WASHINGTON, February 6, 2016 — “Three things cannot be long hidden,” said Buddha, “the sun, the moon, and the truth.”
Buddha didn’t live in ObamAmerica, the Orwellian world of contradictory “truth.”
Jonathan Stubbs, a market strategist for Citigroup, said a “stronger U.S. dollar, weaker oil/commodity prices, weaker world trade/petrodollar liquidity” clearly indicate we are in for “a significant and synchronized global recession.” Just for emphasis, he added, “The world appears to be trapped in a circular reference death spiral.’
That sounds a lot like deflation; a fancy substitution for the more familiar and well-worn term “depression.”
At the White House, meanwhile, President Obama trumpeted Friday’s jobs report. “After reaching 10 percent in 2009, the unemployment rate has now fallen to 4.9 percent even as more Americans joined the job market last month. Americans are working.”
Financial cable network CNBC joined Obama in applying lipstick to the pig that is America’s ugly economy, sighting the U.S. Labor Participation Rate, “which rose slightly to 62.7 from 62.6 percent.”
The U.S. Labor Participation Rate measures the number of Americans of working age that are, well, working.
Obama failed to mention that Labor Participation was 65.7 percent when he entered office in late January 2009.
The Congressional Budget Office says the Labor Participation Rate will fall by about .01 percent per year, bottoming out at 62.1 percent by 2019.
But the CBO has a reputation for presenting Congress with rather rosy projections it must later revise. Example: “The latest [budget] deficit estimate is $18 billion higher than CBO had originally projected for 2015,” The Hill recently reported.
With CBO history as our guide, the Labor Participation Rate is more likely to fall precipitously in the months to come.
New York Times columnist and Nobel-Prize-winning economist Paul Krugman insists “none of the dire predicted consequences” of wealth-redistributive Obamanomics “have materialized. It’s not just that overall job creation in the private sector – which was what Mr. Obama was supposedly killing – has been strong… labor markets also show no evidence of predicted ill effects.”
On Thursday, one day before Obama announced the unemployment rate drop to 4.9 percent, CNBC reported, “Layoffs surged in January to the highest levels since July as employers in the retail and energy sectors pulled out the pink slips … U.S.-based companies announced 75,114 planned job cuts last month … That figure was also 42 percent higher from a year ago.”
While President Obama and Paul Krugman herald America’s great economic strides, Mother Market is pricing in another recession—or worse.