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The View from Shoe-Top Tall
By David Glenn Cox
There is a truism that figures do not lie but liars figure, and in politics it’s not the picture but the frame. For example, if your presidency totters because of a massive oil spill in the Gulf of Mexico just days after you make a speech promoting more oil drilling, you do the following: “President Obama Visits Green Energy Start-Up Solyndra.”
Just a coincidence I’m sure, nothing to do with spin or public perception. I don’t mean to take Obama to task, but in this particular venue it seems almost comical. All politicians, thieves, and con men, everyone in the trade uses lies and misperceptions to educate the fatuous and entertain the rest of us. It's sort of like a Disneyland for grown-ups.
“May 26 (Bloomberg) -- Purchases of new homes jumped in April to a two-year high and orders for durable goods climbed the most in three months, signaling the U.S. economy strengthened before the crisis of confidence in the European Union.”
Right, American consumers sit around the dinner table saying things like, “You know, Frank, with historically low interest rates and an $8,000 tax credit, now might be the time for us to buy a new home.”
“I don’t know about that, Margaret, what with the Greek Bond crisis and the falling value of the Euro and Chinese Prime Minister Hu hesitant to revalue the yuan, it might not be.”
“You know, my mother warned me that you were an asshole, Frank.”
It is a ridiculous assumption, but Bloomberg and the Wall Street Journal and CNBC have been pimping this mythology that the economy is improving. They are “The Little Engine that Could.” I think it is, yes it is, I think it is, yes it is. See, the economy is getting better; the government hired part-time census workers.
“New-home sales increased 15 percent to an annual pace of 504,000 last month, the highest level since May 2008, while bookings for goods meant to last at least three years rose 2.9 percent, the Commerce Department said today in Washington.”
Wow! 504,000 new home sales. That’s almost as good as the sales in 1963! True, in 1963 the United States only had 189 million people, but it’s still an impressive number in a country with over 300 million. If you throw out 2009 and 2008 it’s the worst numbers in thirty years but it is better than last year's 375,000 new home sales, before the government started paying those with income and credit to purchase new homes.
Four hundred thousand of seventeen million unemployed Americans are losing their benefits each month and we're on a pace for 4.5 million home foreclosures this year. Doesn’t it strike you as just a bit odd that a government struggling with a massive budget deficit would lavish $12.6 billion on individuals with both employment and credit to consider purchasing a new home in the worst economy since the last Great Depression?
To me it smacks of visiting a green energy plant while a massive oil spill pollutes the Gulf. It is a policy that says: give to those least in need and it will help those most in need when it trickles down to them. The plan has been so successful that it has pushed new homes sales to the sixth worst year on record. That's billions of dollars in tax credits to sell 129,000 more new homes than last year but less than half the numbers of 2006.
The Commerce Department report shows that a lot of the increase in orders of durable goods is due to aircraft sales, but the report also shows a precipitous fall in new orders for next month pointing to an economic burp rather than a trend. Here in my little end of the Earth I continue to look diligently for work and on too many days there aren’t even any jobs to apply for. It's still just the usual scams and come ons, commission only and commission maybe, minimum wage possibly, short-term employment probably.
Living in a garage in an industrial park I’ve learned a lot about my neighbors. The body shop next door had four or five classic car cores that belonged to the owner. They’ve all been sold except for a 1970 Mustang. His lot, once full of cars waiting for pick up, is now mostly empty and several cars have been waiting for pick up for several weeks.
The man on the other side runs a cabinet shop and has always stayed busy. The owner has one employee named Gary and he’s a gregarious fellow. I once asked him about the owner, “You guys always seem to stay busy. Is he that good or does he work cheap?”
Gary assured me that it was because he is that good, but Gary has been laid off in the last three weeks and the owner comes in and makes calls and inquiries but I don’t hear the saw running as it should be. On the other side of them is a company that installs and services the alcohol systems for service stations. Last Thanksgiving I thought I might have talked them into giving me a job but today a photographer was taking pictures of their trucks for a title loan to keep the company afloat. Their customers are big-time players, household names, and for a small business that is sometimes the kiss of death.
The big corporations know that the little guy isn’t likely to tell them to kiss off if he doesn't get paid right away; he needs that big account. I once had to put a major corporation on COD because their bookkeeping department refused to cut a check because someone in the maintenance department ordered an engine from me before the purchase order was released. I once had the Air Force on COD because they typed up the paperwork and put the company name on the wrong line of the form and wanted me to write a letter explaining why the company had changed its name without notifying the Air Force.
The most common reason for slow pay is simply that they don’t have the money. Billion dollar companies go bankrupt all the time and when they do they take a lot of little companies with them.
On the other side of the cabinet shop is a motorcycle (Harley) repair shop with an owner/mechanic and another mechanic. Well, that’s the way it was up to about a month ago when the mechanic was let go. The sound of those Harley’s roaring up and down the street has been replaced by silence. The cinder block company is back to working two days a week but the manufacturing process only requires two employees.
My son’s business in automotive rebuilding is facing rising prices at the auctions along with a lower supply of cars. When people don’t drive as much they don’t have as many accidents. That means fewer cars but falling prices on a retail level means less margin to fix the badly damaged vehicles. There is no market for the Escalades or Suburbans, pushing prices on fuel-efficient cars to a premium. The auctions themselves are struggling because of fewer cars and many have allowed the public in, which only depresses the market further.
So the Commerce Department report might say great things, promises of a wonderful world a-comin' and $12 billion in tax credits might keep the housing market from a full collapse. But here on Poverty Street the story is different. From shoe-top tall it's an economy with soaring lay offs in the onesies and twosies but when you only have one employee to begin with, it is way serious because the next round of layoffs means locking the door.
What aid is available to them? Why, none, same as for you!
“But they seem to be beyond the concern of a National Administration which can think in terms only of the top of the social and economic structure. They have sought temporary relief from the top down rather than permanent relief from the bottom up. They have totally failed to plan ahead in a comprehensive way. They have waited until something has cracked and then at the last moment have sought to prevent total collapse.
It is high time to get back to fundamentals. It is high time to admit with courage that we are in the midst of an emergency at least equal to that of war. Let us mobilize to meet it.” Franklin Delano Roosevelt
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