"Pimp Bernanke" and Psychopathic CNBC Reporting - Statistics Proving Death of Middle Class & Deficit-Increasing Tax Cuts for Rich Exposed

(If throwing a contribution Pottersville2's way won't break your budget in these difficult financial times, I really need it, and would wholeheartedly appreciate it. Anything you can afford will make a huge difference in this blog's lifetime.)

From the gentle folk at Walled-In Pond:

Where are the jobs? For many companies, they have been moved overseas where the markets are operating normally. Yes, Virginia, the good ole US of A is really suffering (bailouts, anyone?) as other countries have dug out from the financial flimflam of Goldman Sachs and the Federal Reserve and increased their regulatory functions to ensure that they are not victims again. And are you beginning to understand the non-issue of how tax cuts are not needed in order to create jobs? Also, Virginia, aren't you pleased with how well all those ex-third world countries are doing now? Even better than their teachers? (Emphasis marks added - Ed.)

Corporate profits are up. Stock prices are up. So why isn't anyone hiring? Actually, many American companies are — just maybe not in your town. They're hiring overseas, where sales are surging and the pipeline of orders is fat.

More than half of the 15,000 people that Caterpillar Inc. has hired this year were outside the U.S. UPS is also hiring at a faster clip overseas. For both companies, sales in international markets are growing at least twice as fast as domestically.

The trend helps explain why unemployment remains high in the United States, edging up to 9.8 percent last month, even though companies are performing well: All but 4 percent of the top 500 U.S. corporations reported profits this year, and the stock market is close to its highest point since the 2008 financial meltdown.

But the jobs are going elsewhere. The Economic Policy Institute, a Washington think tank, says American companies have created 1.4 million jobs overseas this year, compared with less than 1 million in the U.S. The additional 1.4 million jobs would have lowered the U.S. unemployment rate to 8.9 percent, says Robert Scott, the institute's senior international economist.

"There's a huge difference between what is good for American companies versus what is good for the American economy," says Scott. American jobs have been moving overseas for more than two decades. In recent years, though, those jobs have become more sophisticated — think semiconductors and software, not toys and clothes. And now many of the products being made overseas aren't coming back to the United States. Demand has grown dramatically this year in emerging markets like India, China and Brazil.

Meanwhile, consumer demand in the U.S. has been subdued. Despite a strong holiday shopping season, Americans are still spending 18 percent less than before the recession on furniture, and 10 percent less on electronics, according to MasterCard's SpendingPulse.

"Companies will go where there are fast-growing markets and big profits," says Jeffrey Sachs, globalization expert and economist at Columbia University. "What's changed is that companies today are getting top talent in emerging economies, and the U.S. has to really watch out."

With the future looking brighter overseas, companies are building there, too. Caterpillar, maker of the signature yellow bulldozers and tractors, has invested in three new plants in China in just the last two months to design and manufacture equipment. The decision is based on demand: Asia-Pacific sales soared 38 percent in the first nine months of the year, compared with 16 percent in the U.S. Caterpillar stock is up 64 percent this year.

"There is a shift in economic power that's going on and will continue. China just became the world's second-largest economy," says David Wyss, chief economist at Standard & Poor's, who notes that half of the revenue for companies in the S&P 500 in the last couple of years has come from outside the U.S.

Take the example of DuPont, which wowed the world in 1938 with nylon stockings. Known as one of the most innovative American companies of the 20th century, DuPont now sells less than a third of its products in the U.S. In the first nine months of this year, sales to the Asia-Pacific region grew 50 percent, triple the U.S. rate. Its stock is up 48 percent this year.

DuPont's work force reflects the shift in its growth: In a presentation on emerging markets, the company said its number of employees in the U.S. shrank by 9 percent between January 2005 and October 2009. In the same period, its work force grew 54 percent in the Asia-Pacific countries.

"We are a global player out to succeed in any geography where we participate in," says Thomas M. Connelly, chief innovation officer at DuPont. "We want our resources close to where our customers are, to tailor products to their needs." While most of DuPont's research labs are still stateside, Connelly says he's impressed with the company's overseas talent. The company opened a large research facility in Hyderabad, India, in 2008.

A key factor behind this runaway international growth is the rise of the middle class in these emerging countries. By 2015, for the first time, the number of consumers in Asia's middle class will equal those in Europe and North America combined.

"All of the growth over the next 10 years is happening in Asia," says Homi Kharas, a senior fellow at the Brookings Institution and formerly the World Bank's chief economist for East Asia and the Pacific. Coca-Cola CEO Muhtar Kent often points out that a billion consumers will enter the middle class during the coming decade, mostly in Africa, China and India. He is aggressively targeting those markets. Of Coke's 93,000 global employees, less than 13 percent were in the U.S. in 2009, down from 19 percent five years ago.

The company would not say how many new U.S. hires it has made in 2010. But its latest new investments are overseas, including $240 million for three bottling plants in Inner Mongolia as part of a three-year, $2 billion investment in China. The three plants will create 2,000 new jobs in the area. In September, Coca-Cola pledged $1 billion to the Philippines over five years.

The strategy isn't restricted to just the largest American companies. Entrepreneurs, whether in technology, retail or in manufacturing, today hire globally from the start. Consider Vast.com, which powers the search engines of sites like Yahoo Travel and Aol Autos. The company was founded in 2005 with employees based in San Francisco and Serbia. Harvard Business School Dean Nitin Nohria worries that the trend could be dangerous. In an article in the November issue of the Harvard Business Review, he says that if U.S. businesses keep prospering while Americans are struggling, business leaders will lose legitimacy in society. He exhorted business leaders to find a way to link growth with job creation at home.

Other economists, like Columbia University's Sachs, say multinational corporations have no choice, especially now that the quality of the global work force has improved. Sachs points out that the U.S. is falling in most global rankings for higher education while others are rising.

"We are not fulfilling the educational needs of our young people," says Sachs. "In a globalized world, there are serious consequences to that."

And an especially cognizant economic post comes from our friend, Jazzbumpa at Retirement Blues where he makes it easy to view our economy's demise (emphasis marks and some editing inserted - Ed.):

The U.S. Economy is Dying - Pt 2

Back in October I posted Part 1, based on a look at GDP since WW II. Here are some other dismal facts to ponder. Consider first, Capacity Utilization. Data from the Federal Reserve. It's easy to pick out the recessions on this graph. The line droops like an icicle as business slows, then climbs up again as we come out of recession. The disturbing thing is the trend line, shown in green on the chart - relentlessly down, down, down for over 40 years, as each recovery is more anemic than the last.

Just for kicks, the capacity utilization line is sketched out in Red and Blue segments, indicating the spans of Republican and Democratic administrations. I've also added a horizontal line for each admin, indicating the average of utilization over its time span. Note that the moribund Carter admin. was at a higher level than ANY of the Republicans. Actually, at 83.45%, Carter even inches out Clinton at 82.84%. It's just an amazing coincidence that all of the icicle tips - except for the last one, that B. Hoover Obama inherited from his idiot predecessor - are Red.

One might also note in passing that the onset of a Republican administration is always - and I mean ALWAYS indicated by a steep drop in capacity utilization (e.g. RECESSION). This must be one of the ways in which Republicans are good for business.

Right now, in the midst of an a scintillating recovery - we've been stalled at 75% for three months - we're still nowhere near the descending tend line that connects the tops. Note also that 75% is in the mid-range for previous bottoms. Here's industrial production since 1967 , from Calculated Risk.

There was a time when this was a growth curve - then G. W. Bush happened. Now it looks like we're stalling out at a level that was once a peak - a mere 10 years ago.Remember that small business are the real growth engine of our economy. Here are their near-term hiring plans, also from CR (Calculated Risk). The ZERO level used to occur at bottoms. Now, we've had to improve to get to that level. (Take that, Lump of Labor Fallaciators.) Plus it looks like we might be stalling there as well. On the other hand, though, big business are doing their part by hiring lots of people. That would perhaps be more helpful if it were happening on this continent. (Take that, Lump of Labor Fallaciators.) (H/T to the L/W.) And if you're wondering why all this is happening, let's ask all the small business owners what their biggest problem is. Poor sales?!? Could that be an aggregate demand shortfall?

Those small business owners sound like a bunch of Keynesian idiots!

No wonder we're in so much trouble.

Paul Krugman finally says:

Yes, They’re Frauds

And then there are those very disturbing statistics proving beyond your very need for proof . . . (emphasis marks added - Ed.).

22 Statistics That Prove The Middle Class Is Being Systematically Wiped Out Of Existence In America

The 22 statistics that you are about to read prove beyond a shadow of a doubt that the middle class is being systematically wiped out of existence in America.

The rich are getting richer and the poor are getting poorer at a staggering rate. Once upon a time, the United States had the largest and most prosperous middle class in the history of the world, but now that is changing at a blinding pace.

See proof of the Middle Class extermination here

So why are we witnessing such fundamental changes? Well, the globalism and "free trade" that our politicians and business leaders insisted would be so good for us have had some rather nasty side effects. It turns out that they didn't tell us that the "global economy" would mean that middle class American workers would eventually have to directly compete for jobs with people on the other side of the world where there is no minimum wage and very few regulations. The big global corporations have greatly benefited by exploiting third world labor pools over the last several decades, but middle class American workers have increasingly found things to be very tough.

The reality is that no matter how smart, how strong, how educated or how hard working American workers are, they just cannot compete with people who are desperate to put in 10 to 12 hour days at less than a dollar an hour on the other side of the world. After all, what corporation in their right mind is going to pay an American worker ten times more (plus benefits) to do the same job? The world is fundamentally changing. Wealth and power are rapidly becoming concentrated at the top and the big global corporations are making massive amounts of money. Meanwhile, the American middle class is being systematically wiped out of existence as U.S. workers are slowly being merged into the new "global" labor pool.

What do most Americans have to offer in the marketplace other than their labor? Not much. The truth is that most Americans are absolutely dependent on someone else giving them a job. But today, U.S. workers are "less attractive" than ever. Compared to the rest of the world, American workers are extremely expensive, and the government keeps passing more rules and regulations seemingly on a monthly basis that makes it even more difficult to conduct business in the United States.

So corporations are moving operations out of the U.S. at breathtaking speed. Since the U.S. government does not penalize them for doing so, there really is no incentive for them to stay.

What has developed is a situation where the people at the top are doing quite well, while most Americans are finding it increasingly difficult to make it. There are now about 6 unemployed Americans for every new job opening in the United States, and the number of "chronically unemployed" is absolutely soaring. There simply are not nearly enough jobs for everyone.

Many of those who are able to get jobs are finding that they are making less money than they used to. In fact, an increasingly large percentage of Americans are working at low wage retail and service jobs.

But you can't raise a family on what you make flipping burgers at McDonald's or on what you bring in from greeting customers down at the local Wal-Mart. The truth is that the middle class in America is dying - and once it is gone it will be incredibly difficult to rebuild.

House Republican Rule Changes Pave the Way For Major Deficit-Increasing Tax Cuts, Despite Anti-Deficit Rhetoric House Republican leaders yesterday unveiled major changes to House procedural rules that are clearly designed to pave the way for more deficit-increasing tax cuts in the next two years. These rules stand in sharp contrast to the strong anti-deficit rhetoric that many Republicans used on the campaign trail this fall. While changes in congressional rules rarely get much public attention, these new rules — which are expected to be adopted by party-line vote when the 112th Congress convenes on January 5 — could have a substantial impact and risk making the nation’s fiscal problems significantly worse.

I hear that a lot of journalistic insiders were annoyed when I began calling out self-styled deficit hawks like Paul Ryan as flim-flammers. But they are; nobody, and I mean nobody, in a position of influence within the GOP cares about deficits when tax cuts for the affluent are on the line. Deficit hawkery is just a stick with which to beat down social programs.

Suzan ________________________