21 Signs That The Once Great U.S. Economy Is Being Gutted

21 Signs That The Once Great U.S. Economy Is Being Gutted, Neutered, Defanged, Declawed And Deindustrialized - The Economic Collapse - February 13, 2011

Once upon a time, the United States was the greatest industrial powerhouse that the world has ever seen. Our immense economic machinery was the envy of the rest of the globe and it provided the foundation for the largest and most vibrant middle class in the history of the world. But now the once great U.S. economic machine is being dismantled piece by piece. The U.S. economy is being gutted, neutered, defanged, declawed and deindustrialized and very few of our leaders even seem to care. It was the United States that once showed the rest of the world how to mass produce televisions and automobiles and airplanes and computers, but now our industrial base is being ripped to shreds. Tens of thousands of our factories and millions of our jobs have been shipped overseas. Many of our proudest manufacturing cities have been transformed into "post-industrial" hellholes that nobody wants to live in anymore.

Meanwhile, wave after wave of shiny new factories is going up in nations such as China, India and Brazil. This is great for those countries, but for the millions of American workers that desperately needed the jobs that have been sent overseas it is not so great.

This is the legacy of globalism. Multinational corporations now have the choice whether to hire U.S. workers or to hire workers in countries where it is legal to pay slave labor wages. The "great sucking sound" that Ross Perot warned us about so long ago is actually happening, and it has left tens of millions of Americans without good jobs.

So what is to become of a nation that consumes more than it ever has and yet continues to produce less and less?

Well, the greatest debt binge in the history of the world has enabled us to maintain (and even increase) our standard of living for several decades, but all of that debt is starting to really catch up with us.

The American people seem to be very confused about what is happening to us because most of them thought that the party was going to last forever. In fact, most of them still seem convinced that our brightest economic days are still ahead.

After all, every time we have had a "recession" in the past things have always turned around and we have gone on to even greater things, right?

Well, what most Americans simply fail to understand is that we are like a car that is having its insides ripped right out. Our industrial base is being gutted right in front of our eyes.

Most Americans don't think much about our "trade deficit", but it is absolutely central to what is happening to our economy. Every year, we buy far, far more from the rest of the world than they buy from us.

In 2010, the U.S. trade deficit was just a whisker under $500 billion. This is money that we could have all spent inside the United States that would have supported thousands of American factories and millions of American jobs.

Instead, we sent all of those hundreds of billions of dollars overseas in exchange for a big pile of stuff that we greedily consumed. Most of that stuff we probably didn't need anyway.

Since we spent almost $500 billion more with the rest of the world than they spent with us, at the end of the year the rest of the world was $500 billion wealthier and the American people were collectively $500 billion poorer.

That means that the collective "economic pie" that we are all dividing up is now $500 billion smaller.

Are you starting to understand why times suddenly seem so "hard" in the United States?

Meanwhile, jobs and businesses continue to fly out of the United States at a blinding pace.

This is a national crisis.

We simply cannot expect to continue to have a "great economy" if we allow our economy to be deindustrialized.

A nation that consumes far more than it produces is not going to be wealthy for long.

The following are 21 signs that the once great U.S. economy is being gutted, neutered, defanged, declawed and deindustrialized....

#1 The U.S. trade deficit with the rest of the world rose to 497.8 billion dollars in 2010. That represented a 32.8% increase from 2009.

#2 The U.S. trade deficit with China rose to an all-time record of 273.1 billion dollars in 2010. This is the largest trade deficit that one nation has had with another nation in the history of the world.

#3 The U.S. trade deficit with China in 2010 was 27 times larger than it was back in 1990.

#4 In the years since 1975, the United States had run a total trade deficit of 7.5 trillion dollars with the rest of the world.

#5 The United States spends more than 4 dollars on goods and services from China for every one dollar that China spends on goods and services from the United States.

#6 In 1959, manufacturing represented 28 percent of all U.S. economic output. In 2008, it represented only 11.5 percent and it continues to fall.

#7 The number of net jobs gained by the U.S. economy during this past decade was smaller than during any other decade since World War 2.

#8 The Bureau of Labor Statistics originally predicted that the U.S. economy would create approximately 22 million jobs during the decade of the 2000s, but it turns out that the U.S. economy only produced about 7 million jobs during that time period.

#9 Japan now manufactures about 5 million more automobiles than the United States does.

#10 China has now become the world's largest exporter of high technology products.

#11 Manufacturing employment in the U.S. computer industry is actually lower in 2010 than it was in 1975.

#12 The United States now has 10 percent fewer "middle class jobs" than it did just ten years ago.

#13 According to Tax Notes, between 1999 and 2008 employment at the foreign affiliates of U.S. parent companies increased an astounding 30 percent to 10.1 million. During that exact same time period, U.S. employment at American multinational corporations declined 8 percent to 21.1 million.

#14 Back in 1970, 25 percent of all jobs in the United States were manufacturing jobs. Today, only 9 percent of the jobs in the United States are manufacturing jobs.

#15 Back in 1998, the United States had 25 percent of the world’s high-tech export market and China had just 10 percent. Ten years later, the United States had less than 15 percent and China's share had soared to 20 percent.

#16 The number of Americans that have become so discouraged that they have given up searching for work completely now stands at an all-time high.

#17 Half of all American workers now earn $505 or less per week.

#18 The United States has lost a staggering 32 percent of its manufacturing jobs since the year 2000.

#19 Since 2001, over 42,000 U.S. factories have closed down for good.

#20 In 2008, 1.2 billion cellphones were sold worldwide. So how many of them were manufactured inside the United States? Zero.

#21 Ten years ago, the "employment rate" in the United States was about 64%. Since then it has been constantly declining and now the "employment rate" in the United States is only about 58%. So where did all of those jobs go?

The world is changing.

We are bleeding national wealth at a pace that is almost unimaginable.

We are literally being drained dry.

Did you know that China now has the world's fastest train and the world's largest high-speed rail network?

They were able to afford those things with all of the money that we have been sending them.

How do you think all of those oil barons in the Middle East became so wealthy and could build such opulent palaces?

They got rich off of all the money that we have been sending them.

Meanwhile, once great U.S. cities such as Detroit, Michigan now look like war zones.

Back in 1985, the U.S. trade deficit with China was about 6 million dollars for the entire year.

As mentioned above, the U.S. trade deficit with China for 2010 was over 273 billion dollars.

What a difference 25 years can make, eh?

What do you find when you go into a Wal-Mart, a Target or a dollar store today?

You find row after row after row of stuff made in China and in other far away countries.

It can be more than a bit difficult to find things that are actually made inside the United States anymore. In fact, there are quite a few industries that have completely and totally left the United States. For certain product categories it is now literally impossible to buy something made in America.

So what are we going to do with our tens of millions of blue collar workers?

Should we just tell them that their jobs are not ever coming back so they better learn phrases such as "Welcome to Wal-Mart" and "Would you like fries with that"?

For quite a few years, the gigantic debt bubble that we were living in kind of insulated us from feeling the effects of the deindustrialization of America.

But now the pain is starting to kick in.

It has now become soul-crushingly difficult to find a job in America today.

According to Gallup, the U.S. unemployment rate is currently 10.1% and when you throw in "underemployed" workers that figure rises to 19.6%.

Competition for jobs has become incredibly fierce and it is going to stay that way.

The great U.S. economic machine is being ripped apart and dismantled right in full view of us all.

This is not a "conservative" issue or a "liberal" issue. This is an American issue.

The United States is rapidly being turned into a "post-industrial" wasteland.

It is time to wake up America.

Melding the Corporatocracy with a Kleptocracy

Below are two presentations that get to the bottom of the issues that we face here in America. The First is a presentation from Dr. Paul Craig Roberts that defines the waste and dysfunction of the American Economic system as it stands today entitled Klepocrats at Work. The second is a video interview of Catherine Austin Fitts by Max Keiser on his TV program On the Edge.

What is it going to take for people to wake up to what are the actual underlying systemic, problematic issues in our economy and what will it take for people to take action? We have seen upheaval in the Middle East related to their cost of living and governments that are autocratic protecting the interests of the ruling class at the expense of the people. We have been buffered to a great degree from the cost of living issues, because of the American Dollar's role as the World Reserve Currency.

Fundamental Economics have not played a role in the value of our money since the Dollar was taken off of the Gold Standard in 1971 (Nixon Shock - The ending of the Bretton Woods agreement). The Dollar became a "Legal Tender" currency, which many define as being backed by the full faith and credit of the United States Government. Thus today the notes are backed only by the government's ability to levy taxes to pay its debts. In another sense, because the notes are legal tender, they are "backed" by all the goods and services in the U.S. economy and have value because the public may exchange them for valued goods and services in the U.S. economy.

This led to the Petrodollar and the role of the dollar as the World Reserve currency (Petrodollar), because of agreements made between the United States Government and Oil Exporting Nations (mainly The Organization of the Petroleum Exporting Countries - OPEC). American Dollars have been used for the basis of exchange for oil. This was originally instituted, because we were the leading importer of oil from Oil Exporting nations. Instead of pegging our currency to Gold (prior to 1971), it would now be pegged to oil (shortly thereafter ever since). This peg supposedly led to stability in oil prices, as well as stability in the value of our dollar.

What we have seen is that the Dollar has been hijacked as a result of this system. Instead of Petrodollars bringing stability, they have brought instability. We are engaged in worldwide conflicts that propagandists try to insinuate are a result of ideological principles, when the baseline hostilities could easily be defanged by a reduction in the exchange of American dollars to buy foreign imports, mainly centered on Oil. Would the issues we face in the Middle East and North Africa be as perilous today if we were not tangled in this Oil Web?

What Catherine Austin Fitts details in the Video below is that, "What happens to the Dollar will be the result of our Military. The central banks print money and the Military makes sure everybody takes it, while trading back natural resources cheap." That is what we have seen. That is where the "Full Faith and Credit" is enforced.

This Federal Credit mechanism keeps the liquidity going through force. This system has been breaking down, because it must constantly grow and it cannot grow to infinity. Over the years this system has allowed America to become an Empire, but as the fundamental system based around our dominant currency continues to break down and as this breakdown accelerates it becomes more impossible to sustain and eventually it will completely collapse as people wake up and realize that this system is dysfunctional and they choose not to participate in the American Dollar system any longer. Because as Gerald Celente states, "It is not worth the paper it is not printed on."

The Fiat Dollar was functional in the beginning because it was backed by our wealth as a nation. It was backed by the assets we had built up as a nation since our inception and because of our status created as a result of the role we played in solving the disputes of World War I and II. Now, instead of playing a role in solving disputes, we are playing a major role in the inception and continuation of hostilities both overtly in some instances and covertly through wars of proxy. Now we have shrunk our Industrial capacity and strained our creative abilities to the extent that we are contributing to our own implosion and eventual demise.

It is time that we get back to our core principles as a nation. It is time that we restore our roots as a Republic. It is time to revalidate the Constitution and the principles of our founders. The founders of this nation were men who were willing to put their lives on the line. They would have been executed if they had failed in their mission. The "leaders" of today are men of clay, who want to maintain the status quo and continue to enjoy the fruits of an unmanageable and crumbling system that is harming the people of this nation. What they don't understand is that when it crumbles they will be holding a whole lot of nothing.

Kleptocrats at Work - Paul Craig Roberts - Infowars.com - February 8, 2011

Kleptocracy is as old as government. Exotic car broker Michael Sheehan discovered an amazing case nine years ago when he was invited to purchase rare Ferraris and McLaren F1s from a Brunei collection. He writes about it in the current issue of Sports Car Market.

Brunei is a family-owned oil sultanate of 400,000 people located on the island of Borneo in southeast Asia. A brother of the sultan was finance minister until 1997, when the Asian financial crisis hit Brunei. The Arthur Andersen accounting firm was called in to audit the books. The accountants found that between 1983 and 1998 $40 billion had disappeared and that the finance minister himself had personally spent $14.8 billion.

The finance minister had a collection of 2,500 exotic cars, 500 properties, five yachts, and nine world-class aircraft. He had managed to spend $900,000,000 in the London jeweler Asprey, apparently guaranteeing the old age retirements of a number of attractive women who consort with kleptocrats.

The finance minister was allowed to keep 500 of the cars, but he had to turn in the rest of his loot – to no avail as we shall see.

Sheehan went to Brunei to view the cars. From his general description of the collection, I estimate that the finance minister had paid six figures for the least expensive car in the collection. Many cost much more. McLaren F1s cost $1,000,000 new. They are more valuable now. In October 2008 one sold at a London auction for $4,100,000. Many of the cars were custom built. Some of the high-speed Ferraris “were coated in radar-absorbent matte-black coatings and fitted with infrared cameras for night driving.” Easily more than one billion dollars of Brunei’s oil revenues had found their way into the finance minister’s car collection.

Sheehan reports that the cars were stored in about 12 buildings “surrounded by a high wall topped with razor wire and with a bomb-proof front gate” and patrolled by “armed Gurkhas with very serious German shepherds.” The security was for naught, because “the air conditioning was off, but the tropical sun was not.” Years of heat and humidity had destroyed the cars. The storage facilities had become a car tomb.

Sheehan concluded that most of the cars were in such a state of ruin that only a few of the cars had sufficiently high inherent values to support commercially viable restorations. The best use of the rest, Sheehan decided, would be to turn them into an artificial ocean reef.

The careless waste is shocking and even more so to car buffs who consider many of the ruined cars to be artistic masterpieces. This is the kind of opulent waste that we associate with family-owned countries. But before we Americans start feeling superior, consider that the U.S. government puts the Brunei finance minister to shame.

On Jan. 29, 2002, the CBS Evening News reported that the Pentagon had lost track of $2.3 trillion, yes, $2,300 billion. Defense Secretary Rumsfeld admitted, “According to some estimates we cannot track $2.3 trillion in transactions.” “We know it is gone,” said Jim Minnery of the Defense Finance and Accounting Service, “but we don’t know what they spent it on.”

Reported thefts from Iraq and Afghanistan reconstruction aid rival Brunei’s missing billions. Pallets of cash stacked high have been flown out of Afghanistan in plain view. The stories of corruption and missing funds are so numerous that they are no longer reported.

The U.S. Congress, at President Obama’s request, recently passed the largest military spending bill of all time in behalf of the share prices of the military/security complex, while many of the 50 states teeter on bankruptcy and default on pensions and municipal bonds and slash education, medical, and other services. For “our” government in Washington, it is a no-brainer that the profits of the military-security complex take every precedence over every need of the American people.

If the Brunei finance minister’s billion-dollar car collection becomes an artificial reef, it will foster marine life. In contrast, Dick Cheney seriously damaged, perhaps for many years to come, the Gulf of Mexico, because Cheney believed a few extra bucks for the oil companies were more important than safety standards. The missing safety standards have cost British Petroleum $20 billion in clean up and restitution costs.

U.S. taxpayers are paying the Orwellian Department of Homeland Security $56,336,000,000 this year to porno-scan and grope them and otherwise invade their privacy, while millions of Americans are foreclosed out of their homes.

How are the priorities of the U.S. government superior to those of the Brunei finance minister? When it comes to waste and corruption, lies and deception, the U.S. government has no equal.

Dr. Paul Craig Roberts is the father of Reaganomics and the former head of policy at the Department of Treasury. He is a columnist and was previously the editor of the Wall Street Journal. His latest book, “How the Economy Was Lost: The War of the Worlds,” details why America is disintegrating.

Catherine Austin Fitts interview with Max Keiser - Revolutions and Economy

Hickory 2015 - Realities, Challenges, Opportunities!!!

The following thesis that I am putting forth comes from a question posed by the Chairman of the Future Economy Council of Catawba County, Terry Bledsoe. Terry asked, "One of the purposes of this group was to identify weak signals here in the county, the region, and beyond that may have an impact on us or offer us an opportunity. What weak signals are you seeing?"

"Weak Signals" are advanced indicators of changes in trends and systems that are currently forming and will continue to gel until reaching tangible status in the future. The study and acknowledgment of these signals can be used for enabling anticipatory action.

The following is a critical thinking exercise and I wish that more people in this community would think along this manner. We need more of our citizens to think about the realities, challenges, and responsibilities that we face in this community over the next few years. What do you see forming and how would you address these issues?

Here is my View of some of the Weak Signal issues that we face over the next 3 to 5 Years:

An Established pattern of Energy Dependence

Let's think back to the Arab Oil Embargo of 1973. when the members of Organization of Arab Petroleum Exporting Countries or the OAPEC (consisting of the Arab members of OPEC, plus Egypt, Syria and Tunisia) proclaimed an oil embargo "in response to the U.S. decision to re-supply the Israeli military" during the Yom Kippur war; it lasted until March 1974.

During that period of time, we saw a near tripling of the price of crude from 1973 to 1975 - (http://www.inflationdata.com/inflation/inflation_rate/historical_oil_prices_table.asp)

(Year - Nominal - Inflation adjusted):
1972 - $3.60 - $20.78
1973 - $4.75 - $23.13
1974 - $9.35 - $41.27
1975 - $12.21 - $49.42
1976 - $13.10 - $50.19
1977 - $14.40 - $51.76
1978 - $14.95 - $49.99
1979 - $25.10 - $74.67
1980 - $37.42 - $99.11
1981 - $35.75 - $85.82

If one looks at a pattern of oil prices, then one would see stability during the 1950s and 1960s with oil hovering in a low inflation adjusted range around $20/barrel from 1948 to early 1973, then the inflation adjusted price doubles over the next two years and quadruples-plus over the seven year time period (to 1980-81).

From 1986 to 2002, with the exception of the Gulf war in 1990-91, we fell back to $20 to $30/barrel inflation adjusted Crude Oil. Then in 2003 oil began to rise again. Oil prices have essentially doubled from 2003 to 2011, with the brief spike to $146 in 2008. So if we carry this correlation out, then we could see a doubling of the current price over the next few years (from double to quadruple from 2003). This means that we would be dealing with a price per barrel in the $130 to $150 range, with possible blips to the upside in the $200 area.

Look at our vulnerabilities related to the importation of Crude Oil. In 1972 we were importing 2.2 million barrels of Oil per day and now we are importing over 9 million barrels per day. The latest Statistics show that we are consuming around 19 million barrels of oil per day total, which is only a 10% increase over what we were using in 1973 (17.3 million barrels/day) - U.S. Energy Information Administration.

Oil Imports per day:


Oil Consumed per day:


I do believe that the above proves that the U.S. has become highly efficient in its usage of Petroleum. We are only utilizing 10% more oil as compared to 28 years ago and our population has increased by nearly 50% from nearly 212 million in 1973 to 312 million in 2011, but we have definitely left ourselves more and more vulnerable by not producing more energy domestically.

It surely does seem that the pattern of inflationary energy costs are repeating themselves. If we overlay this correlation it means that oil trading today at $87 will cause gasoline at its current price ($3) to expand 1.5x and could blip to 2.5x that price. This means that over the next 3 to 5 year period we would have to deal with gas prices in the $4.50 to $7.50 range.

Now, if we carry this out and understand that Oil is an essential ingredient in everything we consume, then you can foresee what the mid-term future holds for the world and our area.

Translating this Reality to Tomorrow

First, I believe that the instability created by inflation is going to lead to hostilities and uprisings throughout the world as people become more and more anxious. The Federal Reserve creating a bubble throughout the speculative markets with the influx of dollars through the megabanks is contributing to much of the upward pressures we are seeing in all commodities as I have shown in various articles since this blog began 2 1/2 years ago. These inflationary processes have consequences. This is not Collegiate theory. Rising prices are something that will have a huge impact on the affordability and quality of our lives.

In our own area, we see a problem with the permanent unemployment structure and an aging population. The median household income for Catawba County was $40,536 as of the 2000 census. The American Community Survey shows that median household income, as of 2009, is $41,116. This means that over a nine-year period the county only saw a growth in income for households of 1.43%. Over that same time, the Consumer Price Index in the United States grew by 23%. This means that to keep up with the cost of living, the year 2000 household income of $40,536 should be $49,950.38. That $8,834 less in income means less money for people to live on, having to become more thrifty to make ends meet, and less to spend on, in, and for local businesses. This therefore has implications on the community from the top to the bottom of the socio-economic strata.

We were once one of the wealthiest areas in the State and now we are one of the poorest. That means that we are going to have to deal with this issue over the next 3 to 5 years, because it is going to be in our face.

When one couples this income/employment issue with the aging population problem and what I have explained with the cost of living (fuel issue and inflation), it paints a bleak picture, but from this black hole is where our opportunities will arise and that is the reason we need to be honest about these issues, so that we can understand them, and take advantage of them. If you walk out onto I-40 with blinders on and ear plugs in does not mean that by not acknowledging the traffic that you're not going to get run over!

Economic Development Goals for the next 3 to 5 years (2015)

We spoke of some of this last year in our State of Hickory Address for 2010. As far as economic development, I think that we need to follow Steve Ivester's advice and create our own Regional Economic Development entity. This can be created by the State Legislature; combining some of Advantage West and the Charlotte Regional Partnership areas and placing Hickory as the hub of said region. Charlotte has issues, because of the scramble left from the consolidation of the banking industry towards Wall Street and New York interests.

Things aren't going to change around here through a political process. It's about the mindset. Look at how Charlotte and Duke Power are focused on new energy. They're retaining their financial capacity and facilitating micro-lending to help entrepreneurs. They have expanded their culinary scene substantially over the years. Restaurant and Hospitality is a real industry that is thriving throughout the Charlotte area. Charlotte has a new biomass center and they have recently opened a Superfund cleanup site. UNC-Charlotte has laid biotech plans that are interconnected with the biotech center in Kannapolis. Concord's retail center and race track are attached to Charlotte at the hip.

Charlotte has sown seeds that will continue to blossom in the upcoming years and Hickory has too. We're moving towards having more eldercare facilities, doctors, medical industry, cheap housing, fast food, cheap groceries, cheap retail, and cheap labor. The sad thing is that when Charlotte talks about being a hub of economic growth, it stops right at Catawba County. If you don't believe me, ask people that have seen Charlotte's transportation plans looking to future growth.

Hickory and Catawba County need to look out for our own interests. Changing the status quo does not necessarily equate to instability, but maintaining the status quo at all costs will cause us to fall further and further behind and we can already see that we have economic instability and it can get worse, a lot worse.

So I think we need to reestablish our roots of independence. I am not saying that we need to become an island. We still need to network and make connections. What I am saying is that the reason why the original inhabitants came here to start with was to make a new life for themselves. They wanted to get away from the eastern North Carolina established interests and the Germans came here to get away from Old Europe and it's monarchical and noble classes and their entrenched interests. We need to make provisions to be able to sustain this community on its own, if all hell breaks loose, while looking to existing challenges and the opportunities that will develop around those challenges.

Looking at the challenges we face related to Fuel and commodity prices, I think that we must get into the energy game. I honestly don't think we can do this by piggy backing on Charlotte. The Eco-Complex is a wonderful thing and to it I say bravo. We need to expand that concept to other areas of the region with the eco-complex being the hub.

I think that we need to expand the farmer's markets and have them be regional and introduce one huge farmer's market site to go along with smaller satellite sites and make it easier for people to have access and participate in these marketplaces. I think that Urban and suburban gardening, community and victory gardens are going to become an essential part of our lives. This food is fresher and healthier in many ways than what we find in the grocery stores. How do we facilitate, expedite, and build a foundation off of this type of natural development and structure that will develop from necessity? I think that should be a near future discussion that we can all take advantage of and spread the word about and ingrain in our local culture.

Conclusions and Solutions headed towards 2015

I think that the rising fuel prices are going to have a lot of implications. The above are results of that, but just think about filling your tank up and it costing $60 to $100 for a mid-size car or $150 to $250 for an SUV. This will change your lifestyle!

This will mean that you have to create alternatives to deal with the sprawl that we have in the area. This is the reason why it will be necessary to have gardens. This means that a lot of our local restaurants are going to go out of business and others will have to rethink their business model in order to survive, because their profit margins are already slim. Throw in the fact that their customers won't have as much money and won't be able to get there as frequently and prices are set to go up a lot due to the energy costs that play a role in their wholesale costs as well as the services they deliver and you see what I am getting at.

I really do appreciate the initiative that Danny Hearn and Garrett Hinshaw have taken in getting these innovation project contests off the ground. I think that we will see fruit born from this and it will feed off of itself. It is my hope that this will lead to the creation of a permanent facility and structure that will allow creators and innovators to explore unknown opportunities that can bear fruit. My idea is that this Center would allow access to knowledge centers, in which these people can do research in an attached or detached manner -- whatever the circumstances call for. By doing this, the person would have an area in which to be alone when they need to concentrate and have other Human energy resources of inspiration near them when they need that kind of motivation or help.

I would like to see one of these old manufacturing buildings around here utilized for that. I think that is what Donald Duncan is getting around to with the Conover Station Concept. We need more of that. How do we make that happen? How do we convince some of the people who own these buildings to allow this to happen? How do we show them that this can bear fruit and pay dividends for the community and they can get the credit for this and participate in it? What do they have to lose? I mean the building is going to eventually fall down anyway, if it isn't maintained, and let's be frank, most of these buildings aren't being maintained.

Maybe I am a little out there, but I don't only think that the identification and acknowledgment of weak signals is important. I think it is more important to take action, managing, massaging, and being flexible in dealing with these weak signals and the opportunities that they present.

Why Small Business Isn't Hiring and Won't Be Hiring

Why Small Business Isn't Hiring and Won't Be Hiring - (of two minds.com - Charles Hugh Smith - February 8, 2011)

Pundits and politicos promote a magical myth: a coming small business hiring boom. That fantasy is completely disconnected from the harsh realities of private enterprise.

Regardless of their ideological persuasion, pundits and politicos reliably repeat the mantra that "small business is the engine of jobs growth." The mantra is followed by the pundit-politico's belief that a "small business jobs boom is right around the corner."

I have news for the pundits and politicos: ain't gonna happen. Why? The answer cannot be found in the manipulated and massaged Bureau of Labor Statistics numbers (have any real jobs been created, net of jobs lost, in the past year? Who knows?) or in the punditry's Cargo-Cult-like belief in a mythical "small business jobs machine" that they have never experienced and know nothing about.

While a handful of the new crop of politicos are entrepreneurs, most Washington denizens are attorneys, the offspring of wealthy or politically connected families or people who have lived off the government at some level their entire lives. Most have never had a customer or client or had to borrow off a credit card to make payroll. (I have; any pundits who can honestly raise their hands for that one?)

Pundits come in two flavors: the academics, happily making mud pies in the moat surrounding their secure Ivory Tower, and the loud-mouths who have screeched louder and longer than the other media-monkeys. All know less than zero about actual small business.

To understand why small business isn't hiring and won't be hiring, you need to understand the psychology of this era and the systemic pressures on all small businesses which don't live off Federal government contracts. In a very powerful sense, those businesses which live from one government contract to the next are not private businesses at all: they are merely proxies or extensions of the government. Their non-governmental work is either trivial or non-existent.

So when some government set-aside program sanctions $40 million or whatever for "small business," it's no different than opening another government office: the only difference is the employees are not Civil Service. The competition is not between private-sector and government, it's only between rival government contractors.

What pundits and politicos don't get is small business knows the "recovery" is totally bogus. Why hire somebody who you'll have to lay off a few months from now? Laying people off is emotionally painful--you dread it, tire of it, are wearied by it. This is a real human being who is losing their job, not some ginned-up statistic hyped by some think-tank-pundit pulling down $15K a month for dishing whatever flavor of propaganda he/she is paid to churn out.

The Washington establishment--the Fed, the Treasury, Congress, the Obama Administration-- seem to believe they've successfully pulled the propaganda wool over Americans' eyes, and that the yokels actually believe "things are getting better and better every day and in every way."

Only the yokels without clients, customers and payrolls can believe the propaganda.

Meanwhile, back in the real world, small business income is down 5%. Small Business: Still Waiting for Recovery.

According to data from the Bureau of Economic Analysis. Proprietors' income-- the profits of unincorporated businesses such as partnerships or individuals who work for themselves--is down nearly 5 percent from two years ago, while corporate profits have jumped 21 percent in that period.

About 19.9 million partnerships and sole proprietorships with no employees existed in 2008, the latest year for which U.S. Census Bureau data are available. That number fell almost 2 percent from the previous year.

In a private-sector workforce of about 106 million, that's about 19% of all people with a job. Recall that the BLS counts you as employed if you work one hour a week or if you're "self-employed," even if you aren't making a dime.

Only in the Fantasyland of propaganda does nobody notice that self-employed people who are seeing revenues and profits fall do not need to hire someone: they're sinking all on their own.

Only in the Fantasyland of propaganda does nobody seem to notice that for every celebrity-chef restaurant opening to gushing hype in Manahattan, West L.A. or San Francisco, two other restaurants quietly closed.

Small business understands uncertainty is now permanent. That's why 26% of all new private-sector hires are temporary--and if we subtract the bogus phantom jobs created by the BLS "birth-death model," then the number is probably more like a third or even half.

Small business understands that the "recovery" is merely a Federal towel stuffed in the gaping hole in the rowboat's leaky planks, and that it's literally insane to hire workers when your revenues could evaporate next month.

Small business re-discovered it could do more with less. Once businesses trimmed payrolls to survive, they discovered they could make more money for themselves and do so with fewer people. Why add to staff when all that means is transferring your own paycheck to someone else?

Small businesses are closing, not opening. Rents have barely dipped, local government taxes and junk fees have skyrocketed, and the complexities and costs of the new healthcare bill have all added systemic pressures on every small business: it's either adapt quickly and successfully or perish, and many are choosing to close down and quit working so hard for so little payoff.

When leases expire, the doors close, and no one leaps in to pay boomtime-level rents, and heavy business licence and permit fees. The only people insane enough to hire anyone are three guys working in a living room somewhere, trying to hire a few Javascript programmers to finish their app so they can cash out by selling the "company" to some larger enterprise.

The programmers are independent contractors who have to take care of their own healthcare and taxes, or they're young and single so the healthcare insurance costs are modest--if they even bother with buying insurance.

Nobody's hiring for the long-term for the simple reason that there is no long-term: we're either selling the company as soon as we can, or we're waiting for the next dip in revenues to close down before we lose everything.

Local government has grown accustomed to small business being uncomplaining tax-donkeys, silently paying every junk fee and every additional tax the government levies. Only a funny thing happened on the way to local government's plan to fill the shortfalls in its own revenues by taxing small businesses even more: they're closing down.

The reason is simple: why work for free? This is incomprehensible to both local governments, who expect all those "filthy-rich small-business Capitalists" to pay higher taxes and fees, and the safely remote-from-the-real-world pundits and politicos.

These members of the academia-think-tank-media-politico Cargo Cult have a magical belief in a mythical "small business" which is anxious to get out there and create new jobs because "to get rich is glorious," as if "getting rich" is even an option for 90% of real small businesses.

In the real world, small businesses aren't getting rich, they're going broke and closing down to save whatever remains of their sanity and assets. You want high-tech and "clean energy" jobs? Well, how about MySpace laying off half its 1,000-person staff? How about Evergreen Solar closing its Devens, MA plant, laying off 800 workers and moving production to China? Did the pundits honestly think that globalization was over?

Memo to pundits and politicos: you worship at the altar of Capitalist profits driving small business--get real. People will do whatever they have to in order not to go broke.

That's why the three guys or gals aren't renting an office--who needs the overhead? They also don't have health insurance: who can afford $1,000 a month for crappy, confusing "care" young people rarely even need? Better to pay cash.

And they aren't hiring "employees": they're paying their friends with equity shares, or cash, and paying their own taxes is up to each free-lancer.

That is the new model of American entrepreneurship: no office, no overhead, no employees, no health insurance, no business travel. That's the only way any new enterprise can survive.

Everyone who buys into the myth and pays absurdly high rents, junk fees and healthcare insurance will be ground down and bled dry. The only exception are those well-connected enough to run a pipe into the limitless lake of Federal money. Yes, 40% of the lake is borrowed from our kids, but no matter--the "recovery" is real, and this stone with a crudely painted radio dial is in fact a working radio. It's magic. You just have to believe.

Small business can't afford to believe in myths and fantasies. They are dealing with the harsh reality of adapt or die.

Does anyone notice that food prices are rising?

Sysco profit falls as “extreme” meat, dairy inflation raises costs - (Drover's Cattle Network - 2/7/2011) -
Meat, seafood and dairy costs rose 11 percent to 12 percent during the quarter ended Jan. 1, Sysco executives said during a conference call today with analysts following the release of quarterly results. Those categories account for about a third of Sysco’s sales... Meat prices are expected to continue rising this year as soaring feed costs discourage herd expansion. That’s raising concern over consumers’ willingness to pay for steaks, chops and other pricier foods with unemployment still high... Sysco is North America’s largest food distributor to restaurants and has about 400,000 customers, including schools, hotels and prisons.

U.S. faces $70 billion inflation hit - CNNMoney.com - February 7, 2011
If the recent run-up in energy and agricultural commodities persists, U.S. consumers will have to shell out $20 billion more for energy and $50 billion more for food this year, Capital Economics estimates... And with all that, the bite from food inflation has yet to arrive. Capital Economics forecasts that the price shock will take nine months to show up at the grocery store. It says the food component of the consumer price index will rise at a 7% annual clip later this year, as rises in the costs of sugar, corn and other agricultural commodities work their way through the system.

Food inflation and QE2: the correlation is undeniable - The International Business Times - 2/3/2011 -
Experts can argue all they want about the causality relationship between food inflation and the Federal Reserve’s second round of quantitative easing (QE2). What cannot be denied, however, is the correlation. Indeed, ever since QE2 was clearly signaled by the Fed, the price of food commodities surged.

Unemployment and Irrelevant Statistics - the scam most of us understand

Prologue: Below is an article from Paul Craig Roberts related to the latest Unemployment statistics released on Friday. Then there is also an article that was released on Friday. The bottom line is that these two articles go into further detail of what I have been addressing over the last 2 1/2 years. If the trends are allowed to continue, then we are going to see an exponential hockey stick curve of job losses continue to accelerate over the next couple of years. Of course the long term and permanently unemployed numbers will continue to increase, keeping the real unemployment rate artificially low, but these numbers are proving to be irrelevant and only cause the distrust of the government and their self-serving agenda to fester.

The PR stunt that is the production and communication of these delusional numbers are right out of the George Orwell 1984 playbook. These low numbers keep the government from taking the urgent action that is needed and necessary. The lack of empathy and honesty directed towards the working class is not going to end well for the rulers and narcissistic elite of the nation. Common Sense tells us that.

The Official Unemployment Rate; an "Official" Lie KINGSTON, NY, 7 February 2011 — Do you believe Friday’s government report that the unemployment (U.3) rate fell last month from 9.4 percent to 9.0 percent? How could the rate decrease when January only saw a reported increase in payroll employment of 36,000 jobs when some 150,000 new jobs are needed to be created each month just to stay even with population growth? According to Friday’s Bureau of Labor Statistics report, a 0.4 percentage point decline in the unemployment rate means “the number of unemployed persons decreased by about 600,000.” Where did the other 564,000 January jobs come from as they cannot be found in the reported jobs data? The jobs are phantom jobs created by faulty seasonal adjustments. As statistician John Williams (shadowstats.com) puts it, “the extraordinary severity and duration of the economic duress in the United States during the last three to four years has destabilized traditional seasonal-factor adjustments and the related monthly reporting.” In other words, the 564,000 people are, in reality, unemployed and are not employed in the non-existent seasonally-adjusted jobs that the government added to the numbers. Williams reports that the unadjusted data show that “the employment rate rose in January.” It’s BLS magic. Unemployment rose, but the unemployment rate fell. Washington pulled the same stunt last month. Using this government ploy, theoretically, the U.S. could have a zero unemployment rate while the entire population is out of work! Don’t expect the financial press to tell you what this Trend Alert just told you. In response to the cooked numbers, Bloomberg quoted economists, whose job is to hype recovery, that “we’re setting ourselves up for a pretty strong improvement in payrolls.” (4 February 2011) According to John Williams, even the measly 36,000 job gain is an illusion created by the faulty “birth-death” model, which guesses that new startups add more jobs each month than business failures subtract. This might sometimes be true, but not during an economic downturn. Without the jobs added by this faulty estimating technique, “the reported January 2011 payroll gain of 36,000 would have been a decline of 52,000!” Indeed, the BLS “birth-death” model’s over-estimate of payroll jobs results in quiet annual revisions in the number of employed. In Friday’s employment report, largely unnoticed by the financial press, the BLS reports in its benchmark revision that there were 483,000 fewer people employed in December 2010 than previously reported. The U.3 unemployment rate is the headline rate. It receives all the media attention, because it only measures 40 percent of the unemployed, thus making the recession look smaller than it really is. No discouraged workers who have given up looking for work are included. The government has a more complete measure of the unemployment rate known as U.6, which includes the short term discouraged (less than one year). That rate is16.1 percent. John Williams adds in the long term discouraged, which brings the true rate of unemployment to 22.2 percent. Economists have no known way of explaining how an economy, in which millions of manufacturing and professional service jobs have been offshored, can compensate for the lost American incomes and purchasing power. The profits from offshoring flow to a narrow segment of the population consisting of corporate management, shareholders, and Wall Street. These income flows cannot replace the millions of lost incomes and careers of those whose jobs have disappeared. There is a limit on the ability of the mega-rich to buy and to consume. The consumption of a few people cannot drive an economy. This is why the concentration of income and wealth in a few hands kills an economy. For a decade the American economy has been driven by private debt accumulation. Today policymakers in Washington are trying to drive the economy with public debt accumulation. The plan cannot succeed. The annual budget deficit of the U.S. government is being financed by the Federal Reserve by creating new money. For now, because of the impaired condition of U.S. financial institutions and the over-indebtedness of the American population, the money injected into the financial system by the Federal Reserve is not being lent. The banks need the reserves to bolster their solvency and consumers are too indebted to borrow. Thus, the money multiplier has collapsed, preventing the Federal Reserve’s money creation from resulting in rapidly increasing inflation. More BS from the BLS Just as the unemployment rate is understated, so is the Consumer Price Index. The CPI no longer measures the prices of a fixed basket of goods, but assumes that people substitute cheaper items for those that rise more in price. Moreover, inflation can also arise from decline in the dollar’s exchange rate vis-a-vis other currencies. With the dollar being the world reserve currency, many commodities are priced in dollars. As more dollars are being created than other currencies, food and commodity prices are rising as a result of the dollar’s falling exchange rate. The Fed chairman says that he can avoid inflation when it appears by pulling the excess money out of the economy by selling bonds. But the Fed can sell bonds only by lowering bond prices, thus raising interest rates. What do you think happens to the depressed U.S. economy if interest rates rise? Stocks and whatever remains of the housing market would collapse, as would the bond portfolios of whatever remains of Americans’ pension funds. The remnants of the investment incomes of ordinary people would be wiped out. In other words, the Fed believes it can control the inflation, whose seeds it is planting, by wiping out the remnants of the wealth, and the income from it, of ordinary people. This tells you all you need to know. by Paul Craig Roberts

©MMXI The Trends Research Institute®

Find A Job? Good Luck In This Economy – 10 Reasons Why The Latest Unemployment Numbers Are No Reason To Cheer - The Economic Collapse Blog - February 4th, 2011 - The U.S. government is telling us that the unemployment rate fell all the way down to 9.0% in January. Should we all cheer? Is it now going to be a lot easier to find a job? Has the economy finally turned around? Are happy days here again? Well, it is a good thing to have a positive attitude, but the truth is that there is just not much to cheer about when you take a closer look at the recent unemployment numbers. First of all, the U.S. economy only added 36,000 jobs in January. Economists had been expecting an increase of about 145,000 jobs, and an increase of 150,000 jobs per month is necessary just to keep up with population growth. So why did the unemployment rate go down? Well, the government says that over half a million Americans suddenly dropped out of the labor force in January. That doesn't make a lot of sense, but this is how the government calculates their numbers. So what happened to those 500,000 Americans? Did they all win the lottery? Have they all become independently wealthy? Did they all die? No, the vast majority of them are still around and the vast majority of them still desperately need jobs. It is just that the government does not count them as "looking for work" anymore.

It would be great if the employment situation in America actually was getting better. All the time people send me absolutely heartbreaking stories about what they have had to endure in this economy. Soon I hope to share some of those stories with you all. It is hard to try to describe the absolute horror that many Americans are going through right now.

People would like to believe that things are going to get better, but unfortunately that is just not going to be the case. The government can try to massage the numbers to make them look better, but the truth is that the tens of millions of American families that are deeply suffering right now are not fooled.

The following are 10 statistics that reveal that the latest unemployment numbers from the government are no reason to cheer....

#1 According to CNBC, economists were expecting the U.S. economy to add 145,000 jobs during January. Obviously the 36,000 figure was a huge disappointment.

#2 Approximately 150,000 jobs need to be added to the economy each month just to keep up with population growth.

#3 The government jobs report also indicated that 504,000 Americans "dropped out of the labor force" in January. That may make the unemployment numbers look better, but the truth is that the vast majority of those 500,000 Americans still need incomes and still need jobs.

#4 According to the latest numbers from Gallup, the unemployment rate actually increased to 9.8% at the end of January.

#5 Gallup's measure of "underemployment" (those that are unemployed plus those that are working part-time but want full-time employment) was sitting at 18.9% at the end of January.

#6 As I reported yesterday, there are approximately 28 million Americans that would like full-time jobs but that don't have full-time jobs.

#7 According to Zero Hedge, the number of Americans that are "not in the labor force" but that would like a job right now has hit an all-time record high. If you add all of those people into the official unemployment figure it would jump to 12.8%.

#8 According to Calculated Risk, this is the deepest and most brutal employment downturn that the United States has experienced since World War II. The current employment downturn started 37 months ago and there doesn't seem to be any indication that we will return to pre-recession levels any time soon.

#9 The U.S. Labor Department has also announced that job growth during 2010 was much weaker than they had previously reported. The numbers for 8 months were revised down, and the numbers for 4 months were revised up. After all of the revisions are accounted for, it turns out that a total of 215,000 fewer jobs were created during 2010 than originally calculated.

#10 According to one brand new survey, 4 out of every 10 Americans are struggling "a lot" to pay the bills right now.

The situation is not pretty out there. The U.S. needs tens of millions more jobs than we have right now.

So where are all of our jobs going? The video posted below contains some very strong hints. The truth is that globalism is ripping our economic infrastructure apart, and all of the crazy rules and regulations we keep heaping on business are not helping either....

U.S. workers have been merged into a "global labor pool" where we are expected to directly compete for jobs with people making slave labor wages on the other side of the globe.

The more time you spend thinking about that, the more you start realizing that the standard of living of average American families is going to continue to decline.

Unfortunately, as I wrote about in a recent article entitled "Nothing Is Stable Anymore", the world is changing faster today than at any other time during our lifetimes. Everything that we used to assume about employment, money, our economy and our finances is being turned upside down. We now live in a world where very little can be taken for granted.

2011 has already been a very tumultuous year. The world is being transformed. Nobody knows for sure what is going to happen next.

One thing to really keep an eye on is the price of oil. Right now, large numbers of investors are betting that the price of oil will rise to $125 a barrel by May. Shockingly, some investors are even betting that the price of oil will rise to $250 a barrel by next December.

If oil starts to spike dramatically, it will have tremendous implications for the U.S. economy. Our entire economic system runs on oil. The price of oil affects the price of everything else.

If the price of oil keeps going up it is inevitably going to cause a slowdown in the U.S. economy and it will cause the unemployment situation to get even worse.

So be glad that the employment situation is at least somewhat stable for now, because if things take a bad turn for the worse in 2011 who knows what kind of unemployment numbers we'll be talking about a year from now.

detnews.com - Ford's most advanced assembly plant operates in rural Brazil

Texas Tea - When do we learn?

An article I contributed to the Hickory Daily Record in late August 2008:

We need more Energy

It’s sad when Paris Hilton makes more sense than government leaders. PickensPlan.com and AmericanSolutions.com have plans that do exactly what she espouses in her commercial. Read them and think about joining them.

Most everyone agrees that our current energy policies are unacceptable. Demonizing fossil fuels will not solve the problem. Look around you Plastic, Glass, Metal, Fiber, and Silicon all need Oil and Coal to produce. There is no Utopian alternative available. Admitting to having a problem is the first step towards solving it. We will have to utilize carbon-based energy for many generations to come. We have and will continue to become more efficient in its usage. The population continues to grow and immediate elimination of fossil fuels will lead to grave consequences.

We currently produce around 6% of our energy using renewables. We aren't going to find the other 94% overnight. I love Wind Turbines, Solar Panels, Hydro Electric, Nuclear, etc. and hope we find true breakthroughs soon, but I refuse to fall victim to the green rhetoric that is contributing to the stagnation, litgation, and burdensome regulation of our economy.

Creation and expansion of energy resources creates value. Our government (which is us) would be paid fees and royalties for the right to drill, which should be invested in renewable energy projects. Economics 101 shows that increased supplies of energy will bring prices down. It’s a win-win.

We must keep energy money in the USA, because it protects national security, keeps the dollar strong, and supports quality high tech jobs. As stewards of the planet, we are all environmentalists. We can responsibly use its bountiful resources.

James Thomas Shell

What has changed. Why did we not learn any lessons from $4 gasoline? Remember when the Hurricane hit the Gulf of Mexico in mid September that year and the gasoline lines?

Oil fell below $40 a barrel and hovered around $70 over the subsequent two years and everyone went back to sleep, because gas seemed affordable compared to those $4+ prices. Everyone seems to want to forget that period that kick started the economic slide that continues to assault the American middle class. You cannot wish these economic realities away and we have wasted time in we should have been fervently addressing these issues. The crescendo of these realities continue to build and anyone who cares to face the truth can obviously see that we still face the same issues today as we did 2 1/2 years ago.

Today Oil hit $103 per barrel. This steady march has little to do with what we see in Egypt. The main reason, in my opinion, for this progressive increase is the devaluation of our currency. But, what we see is our vulnerability in relation to the world economy. Just as we have seen the rise in staple food commodities and precious metals that I addressed in the article Icelandic volcano displays our vulnerability related to the World Economy. The United States needs to get its house in order and address the issues that it faces.

It is obvious that Egypt is a powder keg, even though most people don't really understand the forces at play under the current state of affairs. You can't really trust what you see and hear as relayed by our media, who never tells it like it is. We all know that they serve an agenda. Isn't that obvious? The media has joined forces with the people who they support in our government and that is the viewpoint you will get. There is no objectivity.

The problems with Egypt are fairly simple. They made a deal with Israel and have suffered some severe consequences as a result of that deal. The Arabs really don't want to help Mubarak or this regime, because of the deal they made with Israel. This deal got Anwar Sadat assassinated. Egypt fought wars against Israel in 1948, 1956, 1967, and 1973. The peace accords came in 1979 and Sadat was assassinated in 1981. The economy is terrible and the people are starving, because of the worldwide increase in food prices (Global Food Prices Hit All-Time High As Violence Erupts In Yemen - February 3, 2011 - Forbes.com).

The Suez Canal is the key in this whole scenario. Israel took control of the Sinai Peninsula after the Six-Day War in 1967. They occupied the entire Peninsula until the peace accords were signed in 1979. Egypt closed the Suez Canal after the June 1967 war and did not reopen it until June 1975.

The people of Egypt look at the United States as an entity that fostered the relationship between Egypt and Israel. Egypt's membership to the League of Arab Nations was suspended in 1979 after it signed a peace treaty with Israel; the league's headquarters was moved from Cairo, Egypt, to Tunis, Tunisia. In 1987, Arab leaders decided to renew diplomatic ties with Egypt. Egypt was readmitted to the league in 1989 and the league's headquarters was moved back to Cairo.

Many people in Egypt and around the world understand the power of the American dollar. The Dollar is the World Reserve Currency. Oil is traded on world markets in American dollars. The people of Egypt (and the world) may not completely understand the role of the Federal Reserve in the loss of value of the American dollar as a monetary instrument, but they understand its force as a means of trade. The loss of value of the dollar (inflation) has played a major role in the growing expense of food. This increased cost is not affordable to the poor people of Egypt. Do you not think that these people are going to blame us for this.

Strike three is the fact that these people see these ships flowing through their canal and they know where that oil is flowing to. Can you really not understand the thin ice that we are treading on? Isn't it time to stop the games and face the reality? Or are we going to still stick our head in the sand and pretend that these problems don't exist?

It is time to quit compartmentalizing these issues. They are all interconnected. It is time to face the challenges. We can achieve energy independence and defuse these time bomb situations. People talk about being self-reliant and at the same time they refuse to understand the context of this dangerous world and the challenges we face. We are vulnerable, because the vast majority of the people of this nation refuse to face the real issues of the day and therefore a day of reckoning is fast approaching. It saddens me to know this, but folks we are pushing a snowball up a hill and we better wake up or bad things we never fathomed being possible just a few years ago will not only be at our doorstep, they will happen!!!