I was shocked to chat with two very smart, very busy professors who did not realize the state of
America's economy. For their benefit, and for others who don't have time to do their own research, here
are a few sources. This article will grow as my research continues.
1. The “Jobless and Wageless” Recovery from the Great Recession of 2007-2009: The Magnitude and
Sources of Economic Growth Through 2011 I and Their Impact on Workers, Profits and Stock Values.
(Center For Labor Market Studies, Northeastern University, Boston, Massachusetts, May, 2011)
Key Information and Concepts:
In the first quarter of 2011 (2011qI), there were 6.6 million fewer American jobs than there were in the
fourth quarter of 2007 (2007q4). (Chart 3, page 4).
Despite a 5.5% rise in worker productivity in the seven quarters since 2009q2 (when the economy
started growing again), total wages (the real aggregate annualized value of wages and salaries) in
2011q1 remain 3% below 2007q4, the start of the recession. From 2009q2 through 2011q1, total wages
declined $22 billion (.3%). (Page 11, 12, 16).
Over the seven quarters since the economy started growing again, corporate profits rose 40% from an
estimated annual $1,203 billion in 2009q2 to $1,668 billion in 2001q1. (Chart 11, page 17).
"The absence of any positive share of national income growth due to wages and salaries received by
American workers during the current economic recovery is historically unprecedented. The lack of any
net job growth in the current recovery combined with stagnant real hourly and weekly wages is
responsible for this unique, devastating outcome." (Page 20, 21).
Search "The “Jobless and Wageless” Recovery from the Great Recession of 2007-2009" to find the full
report. It contrasts the recovery from former recessions to the recovery from this one, an exercise
which shows clearly the result of the decline in American manufacturing.
2. Dave Gilson and Carolyn Perot, "It's the Inequality, Stupid," Mother Jones, March/April 2011.
Search: Mother Jones "It's the Inequality, Stupid". This is an article which presents charts showing that
workers have made no income gains in the past thirty years, although in the same period the incomes of
the rich have skyrocketed. The data presented is based on the research of prominent economists. This
article is well worth the time it takes to read it.
3. Richard McCormack, "The Plight of American Manufacturing," The American Prospect, December 21,
Search "The Plight of American Manufacturing" Richard McCormack. This excellent article gives
specifics on the outsourcing of American manufacturing that has caused such job loss. (You can also
find some of Richard McCormack's quotes on this website in the article No. 124,"Quotable Notables.")
(My comments: The loss of American jobs is unacceptable. It adds to the government outflow for
unemployment insurance benefits and welfare at the same time that it decreases critical revenue. Some
solutions are suggested on this website, see No. 122, Economic Misery 101.)
4. Rex Nutting, "How the Bubble Destroyed the Middle Class," MarketWatch, July 8, 2011. This is a
summary of the American middle class loss of half their wealth, $7.38 trillion. Nutting also explains why
the economy will be extremely slow to recover, particularly if there are insufficient new jobs. (Search
Rex Nutting Bubble).
5. Jesse Drucker, "Google 2.4% Rate Shows How $60 Billion Lost to Tax Loopholes," Bloomberg, Oct 21,
Key Information and Concepts:
This article shows how Google shifts income through Ireland and the Netherlands to a tax haven,
Bermuda. Google sent $5.4 billion in royalties for the use of their technology to Bermuda via this route
in 2008. By this income shifting process Google saved over $3.1 billion in taxes for the last three years.
Facebook and Microsoft also favor this income shifting strategy. Multi-national companies have been
able to successfully lobby against imposing taxes on the transferred funds. An estimate of $60 billion in
lost taxes may be conservative.
The Google loophole has stiffed the American taxpayers, who funded creating Google's technology.
"The U.S. National Science Foundation funded the mid-1990s research at Stanford University that helped
lead to Google’s creation. Taxpayers also paid for a scholarship for the company’s cofounder, Sergey
Brin, while he worked on that research." (Jesse Drucker, "Google 2.4% Rate Shows How $60 Billion Lost
to Tax Loopholes," Bloomberg, Oct 21, 2010).
"After three years of negotiations, Google received approval from the IRS in 2006 for its transfer pricing
arrangement, according to filings with the Securities and Exchange Commission. The IRS gave its
consent in a secret pact known as an advanced pricing agreement." (Ibid).
(My comments: If I was the bureaucrat who signed an agreement that deprived America of billions of
dollars in taxes, I'd keep it a secret too. My advice to everyone in Washington, get some backbone, the
country needs the money!) Search Google tax loophole.
6. MG Paul E. Vallely US Army (Ret.), "SUA Alert, Iranian Revolutionary Guard Activities," The Stand Up
America Blog, Sept. 3, 2011
"SUA believes strongly that Iran now possesses low yield nuclear war heads that can be mounted on the
Shehab missile and deployed on the oceans in container ships with the Russian provided Club K missile
launch systems. Primary goal of the Iranian Revolutionary Guard is to launch EMPs weapons on US
Coastal cities and freeze our national grid systems. Iran for the first time has recently deployed ships to
the Atlantic Ocean on maneuvers."
The Russian Club K missile launch systems are hidden in 40 foot containers and pose a threat to all
coastal cities since they can be launched from the deck of a ship. According to General Vallely, Iran was
the first purchaser of this missile launch system. Russia sells them on the open market for $15 million.
"Iran has started setting up uranium enriching centrifuges at Fordow, a fortified facility dug into a
mountain near the holy city of Qom... Iran had now accumulated more than four tons of low enriched
uranium and over 70 kilograms — more than 150 pounds — of higher enriched material. Those two
stockpiles give it enough enriched uranium to make up to six nuclear warheads, should it choose to do
Most of the information above was taken by General Vallely from a nine page report by the International
Atomic Energy Agency which was released Friday, Sept. 2, 2011. Search The Stand Up America Blog.
7. Mike "Mish" Shedlock, "Dissecting the Lies in Obama's $447 Billion "Shock-and-Awe" Reelection Ploy;
Dead-on-Arrival in Congress? Alternative Proposal Will Not Cost a Dime," Mish's Global Economic Trend
Analysis, September 09, 2011
Mish refutes Obama's job speech lies point by point, concluding:
"The US cannot afford a $447 billion boondoggle that will create zero lasting jobs, for no other purpose
than to get the president reelected. If Congress has any sense, this proposal will be Dead-on-Arrival in
the US house."
In place of Obama's job proposals, Mish offers a structural repair which addresses the underlying
problems. Here is what he has to say:
"Twelve Specific Recommendations
"1. Banks and bondholders should take a hit. Banks are not going to lend anyway so bailing them out at
the expense of taxpayers is both morally and economically stupid. End the bailouts, all of them, and
prosecute fraud, the higher up the better.
"2. Implement serious bank reform now, not 9 years from now. Banks should be banks, not hedge funds.
This proposal will necessitate breaking up banks. So be it.
"3. Scrap Davis-Bacon and all prevailing wage laws. Such laws drive up costs and have wreaked havoc
on many cities and municipalities, now bankrupt or on the verge of bankruptcy.
"4. Pass national right-to-work laws. Once again, we need to reduce costs on businesses and local
governments to spur more hiring and reduce costs.
"5. End collective bargaining rights of all public unions. The goal of unions is to provide the least
service for the most money. The goal of government should be to provide the most services for the
"6. Scrap ethanol policy and end all tariffs.
"7. Legalize hemp and tax it. Prison costs will go down, tax revenue will grow, and biofuel and fiber
research will expand as hemp produces very soft fibers.
"8. Corporate income tax rates should be lower in the US than abroad. Current policy encourages capital
flight and jobs flight via lower tax rates on profits overseas than in the United States. This penalizes
businesses that work only in the US, especially small businesses that do not have an army of lawyers
"9. Stop the wars and set a plan to bring home all US troops from Iraq, Afghanistan, and 140 or so other
countries. The US can no longer afford to be the world's policeman.
"10. Implement Paul Ryan's Medicare voucher proposal. It is the only way so far that anyone has
proposed that puts much needed consumer "skin-in-the-game" that will reduce medical costs.
"11. Legalize drug imports from Canada
"12. End the Fed and fractional reserve lending. Both have led to boom-bust cycles of ever-increasing
"Those are the kinds of things we need to do, not throw more money at problems. The latter does
nothing but drive up national debt and interest on the national debt for short-term gratification."
I agree with Mish on almost all of his proposals, but would add that I agree with the Democrats that tax
loop holes should all be closed. I believe all tax loop holes should be replaced by a very low corporate
income tax for manufacturing and a very low tax on the profits from investment in new or reopened
American factories. The rich have invested their tax savings in overseas manufacturing for the past
decades. America must have specific tax incentives to bring the jobs back home.
Further, I am aware of the need to restore fairness to our trade with China by forcing China to stop its
complex array of unfair trade practices. (See No. 126, "Communism 1, Democracy 0.")
When there are people like Mish (and me among others) who know how to fix America, why is unlikely to
happen? Regardless of political affiliation most politicians remain loyal to the financial system that has
destroyed half the wealth of the middle class since 2007.
That financial system caused the income of the super-rich (top 1%) to triple between 1979 and 2007,
during the same years, the bottom 80% made no real non-inflation income gains. (Source: Congressional
Budget Office). Since 2007, chaos created by that financial system has almost certainly caused the
income of the bottom 80% to shrink as the number of jobs has shrunk.
Why are politicians wedded to this pernicious financial system? It takes big money to get elected to the
high salary, big pension jobs in government. Most politicians are unwilling to bite the hand that feeds
8. Cresson H. Kearny, "Nuclear War Survival Skills," Oregon Institute of Science and Medicine, Cave
Junction, Oregon, 1987
This is a complete online free book, just click each chapter on the left hand side. The most useful
chapter is Ch. 1: The Dangers from Nuclear Weapons: Myths and Facts. Two very smart people assured
me yesterday that no one would survive a nuclear war. That's the first myth dispelled.
This is a must read book. Bible prophecy foretells that a war involving Israel will escalate into WWIII and
that WWIII will be a nuclear war. For 50 years Americans have been in denial about the possibility of a
nuclear war, but you and your family could very well survive - if you take the time to read this free on-
line book - and make preparations for your families survival. Knowledge is not only power, it is survival.