Tuesday, January 20, 2015

State Of The Union In Two Words -- It Stinks

92,898,000 Americans of working age are not working.  That's the highest that number has ever been in our nation's history and even accounting for our general population being higher than its ever been, the proportion is at levels not seen since the great stagflation of the 70's or the great depression of the 30's.  

Unemployment numbers which look good currently are completely unrepresentative of reality since a huge number of unemployed are not counted as unemployed because it's assumed they no longer wish to work. This is based on how long they've been unemployed and how many job applications are being submitted. This is like assuming many of the victims of a famine have stopped wanting to eat since they no longer go out looking for food.

Many stock analysts believe that stocks are generally over-valued thanks largely to the Federal Reserve's quantitative easing.

Real-estate is said to have an optimistic outlook, but the reason frequently given for this should be disconcerting.  Most of the foreclosure related bargains have been bought up.  That's the reason given.  The thinking is that those bargain properties wont be competing with and bringing down the prices anymore.  But the question as to who is going to buy property at higher rates remains largely unanswered, and that should hamper optimism more than it is amongst real-estate industry people.

One must remember that people who's careers and lives are invested in a given market can only remain pessimistic about it for so long before they're changing professions.

The taunting insensitive bow on this wretched economy is the average household income which has dropped considerably since the crash of 08, and the new jobs are predominantly much lower paying than the ones they're trying to replace.  The word "trying" is appropriate since job growth is still not running ahead of growth in the potential workforce.

So any politician who boasts about the economy at this point is at best cruel and it's probably best not to use the words that would describe them at worst.

Yes America, the state of the union, it stinks.

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