Good News Not

If you have any money in stock market maybe via a 401K or something I'm sure you are pleased that it has returned to 2000 levels with its run up yesterday...Congratulations you are where you were 13 years ago.

Seriously, it is really difficult to get all giddy about the about the Dow going over 14,000.  Robert Reich doesn't feel to giddy either, and explains why.

The key thing to note is that only the wealthiest 1% in this country make any profit off the stock market and are better off than they were 13 years ago. They also pay very low, if any, taxes on said profits. The rest of us (you know the other 99%) are actually worse off than we were in 2000 and we pay the full boat in taxes even on our minimum wage job.

More and More Criminals

Steve at YDD links to one in a series of articles by Barbara Ehrenreich in which she documents the many ways in which municipalities have made it illegal to be poor in America. There are links as well there to the two previous articles in the series. This is not pleasing or rewarding reading but something everyone should read.

As I commented over at Steve's place. There is only so much pain and suffering such a large group of people will take lying down. The ever increasing potential for violent demands for change will break sooner or later and it will be very ugly. The main stream media, when it deals with the trials of the current depression, are focusing on the 'middle class' or what Barbara calls the 'Nouveau Poor' but as she so aptly describes there existed a whole class of already poor when this depression arrived and they are being pushed further and further down the slope. It's absurd that this should be the case in a country with all the wealth of this one that people, through no fault of their own, should be forced to live in such misery.

Expect More Violence

From the Wall Street Journal

PITTSBURGH -- A 22-year-man who shot and killed three Pittsburgh police officers over the weekend had been stockpiling guns and ammunition, buying and selling the weapons online "because he believed that as a result of the economic collapse, the police were no longer able to protect society," according to a court report.

[snip]

The shootings came during a particularly violent three days across the U.S., with shootings that left 14 dead in Binghamton, N.Y., and six dead in Washington state, where a father shot five of his children, ages 7 to 16, using a rifle, and later, himself. It also follows just two weeks after four police officers were fatally shot in Oakland, Calif., in the deadliest day for U.S. law enforcement since Sept. 11, 2001. Last month, a North Carolina man shot and killed eight people before police shot him and ended the rampage, and a 28-year-old man killed 10 people, including his mother and four other relatives, across two rural Alabama counties before killing himself.

As tragic and senseless as these murderous rampages are, I'm afraid this will become a more frequent occurrence in the near term. Insane people like Glenn Beck and Michele Bachmann are setting fires under the people that need just a little push before they go into full blown crazy. People like Beck are repeating and repeating the completely false narrative that President Obama is going to take away all the guns, form a military police and turn us into a socialist dictatorship. It's like shouting fire in a crowded theatre. There are a lot of people with only a fingernail grip on reality and sanity and it takes merely a suggestion that feeds their paranoia to send them over the edge.

The economy already has a large percentage of the populace on edge, one in six Americans are either unemployed or underemployed and a goodly number of the rest are worried about their job. The media should be calling for calm and patience not "armed rebellion". The latest numbers from the FBI report that the applications for gun ownership are up dramatically which bodes very badly for an upturn in violence. It's a very simple equation. More guns plus more tension equals more violence.

Darker and darker

While a good many of us could have told you that things are actually worse than we are being told (and we have been saying so for over a year) there are a lot of folks, mostly fat cat Republicans who still will insist that the economic problems are not that bad and that there were even signs of recovery late last year. For the rest of us, this confirms what we already knew was happening.

The U.S. economy contracted more sharply than initially estimated in the fourth quarter, government data showed on Friday, as exports plunged and consumers cut spending by the most in over 28 years amid a severe recession.

The Commerce Department said gross domestic product, which measures the total output of goods and services within U.S. borders, fell at an annual rate of 6.2 percent in the October-December quarter, the deepest slide since the first quarter of 1982. The government last month estimated the drop in fourth-quarter GDP at 3.8 percent.

The weaker GDP estimate reflected downward revisions to inventories and exports by the department.

The decline was worse than analysts' expectations for a 5.4 percent contraction in fourth-quarter GDP. The economy expanded 1.1 percent in 2008, the slowest pace since 2001, the department said.

Consumer spending, which accounts for more than two-thirds of domestic economic activity, dropped at a 4.3 percent rate, the biggest fall since the second quarter of 1980, as household wealth plunged. That compared with a 3.5 percent fall estimated last month.

Exports, until recently one of the few pillars supporting the distressed economy, tumbled at a 23.6 percent annual rate, the steepest plunge since 1971. That was revised from the 19.7 percent drop estimated in last month's report.

the thing is, I don't think people realize what this continuing saga of bad news and worsening conditions portends. Our "leaders", whether they be in government or banking or manufacturing, have actually had it pretty easy so far. We are still paying them big bucks for failure or reelecting them inspite of their bad governance. There is a strong likelihood that this happy go lucky attitude on the part of the downtrodden masses will shift in a very negative direction.

Worst-case scenarios abound:

The global economic meltdown has already caused bank failures, bankruptcies, plant closings and foreclosures and will, in the coming year, leave many tens of millions unemployed across the planet. But another perilous consequence of the crash of 2008 has only recently made its appearance: increased civil unrest and ethnic strife. Someday, perhaps, war may follow.

As people lose confidence in the ability of markets and governments to solve the global crisis, they are likely to erupt into violent protests or to assault others they deem responsible for their plight, including government officials, plant managers, landlords, immigrants and ethnic minorities. (The list could, in the future, prove long and unnerving.) If the present economic disaster turns into what President Obama has referred to as a “lost decade,” the result could be a global landscape filled with economically fueled upheavals.

I still remember the downright nastiness back in the 70's when gas was in short supply. Many probably don't remember but that is when you began to see locking gas caps and anti-siphon hardware on the fill caps. It was a regular occurrence to have the gas siphoned from your car even when it was parked in your driveway. Rarely a day went by without someone getting rowdy in a gas line or even having a gun pulled when someone really got angry. It really doesn't take much to send otherwise civilized people over the edge. If gasoline shortages can do it, just imagine what bread lines will cause.

About Time for the H-1B to Go Away

One of the things I really like in the stimulus package is the fact that companies hiring people under the H1-B visa program are not eligible for bailout money. About damn time we started to put a finger in this hole in the dike. The primary reason I am unemployed right now is that someone from India on an H1-B visa is doing the job I should be. The rules say they have to be paid the "prevailing wage" but I know from personal experience that they are paid a lot less than American workers in the same job. Yes, most of them are smart and seem capable but that is not the point. The thing is, India has been sending 65,000 IT workers over here every year and each one of those jobs is putting someone like me out of work. The program was originally supposed to help bridge the gap in demand for IT workers that couldn't be met with American workers but that time is long past.

Predictably, the anger is growing in India over proposed changes to the U.S. H-1B visa work program. The stimulus package forbids companies who hire H-1B workers from receiving federal bail-out money and the move could send tens of thousands of temporary workers, largely engineers, back to India. Indian labor and political parties are threatening boycotts of American companies if Indian workers are eliminated.

Let them boycott. If you take an inventory of the Indian workers in the IT departments of most major American companies, including and especially the financial sector, you will find that they outnumber Americans by a large majority. This might have been an OK thing back when there was a huge shortage of IT trained American workers but that situation is changed and the whole H1-B visa program should be scrapped for good.

We'll probably lose some good Indian restaurants but I'll willingly make the sacrifice.

Speaking of Bad News

Monday was a great day with only 71,400 people laid off.
Tuesday, by comparison, was no slacker but not nearly as bad.

High-tech glass and ceramics maker Corning Inc. (GLW, Fortune 500) announced it will cut 3,500 jobs, or 13% of the company's workforce, by the end of 2009.

Oil field services company Baker Hughes (BHI, Fortune 500) announced it will cut 1,500 employees worldwide. That's about 4% of its work force, and 850 of the cuts will be from the company's North American work force.

Navistar International Corp. (NAV) said it will close its Indianapolis engine plant and Indianapolis Casting Corporation factory at the end of July. About 700 employees will lose their jobs as a result, a Navistar spokesperson said.

Specialty chemicals and office products company Avery Dennison (AVY, Fortune 500) announced it will cut approximately 3,600 employees worldwide over the next two years.

Volvo Trucks North America announced permanent layoffs of 650 hourly employees in March and April at its plant in Dublin, Va. A spokesman said declining demand caused the 40% workforce reduction at the plant. (they cut 1000 last May)

Forest product company Weyerhaeuser (WY, Fortune 500) announced it will close two mills in Washington and cut approximately 220 jobs "due to weak market conditions." The company said 25 salaried positions and 196 hourly positions will be cut.

Target (TGT, Fortune 500), the second-largest U.S. discounter after Wal-Mart (WMT, Fortune 500), announced 1,500 job cuts. The Work force reduction affects 9% of employees at its headquarters, including the elimination of about 600 employees and 400 open positions, primarily in the Twin Cities area. Target also announced it will close its Little Rock, Ark., distribution center, which currently employs 500 people, later this year.

Are we having fun yet?