Personal Income by Cities dropped -1.8%, on average, for 2009. Per capita metropolitan income plunged -2.8% last year. The BEA release tells an even more troubling story. The only income gains where from government payments via unemployment insurance, social security, disability benefits (transfer receipts) and government jobs.
We seldom hear pertinent, nor factual news, anymore, but when we do the stories are fed to us as discrete events, having no connection or bearing with one another.
Throughout this post I intend to fill in the back story and elaborate the connections between these various news bytes.
Sometimes the information provided may appear circumstantial, but courtroom convictions occur on such evidence, and when there is an overwhelming amount of circumstantial evidence, the conclusion becomes glaringly obvious.
The governor of Ohio issued an executive order prohibiting use of public funds for outsourcing. Seems like a no brainer right? Don't use our taxpayer dollars to offshore outsource our jobs? Believe this or not, use of our money to offshore outsource our jobs happens every day, from food stamp and unemployment support to large software design projects. Yet as a result of an investigative journalism piece, Ohio, finally, does the right thing.
Columbus, Ohio--Ohio Governor Ted Strickland today issued an executive order that prohibits the expenditure of public funds for services provided offshore.
"Outsourcing jobs does not reflect Ohio values," Strickland said. "Ohioans have been among the hardest hit by more than a decade of unfair trade agreements and the trickle-down economic policies that promoted offshoring jobs at the expense of Ohioans who work for a living. We must do everything within our power to prevent outsourcing jobs because it undermines our economic development objectives, slows our recovery and deprives Ohioans and other Americans of employment opportunities."
Matt Taibbi has written an autopsy report on the lack of real financial reform and how it happened. In Wall Street's Big Win, Taibbi first sums up what happened in the last decade:
The huge profits that Wall Street earned in the past decade were driven in large part by a single, far-reaching scheme, one in which bankers, home lenders and other players exploited loopholes in the system to magically transform subprime home borrowers into AAA investments, sell them off to unsuspecting pension funds and foreign trade unions and other suckers, then multiply their score by leveraging their phony-baloney deals over and over. It was pure financial alchemy – turning manure into gold, then spinning it Rumpelstiltskin-style into vast profits using complex, mostly unregulated new instruments that almost no one outside of a few experts in the field really understood. With the government borrowing mountains of Chinese and Saudi cash to fight two crazy wars, and the domestic manufacturing base mostly vanished overseas, this massive fraud for all intents and purposes was the American economy in the 2000s; we were a nation subsisting on an elaborate check-bouncing scheme.
Many of us contend the dot con bust, 9/11 fueled, offshore outsourcing 2001 recession never really recovered. It was masked by the glorified ponzi scheme described above.
Main Street may be about to get its own gigantic bailout. Rumors are running wild from Washington to Wall Street that the Obama administration is about to order government-controlled lenders Fannie Mae and Freddie Mac to forgive a portion of the mortgage debt of millions of Americans who owe more than what their homes are worth. An estimated 15 million U.S. mortgages – one in five – are underwater with negative equity of some $800 billion. Recall that on Christmas Eve 2009, the Treasury Department waived a $400 billion limit on financial assistance to Fannie and Freddie, pledging unlimited help. The actual vehicle for the bailout could be the Bush-era Home Affordable Refinance Program, or HARP, a sister program to Obama’s loan modification effort. HARP was just extended through June 30, 2011.
The move, if it happens, would be a stunning political and economic bombshell less than 100 days before a midterm election in which Democrats are currently expected to suffer massive, if not historic losses. The key date to watch is August 17 when the Treasury Department holds a much-hyped meeting on the future of Fannie and Freddie.
The July 2010 monthly unemployment figures are out. The official unemployment rate remained at 9.5% and the total jobs lost were -131,000. 143,000 temporary government census jobs were lost and private sector jobs increased by 71,000. Minus the census jobs, total jobs created was 12,000.
On The Economic Populist you might have noticed the right column. We try to list other sites and blogs who have exceptional insight and writing on what is happening in the U.S. economy.
Sometimes though, one cannot say it better but miss those who did.
The problem was not the investment Cortney's family made in her education. The problem is our dangerously low level of job creation.
What happened to the jobs Cortney was counting on?
Investment creates jobs. GE invests billions in China. Microsoft invests billions in India. Boeing invests billions in Russia. General Motors builds more cars in China than in America. We are making millions of new jobs -- just not in America.
It is no surprise that our economy is hollowing out. Look at the huge global oversupply of cheap labor, combined with mobility of capital, rapid transfer of technology out of the country, and trade policies that encourage investment offshore.
It's Friday Night! Party Time! Time to relax, put your feet up on the couch, lay back, and watch some detailed videos on economic policy!
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