Stocks climb on higher unemployment news

Official unemployment has climbed above 10% but we can most likely double that.  Among 25 to 35 years olds it's probably around 25%. It doesn't take a rocket scientist to figure out that with less money, people are more frugal.  The result is having a drastic effect on prices as companies reduce them in order to boost sales.  In a world where millions starve, Burger King is selling double cheeseburgers for $1.

Along with unemployment and the fall in household wealth, the near collapse of the system itself has changed consciousness forever.  The market has been discredited, especially the US capitalist model, and US workers and the middle class will not return to old habits easily, if ever.  Consumers "are digging in for a long, frugal winter" says the Wall Street Journal.

We have always been told that high wages price us out of the market.  The auto workers were too costly.  A $15 an hour minimum wage would mean $20 hamburgers.  A rise in the minimum wage would mean the employers would raise prices or shed jobs. This idea has been propagated for years in order to deter us for fighting for higher wages. But events confirm, as Marx pointed out, that wages and prices are not organically linked. They would raise prices or shed jobs anytime if they could; but the market determines whether or not they can do this, not wages.  They are forced by the market, by the law of supply and demand, to lower prices which is what is happening now. 

But it is not bad for all of them.  Stocks rose on the good news that unemployment climbed higher.  The Dow Jones Industrial Average rose 3.2% last week and is up 14.2% on the year.  The reason stocks are doing so well is the Federal Reserve, that private club of capitalists is keeping interest rates low; money is cheap right now.  "Cheap money" writes the Wall Street Journal, "keeps financing costs low and pushes corporate profits higher."  The announcement last week that unemployment had risen above 10% boosted stocks even more.

Along with cheap money, the trillions of dollars in taxpayer funds that they have given to the bankers and speculators who caused this mess is being used not to build schools, hospitals, roads, or mass transit, it is being used to gamble on the stock exchange. The flip side of this of course is the danger of inflation. Since 2008, $17.5 trillion has been given, loaned or guaranteed to US banks.  Compare this to the $0.5 trillion annual spending on education. Massive deficits, inflation and increased protectionism, these are the dangers ahead but short term profits are the order of the day.  "First we enjoy our dinner.  Later come the after dinner speeches, we have a period ahead of us of low interest rates, markets love that." says one speculator-----cheaper money combined with mass layoffs and increased workloads for those lucky enough to keep their jobs mean higher profits.

The capitalist class has just been handed trillions of dollars of our money and are gambling with it, preparing the ground for further crisis and misery.  Their federal reserve led by the most powerful and unelected individual in society ensures that they pay nothing for the use of this money, a lot less than they charge us for it through credit cards.

Those of us that produce this blog have argued consistently for the finance houses, the banks and the insurance companies to be taken in to public ownership. The capitalist class has passed the historical point where it can advance society in any way; it is a system of wars, racism, and plunder.  Collective ownership of the financial system does not mean collective ownership of our individual savings.  They use our collective wealth to satisfy their rapacious thirst for profits, we must use it for our collective well being, for human needs and the protection of our environment.