Thursday, November 29, 2007

If America's economy is strong the whole world is in deep…

posted by Bill Arnett @ 9:29 AM Permalink

One of the most obvious lies told by the bush maladministration is that, "Our economy is strong, the job market is great, and I will still respect you in the morning." (Okay, maybe they don't really say that last one, I don't think the Rethugs honor or respect the intelligence of any American smart enough to realize that our "strong economy" is a myth.

From the NYT:
Credit flowing to American companies is drying up at a pace not seen in decades, threatening the creation of jobs and the expansion of businesses, while intensifying worries that the economy may be headed for recession.

The combined value of two leading sources of credit — outstanding commercial and industrial bank loans, and short-term loans known as commercial paper — peaked at about $3.3 trillion in August, according to data from the Federal Reserve. By mid-November, such credit was down to $3 trillion, a drop of nearly 9 percent.[…]

Not once in the years since the Fed began tracking such numbers in 1973 has this artery of finance constricted so rapidly.[…]

Policy makers at the Federal Reserve are growing increasingly alarmed about the problem, which is an outgrowth of the woes of the housing and mortgage industries.[…]

By themselves, commercial bank loans have actually surged: large companies have tapped prearranged lines of credit to weather the financial chaos that has accompanied the unraveling of the American real estate market.

But this source of finance has been nowhere near enough to compensate for the virtual shutdown of the short-term commercial paper market. Much of this debt had been pledged against the value of mortgages, making them effectively radioactive in markets around the globe.
And all the jobs the Rethugs like to brag that they have created? This is also a myth:
A slowdown among smaller companies could be especially costly to the economy in terms of jobs. More than half of American jobs are at companies with fewer than 100 workers, according to Moody’s

In recent months, smaller companies have been adding jobs even as larger firms have been shedding workers, according to the ADP National Employment Report, which tracks changes at companies with payrolls overseen by ADP. From May to October, 276,000 of the 378,000 jobs added were at companies with fewer than 50 employees, the report found.
May through October is six months, which translates to the creation of a truly anemic average of only 63,000 new jobs a month, nowhere close to the number of jobs that must be created just to keep up with people entering the job market for the first time (the last figure I saw said over 150,000 new jobs must be created each month just to provide work for the new entries into the job market.)

Funny that no one constantly reminds the public that Clinton created 22,000,000 jobs while the stock market increased in value by 180%.

So I perceive a very simple way to explains this:

Democrats - good for economy.
Republicans - a disaster for the economy.

It really is that simple.

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