02 Mar WHAT?!?!
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“According to the predictions of many economists last summer and fall, America should be in a recession right now. But as my colleague Annie Lowrey wrote in The Atlantic today, the facts reveal a very different state of affairs:
Unemployment is holding steady at its lowest rate in half a century. Layoffs are not increasing. The economy is growing at a decent clip. Wages are rising, and households are not reducing their spending. Corporate profits are near an all-time high. Consumers report feeling confident.”
–https://www.theatlantic.com/newsletters/archive/2023/03/recession-economists-wrong/673252/ emphasis mine
When you look at the latest layoff roster on LinkedIn, it has more announcements every day. I hardly get a segment for my Saturday Broadcasts recorded before a new set of announcements roll in. How can anyone say that layoffs are not increasing? This is like insane, next level hopium, IMO.
“US-based employers announced 102.943K job cuts in January of 2023, the most since September of 2020, and compared to 43.651K in December. It is also the highest January total since 2009, when 241.749K were announced, as companies are preparing for an economic slowdown, cutting workers and slowing hiring. The technology sector announced the most cuts with 41.829K, 41% of all cuts, and the second highest on record.” –https://tradingeconomics.com/united-states/challenger-job-cuts
The comparisons to 2008-2009 are becoming clearer. In fact, some statistics are worse now than they were then.
“A record share of consumers with low credit scores are falling behind on auto loans, as more households struggle with high inflation, rising interest rates and the end of pandemic-era benefits. Payments on more than 6% of “subprime” auto loans were at least 60 days late in December, according to S&P Global, a higher share than during the 2008-09 Great Recession. Meanwhile, auto dealers tell Bloomberg that they’re seeing a growing number of trade-in customers carrying up to $10,000 in negative equity — the amount that car loan debt exceeds a vehicle’s value.” –https://www.linkedin.com/news/story/car-debt-delinquencies-are-spiking-5565060/ emphasis mine
Consumers are feeling confident? They aren’t reducing their spending? Wages are rising?
How could anyone write that with a straight face? Is this satire?
“Four Signs Consumers Are Pessimistic About the Economy
Shrinking real wages, a slowing job market and pressure on retirement savings have many people feeling gloomy. Slowing inflation may brighten the outlook.”
Apparently, the MSM can’t even agree on which корпоративная пропаганда Америки it needs to push. Or who knows – maybe they are told to publish bizarre, conflicting narratives to keep everyone confused.
According to the WSJ, the four signs are:
“1. Real wage growth dropped
2. The job market is slowing
3. Retiring is becoming more difficult
4. American economic confidence remains low”
“Economic conditions have become an excuse executives use to justify their strategic decisions, she argues:
Copycat layoffs also let executives cite challenging business conditions as a justification for cuts, rather than their own boneheaded strategic decisions. In this scenario, the problem isn’t that corporate leadership poured billions of dollars into a quixotic new venture or hired hundreds of what ended up being redundant employees. It’s not that the C-suite misunderstood the competitive environment, necessitating a costly and painful readjustment. It’s Jay Powell! It’s a COVID-related reversion to the mean! Who could have known?” -The Atlantic, Ibid.
I agree on this point and, quite frankly, I think it’s pretty revealing. Do I think companies are having copycat layoffs and merely playing games? No. I think they know what’s coming and they sit back and laugh at the unwashed masses who don’t. But to the writer’s point: yes, some of these companies over-hired, some poured money into risky investments, some poured money into their own pockets, and some made flat-out horrible business decisions and then looked for someone else to blame. Guess what? The politicians do this, too. Where I think we have to be careful is ignoring the collusion of Crony Capitalism. So it’s not that Corpo America is blaming Powell or that Powell is blaming Corpo America. This is where I leave the neocons and the neolibs in the dust to play their partisan games of red versus blue. No, see, I think they COLLUDE TOGETHER TO ENRICH THEMSELVES. The Fed does not surprise Corpo America, nor does Corpo America surprise The Fed. They work together, IMO, to ensure a particular outcome that enriches the fat cats. If you need a refresher on this, remember all the warnings Gordon Gekko gave you about wealth transfer and greedy bankers.
Earlier today, I published a podcast episode, “Потёмкинские деревни aka Nothing to see here, people, move along” about Potemkin villages:
“If you’ve ever visited a movie studio, it may have surprised you to see what the sets actually look like. In some cases, a set can merely be a small 3D model that looks good on camera. The idea of Потёмкинские деревни or Potemkin villages is similar: create a shell that looks good in order to obscure the unhappy or dangerous reality behind it.” –https://www.buzzsprout.com/1125110/12316323
Whenever I read these neolib articles trying to convince me that things are fine, the consumer is resilient, and there is no recession, after I get done puking in my mouth, I think of the Potemkin village concept.
If somebody has just been cruising along– they’re just driving down the road looking at the Potemkin village and they think everything’s fine, they’ve done nothing to prepare, they have no idea what’s coming– in my opinion, I think it’s probably too late for that person. I’m sorry. I know, I know, I know. That’s going to hurt some people’s feelings, it is going to make some people mad. I just have to be honest with you, I think somebody that’s still driving down the road in a state of oblivion– They don’t know anything about bank bail-ins, they don’t know anything about unsecured creditors. They don’t know anything about the condition the economy is really in. They don’t know anything about the condition the job market is really in. They’re not hearing the stories of struggle from people saying, “I had no idea I would be unemployed this long, and I’m scared to death.” Somebody that’s worried about the royal family and gossip, they’re paying attention to mindless bullcrap on Twitter– they’re probably not going to make it. I’m sorry about you. I really am. I’ve tried. I’ve been on my blog and on this podcast for months warning you of what I was seeing in the job market, trying to pull all of the analyses together and tell you, “Okay, here’s how I think the job market relates to the broader economy. Here are my predictions. Here’s what I see coming,” you can take that and do with it whatever you want. I just sit here for your entertainment only. But I do think somebody that is still oblivious, they’re still waiting for somebody to come out and say, “Okay, I’m going to unroll a piece of parchment paper, like some town crier of olden times and say, ‘Alright, now we’re officially in a recession,’ Somebody who’s waiting for that, in my opinion, they’re in bad shape, they’re probably not going to make it.
-“Потёмкинские деревни aka Nothing to see here, people, move along” Buzzsprout, Ibid.
By the way, at the top of the email for The Atlantic Daily where I found the article I mention in this blog post, I saw this: “WEDNESDAY, MARCH 1, 2023 ∙ SUPPORTING SPONSOR: PwC”
All media outlets should be required to disclose who pays the bills, ya know?