" U.S. Expansion Poised for Longevity" - out of touch copy editors strike again

[geckosfeet]

There may be an expansion of sorts going on, but it is NOT happening equitably across the U.S. Based on the content of this article (and most peoples daily life experiences) the expansion is benefiting corporations and the investor class. Those few people lucky enough to have jobs that allow them to contribute to a 401k also are getting some crumbs from the table.

U.S. Expansion Poised for Longevity

I was reading the piece (somewhat optimistically) when a couple things jumped out at me:

"If the economy keeps expanding for the next three to five years, earnings will go up and the stock market will go up," said Allen Sinai, chief executive officer of Decision Economics Inc. in New York. He said the Standard & Poor’s 500 Index may rise as high as 1,750 later this year and could hit 2,000 in 2015. The stocks benchmark was at 1,643.38 at 4 p.m. on June 7.

...

Policy makers would be hard-pressed to cope with the fallout of a sudden shift, Zandi added. Short-term interest rates controlled by the Federal Reserve already are near zero, and the nation’s budget deficit is still high by historical standards. The $642 billion shortfall that the Congressional Budget Office sees for 2013 compares with about a $200 billion annual average over the past half century.

...

The Fed currently is buying $85 billion of assets each month in an effort to keep long-term interest rates down. It also has promised to keep short-term rates near zero as long as unemployment remains above 6.5 percent and the outlook for inflation doesn’t exceed 2.5 percent.

On the face of it, one might think this a positive thing, even when considering the abstract nature of market indices. As I read that it really started to sink in, that monetary policy is not benefiting people. In fact, it is designed in a way that gives a head nod towards creating an "expendable working class" that exists to service corporate interests. Think of it - federal monetary policy that encourages corporations and the rich to keep getting richer by keeping the less wealthy in state near starvation and desperation. This fed policy all but openly declares its disdain for people.

Read this again:

The Fed currently is buying $85 billion of assets each month in an effort to keep long-term interest rates down. It also has promised to keep short-term rates near zero as long as unemployment remains above 6.5 percent and the outlook for inflation doesn’t exceed 2.5 percent.

What incentive do corporations have for hiring? None. Zero. Zippo, zilch. They benefit from this policy and people and families suffer the fate of unemployment and underemployment.

Corporations are getting free money from the fed. But only as long as the unemployment rate stays above 6.5%, an historically high number, but still lower than what we have today. But stock markets are flying high and corporations are raking it in on that front as well. And unemployment remains stagnant. Corporations refuse to hire people to boost output, which would be consumed by people with jobs - simply because fed monetary policy encourages them not to hire people.

Fed monetary policy is blatantly designed to benefit corporate bottom lines and the wealthier investor class. I am really getting sick of this fed.

U.S. Expansion Poised for Longevity