A string of developments has altered the sentiment within the central bank,
leading Fed policy makers to stop worrying for the moment about the increasingly remote prospect of inflation.
Instead, they are increasingly focused on the potential for the economy to slip into a deflationary spiral of declining demand, prices and wages.
Not since 2003 has the prospect of deflation been taken so seriously at the Fed,
Business productivity fell for the first time in 18 months in the second quarter and labor costs were flat,
according to government data released earlier this summer.
Productivity declined by an annual rate of 0.9 percent after rising at a revised 3.9 percent rate in the first quarter, a Labor Department report showed.
Falling output per worker implies the economy is operating less efficiently because overall production is below its potential.
The roots of the mortgage crisis are well known — overly aggressive lenders, overly optimistic borrowers and lax regulation of financial firms.
But as policymakers search for a resolution,
they need to recognize another critical aspect of the problem:
today’s mortgages are designed for yesterday’s borrowers.
Until recently, most Americans paid for their homes through 30-year self-amortizing mortgages,
Profits of corporate America have been rising at an impressive clip.
But sales have not risen nearly as rapidly.
As a result, profit margins for companies in the Standard & Poor’s index of 500 stocks are now higher than they were before the recession began.
When second-quarter earnings results began to be reported in early July, the higher numbers seemed to reassure investors,
American consumer spending and personal incomes were flat in June and factory orders declined,
according to government statistics released earlier this month,
the latest indication that the economy would continue to struggle in the second half of the year.
The Commerce Department figures, which were seasonally adjusted, showed that personal income was steady in June, compared with a slight 0.3 percent rise in May.
As long-term unemployment in US hits record levels,
top execs in the American financial sector were being rewarded at a pace even the Federal government –
which has otherwise given the big banks just about everything they want – finds unacceptable.
Of course, it’s not going to actually DO anything, but, hey, it’s still Cheney / Bush America, whoever may sit in the White House.
With the financial system on the verge of collapse in Black September 2008,
In the US, unemployment has typically been a relatively brief affair.
The vast majority of people who lost jobs soon found new work.
That is not the way it has been in many other developed countries.
In Europe and Japan, long-term unemployment is far more common.
At any given time, most of the unemployed people in many European countries have been out of work for more than six months.
Now the United States appears to be becoming similar to Europe.
The Internal Revenue Service has announced that it would overhaul a unit devoted to scrutinizing large corporations and wealthy individuals,
a shift that would bolster the agency’s growing focus on international tax evasion.
The I.R.S. said that it would centralize operations at the core unit, which will now be known as the large business and international division,
Americans have always assumed that wealth comes and goes.
A poor person can work hard, become rich and pass his money on to his children and grandchildren.
But then, if those descendants do not manage it wisely, they may lose it.
“Shirtsleeves to shirtsleeves in three generations,” the saying goes, and it conforms to our preference for meritocracy over aristocracy.
This assumption is now being undermined, however, through the increasing use of so-called dynasty trusts.
From the moment, George W Bush and his controller, “Vice-President” Dick Cheney began the post 9/11 drumbeat for war against Iraq,
we argued it was NOT about oil – everyone knew the post-insane Kuwait invasion of 1990 sanctions had been a “success”,
at least in crippling the Iraqi oil industry for years, as well as millions of Iraqis, above all children –
but, even worse, about no-bid contracts for the former and future employers of Cheney and Bush,
