"The economy is still in the gravitational pull of the Great Recession," said Robert Reich, former US labour secretary. "All the booster rockets for getting us beyond it are failing." "Home sales are down. Retail sales are down. Factory orders in May suffered their biggest tumble since March of last year. So what are we doing about it? Less than nothing," he said. California is tightening faster than Greece. State workers have seen a 14pc fall in earnings this year due to forced furloughs. Governor Arnold Schwarzenegger is cutting pay for 200,000 state workers to the minimum wage of $7.25 an hour to cover his $19bn (£15bn) deficit. Can Illinois be far behind? The state has a deficit of $12bn and is $5bn in arrears to schools, nursing homes, child care centres, and prisons. "It is getting worse every single day," said state comptroller Daniel Hynes. "We are not paying bills for absolutely essential services. That is obscene." Roughly a million Americans have dropped out of the jobs market altogether over the past two months. That is the only reason why the headline unemployment rate is not exploding to a post-war high. Let us be honest. The US is still trapped in depression a full 18 months into zero interest rates, quantitative easing (QE), and fiscal stimulus that has pushed the budget deficit above 10pc of GDP. The share of the US working-age population with jobs in June actually fell from 58.7pc to 58.5pc. This is the real stress indicator. The ratio was 63pc three years ago. Eight million jobs have been lost. The average time needed to find a job has risen to a record 35.2 weeks. Nothing like this has been seen before in the post-war era. Jeff Weninger, of Harris Private Bank, said this compares with a peak of 21.2 weeks in the Volcker recession of the early 1980s. "Legions of individuals have been left with stale skills, and little prospect of finding meaningful work, and benefits that are being exhausted. By our math the crop of people who are unemployed but not receiving a check amounts to 9.2m." Republicans on Capitol Hill are filibustering a bill to extend the dole for up to 1.2m jobless facing an imminent cut-off. Dean Heller from Vermont called them "hobos". This really is starting to feel like 1932. Washington's fiscal stimulus is draining away. It peaked in the first quarter, yet even then the economy eked out a growth rate of just 2.7pc. This compares with 5.1pc, 9.3pc, 8.1pc and 8.5pc in the four quarters coming off recession in the early 1980s. The housing market is already crumbling as government props are pulled away. The expiry of homebuyers' tax credit led to a 30pc fall in the number of buyers signing contracts in May. "It is cataclysmic," said David Bloom from HSBC. Federal tax rises are automatically baked into the pie. The Congressional Budget Office said fiscal policy will swing from a net +2pc of GDP to -2pc by late 2011. The states and counties may have to cut as much as $180bn. Investors are starting to chew over the awful possibility that America's recovery will stall just as Asia hits the buffers. China's manufacturing index has been falling since January, with a downward lurch in June to 50.4, just above the break-even line of 50. Momentum seems to be flagging everywhere, whether in Australian building permits, Turkish exports, or Japanese industrial output. On Friday, Jacques Cailloux from RBS put out a "double-dip alert" for Europe. "The risk is rising fast. Absent an effective policy intervention to tackle the debt crisis on the periphery over coming months, the European economy will double dip in 2011," he said. It is obvious what that policy should be for Europe, America, and Japan. If budgets are to shrink in an orderly fashion over several years â as they must, to avoid sovereign debt spirals â then central banks will have to cushion the blow keeping monetary policy ultra-loose for as long it takes. The Fed is already eyeing the printing press again. "It's appropriate to think about what we would do under a deflationary scenario," said Dennis Lockhart for the Atlanta Fed. His colleague Kevin Warsh said the pros and cons of purchasing more bonds should be subject to "strict scrutiny", a comment I took as confirmation that the Fed Board is arguing internally about QE2. Perhaps naively, I still think central banks have the tools to head off disaster. The question is whether they will do so fast enough, or even whether they wish to resist the chorus of 1930s liquidation taking charge of the debate. Last week the Bank for International Settlements called for combined fiscal and monetary tightening, lending its great authority to the forces of debt-deflation and mass unemployment. If even the BIS has lost the plot, God help us. http://www.telegraph.co.uk/finance/...his-really-is-starting-to-feel-like-1932.html
I hope we do crash! Then maybe they will get there house in order. So much wasted spending day in day out.. We spend around $53,000 per year to house a prisoner over 70 % of people in Prison is for Drug use..giving people 5 years just for smoking Pot what a waste of Money..That's over $250,000 right there to house just one pot smoker! for 5 years and how many thousands of people are in Jail just for Pot? and they go in and out of Jail over and over again! Let's legalize it and Tax it. That right there would save Billions Nation wide and it would let the Police have more time to do better things..
You make good points. Before the later days of the industrial revolution, punishment for crimes was much more severe, "barbaric" and much less expensive. There simply wasn't any surplus wealth to house prisoners for great lengths of time. Now with so much "wealth" generated by industrial capitalism, prisoners can be housed for years at great expense for petty crimes. Society hasn't gotten any less barbaric, just richer.
"This really is starting to feel like 1932" Oh yea.... says who? Senator Byrd died last week,didn't he?
Just so you know...to get a 5 year prison sentence for marijuana, you have to be convicted of an offense involving at least 100 kilos (220 pounds) of marijuana. Thats hardly just a recreational smoker. Not to mention that someone that is dealing with that much marijuana probably had alot of cash, cars, and other valuables that would now be seized. 100 kilos of pot is almost $500,000 in street value, so there is a good chance that catching someone like that pays for itself.
Probably not actually when you consider all money spent on law enforcement, the legal system, prison, etc. Not to mention the fact that nothing of value to society came out of it. They ought to just legalize the shit or make booze illegal too. The idea that liquor, which is infinitely worse in terms of it's negative effect on the user, is legal and pot isn't shows just how screwed up the system is. I don't do either anymore, but I'd sure as hell feel a lot safer around a bunch of stoned people than a bunch of drunken ones. Also, 49% of the people in prison are in for violent crimes so the claim that 70% of people in the slammer are there for drugs isn't true.
I disagree with Evans-Pritchard's thesis. This does NOT feel like 1932. In 1932 there was the possibility of changing the monetary system and "printing their way out." This no longer exists as we already have fiat currencies. In times past a country that had a fiat currency that debased (went into hyper inflation) could switch to another country's currency and continue on (though with much disruption). Today the whole world is collapsing and the whole world is already on fiat currencies. Today's situation is going to result in the complete change of the whole world. Get ready for this fact...accept this fact and prepare accordingly.* -gastropod * I believe the world has been set up to "fail" - so that the banksters and a few families will "rule" the world. Yes, I believe this is an open conspiracy to take over the world...have one world government - a dictatorship that reduces the average person (who is left alive) to the status of serf. They will be serfs, because a serf has little chance of rising above being a serf. A slave could at least hope for or somehow gain freedom.