Economy

Think Progress has posted this stomach-turning chart:

The red line indicated corporate profits and the blue is the average wage of Americans. As you can see the profits have been sky rocketing to record levels, while wages continue to plummet.

CNN Money puts it into words here:

In the third quarter, corporate earnings were $1.75 trillion, up 18.6% from a year ago, according to last week's gross domestic product report. That took after-tax profits to their greatest percentage of GDP in history.

But the record profits come at the same time that workers' wages have fallen to their lowest-ever share of GDP.

So we have to record breaking pieces of information here; profits are at record highs and wages are at record lows.

This comes at a very critical time in our nation. With the fiscal cliff less than a month away, many on the right are content with middle class taxes going up, just to save the corporations some tax money. The thinking is the same, failed logic that GOP has been pushing for years; "if corporations have more money, they will hire more." It goes against the very basis of supply and demand economics and is a proven failure just by this data. The corporations do have the money, but they aren't hiring and they aren't paying.

Many in our country feel that everything should be privatized, from road repairs to our military. Somehow they feel that corporations, which exist solely to make money, are a cheaper route than the government, which of course isn't in the profit business. It's one of the most infuriating and mind boggling ideas out there, and we are in a time of some totally bat shit crazy ideas about government.

We have already heard the nightmares of government contractors in Iraq. We've also heard the nightmare stories of privately run prisons and how they are making a mockery of our already highly broken justice system. But how about something else? How about a day at the beach? What could possible go wrong there if a private business takes over, say the lifeguard duties? Well check this out:

As lifeguards are paid and trained to do, Tomas Lopez rushed down the beach to rescue a drowning man — and then got fired for it.

The problem: Lopez stepped out of the beach zone his company is paid to patrol, a supervisor said Tuesday.

"I ran out to do the job I was trained to do," said Lopez, 21, of Davie. "I didn't think about it at all."

Now this story could have ended much worse, like the man drowning, but it still has a terrible ending - a man losing his job. And what is the justification for this harsh reaction by the man's employer, who should be holding him up as a hero?

Lifeguards in Hallandale Beach work for Orlando-based company Jeff Ellis and Associates, which has been providing lifeguard services for the city's beaches and pools since 2003.

Company officials on Tuesday said Lopez broke a rule that could've put beachgoers in his designated area in jeopardy. The firm could ultimately have been sued, officials said.

One big contributor to the housing crash in 2008 was speculation. One of the biggest drivers of oil prices is price speculation. Now President Obama wants to do something about it:

President Barack Obama announced Tuesday that he has asked Attorney General Eric Holder to "reconstitute" a task force examining oil and gas speculation.

But the task force, which Obama initially proposed last April when a big spike in gas prices sparked public outrage, has met only four or five times, mostly around the time it was created, and has not reported to the public on its activities, McClatchy News Service reported. Critics say the group has fallen short of its mission thus far.

While this is good news, I can't help but wonder why Obama has been so reactionary on speculation instead of taking a proactive stance. Speculation is like the entire country paying for a few rich people's trips to Vegas. They are gambling and their assets are all ours - our economy and cost of living. It's time to put an end to this crap once and for all. Let the actual market dictate price, not a few greedy gamblers.

Let's hope this keeps up:

The news is all good for the jobs market so far in 2012: Separate reports Thursday showed a surge in private-sector job creation, a sharp drop in weekly unemployment claims and planned layoffs at their lowest level in six months.

Though the December data flowing in is sensitive to seasonal revisions, the trend is moving in the right direction.

Private-sector jobs surged by 325,000, according to ADP and Macroeconomic Advisors, while the government said weekly jobless claims fell 15,000 to 372,000 — still at an elevated level but consistent with recent data showing a consistent if grudging turnaround.

Goods-producing businesses created 176,000 positions in the month, according to ADP's payrolls count, while the goods-producing sector rose 52,000 and manufacturing increased 22,000.

Of course we aren't in the clear yet. Europe is still very much in trouble and a sudden collapse there will send world markets back into chaos, which will translate into layoffs again. Everything is tied to that global economy and we got to keep an eye on that.

But if we keep trending this way then jobs will become a smaller issue by the time we hit the general election. Even if unemployment is still around 7% by then, as long as it's moving down I doubt that voters would want to replace President Obama with someone else who might reverse that flow.

Basically out economy is still very fragile and can easily be sent back into chaos. Keeping the ripples out right now is very important and a change at Pennsylvania Avenue is a rather large ripple. Hopefully Democrats will seize on these numbers and show people that progress is being made on repairing the Bush economy that President Obama inherited, which was the worst economy since the Great Depression.

Home ownership is a significant indicator of the health of our economy. One key indicator of how that segment is doing comes from new home construction. November's numbers actually look pretty good at first glance, jumping to 9.3%, but there is something buried inside that is also troubling:

But building permits, a gauge of future construction, rose nearly 11%. The increase was spurred by a 30% increase in apartment permits, to the highest level in three years.

Over the past year, apartment permits have surged roughly 63%. Single-family permits have increased just 6.6% in that time.

This is a mixed bag. The rise in apartment construction is spurred by two factors:

• A flood of foreclosed and short sale homes on the market.
• The inability of people to actual secure a loan for a new home.

Both of these factors are troubling. The first one indicates that we still have rather high foreclosure rate, something we can easily see by published reports, but also the short sales is troubling and that is something not so easily gauged.

The second item comes with having a period of long term unemployment. Being out of work for an extended time makes it harder to secure a loan for a new home. Not only that but with American's seeing their actual salaries decline, they also see their chances of securing a new home loan diminish.

Of course all of this could be indicative of where the U.S. economy is heading. We might be leaving the era of an ownership society and entering a time where renting becomes the new norm. That's good news and bad. It means more Americans will be living within their means, but at the same time their net wealth through assets will go down.

With the price of gas on the rise again, this is really shocking news:

The United States is awash in gasoline. So much so, in fact, that the country is exporting a record amount of it.

The country exported 430,000 more barrels of gasoline a day than it imported in September, according to the U.S. Energy Information Administration.

That is about twice the amount at the start of the year, and experts and industry insiders say the trend is here to stay.

We always hear that if we want gas prices to go down one of the big answers is more refineries. Well apparently we have more than enough refining available if we are now in the export business.

And why are we exporting more than we are importing? It seems like it would make more sense to just say "hey - we're not going to import or export and use it all here". But this is the "global economy" and not much makes sense in that.

Bloomberg is out with another article about the financial collapse. In it they report that former Treasury Secretary Hank Paulson, who was in charge during the collapse, gave insider information to hedge funders. The following alledgedly took place on July 21, 2008

At the Eton Park meeting, he sent a different message, according to a fund manager who attended. Over sandwiches and pasta salad, he delivered that information to a group of men capable of profiting from any disclosure.

Around the conference room table were a dozen or so hedge- fund managers and other Wall Street executives -- at least five of them alumni of Goldman Sachs Group Inc. (GS), of which Paulson was chief executive officer and chairman from 1999 to 2006. In addition to Eton Park founder Eric Mindich, they included such boldface names as Lone Pine Capital LLC founder Stephen Mandel, Dinakar Singh of TPG-Axon Capital Management LP and Daniel Och of Och-Ziff Capital Management Group LLC.

After a perfunctory discussion of the market turmoil, the fund manager says, the discussion turned to Fannie Mae and Freddie Mac. Paulson said he had erred by not punishing Bear Stearns shareholders more severely. The secretary, then 62, went on to describe a possible scenario for placing Fannie and Freddie into “conservatorship” -- a government seizure designed to allow the firms to continue operations despite heavy losses in the mortgage markets.

Now who was President in 2008? Oh yeah! But again that is fact. Here's what Andrew Breitbart's Big Government is pushing this meme from their editor's new book, Throw Them All Out: