When Liars Tell the Truth

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by David Glenn Cox

When
our media tells the truth, they still lie. They won’t tell you that the
ship is sinking, instead they will tell you that the ship is taking on
less water than it was. They will assure you that all will be fine if
you’ll just trust them.

Bloomberg- "Fed Beige Book Says Economy Making 'Modest' Gains

“All
12 district banks reported a weak or declining commercial real estate
market, the central bank said today in its Beige Book business survey,
published two weeks before officials meet to set monetary policy. The
banks observed little or no price pressures, while demand for bank
loans was weak or declining and many districts reported a further
erosion of credit quality.”

Does that sound like "modest"
gains to you? That further erosion of credit quality, that’s you
they’re talking about. It means that you can no longer pay your bills
on time.


“The survey indicates that the economy, while gaining
momentum, has yet to overcome weaknesses in banking and employment.
Unemployment rose last month in 23 U.S. states, the Labor Department
said today, while earlier reports showed declines in wholesale prices
and lower-than-forecast housing starts, giving central bankers more
reason to hold the main interest rate at a record low to stoke a
recovery.”

Using the phrase “Unemployment rose last month in
23 U.S. states,” is nothing but another way of parsing the truth. Which
23 states? Which would be more reflective of real unemployment in the
United States: Utah, North Dakota and Wyoming? Or Florida, Illinois and
California? A 1% rise in these latter three states would be almost more
people than the entire population of the other three.

“Today’s
report cited continued 'weak or mixed' labor markets. Unemployment rose
to a 26-year high of 9.8 percent in September and is forecast by
economists to hit 10 percent by the end of the year.

"Reports
of gains in economic activity generally outnumber declines, but
virtually every reference to improvement was qualified as either 'small
or scattered,' the Fed said today.”

Like an Almond Joy candy
bar, they cover the nuts with chocolate. Small, scattered generally
means no less than the drought's not over but I found a guy who spilled
a glass of water! It’s whipped cream topping on a disaster.

“Dallas
Fed President Richard Fisher said, 'bad numbers are getting less
worse.' Growth next year will be a 'tough slog' and 'significantly
below potential,' he said in an interview with The Toronto-based BNN
television network.

“Defaults on commercial real estate loans
totaled $110 billion, or 6 percent of all such loans, in the second
quarter, about 11 times the level in the fourth quarter of 2006.
Defaults may rise to $170 billion by the fourth quarter of 2010,
according to Foresight Analytics LLC, a real-estate market consulting
firm.”

“Economy Making ‘Modest’ Gains.” Really?

Here in
Gwinnett County, Georgia, north of Atlanta, the county faces a one
billion-dollar budget shortfall. They’ve begun laying off 600 full time
employees and estimates are that as many as 20% of all businesses in
the county have already closed their doors. Shopping centers are
abandoned, some only half completed, but that is small potatoes.

In
California, Republican Governor Arnold Schwarzeneger forced through the
legislature the most draconian budget cuts in the state's history.
Forty days into the fiscal year, the new budget is already in the red,
and the deficit is growing faster than the state can make cuts.

“NEW
YORK (CNNMoney.com) -- Despite concerted government-led and
lender-supported efforts to prevent foreclosures, the number of filings
hit a record high in the third quarter, according to a report issued
Thursday.

"'They were the worst three months of all time,' said
Rick Sharga, spokesman for RealtyTrac, an online marketer of foreclosed
homes.”

In those three months, 937,840 homeowners received a
notice of foreclosure. If we assume four members to a household, that’s
3.75 million Americans losing their homes in the last ninety days and
they will spend the winter God only knows where. It all rolls uphill;
these empty houses will mean defaults on their property taxes so your
county won't be able to pay its employees either. The eventual new
purchaser will buy the home for much less and pay much less in property
taxes. But the counties have budgeted at the old higher tax rate.
They’ve borrowed money on anticipated revenues and now the revenues
aren’t there.

Unemployed workers pay no taxes; failed businesses
pay no taxes. So the criticism of Obama expanding the budget deficit
becomes academic. I, too, borrowed money when my business began to
fail. It’s human nature when you fall to try and catch yourself, and it
matters very little whether you owe a dollar or a million dollars if
you ain’t got a dollar in the first place!

New York Times- “Federal Deficit Hits All-Time High of $1.42 Trillion

“As a percentage of U.S. economic output, it's the biggest deficit since World War II.”

More
parsing of the truth, during WWII the United States had the largest
industrial capacity in the world. We were running factories twenty-four
hours a day turning out aircraft, tanks, ships, guns and bullets. As
well as food, bandages, medicine, iron and steel. Mines worked in three
shifts turning out coal and raw materials, railroads were weighted down
with tonnage and had to devise a priority system to ease the
congestion.

Workers were working overtime in union shops. With
restrictions on most consumer goods, the workers put their money in the
bank for after the war. To compare that economy to this feeble economy
is like comparing Mr. Olympia to Pee Wee Herman. Mr. Olympia could lift
the weight, but can Pee Wee?

It’s jobs, jobs, jobs, and that’s
the simple truth. The banking bailout was feeding the tiger when what
was needed was strangling of the tiger. Leaving the banks in charge of
the mortgage rescue was sheer insanity. The banks have new money; the
home foreclosures are tax write offs for the bank. Their interest is in
the wellbeing of the bank, not the people. That’s the government's job.
You want some truth? OK, here goes:

Millions of Americans face a
long cold winter with nowhere to live and without jobs. They are
veterans, and women and children of all ages who will shiver in the
cold and some won’t live to see the spring. Meanwhile, our government
plays in the margins and ignores them, when they should be this
nation's priority. There are millions that would gladly trade places
with the balloon boy because at night they dream of flying away to
dodge the horrible reality that faces them each and every morning.

“But
while they prate of economic laws, men and women are starving. We must
lay hold of the fact that economic laws are not made by nature. They
are made by human beings.” Franklin Deleno Roosevelt