It seems that every sign of anything moving up in any statistical reports is being looked at or interpreted as a sign of a recovery.

There are of course seasonal and other factors to consider. November and December for instance, typically allow temporary hiring to take place, and retail sales pick up due to the gift buying season. So seeing an uptick in these statistics is really stretching it a bit to say that the recovery is here!

Housing starts are up.....due to the unprecedented tax credits for home buyers and due to the significant reduction in the price of new homes being available. Also, the statistics do not consider or compare if the home being built consists of 900 square feet for sale at $100,000, or 9,000 square feet for sale at $1,000,000. There is a significant difference if we are building 900 square foot homes or 9,000 square foot homes.

The most important bottom up recovery has to take place in key industries which are a sign of life for the rest of the economy such as steel production, manufacturing, autos, housing, and other heavy industries.

There appears to be no such trend. Even Nevada casinos are mothballing rooms due to lack of demand in what was considered a recession proof industry.

Every piece of pending or planned legislation in Congress is attacking industry and business, especially small business which is the major employer in the country. There is absolutely no reason for businesses to expand right now, and in fact the opposite is true---productivity is being increased....with less employees, not with added employees.

The economy is weak enough to keep inflation in check but strong enough to increase the pace of home construction and raise hopes for a sustained recovery (ha).

That was the picture sketched Wednesday by government data showing an economy growing, however slowly.

Higher energy prices sent overall consumer prices higher in November. But after stripping out volatile energy and food prices, inflation disappeared last month. That gives the Federal Reserve, ending a two-day meeting Wednesday, leeway to hold its key interest rate at a record low to aid the recovery.

At the same time, home construction rebounded in November after a setback in October. And applications for new building permits -- a gauge of future activity -- rose more than economist had predicted. A housing recovery is critical to the overall economy.

Also Wednesday, the government said its broadest measure of foreign trade posted a sharp increase in the July-September quarter, signaling higher demand for foreign goods. That, too, is seen as a sign of a strengthening economy.

yes, but not the USA economy!

The current account is the broadest measure of trade because it includes not only trade in goods and services but also investment flows among countries.

For last month, the Consumer Price Index, the most closely watched inflation barometer, rose 0.4 percent. That was up from a 0.3 percent increase in October, the Labor Department reported. But "core" inflation, which excludes energy and food, was flat, signaling that inflation isn't rising through the economy. It was the first time core inflation was unchanged after 10 straight monthly increases.

"Aside from the surge in energy prices ... there were few signs of any inflationary pressures," said Paul Ashworth, economist at Capital Economics Ltd.

In the months ahead, companies will likely find it hard to raise prices because consumers are expected to remain cautious, the job market is weak and the recovery is sluggish.

Fed Chairman Ben Bernanke says he thinks slack in the economy -- meaning idle plants and the weak job market -- will keep inflation in check. The Fed is expected Wednesday afternoon to announce that it's leaving interest rates at a record low. It may also strike an upbeat note about the economy's progress.

The government said energy prices rose 4.1 percent last month, reflecting more expensive fuel oil and gasoline. Energy prices, though, are already in retreat. Oil prices are down about 10 percent this month.

Food prices, meanwhile, edged up 0.1 percent for the second straight month. Falling prices for dairy products and nonalcoholic drinks helped blunt small increases for meat, cereals and baked goods, and fruits and vegetables.

Elsewhere, prices for clothing fell as retailers struggled to lure shoppers. Costs for recreation and for shelter dipped. But prices for airline fares, new cars, medical care and tobacco products all rose.

The uptick in inflation last month, however slight, ate into Americans' already-weak wages. Average weekly earnings, adjusted for inflation, dipped 0.7 percent from November 2008, according to a separate Labor Department report Wednesday. It was the first such drop this year.

On Tuesday, the government said its Producer Price Index, which measures the costs of goods before they reach stores, jumped 1.8 percent in November. That was more than double the gain analysts had expected. Higher-priced energy products and trucks drove the increase.

In the Commerce Department's report on housing starts, it said construction of new homes and apartments rose 8.9 percent in November to a seasonally adjusted annual rate of 574,000 units. The gain represented strength in all areas of the country, though the rise was slightly lower than economists had expected.

Applications for new building permits rose 6 percent, a stronger showing than predicted. Again there is no distinction as to the price of the homes which are being built, I bet their value is much lower than traditionally.

The government is spending an unprecedented amount to prop up the housing market. The money includes about $111 billion by year's end to shore up mortgage finance companies Fannie Mae and Freddie Mac -- plus roughly $15 billion for a tax credit for homebuyers.

In addition, the tax credit is being extended until spring at a cost of $8.5 billion. And the cost of bailing out Fannie and Freddie could ultimately soar as high as $300 billion, according to Barclays Capital.

Separately, the Fed has helped keep mortgage rates down by spending $1.25 trillion to buy mortgage-backed securities. These purchases are expected to be completed by spring.

For the third quarter, the current account deficit in goods grew to $132.1 billion, up from $115.5 billion in the second quarter. At the same time, the U.S. surplus in services -- such as airline travel, shipping and financial services -- widened to $34.8 billion from $34.2 billion.

Exports of products rose 7.2 percent, driven by automotive products, heavy capital goods and consumer products. But imports of goods rose at a faster rate, led by foreign oil and autos.

The rise in exports has been helped by a decline of about 10 percent in the value of the dollar against major currencies. A weaker dollar makes American products cheaper for foreigners to buy, and the value of our savings accounts and other assets denominated in US Dollars is worth less.


Wow, national unemployment is now only 10%...or 17.2% real unemployment! This is good news?

Contrary to the top line reporting, taking a real analysis in reading the reports, the job losses continue in the highest paying jobs like manufacturing and construction! They are growing, not falling, contrary to the fortune tellers who see some type of magical economic turnaround.

To use my company as an example, we routinely add 15-20 employees during November and through the end of December to help during the busy season...after these two months we do not need them anymore. This year, we actually hied for these $10 an hour jobs with no other benefits 10 of the people who are laid off from MANAGEMENT POSITIONS!

In the past we hired housewives, now we got people with management degrees and experience. We will be offering them an opportunity to stay on in a fully commission position if they want to continue in January.

This is why the unemployment went down in November. It will spike up in january and onwards.

In the state I am located in, it remains very high due to unions controlling many of the factories in the area, I am non-union and thus am actually still profitable.

If under the new health plan I would be forced to provide health benefits, I would not hire these workers.


Recently released information revealed that about 8% of the Presidential advisers who advise him on all matters including economic matters, have ANY previous business experience! Yet, these advisers, are advising!

Apparently, no president in the last 100 years had anything close to this anemic wonder we are diving head-first into financial/fiscal government and business disaster.

What can they advise on relating to business? They were never in a business, never operated a business, never made a payroll, etc..

So far the only advice was to raise taxes on the employers and high earning individuals (who pay literally all the taxes anyway right now.) This is not an economic policy, but rather income re-distribution that does nothing to create jobs.

At present about 115 million people are employed by small business at 5 million individual firms.

The needs of these firms are totally overlooked, as evidenced by the fact that the CHAMBER OF COMMERCE, was not represented at the JOB SUMMIT called by the President.

Based on the present state of economic affairs, and the lack of experience by the Presidential advisers, expect that the next 3 years will be very challenging for businesses, employees and the economy.


Pay Excesses

* Federal civilian wages averaged $79,197 in 2008, more than 50% greater than that of the average private sector employee’s wages of $49,935.
* Pay in the public sector climbed 53.7% from 2000 to 2008 for federal civilian workers while wages in the private sector rose just 28.5% over the same time period.
* The U.S. government issued employee bonuses of some $370 million last year.
* The average state and local government employee earns 29% more than the average private sector employee.
* More than 40% of city employees In Vallejo, California, had salaries greater than $100,000 in 2008. In May 2008, Vallejo filed for bankruptcy.
* Taxpayers support some hefty teacher salaries in Illinois. For example:
o a physical education teacher earning $163,000 (more than 400 earn in excess of $100,000)
o an English teachers earning $164,000 (more than 300 earn in excess of $100,000)
o a driver education teacher earning $170,000 (94 earn in excess of $100,000)
* In New York, state agency workers collected more than $459 million in overtime, with one aide clocking in 2,455 extra hours, nearly tripling her base salary from $38,500 to $110,841.

Benefits Disparity

* When wages and benefits are combined, federal civilian workers averaged $119,982 in 2008, twice the amount of $59,909 which workers in the private sector averaged for wages/benefits.
* The value of benefits for federal civilian workers averaged $40,000/year, four times the value of benefits that the average private sector employee receives.
* Only 12%of retirees from the private sector have defined benefit pensions to supplement Social Security. Their average annual pension is $13,083, and they are not eligible for full Social Security benefits until their late 60s.
* BUT…. The majority of public sector workers have pension plans that allow them to retire 10-25 years earlier with benefits many times the retirement payout that Social Security would provide.
* In San Jose, California, 256 retired officers and firefighters and 34 other city workers collect $100,000+ pensions, and all city retirees get free healthcare.
* Florida taxpayers foot the bill for $1.44 billion in the past year toward healthcare coverage for state employees who also enjoy perks like free college classes and financial consulting.

Double-Dipping/Spiking/Pension Abuse

* More than 4,000 state employees are double-dipping in Arizona.
* In Florida, a police commander in Delray Beach retired at age 42 earning $90,000 a year. He now collects a pension of $65,000 and earns a salary from his new job at a nearby beach.
* There are at least 9,000 public employees and 200 elected officials double dipping in Florida.
o A Miami-Dade community college president got a lump sum of $893,286 and earns $441,538 annually, in addition to his $14,631/month pension.
o An Indian River State College president got a lump sum of $585,000 and earns $286,470 annually, in addition to his $9,823/month pension.
o A Northwest Florida State College president got a lump sum of $553,228 and earns $228,000 annually, in addition to his $8,803/month pension.
* In Connecticut, there were 29 retirees collecting a six-figure pension and still collecting a paycheck as of 2008.
* In San Francisco, California, the prevalence of “spiking”, or boosting pension benefits via final work year promotions, has resulted in over half of the police and firefighters in the past decade earning pensions in excess of the wages they earned while actively working.
* In Arkansas, there are at least 144 employees on the state payroll who have retired and returned to the same job after less than two months since June 2001.
* Public school teachers in New York are able to retire at 55 with pensions sometimes larger than their annual salaries by cashing in unused sick and vacation time. Nearly 700 former NY teachers and administrators receive pensions over $100,000.
* The highest paid city official in California was earning more than $500,000 as a city administrator when he was arrested. He was charged with embezzlement of city funds. Still, he continued earning a $500,000/year pension, even as he waited for his trial.
* Several New York state employees are collecting pensions despite being convicted of crimes. Some examples include:
o A Buffalo detective convicted of stealing from suspected drug dealers and sentenced to 30 months is collecting a $54,751 pension.
o A state comptroller convicted of defrauding the government and indicted in a kick-back scheme involving state pension investments is still collecting a $166,467 pension.
o A teacher convicted of sexually abusing members of the Boy Scout troop he led and sentenced to 50 years is still collecting a $52,073 pension.
o A detective convicted of orchestrating mob hits and sentenced to life is collecting a $63,000 pension.

Employment Situation

* The private sector lost some 5.2 million workers while government grew by 238,000 workers between July 2008 and July 2009.
* Since the recession began in December 2007, private sector employment has declined 5.74 percent, while government payroll has grown 0.83 percent.

Growing Debt and Unfunded Liabilities

* The total public debt is now at $11.8 trillion.
* Interest payments alone on debt came to $452 billion in 2008.
* The Congressional Budget Office states that by next year America’s debt will exceed 60% of its Gross Domestic Product (GDP). In 2023, our debt will exceed 100% of the GDP.
* The unfunded liability for Social Security is $17.5 trillion in 2009, according to the National Center for Policy Analysis. Medicare Part A is underfunded by $36.7 trillion, Part B by $37.0 trillion and Part D by $15.6 trillion, bringing the total unfunded liability for Social Security and Medicare to some $106.8 trillion!
* The unfunded liability for state and local pension plans was pegged at $400 billion, but American Enterprise Institute scholar Andrew Biggs estimates the actual amount of unfunded liability is more than $3.5 trillion if analyzed in the same manner as private sector plans.

Government’s Decisions for Dealing with Budget Shortfalls

* Colorado has proposed to free 3,100 inmates six months early and end the oversight of some parolees to save almost $19 million toward the state’s $318 million budget deficit.
* Arizona legislators are considering selling their own headquarters, the state fairgrounds and some 30 other state-owned properties to meet their budget shortfall. They could make about $735 million on the combined sales but would then lease back the properties, costing $1.2 billion over the next 20 years.
* In Texas, the city of Dallas will likely cut funds to public parks, libraries and recreation centers, resulting in less maintenance, fewer books, shorter hours and program cancellations.
* In Illinois, the city of Chicago made a $1.15 billion deal to privatize the city’s parking meters via a 75-year lease to ease Chicago’s budget deficit, but that money will be exhausted in 2010.
* Indiana privatized its toll roads to Australian and Spanish investors in 2006 for the next 75 years for a lump sum payment of $2.8 billion, but the one-time infusion of cash, meant to cover the state’s highway funding deficit without new taxes, will only cover the shortfall for 10 years.

The above are just a few examples of the more than 2,000 entries in The Free Enterprise Nation database.