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
Here are the three biggest economic myths -- the things everything thinks they know about the economy
that just ain't so.
Myth 1: Unemployment is below 10%
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.
举例来说，请想想那些处于最佳就业年龄的男性。对美国劳工部(Labor Department)一项数据的分析显示，美国在25至65岁年龄段的男子有7,900万人。其中22%(近1,800万人)完全没有工作(上世纪50年代时这一比率不足10%) 。而且这部分人中还不包括那些因得不到全职工作而打零工的人。如果把这部分人包括进去，美国处于最佳就业年龄段的男子约有四分之一没有全职工作。
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.
华盛顿经济和政策研究中心(Center for Economic and Policy Research)的经济学家贝克尔(Dean Baker)说，实际情况甚至可能比这还要糟。他的研究显示，有越来越多美国男性，特别是那些居住在教育状况不佳、城市和少数民族社区的人，干脆就没被包括进这些就业统计数据中去。
Myth 2: The markets are panicking about the deficit
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.
But they're not. It's that simple.
If they were, the interest rate on government bonds would be skyrocketing. That's what happens with risky debt: Lenders demand higher and higher interest payments to compensate
them for the dangers.
But the rates on U.S. bonds have been plummeting recently. The yield on the 30-year Treasury bond down to just 4%. By historic
standards that's chickenfeed. Panicked? The bond markets are practically snoring.
They aren't seeing
inflation either. On the contrary
, they're saying
it will average just 2.3% a year over the next three decades. That's the gap between the interest rates on inflation-protected Treasury bonds and the rates on the regular bonds. By any modern standard the forecast
is low. Instead of worrying about inflation, some are starting to worry about something even more dangerous: deflation, or falling prices.
If that takes hold, cutting spending and raising taxes would be a bad move.
It's certainly possible the lenders buying these bonds are being foolish. And it's worth noting that the Treasury market is also subject to political distortions, because foreign are among the heavy buyers of bonds. So it's worth treating its apparent
verdicts with some caution
. Nonetheless, the burden of proof, as usual, is on those who argue the market is wrong.
Myth 3: The U.S. is sliding into 'socialism'
For a system
allegedly being strangled in its bed, U.S. capitalism
seems to be in astonishingly robust
Numbers published by the Federal Reserve a few weeks ago show that corporate profit margins have just hit record levels. Indeed. Andrew Smithers, the well-regarded financial
consultant and author of 'Wall Street Revalued,' calculates from the Fed's latest Flow of Funds report that corporate profit margins rocketed to 36% in the first quarter. Since records began in 1947 they have never been this high. The highest they got under Ronald Reagan was 30%.
美国联邦储备委员会(Federal Reserve)几周前发布的数据显示，美国企业的利润率屡创历史新高。事实上，深受尊敬的财务咨询师史密瑟斯(Andrew Smithers)研究美联储最新资金流动报告后得出结论说，今年第一季度美国企业的利润率飙升至36%。自从1947年有这项统计数据以来，它还从未这么高过。在里根(Ronald Reagan)总统当政时期该数字最高也只达到过30%。
The picture is also similar when you excludefinancial
The Dow Jones Industrial Average is above 10,000. Small company stocks have rallied astonishingly since early last year: The Russell 2000 index is back to levels seen not long before Lehman imploded. Meanwhile Cap Gemini's latest Wealth Report notes that the North American rich saw an 18% jump in their wealth
道琼斯工业股票平均价格指数已升至10,000点以上。自从去年初以来，小型股已出现了令人惊异的上涨。罗素2000指数回升到了雷曼兄弟公司(Lehman Brothers)垮台前不久的水平。咨询公司凯捷(Cap Gemini)最新发布的财富报告也指出，北美地区富人的财富去年跃升了18%。
spending, about 25% of the economy
this year, is expected to fall to about 23% by 2013. In 1983, under Ronald Reagan, it hit 23.5%. In the early 1990s it was around 22%. Some socialism.
These days, three-fifths of the entire budget
goes on just three things: Insurance for our old age (through Social Security and Medicare), defense, and debt interest.
Conservatives don't want to cut the $700 billion-plus we spend on defense. We can't cut debt interest payments. And while Social Security and Medicare certainly need reform
, the main 'problems' are simply rising life expectancy and health care demands. If we didn't provide for the insurance through our taxes we'd have to do it individually.
What about the rest of the budget
? It's jumped from around 7% of GDP a few years ago to about 10% now. Out of control? It's been in the 6% to 9% range for decades. It's forecast
to fall to about 8% again in a few years.
So much for a revolution. But here comes the counter-revolution just the same.