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Brett Arends' ROI
June 29, 2010, 12:01 a.m. EDT · Recommend (8) · Post:
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BP CEO may be trying to get fired, really
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David Carey to put his stamp on Hearst
By Brett Arends, WSJ.com and MarketWatch
BOSTON (MarketWatch) -- The counter-revolution is underway.
The G-20 calls for members to slash their budget deficits. The U.S. Senate ices further aid for the unemployed. The head of the Business Roundtable slams President Obama for undermining American capitalism. Wall Street succeeds in watering down reform.
Depending on your politics, you'll love this or hate it.
But there's just one problem.
We're still living in a fantasyland. Most people have no idea what's really going on in the economy. They're living on spin, myths and downright lies. And if we don't know the facts, how can we make intelligent decisions?
Economists worry that jobs, consumer confidence readings won't support hope for economic recovery, Barrons.com's Bob O'Brien reports.
Here are the three biggest economic myths -- the things everything thinks they know about the economy that just ain't so.
What nonsense that is. The official jobless rate, at 9.7%, is a fiction and should be treated as such. It doesn't even count lots of unemployed people. The so-called "underemployment" or U-6 rate is an improvement: For example it counts discouraged job seekers, and those forced to work part-time because they can't get a full-time job.
That rate right now is 16.6%, just below its recent high and twice the level it was a few years ago
And even that may not tell the full story. Many people have simply dropped out of the labor force statistics.
Consider, for example, the situation among men of prime working age. An analysis of data at the U.S. Labor Department shows that there are 79 million men in America between the ages of 25 and 65. And nearly 18 million of them, or 22%, are out of work completely. (The rate in the 1950s was less than 10%.) And that doesn't even count those who are working part-time because they can't get full-time work. Add those to the mix and about one in four men of prime working age lacks a full-time job.
Dean Baker, economist at the Center for Economic and Policy Research in Washington, D.C., says the numbers may be even worse than that. His research suggests a growing number of men, especially in deprived, urban and minority neighborhoods, have vanished from the statistical rolls altogether.
To hear the G-20 tell it, the U.S. and other top countries had better slash those budget deficits before the world comes to an end.
And maybe the markets should be panicking about the deficits.
Brett Arends is an award-winning financial columnist with many years experience writing about markets, economics and personal finance in Europe and the U.S. He has received an individual award from the Society of American Business Editors and Writers for his financial writing, and was part of the Boston Herald team that won two others. He was educated at Cambridge and Oxford Universities, and has worked as an analyst at McKinsey & Co. He is a Chartered Financial Consultant (ChFC) and Accredited Asset Management Specialist (AAMS). His latest book, "Storm Proof Your Money," has just been published by John Wiley & Co.
Conde Nast's loss is Hearst Corp.'s gain, writes Jon Friedman.
3:05 p.m. June 28, 2010
- doomstar | 11:39 p.m. June 28, 2010
"The three biggest lies about the U.S. economy http://on.mktw.net/9v9xQ4" 11:18 p.m. EDT, June 28, 2010 from MKTWArends
"BP CEO may be trying to get fired, really http://on.mktw.net/9PQ5KY" 12:02 a.m. EDT, June 22, 2010 from MKTWArends
"What Obama won't tell you tonight http://on.mktw.net/9qP7LS" 1:15 a.m. EDT, June 15, 2010 from MKTWArends
"Five ways the jobs numbers are worse than bad http://on.mktw.net/cBH25x" 11:50 p.m. EDT, June 7, 2010 from MKTWArends
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