With the US trapped in depression, this really is starting to feel like 1932Sadly, Evan-Pritchard is overly optimistic in his view of the US. He is failing to fully look at the effects of immigration and guest worker programs.
The US workforce shrank by 652,000 in June, one of the sharpest contractions ever. The rate of hourly earnings fell 0.1pc. Wages are flirting with deflation.
California is tightening faster than Greece. State workers have seen a 14pc fall in earnings this year due to forced furloughs. Governor Arnold Schwarzenegger is cutting pay for 200,000 state workers to the minimum wage of $7.25 an hour to cover his $19bn (Â?15bn) deficit.
Can Illinois be far behind? The state has a deficit of $12bn and is $5bn in arrears to schools, nursing homes, child care centres, and prisons. "It is getting worse every single day," said state comptroller Daniel Hynes. "We are not paying bills for absolutely essential services. That is obscene."
Roughly a million Americans have dropped out of the jobs market altogether over the past two months. That is the only reason why the headline unemployment rate is not exploding to a post-war high.
Let us be honest. The US is still trapped in depression a full 18 months into zero interest rates, quantitative easing (QE), and fiscal stimulus that has pushed the budget deficit above 10pc of GDP.
The share of the US working-age population with jobs in June actually fell from 58.7pc to 58.5pc. This is the real stress indicator. The ratio was 63pc three years ago. Eight million jobs have been lost.
With the US trapped in depression, this really is starting to feel like 1932 By Ambrose Evans-Pritchard,The Telegraph(UK), Jul 4, 2010
This is the context in which whores like Barack Obama, Mitt Romney and Jeb Bush are advocating greatly expanding US immigration and guest worker programs. Hint:it takes more than money to win elections, guys. Stuff like a path to citizenship could significantly pack voter rolls. However, that is going to take some time. US elites may not have that kind of time.