U.S. Economic/Financial News
Bush Drives Lower-Income Americans Out of the Labor Force
May 2 (EIRNS)There has been a stunning drop in ability of lower-income Americans to participate in the U.S. labor force at all, during the seven and a half years of the Cheney-Bush Presidency. This has masked unemployment rates for youth and African American workers, which probably rival the 40-50% unemployment rates in Bush's Iraq. Official figures for black unemployment in most major U.S. cities now range from 10-20%; but that is only the percentage of those who are still looking for work. Ten million black Americans of working age are out of the labor force.
Sen. Charles Schumer (D-N.Y.) told a Buffalo forum on black unemployment that "the figures take my breath away"and proposed bigger and better job-training programs.
But with April's job growth flat, according to today's U.S. Labor Department report, the total job creation claimed for the Cheney-Bush Presidencyforget productive, well-paid jobs, this means any jobswill fall to about 3.5 million, over 87 months. That's 40,000 jobs a month, compared to the steady demographic increase in the potential U.S. labor force of about 150,000 month, for seven and a half years.
What did this do to the labor force? The Department reported the participation in the U.S. labor force by some lower-income groups shows "breathtaking" drops, of up to 10% or more over the 87 months of Cheney and Bush. Examples: White teenagers in the labor force have dropped from 55.2% to 42.7%; black teenagers, from an already low 40.9% down to 28.7%; workers in their 20s, from 65.3% down to 61.6%; and among all black Americans, participation in the labor force has sunk from 66.1% to 59.9%. These are huge falls, in a figure in which, usually, a drop of even a few tenths of a percent over time, shows significant economic dislocation.
Schumer heard that of the 7 million African American males who did not finish high school, only 28% have a job. That "took his breath away." But Schumer, like other Congressional Democrats, took a pass on introducing the Economic Recovery Act proposed by Lyndon LaRouche in 2006which would have created millions of jobs building new economic infrastructureor on supporting the companion Americorps Infrastructure bill in the 2006 Congress, which would have recruited inner-city and rural young workers into these infrastructure projects.
Fed Goes Deeper into Bailout Rathole
May 2 (EIRNS)The Federal Reserve today announced a further expansion of its support of the bankrupt U.S. banking system. It will expand the amount it lends to depository institutions under its bi-weekly Term Auction Facility auctions by 50%, to $75 billion, raising the total amount available under the TAF program to $150 billion. This is the fifth increase in the TAF limits since the program was established in December 2007, with a $20 million per auction, $40 billion total limit. The Fed has also increased the existing reciprocal currency agreements with the European Central Bank (ECB) and Swiss National Bank (SNB) for the second time, to $50 billion for the ECB and $12 billion for the SNB, from the initial amounts established in December of $20 billion and $4 billion, respectively, and extended these agreements through Jan. 30, 2009. The Fed also relaxed the collateral standards for a portion of its Term Securities Lending Facility (TSLF) to include AAA/Aaa-rated asset-backed securities. The TSLF, established in March, makes loans to the primary dealers, a group of 20 investment banks.
Taking into account the total of repo loans, TAF loans, discount window loans, loans to securities dealers, and seasonal credit loans, the Fed had $442 billion in loans outstanding on April 30. The weekly average of loans outstanding has climbed steadily, from some $83 billion in December, to $99 billion in January, $111 billion in February, $191 billion in March, and $413 billion in April, as the Fed pours ever more money down the rathole.
Watch Out for Falling Greenspan
April 28 (EIRNS)With the "blue collar workers"or, what Lyndon LaRouche calls "the lower 80%" income-level families in Americanow the defining issue in the U.S. Presidential campaign after the Pennsylvania primary, there is a renewed attack on Alan "Bubbles" Greenspan for the collapse of the financial system.
An April 28 article in the German-language Austrian magazine Profil hits Greenspan hard, in an interview with economist Joseph Stiglitz, winner of the Nobel Prize in economics. According to a press release issued prior to publication, Stiglitz says, "This man [Greenspan] has unfortunately made a lot of mistakes. His first one was to support all the tax cuts which were introduced under Bushthey didn't stimulate the economy very much.... This task was then transferred more towards monetary policy, though then [Greenspan] created a flood of credits with low interest rates."
Stiglitz said he "reproaches" the Bush Administration for the economic carnage, which was also caused by the costs of the war in Iraq. But the most damaging is the policy of the weak dollar, which "will continue to hit the European economy hard, because it will make it much harder to export."
Stiglitz says that there is no way for Europe to "decouple" from the dollar or the United States.
While Stiglitz went after Greenspan in November 2007 for the same policies he mentions in the Profil interview, with the situation now much, much worse, Greenspan could be pushed off his pedestal, if not off a cliff.
Informed U.S. political sources tell EIR that the Stiglitz attacks on Greenspan will be getting wide circulation during the election campaign.