Update: May, 2013

    In April, total non-farm jobs increased by 165,000 while March’s first estimate of 88,000 was revised up to 138,000 and February’s 268,000 revised up to 332,000.  This good news from the private sector shows the recovery, even if weak, is still on track.  This is despite continued  losses of government jobs. The official unemployment rate is at 7.5% with a slight decline in the civilian labor force at 63.3% from January’s 63.6%, with 835,000 discouraged workers in April, down by 113,000 from a year earlier.  The end of the payroll tax cut and  the first effects of the sequester started to cut demand while 11,000 government jobs were cut in April, 16,000 cut in March and 13,000 cut in February 2013.  The some ten percent of Americans who gained from the stock markets rise were doing well; the rest who rely on jobs for their income had their spending constrained.  While hard to find in the BLS statistics, the total of state and local government jobs in April was 21,844,000.  Let us remember when looking at employment in the USA, that as of December 2011, 21,950,00 jobs were those in government at all levels. By January 2013, job cuts reduced this total to 21,858,000.  Q1 of 2013 GDP-growth of 2.5% was better than the revised 0.4% for Q4 of 2012.  Cuts in government jobs (mostly in the Pentagon) should remind Congress of the consequences of budget cutting and the sequester – just as we have witnessed in Europe.

Since December 2008, over 6.3 million jobs in government were lost.  Congress still debates the spending cuts they mandated across the board in the sequester and how they fall on our most vulnerable, politically les-influential citizens.  We will need to balance further government job cuts with hopefully more gains in the private sector.  Ethical Markets Green Transition Scoreboard® now shows $4.1 trillion of private investment in green sectors worldwide since 2007.  As more cuts in government jobs are deemed necessary, the need to continue growing new jobs in renewable energy, smarter infrastructure and cities, as well as in R&D and education will be critical. The official unemployment rate is 7.5% with labor force participation edged lower at 63.3 % with the number of unemployed persons at 11.7 million. Climbing out of the 2008 financial crisis where GDP dropped by 9% has proved to be the long climb back most analysts expected.  For 2012, the private sector added 2.2 million new jobs.  The re-election of President Obama was a vote of confidence, even though few can acknowledge a key problem: the US domestic money supply which is created by banks lending has collapsed.  Since our money is created by private banks when they make loans, after 2008, lending dried up and securitization of loans which had ballooned during the housing bubble also collapsed.  

Recognizing the problem in the 2009 $789 billion stimulus (mostly individual tax cuts, infrastructure and help to states) did create and save over 1 million jobs along with 1.1 million saved in the auto company bailouts as reported in The New New Deal.  The money supply shortfall remained which Fed Chair Ben Bernanke recognized in his QE1, QE2 and other unusual measures of taking toxic assets onto the Fed's balance sheet.  The problem was that his reliance on the textbook "trickle down" model of giving almost free money to the big banks at the Fed's discount window, never trickled down to Main Street.  Instead, the old theory failed to account for the globalization of finance and that the banks sent most of the QE's new money offshore, some creating jobs in China and Brazil, while most ended up in speculation on European bonds, derivatives, commodity ETFs, rising food prices and unwanted asset bubbles in BRIC countries.  A new computer model now links speculation to food price spikes, (“The Economics of Curbing Speculation in Food”).  The lack of progress at the UN COP 18 Climate Conference in Doha unfortunately augers more mega-storms like Sandy and Bohpa which hit the Philippines in early December.

While with the Fed’s continuing QE3 bond purchases help the US economy give a better showing compared with many other countries in Europe which are now in recession, the USA faces continued global uncertainty and unresolved issues in Europe.  European leaders, after getting banks to take a 75% haircut on their Greek debt narrowly avoided these write-downs which might have triggered payment on credit default swaps. This is the underlying danger to the euro area, with Greece a minor pawn in this larger game.  The ECB, May 1, 2013, lowered its interest rate to 0.5% and began its own brand of quantitative easing – to the delight of global markets.  Spain appears to need a bailout.  Italy’s inconclusive election illustrated the limits of austerity.  Cyprus is the latest problem and produced the most radical bail-out plan, focused on haircuts to bank depositors as well as their equity-holders (“It Can Happen Here: the Confiscation Scheme Planned for US and UK Depositors”).  This has resulted in a 2-tier euro – as well as the flight to bitcoins and many other alternative investments. 

Britain’s central bank increased its support of its banks following ECB’s hefty support of EU banks in December, but these banks are hoarding the new cash rather than the hoped-for lending to the real economy.  Lord Adair Turner, Britain’s preeminent financial regulator called for an end to allowing private banks to create the nation’s money supply at interest and recommended this vital function should be returned to Britain’s public treasury (video).  A similar story in the USA shows stock markets, consumer confidence and spending rising while jobs and incomes stagnate and companies continue to hoard cash.  Will central banks, including Ben Bernanke, rethink their "trickle down" policies and focus on the real economies?  Deeper reforms of finance are needed as exposed in Broken Markets, Dark Pools and Bailout. These were discussed at a conference, “Fixing the Banking System for Good” at the Philadelphia Federal Reserve, April 2013.

Former US FDIC chair Sheila Bair, author of Bull by the Horns, joined UN Secretary General Ban Ki-moon in announcing support for a financial transactions tax of well below 1%, to help curb high-frequency trading, echoing growing calls in eleven EU countries, including Germany, France and pension funds in France and Holland.  In January 2013, the European Union approved a 0.1% financial transaction tax for member countries.  The focus will be as a “cancellation fee” since high frequency traders place thousands of orders each millisecond then cancel most of them immediately.  These taxes will curb this speculation and help raise some $400 billion annually for public needs.  Pushback by banks and the mainstream financial press continues.

The global recovery has weakened, leaving unemployment at unacceptable levels, especially in Europe, while the LIBOR scandal and others in financial markets have increased and commodity price swings have put growth at risk. Nowhere in the G-20'sMexico deliberations was there any definition of "growth" although it was mentioned countless times in the final Communiqué. Yet mis-measurement of "growth" perpetuated by GDP still causes mis-pricing of sovereign bonds, energy, food and most goods due to externalizing of social and environmental costs and business models still based on "profits" based on passing on such unrecorded costs to taxpayers and future generations. 

Measuring societies' "progress" beyond GDP became a hot topic at Rio+20, and Ethical Markets’ 2013 “Beyond GDP” survey by Globescan in eleven countries, co-sponsored by the Institute for Chartered Accountants of Britain and Wales (ICAEW) and Tomorrow’s Company (www.tomorrowscompany.com) followed the 2007 and 2010 results in continued finding of wide majorities favoring addition of indicators of health, education and environment (www.ethicalmarkets.com) to be released late May 2013.  The Inclusive Wealth Index (IWI) devised by the UN University, the International Human Development Program and UNEP, while advancing considerably beyond GDP, suffers from too much baggage from obsolete economics: relying on prices and willingness-to-pay, while acknowledging their inaccuracies due to "externalities."  The economics team fail to examine the deeper problems with price systems, inflation, money-printing and the politics of money-creation and credit allocation – arguably deeper sources of un-sustainability in global financial systems (see the Transforming Finance statement).  However, IWI is a step forward. 

Another effort is London-based new economics foundation's Happy Planet Index (HPI), which has garnered much publicity and helped focus on the need to correct GDP.  Launched in 2006, it capitalizes on the Gross National Happiness measured in Bhutan which has captured the imagination of millions and received widespread publicity, including at the UN and Rio+20.  However, "happiness" is open to widely different definitions, is subjective and culturally-biased while being appropriate for a small Buddhist nation.  The approach chosen by the Canadian Index of Wellbeing (CIW) (I serve on its Advisory Board) measures outcomes, an approach we take as well as avoiding aggregation of the many "apples" and "oranges" aspects of well-being into a single index.  The Ecological Footprint, a well-researched, science-based approach used by the WWF in its Living Planet Index is now the pre-eminent measure of ecological systems and is employed in the HPI along with official life-expectancy statistics.  Our Ethical Markets Quality of Life Indicators, pioneered by Calvert and Hazel Henderson cover 12 unbundled indicators "dashboard" mounted on web-platforms which were launched in 2000.  This “dashboard” model is now the preferred approach of the OECD's Better Life Index and in measuring progress toward the UN Millennium Development Goals (MDGs), pioneered by statistician Jochen Jesinghaus.

The G-20's Mexico Communiqué recognized the need to go beyond GDP, grow a greener world economy, curb the 20 too-big-to-fail banks and commodity speculation; examined high-frequency trading and the now widespread support for global financial transaction taxes ("FTT: The Commonsense Approach"), as well as phasing out subsidies on fossil fuels.  These still unfairly compete against the development of the "Green Economy" which was endorsed by the G20.  These cleaner, renewable energy companies are covered by Ethical Market's research (see the Green Transition Scoreboard® and video).  In the US election, polls show large majorities of all voters favoring solar and renewable energy.  While the Obama Administration agrees, Republicans support coal, oil, the XL pipeline and more drilling in shale for gas and oil – with most of their campaign donors from the fossil fuel, nuclear and financial sectors.

While US stock markets have gained since 2008, deep structural problems in the US economy remain: millions of expected foreclosures, millions of mortgages still under water, while the US Treasury is failing to use its mandate to help homeowners as explained by Ethical Markets expert Sarah Stranahan.  All this is reflected in the Occupy Wall Street protests still spreading across the country and worldwide.  Clearly, former Treasury Secretary Geithner misunderstood the housing crisis as the key macro-economic issue still unaddressed.  The debacles at JP Morgan Chase reinforced the need for higher capital reserves and deeper reforms at the TBTF banks as I and D. Wayne Silby, founder of the Calvert Group remark in our "End TBTF: Some Skin Please!" 

Congress continued it’s wrangling over deficits v. jobs and increasingly mindless skirmishes in Congress over the debt ceiling by the scare-mongering “fiscal cliff” campaigners. The many jobs bills of the Obama administration are still encountering Republican resistance while markets push the Fed for even more easing.  Bi-partisan passage of the Jumpstart Our Business Startups (JOBS Act) which was devised to democratize access to capital through crowdfunding on websites by small investors was marred by Wall Street lobbyists.  Patrick T. McHenry (R-NC), who has also held useful hearings on how to keep the Crowdfunding provisions of the 2012 JOBS Act from being hijacked by powerful incumbent market players.  Jobs, while trending upward, are still key in the sluggish economy, plagued by the unaddressed problem of foreclosures.  Cutbacks in the US Postal Service of 5,000 people in November 2012 and 2,000 in January 2013 lead to a new debate to relieve it from onerous financial burdens imposed by Congress in 2006.  Without these burdens, the US Postal Service actually shows a profit and is up-dating its services.  Many groups support allowing the Post Office to expand its services to include savings accounts as in many OECD countries. Government job losses will continue unless sequestration is repealed.   The official unemployment rate is improving at 7.5%. 

Back on October 6th, 2011, President Obama indicated that the explanation for the Occupy Wall Street 99% movement which has spread across the country was due to Americans' frustration. The group's manifesto is a call for corporate social responsibility, fairness and political reforms. Their issues of inequality, unfairness and Wall Street's irresponsibility have received more media driven by Occupy, now a national movement. (OWS NEWS)  Student debt has reached an unrepayable $1 trillion while graduates are jobless while facing bleak futures.  Lawyer Ellen Brown's plan to stimulate recovery by a special Fed bailout found broad support and Obama responded with a limited version.  OWS released its Debt Resistors' Operations Manual in September 2012, and I participated, along with economists Dean Baker, Randall Wray, Jeffrey Madrick, Michael Hudson, Ellen Brown and others in the OWS day-long audio teach-in on their September 17^th anniversary.

The dispiriting Congressional wrangling, the still anemic job numbers and stock market rises andvolatility signal much uncertainty over the debt problems in Europe and a global slowdown in 2013.   The Congressional Budget Office now shows the deficit is decreasing and forecasts estimate for fiscal years 2012-2022 that the US deficit would have continued to shrink further if all the Bush tax cuts had expired, with revenues rising from 16.3% of GDP in 2012 to 20% in 2014 and 21% in 2022.  Policy makers on both sides of the Atlantic are caught between the conservative "debt vigilantes" and their "austerity" demanding more cuts in budgets without increasing revenues versus the Keynesians warning that such cuts may tip the US into another recession.  This deep ideological struggle caused the 12-person Congressional "Super Committee" deadlock and continues with the “Fix the Deficit” and other campaigns funded by billionaire former hedge fund magnate Pete Peterson. The sequester’ s mandatory cuts meant that the Keynesians lost the first round of this debate.  President Obama’s handy election victory has now re-invigorated the calls for more investments in our US future, education, renewing infrastructure and long term prosperity.  This may revive the proposal for a national infrastructure bank.

The Obama administration, with few fiscal policy options to create those long-promised jobs, may push for additional stimulus to avoid a recession.  The $60 billion for Hurricane Sandy rebuilding passed in January 2013.  Retired TV host Dylan Ratigan, author of best-seller Greedy Bastards, focused his short-lived crusade for 30 million new jobs on the need for structural reforms and his Get Money Out campaign to overturn the Supreme Court's 2010 Citizens United decision ("Supreme Court Shocker").  All these "catch 22" problems signify the need for the economic paradigm shift I have advocated since my The Politics of the Solar Age, reviewed in the New York Times in 1981.

As we at Ethical Markets have been advocating, a new re-structuring of trade agreements and our economy is needed: to end subsidies and close tax loopholes for the incumbent fossil-fueled sectors still in control of Congress.  At least a start has been made with cuts to ethanol subsidies. We urge policies that follow the lead of private investors who have already, since 2007, invested over $4.1 trillion in the cleaner, greener more energy-efficient 21^st century economy (www.greentransitionscoreboard.com).  Stock markets received another bailout of past failures, with the Fed delivering Q3 many call “a sugar high”.  Ethical Markets focuses on the new green sectors growing unnoticed by Wall Street and mainstream media's fossilized asset allocation models. The idea of returning to plain vanilla "public utility" style banking is promoted by the Public Banking Institute, and the model of state-owned banks like the Bank of North Dakota is catching hold in 14 states.  The oil-shale boom in North Dakota is now requiring huge public spending on schools, services and infrastructure, while its earlier sound performance was due to its public bank ("North Dakota Economic Miracle: It's Not Oil").

President Obama's jobs bill is in addition to seeking passage of the infrastructure bank bill and his FY 2013 budget proposes continuing to invest in education, R&D and an independent, clean energy future. Meanwhile, the real unemployment rate is still some 15% when discouraged workers and involuntary part time workers are included.  The official 7.5% unemployment rate gives a distorted picture of the real pain still experienced by so many in our economy. While Congress is still gridlocked on the ideological divide between cutting spending and the need for investments in the next economy, hopefully, the focus will shift to cutting subsidies and closing tax loopholes to cut the deficit. The 2011Green Scissors report identifies $380 billion of cuts to both reduce the deficit and save environmental assets from future depletion. 

Gasoline prices reflect demand worldwide and are still subject to speculation.  President Obama appointed a Commission to look at these prices, including the role of "speculators," which Common Cause past estimates showed adding some 70¢ to a gallon of gas. As I have pointed out, speculation by hedge funds and institutional investors drives up the price of oil and all commodities - but has not been curbed yet by the CFTC ("A Closer Look at Oil Speculators"). CFTC’s rules to limit the positions of large investors and raising margin requirements from 5% to 50% were struck down in October by the Washington, DC appellate court.  This speculation can now continue - ironically fueled by the Fed's $600 billion QE2 andQE3 monthly bond-buying, as noted by China at the G-20 in Cannes. 

Bernanke acknowledges that joblessness remains too high and vowed to keep rates low until unemployment rates drop below 6.5%.  Formerly, he threw the ball to policy makers, adding "Central bankers alone cannot solve the world's economic problems."  We agree, since our economy needs restructuring.  Yet, the September QE 3 showed Bernanke's faith in continuing his money creation efforts for the foreseeable future.  Washington policymakers are still beholden to Wall Street and other incumbent industrial sectors while the paradigm war between neo-Keynesians stimulus advocates and deficit hawks led by billionaire Peter Peterson contribute to policy paralysis. 

My interview on Jan. 31, 2010, with John Williams, pre-eminent expert on deconstructing US official statistics at www.shadowstats.com, confirmed my distrust of GDP which continues to need an overhaul, as the Ethical Markets Media Beyond GDP Surveys with Globescan show.  Williams agrees with us that "GDP is the worst quality information from the US government.”  GDP becomes an ever less reliable measure.  The 2011 update of the 2007 Beyond GDP Survey compiled for the European Commission shows that large majorities in 12 countries (2 more than in 2007's survey) still favor adding indicators of health, education, poverty gaps and environment to all national measures of progress.  Our latest Beyond GDP survey with Globescan will be released later in May 2013 along with my forthcoming “Transitioning to the Solar Age: from Economism to Earth Systems Science (www.icaew.com).  As new measures, including the IWI, OECD's Better Life Index, Canada's Index of Wellbeing and others are gaining ground,  The Economist also improved its "Big Mac" Index of purchasing power parity by including data on wages in GDP per person (July 2011). 

Those critiquing the current narrow debate point, as we do, to deeper issues for US malaise: from "free trade" ideologies favoring large multi-national corporations and finance in trade and globalization, technological unemployment, off-shoring of US jobs, de-regulation of global finance fleeing to tax havens, as contributing to US unemployment and further inequality in wealth and income distribution (see my review of Treasure Islands).   My reviews (Bailout, Dark Pools) and recent editorial "Global Finance Lost in Cyberspace!" and Ethical Markets research points to the need to re-structure finance (www.transformingfinance.net and our TV series for college use at www.films.com).  New investment in a 21^st century infrastructure can accelerate the transition from the fossil-fueled Industrial Era to the cleaner, greener, information-rich Solar Age (seewww.greentransitionscoreboard.com).

I have long explored the entire range of distortions that make GDP a perverse measure of US progress, and TIME's article agrees, pointing to our Ethical Markets Quality of Life Indicators and others including the United Nations Human Development Index (HDI).  In CSRWire "Grossly Distorted Picture: GDP Still Misleading Governments" (January 23, 2011), I show how GDP can mis-price sovereign bonds of Greece, Ireland and Portugal by omitting their real wealth: educated workforces, efficient infrastructure and productive ecosystems … all count for zero in GDP. 

As mentioned, better measures of human progress are gaining mainstream media attention: the excellent Canadian Index of Wellbeing (CIW) at www.ciw.ca and the new report Spirit Level (2010) by British researchers Richard Wilkinson and Kate Pickett linking equality with quality of life within and across countries.  They find that countries with the most equal income distribution (by GINI) have the largest socially and politically prosperous middle class while unequal countries do worse on most quality of life indicators (www.equalitytrust.org.uk).  The USA scores poorly and confirms John Williams' and our view that a massive overhaul of GDP, unemployment, inflation, money supply and other US statistics is now urgent if we are to address the need for more jobs. 

Why has the weak US recovery still produced so few jobs?  The BLS "Establishment Survey" differs from the broader "Household Survey" which records the civilian labor force in small companies often failing or unable to obtain financing, which the Establishment Survey cannot detect.  For 20 years, I have pointed to reasons the USA has experienced "jobless growth"  - rooted in the abstractions of macroeconomics theories and methods.  The faith in "free trade" has prevented government agencies from making use of futurists' broader forecasting and planning methods used by most global corporations.  Their economic advisors' market fundamentalism warned against "industrial policy" except for that covertly practiced by the Department of Defense and activities in the name of "national security."  Thus, the "hollowing out" of US manufacturing has continued for two decades at the behest of global corporations and their investment bankers.  President George H. W. Bush famously held that it did not matter whether the US manufactured computer chips or potato chips, while President Bush II's chair of the Council of Economic Advisors, Gregory Mankiw, maintained that outsourcing was good for American workers who could take their severance pay and 401Ks and become day traders on the stock markets.  In spite of the growing protests in America's streets, most politicians, corporate leaders and their academic advisers didn't get it. 

Add to these idiocies the stout denials by economists that increasing capital-intensive technological change, automating manufacturing and services would result in the structural unemployment we see today.  Conventional measures of output per capita masked this technological unemployment as beneficial "increases in productivity" for decades, as we have pointed out.  Unfortunately, Obama administration economic advisors are mostly steeped in conventional theories and models which continue to serve Wall Street and corporate interests at the expense of workers and individuals (see the excellent reports atwww.prospect.org).  Happily, the movie "Inside Job," documenting economists' conflicts of interest won an Oscar and the University of Massachusetts now exposes these ethical lapses. 

The US recovery is still slow and will be fragile until housing further stabilizes and job creation picks up. This may not get big banks to step up lending to domestic companies since they make more money with proprietary trading, hoarding their bailout funds or sending them offshore.  The anemic GDP numbers underline what most Americans have experienced for the past years.  States facing their new fiscal year are wrestling with budget shortfalls by scape-goating teachers, firefighters and police in Wisconsin, Ohio and Indiana.  State and local governments have cut over 700,000 jobs since 2009.  California's budget gap of $24 billion has been closed with a tax increase and further cuts.  North Dakota still stars with continuing budget surpluses, but with public services and infrastructure heavily stressed by their oil and gas boom.  While markets and politicians all cry for more GDP growth, we need to remember that growth must be redefined with the new scorecards to know what is dying, what needs to grow and to maintain key infrastructure. 

President Obama's original 2009 $787 billion Economic Recovery and Reinvestment plan did prevent layoffs, bolstering states' finances and investing in infrastructure prevented a deeper recession and allowed the modest GDP improvement.  Bloomberg estimates that the Fed added another $7.7 trillion to keep banks afloat.  Deeply entrenched ideologies and special-interest politics are battling over the budget with deficit hawks gaining the upper hand. Cutting the Pentagon's weapons procurement and subsidies for nuclear power, fossil fuels and big farmers as recommended in the $380 billion of cuts outlined over 5 years in the Green Scissors report would boost investments in education, health care, efficiency and renewable energy.   At least the President's 30,000 troop surge was reduced by 10,000 and costed transparently in the budget, and with a pledge to end our war in Afghanistan in 2014.  Military expenditures are now on the agenda for US debate since sequester.   The oversight reported on TARP, July 21^st that US taxpayers are liable for up to $23.7 trillions of bailouts (www.sigtarp.gov).  All this shows that the great transition from the fossil-fueled, unsustainable Industrial Era to the green economy of the Solar Age (see my The Politics of the Solar Age, 1981) is now well underway.

The Fed's job with so many new tasks is now harder -- trying to steer between recession, deflation and inflation. Low interest rates continue to punish savers and are actually negative when corrected for inflation.  The role of the Fed, a private institution owned by its 12 regions' banks, came under scrutiny by Bloomberg, Fox Business News and other media for its secrecy.  Their Freedom of Information Act suit earlier released initial data showing some $3 trillion given to bail out companies and even some European banks.  Over 300 Congress members co-sponsored Ron Paul's bill, passed in July 2012, to audit the Fed and account for Bloomberg's new total of $7.7 trillion.  State-owned banks like the Bank of North Dakota could expand local lending.  It provides funds to local banks for low-cost credit directly to North Dakota's infrastructure, education and services, as well as businesses (see "Monetize This!" and "Escape from Pottersville" by Ellen Brown at www.ethicalmarkets.com).  Opponents to advocates of public utility style banking, claim that North Dakota's economy is boosted by Bakken oil, but this new bubble is unsustainable and its role is refuted in "North Dakota Economic Miracle: It's Not Oil."  While triumphant fossil fuel interests claim the USA is the new “Saudi Arabia,” the International Energy Agency is more cautious on these new oil and gas supplies, citing water shortages and climate change as limiting factors (IEA 2012).  A report by HSBC finds that fossil fuel reserves of Shell, Statoil and others are now “sub-prime assets,” unburnable due to the CO₂ emissions (“HSBC: BP, Shell, Statoil at risk from ‘unburnable’ reserves”). Standard & Poor’s also is concerned over these “carbon constrained” assets and Carbon Tracker’s latest report received widespread publicity (Bloomberg). .

A revealing look at these issues is A Demon of Our Own Design (2007) by former hedge fund manager Richard Bookstaber and Fools Gold by Gillian Tett of the Financial Times showing how financial engineering of ever-more exotic swaps, derivatives, options, etc are themselves adding to market instabilities worldwide. Another market institution, the Depository Trust and Clearing Corporation (DTCC) has a backlog in handling the huge volume of derivatives trading.  Much of the volatility on Wall St. is due to high-frequency trading and the failure of these exotic "quant" models and the need for hedge fund managers to sell assets to cover margin calls from their bankers. Yet other challenges to Wall Street's conventional wisdom are the best-seller, The Black Swan, by veteran options trader and mathematician Nassim Nicholas Taleb, and Lecturing Birds on Flying by Paulo Triana, who critique risk assessment models used by investors and banks.  I made similar critiques of such models as Value At Risk (VAR) used so widely that unanticipated events could lead to system-wide crises in The UN: Policy & Financing Alternatives which I co-edited (Elsevier Scientific, UK, 1995, 1996). 

Inflation must keep the Fed on alert longer term, despite new fears that collapsing demand may mean deflation.  The core rate (excluding food and energy) is suspect.  A scathing editorial in The Economist called this use of the core index "highly misleading" since most people eat and drive! (June 23, 2007, p.16)  We have made this same point for many years.  Meanwhile, behind all the headline numbers, average wages for non-supervisory workers have remained stagnant for decades, foreclosures continue, house prices stagnate, and many deeper structural problems in the USA go unaddressed.  The $787 stimulus has repaired some USA infrastructure and provided some green jobs. The growing green economy worldwide is overlooked by Wall Street's obsolete asset-allocation models dominated by the fossil fueled sectors (see my The Sustainability Sector at www.seekingalpha.com).  The growing gap between rich and less affluent citizens is worrying Democrats and Republicans - but their concerns offered the familiar remedy: more GNP-based economic growth.  Economist Joseph Stiglitz now estimates the Iraq occupation will total $3 trillion in his The Three Trillion Dollar War (2008).   

For more on the current trends in US and global finance and economics, visit www.ethicalmarkets.com and browse the categories on Beyond GDP, Reforming Global Finance, Green Prosperity and Trendspotting.  For discussion of solutions, visit www.ethicalmarkets.tv and browse the Ethical Markets series Transforming Finance.

            Our move to the new website and updating of Ethical markets Quality of Life Indicators is proceeding apace!