The phony economic deception machine – JP Morgan Chase CEO earns $23 million in 2011 while 2.7 million foreclosures are filed in the US. GDP at record levels but employment figures down by 5.3 million from their peak.

The US economic and political system is doing an excellent job sealing off opportunities for millions that aspire to be part of the middle class.  Many are starting to realize that the system is rigged in favor of large financial institutions and those with political connections.  The idea of raw success based on talent can be thrown out the window with the corporate welfare generosity leveled at the too big to fail financial institutions.  Many Americans are being told that forced austerity is a necessary part of rebalancing yet the CEO of JP Morgan Chase just received $23 million in 2011 while tens of thousands of foreclosures riddled Chase’s balance sheet.  Earned success?  If we examine real GDP the facts show the US economy is as large as it has ever been but we are running it with over 5,300,000+ fewer workers.  The system is designed to extract economic rents from the public and drive them into a few select sectors.  The working and middle class are feeling this change deeply as noted by the over 5 million fewer workers that we have.

GDP versus Employment

An interesting chart is examining real GDP and total US employment:

gdp and jobs

The above chart is interesting because it tells us two important things:

1.  The US economy overall as measured by GDP is at a high point

2.  Employment is still 5.3+ million below the peak in 2007

Many of the lost jobs that hit in this recession have come at the expense of the working and middle class.  Many new workers were brought on with leaner wages and practically no future job security.  This is happening while large financial institutions have built-in golden parachutes that come at the public’s expense.  This isn’t merely speculation, this is fact and we need only look at the Federal Reserve balance sheet to verify this:
Fed reserve balance sheet 2012

What is going on here?  The Fed is serving as dumping ground for all the toxic assets from the too big to fail banks.  The balance sheet has not retreated.  Many of these assets have no real market so they sit in purgatory on the Fed’s balance sheet.  Things are obviously going well when $23 million annual earnings are being made in the financial sector all the while junk debt and collateral sit in the Fed.  Is it any wonder that inflation is now picking up steam as we are printing our way out of this mess and of course much of this is carried by the public?

Consumer confidence tells us another story

If we look at consumer confidence, the public is not buying into the peak GDP data:
consumer confidence

Consumer confidence is still very weak.  It certainly doesn’t look like a chart that would accompany a peak GDP situation.  This is largely due to the way the middle class is being crushed at the expense of a financial and political plutocracy.  Americans are largely being pushed to believe that times are lean and that somehow, these giant failed banks need leadership that comes at a cost of millions of dollars.  Keep in mind it is these same institutions that wrecked havoc in the economy in the first place.  That narrative never even made it on the airwaves and so life gingerly goes on.  In fact people get captivated by hitting the lottery since it would now appear luck is the only way up.  In the mean time, economic output is at high levels yet we have a tremendously leaner workforce.

It was once hard to imagine a US with no middle class but that is no longer the case.   All we need to do is look around and see how the financial industry destroyed pillars of this dream.  The housing market was transformed into a speculative casino that was merely a pawn in the Wall Street game of mortgage backed securities and derivatives.  Education turned into a rip off mill where students were lured in by snake oil salesman like tactic and saddled with unsupportable levels of debt.  The markets wobble when the Fed mentions it is likely to pull back from its non-stop buying up of worthless debt.  This process is completely unsustainable especially when US debt markets are above $53 trillion.  Let us all keep believing the mainstream press and willfully ignore reality.

RSSIf you enjoyed this post click here to subscribe to a complete feed and stay up to date with today’s challenging market!

TAGS: , , , ,




3 Comments on this post

Trackbacks

  1. Harry Johnson said:

    These finance clowns do not earn anything. They are handed immense sums of money mostly financed by taxpayers. They are the ultimate welfare cheats. Nothing will improve till thousands of hedge fund managers, finance CEOs, commodities speculators, stock and bond salesboys, venture capitalists and all of the other varieties of finance ponzi schemers end up for long terms in the penitentiary.

    April 5th, 2012 at 11:52 am
  2. clarence swinney said:

    THANKS ONCE MORE FOR SUPERB INFORMATION

    April 6th, 2012 at 9:08 am
  3. Dumbfounded said:

    Good article. Right on the money.

    Stupid buyers, sleazy salesmen, and corrupt governments create the worst economies.

    April 6th, 2012 at 5:48 pm

LEAVE A COMMENT

Subscribe Form

Subscribe to Blog


Enter your email address to receive updates from My Budget 360:

100% Private & Spam Free.


Popular – All Time

  • 1. How much does the Average American Make? Breaking Down the U.S. Household Income Numbers.

  • 2. Top 1 Percent Control 42 Percent of Financial Wealth in the U.S. – How Average Americans are Lured into Debt Servitude by Promises of Mega Wealth.

  • 3. Is college worth the money and debt? The cost of college has increased by 11x since 1980 while inflation overall has increased by 3x. Diluting education with for-profits. and saddling millions with debt.

  • 4. The Perfect $46,000 Budget: Learning to Live in California for Under $50,000.

  • 5. Family Budget: How to go Broke on $100,000 a year. Why the Middle Class has a hard time Living in Expensive Urban Areas.

  • 6. Lining up at Midnight at Wal-Mart to buy Food is part of the new Recovery. Banks offering Mattress Interest Rates. The Invisible Recovery Outside of Wall Street.

  • 7. You Cannot Afford a $350,000 Home with a $75,000 Household Income!

  • 8. Crisis of generations – younger Americans moving back home in large numbers. Student loan default rates surging largely due to for-profit college expansion.

  • 9. The next massive debt bubble to crush the economy – 10 charts examining the upcoming implosion of the student loan market. $1 trillion in student loans and defaults sharply increasing.

  • 10. Welcome to the new model of retirement. No retirement. In 1983 over 60 percent of American workers had some kind of defined-benefit plan. Today less than 20 percent have access to a plan and the majority of retired Americans largely rely on Social Security as their de facto retirement plan.
  • Categories



    wordpress stats