Wanted: Fed Policy Focused on Jobs for Americans Instead of Profits for Banks

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http://www.alternet.org/economy/wanted-fed-policy-focused-jobs-americans-instead-profits-banks


File photo shows members of the media reflected in the glass at the entrance to the JPMorgan Chase global headquarters on Park Avenue in New York pictured July 13, 2012

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The Big Six banks’ stock prices have outperformed the Dow’s rise by a factor of more than TEN times, since early 2009. Moreover, low to zero percent interest rates on citizens’ savings accounts have catalyzed depositors, pensions, and mutual funds to buy more stocks to make up for low returns on bonds and money market instruments, further buoying the stock market.

Quantitative Easing ‘QE’ entails buying bonds, not creating jobs

No matter how many articles and politicians claim the Fed is buying Treasury and mortgage-backed securities (MBS) to help the a) economy or b) unemployed, it isn’t true.

According to the Economic Policy Institute “the unemployment rate is vastly understating weakness in today’s labor market.” True, the official unemployment rate (called ‘U-3’ on the Bureau of Labor Statistics reports) has inched downward from a high of 10% in early 2009 to 7%. But, that’s because people have dropped out of the hunt for jobs. The number of these ‘ workers’ as EPI calls them, has risen with the stock market’s rise; that’s not a sign of a healthier employment situation.

If those workers were still ‘participating’ in the employment-seeking crowd, the adjusted U-3 unemployment rate would have hovered between 10 and 11.8% since early 2009. It is currently at 10.3%. In other words, it’s still pretty damn high.

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1. Dream..

.... on.