by Paul Craig Roberts, Paul Craig Roberts:
In previous years I regularly reported on the monthly jobs reports. I explained that most of the jobs gains were in lowly paid service jobs, that many and even most of the jobs were part time, and that the jobs numbers were not the same as employment numbers as many of the newly employed held two of the new part time jobs in order to make ends meet. I pointed out that none, absolutely none, of the “better jobs” promised to the manufacturing work force whose jobs were offshored ever appeared.
I also pointed out that the inflation numbers were a hoax and gave the reasons why, and I pointed out that the claimed jobs gains were always later quietly adjusted to lower numbers.
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Nothing has changed. In fact, it has gotten worse. The US Department of Labor just admitted that it overestimated the jobs gain from March 2023 through March 2024 by 818,000 jobs that never existed.
If you will remember, these non-existent jobs were part of the inflation hype that relied on “strong employment growth” to keep interest rates high. Some readers might remember that I pointed out that the inflation was due to the Covid lockdowns that destroyed businesses, supply chains, and that prices went up because of shortages, not because of inflation.
But in America truth no longer matters. The narrative, not truth, is in control, and the narrative was that a hot job market driven by 818,000 non-existent jobs was driving inflation.
I pointed out that shortages cannot be rectified by high interest rates. High interest rates simply raise the cost of production. High interest rates contribute to inflation when businesses are destroyed and supply chains are disrupted and destroyed by lockdowns. Supply reductions cannot be immediately rectified, and high interest rates are the last thing that helps.
Economists should understand this, but they also understand that going against the official narrative is bad for their career.
Now that the Bureau of Labor Statistics has erased 818,000 jobs from its data list, thus deleting the excuse for high interest rates, the Federal Reserve says that in the US employment and inflation depict a changing situation in the economy, which the Fed says indicates that “the time has come for Fed policy to adjust.” Fed chairman Powell and Atlanta Federal Reserve Bank president Raphael Bostic announce interest rates cut as our future.
Suddenly the job market is “no longer overheated,” and the Fed is concerned about unemployment. What is the stock market’s response to the Fed’s concern that the economy is weakening and the job market is worsening? The market goes up. Why? Not from the prospect of a good economy, but from the injection of liquidity that makes lower interest rates possible.
In other words, it is liquidity, not reality, not performance, that drives the stock market. Or to put it differently, liquidity is reality.
Liquidity is the reason price/earning ratios rise, because where else can money go except into stocks and real estate. So the main result of Fed liquidity is to drive up stock prices and home prices. This is great for those who own these assets, but it prices non-homeowners out of the market, because house prices rise faster than their service sector incomes.
Policymakers, principally the Federal Reserve and the Jews on Wall Street who imposed offshoring of manufacturing jobs, have destroyed the ladders of upward mobility in the US economy–small businesses and manufacturing jobs. While the ladders that permitted people to rise were destroyed, the Democrats’ Open Borders Policy imports yearly a minimum of 3.6 million illegal immigrant-invaders whose job prospects do not extend beyond the chicken and cattle slaughter houses, and these jobs will disappear when we are restricted to a diet of bugs. The Democrats’ DEI policy tries to elevate them, but there just aren’t that many who speak English and are sufficiently educated to be cabinet secretaries and CEOs of Fortune 500 corporations.
This is a prescription for a Third World Economy, not for a superpower.
If you try to find the American economy, it is not here. It has been moved to China and other parts of Asia. Years ago I explained how to get it back, and no one payed the slightest attention.
As time passes America loses a disciplined work force that knows how to get up in the morning, report to work on time, and perform competently the expected tasks. Supply chains, such as local machine shops disappear from lack of manufacturing customers. The ability to produce is lost, and the country becomes Third World.
Meanwhile Third World countries are rising. They not only get our manufacturing and industrial jobs, they now get our service jobs. When was the last time that you had a service problem and called a bank, credit card company, utility, cell phone or Internet provider and heard an American voice, assuming you were able to reach a live person?
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