Update from the Land of Milk & Honey

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Shorenobyl, gli USA gia' nell'87 soffrivano il nucleare

Shorenobyl, gli USA gia’ nell’87 soffrivano il nucleare

Hey man what a difference it makes taking a sabbatical! The last time I posted something to this blog I lamented the dismal state of the economy. Just a bit more than 5 months later things are much better, or this is what are telling us various economic analysts.

Today, March 5th, 2010, unemployment figures are out, and guess what? They didn’t move. Allelujah! Not a bit up nor a bit down. Since last month we lost just a mere 30,000 jobs, but the overall rate stayed at 9,7 per cent. This is positive, the outcome must be due to the fact that 6 million of Americans were so discouraged that decided to stop looking for a job altogether, or because unemployment rates among blacks went past 17 per cent or maybe because the ranks of the underemployed just swelled by a million. Or Wait, wait…I got a better answer. It is because of California. This time the pesky left coasters instead of contributing to the country’s woes decided to absorb a larger share of the nation misery. In the Golden State the unemployment floats at around 12 per cent, and this when one takes into account the Bay Area of San Francisco, were a couple of technological revolutions afoot are providing work to scores of young migrants. But this is another story.

Things are much better also on the corporate side. According to the WSJ, non-financial companies have more than a trillion dollar of cash reserves on hand to spend as they wish. Things like…taking over their competitors, buying back their stocks so to increase shareholders dividends, paying salaries to executives: Goldman Sachs this year doled about 16 billion bonuses to its corporate wizards, the equivalent of almost 600 thousand dollars for each employee. How do they manage to stash away such a huge wad of cash? But firing people of course, and cutting capital expenditures. Thanks to those wise moves we now have a smaller production base and an older industrial infrastructure, which in the future may need to be saved by a rescue plan, but this too is another story.Da Novembre la Goldman Sachs non assume piu' rischi inutili

In the mean time, the economy is solidly out of the tunnel of the Great Recession, or on the recovery paths—as stated by many economists and public policy wonks. Banks also are safe, and hedge funds are back at speculating. Just look at how Goldman Sachs screwed Greece up (in my article on L’espresso of this week), and to the friendly dinner hedge fund managers had recently in a New York penthouse to hammer a common strategy to organize a run on the Euro; this too can be read in a side bar to my article in today’s L’espresso.

But wait Goldman isn’t the only bank thankfully back at its core business, also Citi—which received a few hundred billion dollars form the TARP program—is doing good, they got almost 250 billion in cash reserves.

And on main street? There too things haven’t moved an inch.

About Six million of American families are still going to loose their house this year. Unemployment as we said is staying steady at almost 12 million. School tuitions are up. At UC Berkeley—which is being turned into a publicly funded university for the kids of the rich worldwide—they rose 31 per cent in one semester. Students, and their families took it in stride, and yesterday were cheering in the streets of California. We sent 30 thousand troops more to Afghanistan, and we’re clearly winning the war: in a little while we won’t need to send our soldiers over to that inhospitable region to fight the Talebans and al Qaeda, we’re starting to fight them here at home. And yes we’ve finally found the answer to our need for clean and politically unassailable energy needs, we will build a few new nuclear plants. It feels really good to be back to the future in the land of milk and honey.

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