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No Bottom By David Glenn Cox The true purpose of any government statistic is to obscure the truth rather than to explain it. The Commerce Department’s recent publication of the Consumer Price Index is reported as follows: . Now why would anyone ever categorize a statistic to express the consumer’s well being by exempting food and energy?
The category includes recreation, apparel, medical care and other goods and services. It wouldn’t be a government statistic without the “other” category. It means that the CPI, less food and energy, becomes the index of voluntary and mandatory purchases; a mish mash, socks and underwear mixed with health insurance, college tuition, cell phone purchases, and movie house receipts.
The CPI lists that, when food and energy are included, the twelve month unadjusted average was 4.2% ending May of 2008. All you can do is shake your head and ask, “Huh?” The price of gasoline rises to almost $5.00 per gallon and they’re trying to tell me that overall prices only rose 4.2%. It begs the question, what brand of crack are they smoking? My own personal CPI shows a 25% increase in food products, year upon year. The frozen pizza section of the grocery store has become a ghost town with premium pizzas pushing eight to ten bucks. I kidded my wife that before long they’ll need a credit window. The pizza’s that were three for $7.00 last year are now two for $8.00.
Coke? Forget it, cheap-ass soda for me, from $1.10 to $1.66. Hot dogs, remember hot dogs? Mother used to say, “Yes, we’re having hot dogs because we’re trying to save money.” A package of hot dogs is now $5.00; the buns that last year were a buck, now $1.25. Thank God the price of apparel went down .6% or I don’t know how we would make it.
The treasury secretary, Hank Paulson, with a personal net worth of over $300 million explains, “But credit market stress led to a steep decline in the third quarter of 2008, and the market essentially came to a halt in October. As a result, millions of Americans cannot find affordable financing for their basic credit needs. And credit card rates are climbing, making it more expensive for families to finance everyday purchases.”
The nicest thing that you can call them is out of touch, but clueless comes closer to the mark. Number 1, Americans shouldn’t need financing for their everyday purchases. Number 2, those are same banks which the treasury secretary recently agreed to bail out that are now, in turn, raising credit card interest rates. We, the taxpayers, are in effect paying to bail them out twice, once at the Treasury and once at the mailbox. Number 3, the purpose of the secretary's remarks was to explain why the Treasury is now bailing out the banks to the tune of an additional $220 billion to backstop commercial asset-backed paper and to buy up the banks' mortgage paper.
Dear Clueless in Washington,
What about us? You remember us don’t you? The people? There was a firestorm of congressional criticism over bailing out the big three automakers with a $25 billion loan to save a million American jobs. But ten times that amount to rescue banks and credit card companies with no questions asked? It becomes a dog chasing his tail, we need to rescue the banks to provide affordable credit to Americans who can no longer afford the basics of life and your best plan is to give more money to the banks. Is that compassionate conservatism? Or is it a paternalistic Marie Antoinette? The executives leaving the troubled Wachovia bank will split a pot of $98 million in severance compensation.
Last Sunday the employment section of the Atlanta Journal-Constitution was made up of two and a half pages with around 180 job listings for a metropolitan area of five million people. Unemployment in Atlanta now stands at 9.5% and 17.7% of homes are vacant. The number of jobs in Atlanta has decreased by 20% since 2007.
Almost 10% of the help wanted ads were for Computer/IT professionals. Twenty-three ads were for truck drivers but first looks can be deceiving; half a dozen were actually ads for trucking schools offering high wages and tuition reimbursement and an equal number were looking for owner operators. What? What if you don’t own a truck? Well, they do and with nothing down and low, low rates, you can, too. Would you call that a job listing or an advertisement?
Four openings for loan officers. High commissions! No leads, followed by real estate sales, car & truck sales, and radio airtime. But for pure honesty you have to go with Sales; The Perfect Storm Sales Pros Needed! You can be employed but not earning any money versus unemployed, even the treasury secretary admits that lending came to a halt in October. So the issue becomes what are we going to do for these consumers, for the job applicants who find no jobs to apply for.
We can pour billions into the banks, insurance companies, and automakers, but until we address the problem of consumers and real employment and real wages we will be bailing them out forever. We are trying to fill a bucket with no bottom in it by just pouring it in faster. Of the original $700 billion from the TARP program not one nickel has gone to help Americans struggling to keep their homes. Not one dime to try to help consumers in any way. Bail out the backbone of American industry with $25 billion and they say, well, maybe if we like your business plans and the auto workers union agree to another wage concession, but $220 billion to bail out the credit card companies, sure why not! They can pay us back by raising interest rates on their customers.
It would be hard to imagine an economy more poorly managed, Or an admistration so totally out of touch. It's like they’re feeding the wrong end of the mule, and when the mule won’t eat they try shoving it up his ass and wonder, “why isn’t this working?”
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