that the economy
continued to grow, but sufficiently high to ensure that wages and prices were
kept under control.
Before the eruption of the financial crisis, the so-called neutral
rate at which the economy would remain in “balance” was regarded as being
around 3 percent. Since the financial crisis, however, all the assumptions on
which this model was based have gone awry, pointing to far-reaching changes in
the very structure of the economy.
The stated aim of Fed policy is to keep inflation at or near 2
percent, while ensuring at or near full employment. According to the Phillips
curve, as the unemployment rate comes down so inflation should start to rise.
Yet this has not taken place.
According to official figures, the core inflation rate has been
below the Fed’s target of 2 percent for 58 months in a row, while the US
unemployment rate has halved. And the inflation trend is down, with the rate of
1.5 percent for April, below the figure for a year ago.
Commenting on the inflation data, Lael Brainard, a member of the
Fed’s policy-setting open market committee and regarded as somewhat of a “dove”
on interest rates, said: “That reading marks a considerable shortfall from the
committee’s 2 percent objective. And there does not seem to have been any
progress over the past year or so.”
While indicating during a speech in New York that she favours a
further interest rate rise “soon,” Brainard said that if soft inflation data
persisted “that would be concerning and, ultimately could lead me to reassess
the appropriate path of policy.”
Wages are showing the same pattern as inflation. According to the
Phillips model, wages should start to rise with the fall in unemployment. This
is also not taking place. The 2.5
percent annual growth in average hourly
earnings is
no higher than this time a year ago and well below
the growth of
3.5 percent before the financial crisis.
The wages data point to an underlying structural change in the US
economy—the replacement of better paid full-time jobs with part-time and casual
employment.
A study by Harvard economist Lawrence Katz and Princeton economist
Alan Krueger released in December last year found that 94 percent of the 10
million jobs created during the Obama administration were temporary, contract
or part-time positions. The proportion of workers engaged in such jobs rose
from 10.7 percent to 15.8 percent, with 1 million fewer workers engaged in
full-time jobs than at the start of the recession of 2008-2009.
This trend was underscored in the latest jobs data released last
Friday. The US unemployment rate dropped to 4.3 percent from 4.4 percent but
this was due in no small measure to a 429,000 decline in the size of the labour
force as workers dropped out of the jobs market.
Non-farm payrolls increased by 138,000 in May, while jobs growth
figures for March and April were revised down by 66,000. The number of retail
jobs fell for the third month in a row amid a spate of store closures by the
major retail chains.
There are, however, some shortages in areas of skilled labour. In
an indication of the class character of all its policies, the Fed noted that it
would be prepared to lift interest rates if wages growth began to rise
unexpectedly.
Another significant factor in the shattering of what was
previously regarded as the “normal” pattern of economic development is the rise
of financial parasitism. In the days when the Phillips model was first
advanced, increased profits by corporations led to further productive
investment, increased economic output and rising wages. That is no longer the
case.
Profits are now increasingly not used for new investment. They are
deployed in support of “financial engineering,” involving share buybacks and
increased dividends, as corporations operate under continuous pressure from
hedge funds and investment funds to increase “shareholder value.”
The trends in the US economy are being repeated elsewhere. In
Britain, workers’ wages are still some 10 percent below where they were before
the global financial crisis, while Australia is showing the lowest growth in
wages since records started to be kept. This is despite official data in both
countries showing relatively low unemployment levels.
One of the main factors at work in all the advanced economies is
the falling levels of investment in the real, as opposed to the financial,
economy, which has depressed productivity growth.
The international character of these tendencies was underscored in
the Global Economic Prospects reported issued by the World Bank on Sunday. It
pointed to a “fragile” recovery in the global economy but warned that a
slowdown in investment was threatening productivity growth in emerging
economies and that long-term damage might already have been done.
According to the report: “Even if the expected modest rebound in
investment across [emerging and developing economies] materialises, slowing
capital accumulation in recent years may have already reduced potential
growth.”
OBAMA-CLINTONOMICS
FOR THE RICH:
On
behalf of bankster-owned Barack Obama, Yellen vows to the rich and crony
banksters that they will be protected and subsidized with no strings bailouts
during the next looming economic meltdown around the corner from elections.
“In fact, these policies have
already produced financial and asset bubbles that are unsustainable, and there
are increasing signs of financial instability and crisis. There are growing
warnings that the spread of negative interest rates is leading to a new
financial meltdown even worse than the disaster that struck eight years ago.”
"The same period has
seen a massive growth of social inequality, with income and wealth concentrated
at the very top of American society to an extent not seen since the
1920s."
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