False Hopes for a Failing Economy from a Fake President

Teams of economists across the country anxiously await scores of different reports every month which they use to gauge the state of our economy. During good times, most of us are unaware of these reports or the economists in general. When the economy is good we know it intuitively and go about our normal business. However, now that we are living through the worst economy most of us have ever experienced, we anxiously await these reports and the interpretations offered by these so called "economists." Hoping desperately that they will prove our intuition wrong and show us an economy heading toward recovery. Retail, manufacturing, housing, stock and job reports top the list of endless numbers being thrown at us every quarter, month, sometimes every day. A little knowledge, mixed with some attention to detail and a dash of common sense will add up to an economy rather different from the one we are told we are experiencing.

All summer we heard, home sales are rising, the economy is recovering. I have news for you. Home sales always rise during the summer. It is the most convenient time for most people to move.

In September, the economists touted the strong consumer spending numbers of August. Remember August? That was when our government poured billions of our tax dollars into the Cash for Clunkers program and out of country to foreign car makers. The ever greedy American public was more than happy to suck up the rebates in record time and provide Washington with statistics they could tell us to be proud of.

In the fall, we hear the Standard & Poor's 500 Index has gained almost 60 percent since its low on March 9, 2009, but there are a few brave soles willing to explain how the price of stocks and commodities have been over inflated by government spending, federal reserve money printing, and negative interest borrowing on the dollar. It is federal stimulus bubble that is getting ready to burst.

Today, they announced that the economy is improving because we only shed 11,000 jobs in November. What they fail to mention is that retail outlets across the country hire like crazy each November for the Christmas shopping season. Tell me in February that we are still only shedding 11,000 jobs per month once the year end and holiday pink slips are issued, and then maybe I will believe it is positive news.

They also like to talk about the falling rates of foreclosure in the sub-prime market. What they don't like to talk about is the rising rate of foreclosures among prime borrowers. And what they don't admit to at all is the skyrocketing rate of commercial loan defaults that are sinking entire banks every month, nor will they tell you that there are trillions of dollars worth of negative amortization loans with adjustable rates that are just starting to adjust now. Like the sub-prime adjustable rate mortgages from 2007, inevitably most of these negative amortization loans will default in the coming months, especially when the Fed finally decides to raise the interest rates.   According to  Inside Mortgage Finance Publications, "Performance problems exhibited by option ARM borrowers are set to worsen due to negative amortization, according to a new analysis by Standard & Poor’s. Analysts at the rating service found that even if interest rates stay at low levels, most option ARM borrowers will see large increases in their monthly mortgage payments."

Economists and media outlets who believe that consumer spending is fueled by consumer confidence are more than happy to sell you a false hope in the economy. Question what your hear and ask why they are always talking about the new indication of improvement rather than a continued positive report from multiple sectors of the economy.

However, if after all of that you still have the ability to hope, then you are probably banking on Obama's message of hope for Main Street America. President Obama started his "Main Street" tour today with Allentown and Bethlehem Pennsylvania, about two hours outside of Philadelphia. These were wealthy industrial towns built upon the steel industry until the jobs were shipped over seas. Now, decades after their hay-day, they are medium sized struggling cities surrounded by rural and suburban areas that struggle just as much as the cities themselves. They are home to middle and lower class Americans who can't afford to live in the wealthier suburbia that surrounds Philadelphia. It is a prime location to take the pulse of Main Street America, if you bother to look in the right places. However, according to Obama's speech this afternoon, he started his tour of "Main Street America" with a publicity stunt, bow to unions, and pat on the back in one foul sweep that on the surface is as warm and fuzzy as Theodore Roosevelt's teddy bear. Obama visited Allentown Metal Works, a place full of blue collar workers. Sounds like the perfect start for a look at the "common man" right? Wrong. These people were union members, union members earning far more than the minimum wage the government claims that we can live off of. People earning far more than your restaurant kitchen and wait staff, retail cashiers, stock boys, security officers and other non-union jobs. Strike one. Next, Allentown Metal Works has bid on and received government contracts, no doubt, in part, because they employ union workers. A company being kept a float by federal funds is not "Main Street America," it is the we bought and paid for you and your support politics. Obama's pat on the back; he's keeping them employed. Strike two. Finally, one of those government contracts, which Obama made sure to mention even though it did not appear on his teleprompter was the work they are doing for the World Trade Center memorial. Publicity stunt; look how patriotic we are! Mr. Obama, why didn't you talk to the 20 loan officers in the Allentown area that were laid off by Wachovia Bank a few days before Thanksgiving? Or the stay at home mom who had to find a job two months ago and put her house up for sale because her husband's business has been effected by the poor economy and he now earns 1/2 of what he did two years ago? What about the small business owner who spent the nine months of her pregnancy working 4 other odd jobs to support her family while her business shrank and her husband desperately looked for work and was repeatedly told he was "over qualified"? Why don't you ask her what 2 days of maternity leave was like after a c-section? Mr. Obama, your visit was not Main Street, it was politics as usual. You are selling a false hope that you will listen to and help the good people of this country.