Economic Stories of Relevance in Today's World -- July 17, 2011

Why Banks Aren't Lending: The Silent Liquidity Squeeze - Ellen Brown, Truthout - July 15, 2011 - (This is a must read for small business people) - Where did all the jobs go? Small and medium-sized businesses are the major source of new job creation, and they are not hiring. Startup businesses, which contribute a fifth of the nation's new jobs, often can't even get off the ground. Why?... In a June 30 article in The Wall Street Journal titled "Smaller Businesses Seeking Loans Still Come Up Empty," Emily Maltby reported that business owners rank access to capital as the most important issue facing them today; and only 17 percent of smaller businesses said they were able to land needed bank financing. Businesses have to pay for workers and materials before they can get paid for the products they produce and for that they need bank credit; but they are reporting that their credit lines are being cut. They are being pushed instead into credit card accounts that average 16 percent interest, more than double the rate of the average business loan. It is one of many changes in banking trends that have been very lucrative for Wall Street banks, but are killing local businesses.


Greed, Excess and America's Gaping Class Divide - Rolling Stone - Matt Taibbi - July 13, 2011


What Happened to the $2.6 Trillion Social Security Trust Fund? - Forbes - Merrill Matthews - July 13, 2011 - Well, either Obama and Geithner are lying to us now, or they and all defenders of the Social Security status quo have been lying to us for decades. It must be one or the other... Here’s why: Social Security has a trust fund, and that trust fund is supposed to have $2.6 trillion in it, according to the Social Security trustees. If there are real assets in the trust fund, then Social Security can mail the checks, regardless of what Congress does about the debt limit... The answer is that the federal government has borrowed all of that trust fund money and spent it, exactly as Krauthammer asserted. And the only way the trust fund can get some cash to pay Social Security benefits is if the federal government draws it from general revenues or borrows the money—which, of course, it can’t do because of the debt ceiling... Thus, the answer to my initial question is that the president is telling the truth now in the sense that he is conceding there’s no money in the trust fund to pay benefits; but he and other Social Security status-quo defenders have been deceiving the public for decades.


Entitlement my ass , I paid cash for my social security insurance!! - The Rumor Mill News Reading Room - July 14, 2011


How Globalism Has Destroyed Our Jobs, Businesses And National Wealth In 10 Easy Steps - EndofAmerica.com :

#1 Globalism has merged the U.S. economy with economies that allow slave labor wages.
#2 U.S. companies make bigger profits by sending jobs overseas.
#3 Globalism has allowed foreign countries to dominate a whole host of industries that used to be dominated by the United States.
#4 Jobs and manufacturing infrastructure are being lost at an astounding pace and they are not going to come back.
#5 Workers without good jobs can't buy houses or cars.
#6 If American workers don't have jobs they aren't paying taxes.
#7 Instead of receiving taxes, the government must pay out money to our unemployed workers instead.
#8 As jobs and businesses leave our shores, many of our once great manufacturing cities have been transformed into hellholes.
#9 The United States ends up borrowing back most of the money that it sends overseas every single month.
#10 Foreign countries are using up some of the wealth that we send them every month to buy up our infrastructure.

Sadly, neither political party seems concerned about the effects of globalism at all. In fact, both parties continue to push for even more globalism. But large numbers of ordinary Americans are waking up. According to a recent Washington Post poll, only 36 percent of Americans consider "the increasing interconnection of the global economy" to be a positive thing. Back in 2001, 60 percent of Americans believed that the globalization of the economy was a positive thing. So maybe there is a glimmer of hope. But until fundamental changes are actually made, globalism will continue to destroy our jobs, our businesses and our national wealth.


The next big hit to the economy? - Yahoo News - Zachary Roth - The Lookout – Mon, Jul 11, 2011 - The recovery is weak now--but it could be headed for a major hit that will leave it even weaker... At the start of 2012, the extended unemployment benefits approved by Congress in December 2010, which cover a maximum of 99 weeks per person, will expire. Though the benefits are hardly lavish--a little more than $300 a week for most recipients--their total impact on the economy is huge, because so many Americans are currently taking advantage of them. Moody's Analytics estimates that when the benefits expire, $37 billion will be taken out of the economy, the New York Times reports. That's enough to exert a significant slowing effect--at a time when the recovery is already a long way from robust... Government benefits that go to poorer Americans, like unemployment insurance, tend to boost consumer spending more than other kinds of stimulus, because people living paycheck to paycheck have little choice but to spend the money, rather than saving it. So the disappearance of jobless benefits will take money out of circulation when economic growth is seeking to gain some traction.


A brave new banking system – while public is told banking system is healthy FDIC quietly grows troubled bank list by 180 and adds over 1,600 employees in the last two years to deal with bank failures. - MyBudget360.com - The banking system in the United States rests on a very thin layer of faith and that faith has been shaken by the current financial crisis. The retail banking system is largely a facade that now latches on to taxpayer bailouts to fund speculative investments through their investment banking divisions. The repeal of Glass-Steagall has been an absolute failure for allowing this commingling of financial functions. I find it interesting that while we get a public stance that all is well on the banking front, we find that the FDIC keeps adding employees to handle bank failures and the number of problem institutions continues to grow. Of course this is the kind of information that is buried deep in websites and financial statements while most of the press focuses on distractions.


The Video Congress Does Not Want You To See