When Liars Tell the Truth

[Daveparts still]

When Liars Tell the Truth
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

[silversol]

1. The Truth Hurts

But it's still the truth

[cdsilv]

2. Well said. n/t