The issue I see is that a .25% Fed Funds rate is adding gasoline to the economy via low interest rates. Many people are saying an increase is like taking away the gasoline and taking out a fire extinguisher. But it really isn’t. Raising the rate to .25% is slightly decrease the amount of gas you are adding to the fire. A .25% Federal Funds rate is pouring nearly as much gas on as you are able to but not quite the absolute most you are able to.

It is also true that the Fed bailing out the too-big-to-fail bankers and banks resulted in them not only opening up the gasoline as much as possible (taking rates to 0) they even went far beyond that with new methods of pouring on gasoline that hadn’t even been considered until the bankers’ risk-taking doomed the economy (and bankrupted their institutions – without government bailouts propping them up).

The Federal Reserve has finally turned off the massive extraordinary dumping of gasoline onto the economic fire (via quantitative easing). But they have kept not only dumping lots of gasoline on the economy but doing so to the absolute maximum possible via a 0% Fed Funds rate.

Arguing for slowing the amount of fuel you are dumping into the economy is not the same as saying you are constricting the economy. We have been put into a crazy global economic condition by the too-big-to-fail bankers and the massive amounts of government and personal debt taken out. So simple analogies are not effective in making policy.

The analogies can help explain what the intent and expectation of the policy is. It is true we have created a very tenuous economic foundation (and we haven’t in any way substantial way addressed the risk too-big-to-fail bankers can throw the global economy into and we still have massive debt problems). The main beneficiaries of the central banker’s policies the last nearly 10 years are too-big-to-fail bankers and those borrowing huge amounts of money.

Those suffering from the policy are savers and I fear those that have to cope with the aftermath of this massive intervention with likely bubbles (government debt, personal debt [including education debt in the USA, etc.]). The main reason I believe rates should be raised are to begin the path to stop transferring wealth from savers to too-big-to-fail bankers and those with massive debt problems.

It is true the massively in debt governments have been given a huge transfer of wealth by central bankers and we have largely (across the globe) avoided runaway inflation. Europe has experienced some issues from one of the areas the central bankers have attempted to cover up by injecting gasoline – massive government debt. But overall governments have been able to pay much less to bondholders and therefore make deficits seem much less than they would be with more sensible interest rates.

The global economy is in a very fragile state and luckily inflation has not been a problem. But it seems to me we can’t just keep hoping that putting our feet all the way on the excelerator for years on end is really going to work without consequences. Most likely the risks increase the longer you pour on as much gasoline as you can (asset bubbles, careless taking on of debt, increasingly risky behavior by bailed out too-big-to-fail institutions…).

The risk of deflation and a deflation mentality is one of the only decent arguments (well also that inflation isn’t a risk, right now) against slowing how much gasoline is being poured into the economy (with 0% Fed Funds). The other is that the global economy is about to have real trouble even after years of pouring on as much gas as we can. But I think the risks of keeping pouring as much gas as possible is too great. We need to keep pouring on gas, just not at the absolute maximum level – so we should raise the rate to .25% this month.

I would likely wait 3+ months to do raise it to .5% though obvious depending on what happens that may change. We should get to 1% as quickly as we can, which is still very “accommodative” (pouring on gasoline). Beyond the system risks of creating instability by pouring on as much gasoline as possible continuously it also is bad as you have no room for flexibility if you wan to increase the flow of gasoline. While it is true you can resort to extra-ordinary measures such as the too-big-to-fail quantitative easing bailouts those should be restricted to emergencies such as those created when our politicians allow the behavior that necessitated those unprecedented bailouts (especially since those too-big-to-fail institution still pose huge risks today).

Related: Is Adding More Banker and Politician Bailouts the Answer? – Fed Cuts Rate to 0-.25% (2008) – The Precipitous Fall of the Ringgit Shows the Economic Risk in the Malaysian Economy

The situations have many differences, for example, China is a poor country growing rapidly, Japan was a rich country growing little (though in 1990 it showed more growth promise than today). Still this one of the more interesting pieces of data on how much a bubble China real estate has today. Japan suffered more than 2 decades of stagnation and one factor was the problems created by the real estate price bubble.

The global economic consequences of the extremely risky actions taken to bail out the failed too-big-too-fail banks including the massive quantitative easing are beyond anyones ability to really understand. We hope they won’t end badly that is all it amounts to. Noone can know how risky the actions to bail out the bankers is. The fact we not only bailed them out, but showered many billions of profit onto them (even after taking billions in fines for the numerous and continuing violations of law by those bailed out bankers), leaves me very worried.

It seems to me we have put enormous risk on and the main beneficiaries of the policies are the bankers that caused the mess and continue to violate laws without any consequences (other than taking a bit of the profit them make on illegal moves back sometimes).

I hope things work out. But I fear the extremely risky behavior by the central banks and politicians could end more badly than we can even imagine.

Related: Continuing to Nurture the Too-Big-To-Fail Eco-system – The Risks of Too Big to Fail Financial Institutions Have Only Gotten Worse – USA Congress Further Aids The Bankers Giving Those Politicians Piles of Cash and Risks Economic Calamity Again – Investment Options Are Much Less Comforting Than Normal These Days

Congress gives Wall Street public backing for derivatives trading again: http://t.co/PtBePRGuhy Oh joy.

— John Robb (@johnrobb) November 11, 2013

It is no surprise those we elect that have shown there primary concern is providing favors to those giving them lots of cash have given the wall street crowd that showers them in cash what they want yet again. As long as we keep electing these people they will keep providing benefits to those giving lots of cash that the rest of society is stuck paying for.

Read more about this huge fiasco: Congress Sells Out To Wall Street, Again!

Even ill-informed politicians now can’t pretend they don’t know the risks they run by providing these favors. But they figure they won’t have to be accountable – they haven’t been held accountable so far. So they are probably right that they won’t be held accountable when the taxpayers suffer huge losses and the taxpayers have to again bail out the too big to fail institutions and savers have to again bail out the too big to fail banks and…

As bad as the economy has been since the to-big-too-fail crowd created economic calamity it is amazing it hasn’t been much worse. The extraordinary efforts of the Fed have been amazingly successful. I worry they have put us in an extraordinarily risky place but so far the results have been remarkable. Hoping such slights of hand (plus huge transfers of wealth from middle class savers to to-big-too-fail speculators – in the tune of hundreds of billions of dollars – so it isn’t like there are not huge suffering by millions of people – even those that were not thrown out of work) will allow continued reckless giveaways to those paying politicians is a very bad idea.

But it is no surprise those we elect have chosen that course of action. It seems we are very unlikely to learn without a real depression being forced by decades of extremely foolish behavior by our elected officials in Washington DC.

Related: Continuing to Nurture the Too-Big-To-Fail Eco-system – The Risks of Too Big to Fail Financial Institutions Have Only Gotten Worse – Adding More Banker and Politician Bailouts is not the Answer – Failure to Regulate Financial Markets Leads to Predictable Consequences (as does letting big contributors create “regulations” that are nothing more than government granted favors to huge organizations) – Congress Eases Bank Laws, 1999, while risks were stated by those not willing to lie down for Wall Street Lobbyists (few though they were)

In fact, while the Fed has pumped about $2.8 trillion into the financial system through nearly five years of asset buying.

Bank excess reserves deposited with the New York Fed have mushroomed from less than $2 billion before the financial crisis to $2.17 trillion today. In essence, roughly two-thirds of the money the Fed pumped into the banking system never left the building.

The Fed now pays banks for their deposits. These payment reduce the Fed’s profits (the Fed send profits to the treasury) by paying those profits to banks so they can lavish funds on extremely overpaid executives that when things go wrong explain that they really have no clue what their organization does. It seems very lame to transfer money from taxpayers to too-big-to-fail executives but that is what we are doing.

Quantitative easing is an extraordinary measure, made necessary to bailout the too-big-to-fail institutions and the economies they threatened to destroy if they were not bailed out. It is a huge transfer payment from society to banks. It also end up benefiting anyone taking out huge amounts of new loads at massively reduced rates. And it massively penalizes those with savings that are making loans (so retirees etc. planing on living on the income from their savings). It encourages massively speculation (with super cheap money) and is creating big speculative bubbles globally.

This massive intervention is a very bad policy. The bought and paid for executive and legislative branches that created, supported and continue to nurture the too-big-to-fail eco-system may have made the choice – ruin the economy for a decade (or who knows how long) or bail out those that caused the too-big-to-fail situation (though only massively bought and paid for executive branch could decline to prosecute those that committed such criminally economically catastrophic acts).

The government is saving tens of billions a year (maybe even hundred of billions) due to artificially low interest rates. To the extent the government is paying artificially low rates to foreign holders of debt the USA makes out very well. To the extent they are robbing retirees of market returns it is just a transfer from savers to debtors, the too-big-to-fail banks and the federal government. It is a very bad policy that should have been eliminated as soon as the too-big-to-fail caused threat to the economy was over. Or if it was obvious the bought and paid for leadership was just going to continue to nurture the too-big-to-fail structure in order to get more cash from the too-big-to-fail donors it should have been stopped as enabling critically damaging behavior.

It has created a wild west investing climate where those that create economic calamity type risks are likely to continue to be rewarded. And average investors have very challenging investing options to consider. I really think the best option for someone that has knowledge, risk tolerance and capital is to jump into the bubble created markets and try to build up cash reserves for the likely very bad future economic conditions. This is tricky, risky and not an option for most everyone. But those that can do it can get huge Fed created bubble returns that if there are smart and lucky enough to pull off the table at the right time can be used to survive the popping of the bubble.

Maybe I will be proved wrong but it seems they are leaning so far into bubble inflation policies that the only way to get competitive returns is to accept the bubble nature of the economic structure and attempt to ride that wave. It is risky but the supposedly “safe” options have been turned dangerous by too-big-to-fail accommodations.

Berkshire’s Munger Says ‘Venal’ Banks May Evade Needed Reform (2009)

Related: The Risks of Too Big to Fail Financial Institutions Have Only Gotten Worse – Is Adding More Banker and Politician Bailouts the Answer? – Anti-Market Policies from Our Talking Head and Political Class

They say “misguided government incentives” much of which are due to payments to politicians by too-big-to-fail institution to get exactly the government incentives they wanted. There is a small bit of the entire problem that is likely due to the desire to have homeownership levels above that which was realistic (beyond that driven by too-big-to-fail lobbyists).

“Were safer” says a recent economist. Which I guess is true in that it isn’t quite as risky as when the too-big-to-fail-banks nearly brought down the entire globally economy and required mass government bailouts that were of a different quality than all other bailouts of failed organizations in the past (not just a different quantity). The changes have been minor. The CEOs and executives that took tens and hundreds of millions out of bank treasures into their own pockets then testified they didn’t understand the organization they paid themselves tens and hundreds of a millions to “run.”

We left those organizations intact. We bailed out their executives. We allowed them to pay our politicians in order to get the politicians to allow the continued too-big-to-fail ponzie scheme to continue. The too-big-to-fail executives take the handouts from those they pay to give them the handouts and we vote in those that continue to let the too-big-to-fail executives to take millions from their companies treasuries and continue spin financial schemes that will either work out in which case they will take tens and hundreds of millions into their person bank accounts. Or they won’t in which case they will take tens of millions into their personal bank accounts while the citizens again bail out those that pay our representatives to allow this ludicrous system to continue.

Banks Seen at Risk Five Years After Lehman Collapse

If you get the impression I am upset by the actions of those who have been given responsibility that can be used to ruin millions of people’s economic lives and who have done so you are correct. When teenagers are selfish, irresponsible, brats it is obnoxious but fairly common. When our political leaders and those giving those political leaders the most cash behave as our have the last 20 years it is reprehensible. When the obvious result occurs and tremendous suffering is caused by their reckless, greedy, selfish, foolish and uncaring actions and then just continue to do the same things it is despicable.

That we chose to put those politicians that enable this is sad. But those that are risking the global economy in order to continue their narcissistic behavior are not excused by our foolish decision to re-elect those selling out the country to those paying them for favors.

The exact balance that is unknown. What amount of corruption from political leaders and financial executives can the economy support and survive? I don’t know. Maybe we can support the unforgivable behavior of those leaders in the last 5 years and the the 10 years before that. Maybe throwing millions of people out of jobs, killing thousands of businesses, forcing retirees to have their yields cut to almost zero in order to bail out banks that allow their executives to bleed their treasuries dry with more gusto than kleptocratic dictators in soon to be bankrupt countries. It is disgusting that this behavior continues. How many hundred of billions or trillions more in bailouts and fraud will be extracted from the productive parts of our economies to pay for this unsupportable behavior. Maybe our economies can take this kleptocratic behavior and survive. Maybe it can’t. That we elect people that have decided to take the cash and allow that risk to be tested is a foolish risk to take.

The too-big-to-fail crowd is just fleecing foolish taxpayers and paying those taxpayers representatives (I imagine to knowing continue to fleecing or I suppose it is possible the politicians don’t have the ability to understand what they are doing). The global economy generates trillions of benefits. Such wealth allows for a great deal of kleptocracy and risky bets (that can just be passed onto foolish taxpayers if they don’t work).

The scope of the swindle being perpetrated by the too-big-to-fail crowd and their bought and paid for politicians (who it must be said we continue to put back into office) is beyond anything every attempted before. The devastation caused by their reckless action doesn’t slow them down. They just take the bailouts and place even biggest bets, continue to take tens of millions for themselves, and leave the taxpayers to pick up the mess when it is too large.

That too-big-to-fail bailout champions are not only still alive and allowing those working their to take millions every year is nearly unbelievable.

In order to survive this massively risky economic future you would be wise to be very financial adept. Debt is very risky in such a situation. But debt is actually a way to get huge rewards at the right times in this environment (but do this wrong and you will be bankrupt). The huge bailout culture creates bubbles – making a great deal during the bubbles can be used a way to get capital to survive the costs of bailing out the kleptocrats we have allowed to steal from the productive economy. I am not even sure what are safe investments.

My guess is that the right real estate is one good place to invest (but the kleptocrat economy creates all sorts of risks that are difficult to measure). Companies that are very resilient to economic catastrophe are likely another good place. You have to find companies that don’t listen to the too-big-to-fail crowd that attempts to create risky financial structures in order to make cases to justify taking tens of millions (basically they pretend that this financial engineering created millions in value today so count that as earnings, based on those earnings I get millions… it is innately crazy that anyone accepts this junk but just watch those CEOs of our too-big-to-fail institutions when they testified on the hill and you see these are people that don’t have a clue about running an honest business.

This is such utter crap. For decades this excuse has been used to justify insane risks. Businesses may need cash to fund growth (buy assets, invest in research and development…). They might need some cash to get by while cash flow is not adequate. It may well make sense to have some sensible hedging. None of this requires too-big-to-fail banks.

Relatively small banks can do facilitate these needs. Insurance for business risks can be financed by insurers.

There is nothing that requires us to have speculators allowed to create risks that require government bailouts larger than the largest expenses any governments have every made (larger than World War II). There is nothing that requires 98% of the speculation. I don’t care if people speculate with their money and do not have the ability to massively impact the entire market (capitalism is based on the idea no actors have market power – every actor is a the mercy of the market, not the other way around).

Too-big-to-fail speculation mainly allows fake financial estimates to claim profits that haven’t actually taken place yet have. We can eliminate that with no loss to society. It also allows creating financial speculation so complex no-one can understand the huge fees the too-big-to-fail crowd takes. Again who cares, eliminate this. Nothing should be allowed to be 1/10 the size of too-big-to-fail. The only potential cost of this (and I doubt it would be a cost but theoretically it could be) is perhaps borrowing or hedging would be a bit less efficient. This is completely fine. There is not even remotely any justification for large, risky financial institutions in order to reduce the costs a small bit.

The current financial system is extremely complex and risky. There is no economic reason to allow such risks to continue. We can have financial needs met without ludicrously risky financial gimmicks. We should not vote in people that continue to sell out our productive economy to kleptocrats in the too-big-to-fail financial institutions to game the system the way they have the last 30 years.

The collusion (investment banking fees, front running trading [“high frequency trading”], libor, foreign exchange price fixing…) are illegal actions that use fraud to steal from market participants. Those actions should be investigated and criminally prosecuted but frankly that is minor compared to the main too-big-to-fail system corruptions.

The truth is I am able to navigate the massively distorted investment climate created by out too-big-to-fail designed financial system better than most. It is tricky but I think I’ll do fine. I imagine I will actually likely benefit – there are massive distortions and bubble that too-big-to-fail directed economies will generate that I imagine I will likely benefit from (though I have a greater risk of messing up in this riskier investment climate than one that would be much better for everyone in the economy outside the too-big-to-fail kleptocrats). I would much rather be able to invest without the massive distortions caused by the too-big-to-fail directed economic policies of our largest governments. But others are much less able to navigate the massively distorted investing climate. It is immensely more difficult to just make sensible long term, and safe, investment strategies today than is was until recently (the last 10 years or so).

But hundreds of millions or billions of people are suffering greatly and likely to continue to as long as we allow the kleptocrats at too-big-to-fail institutions to direct our government’s to continually do those too-big-to-fail institutions huge favors.

13 Bankers

Related: Buffett Calls on Bank CEOs and Boards to be Held Responsible – Credit Crisis the Result of Planned Looting of the World Economy – The Best Way to Rob a Bank is as An Executive at One – Is Adding More Banker and Politician Bailouts the Answer? – Paying Back Direct Cash from Taxpayers Does not Excuse Bank Misdeeds – Executive pay “excesses are so great now they will either force companies to take huge risks to justify such pay and then go bankrupt when such risks fail” – Failure to Regulate Financial Markets Leads to Predictable Consequences – Small Banks Having Trouble Competing with Bailed Out Banks

The massively too big to fail financial institutions that exist on massive leverage and massive government assistance are a new (last 15? years) danger make it more likely the currency losses value rapidly as the government uses its treasury to bail out their financial friends (this isn’t like normal payback of a few million or billion dollars these could easily cost countries like the USA trillions). How to evaluate this risk and create a portfolio to cope with the risks existing today is extremely challenging – I am not sure what the answer is.

Of the big currencies, when I evaluate the USA $ on its own I think it is a piece of junk and wouldn’t wan’t my financial future resting on it. When I look at the other large currencies (Yen, Yuan, Euro) I am not sure but I think the USD (and USA economy) may be the least bad.

In many ways I think some smaller countries are sounder but smaller countries can very quickly change – go from sitting pretty to very ugly financial situations. How they will wether a financial crisis where one of the big currencies losses trust (much much more than we have seen yet) I don’t know. Still I would ideally place a bit of my financial future scattered among various of these countries (Singapore, Australia, Malaysia, Thailand, Brazil [maybe]…).

Basically I don’t know where to find safety. I think large multinational companies that have extremely strong balance sheets and businesses that seem like they could survive financial chaos (a difficult judgement to make) may well make sense (Apple, Google, Amazon, Toyota, Intel{a bit of a stretch}, Berkshire Hathaway… companies with lots of cash, little debt, low fixed costs, good profit margins that should continue [even if sales go down and they make less they should make money – which many others won’t]). Some utilities would also probably work – even though they have large fixed costs normally. Basically companies that can survive very bad economic times – they might not get rich during them but shouldn’t really have any trouble surviving (they have much better balance sheets and prospects than many governments balance sheets it seems to me).

In many ways real estate in prime areas is good for this “type” of risk (currency devaluation and financial chaos) but the end game might be so chaotic it messes that up. Still I think prime real estate assets are a decent bet to whether the crisis better than other things. And if there isn’t any crisis should do well (so that is a nice bonus).

Basically I think the risks are real and potential damage is serious. Where to hide from the storm is a much tricker question to answer. When in that situation diversification is often wise. So diversification with a focus on investments that can survive very bad economic times for years is what I believe is wise.

Related: Investing in Stocks That Have Raised Dividends Consistently – Adding More Banker and Politician Bailouts in Not the Answer –
Failures in Regulating Financial Markets Leads to Predictable Consequences – Charlie Munger’s Thoughts on the Credit Crisis and Risk – The Misuse of Statistics and Mania in Financial Markets

The problem was most extreme in Greece where almost two-thirds of those under-25 are unemployed. The rate was 62.5% in February, the most recently available data.
…
Youth unemployment in Spain is 56.4%, in Portugal 42.5%. Italy recorded its highest overall unemployment rate since records began in 1977, at 12%, with youth joblessness at 40.5%. Economists said that the rise in unemployment was fairly broad-based with rises in so-called core countries as well, including Belgium and the Netherlands. The rate in France was 11%.
…
Ireland recorded one of the biggest falls in unemployment, down to 13.5% from 14.9% a year ago. That compares with a rate of 7.7% for the UK, where youth unemployment is 20.2%. The lowest rates for youth unemployment were in Germany at 7.5% and Austria at 8%.

Unemployment continues to be a huge problem. The slow recovery from the great recession caused by the too big to fail financial institutions continues to do great damage. That damage is very visible in unemployment figures and the huge transfer of wealth from savers to bail out otherwise failed financial institutions (that not only haven’t been made to be small enough to fail but continue to pay themseves enormous bonuses while taking the billions in transfer of wealth from retirees that have had their income sliced by the interest rate policies necessatated to bail out the bankers).

The USA employment situation is still bad but has actually could easily be much worse. Unemployment in the USA stands at 7.5% now (the rate for teenagers is 24.1%).

Related: 157,000 Jobs Added in January and Adjustments for the Prior Two Months add 127,000 More (Feb 2013) – USA Unemployment Rate Drops to 7.8%, 200,000 Jobs Added (Oct 2012) – USA Adds 216,00 Jobs in March and the Unemployment Rate Stands at 8.8% (March 2011)

So with this report another 255,000 (171 + 50 + 34) were added, quite a good number. If we could see 250,000 jobs added for 12 more months that would be quite nice – though still will not have recovered all the jobs cost by the too-big-too-fail credit crisis.

Employment growth has averaged 157,000 per month thus far in 2012, about the same as the average monthly gain of 153,000 in 2011.

Hurricane Sandy had no discernable effect on the employment and unemployment data for October. Household survey data collection was completed before the storm, and establishment survey data collection rates were within normal ranges nationally and for the affected areas.

Long-term unemployment remains a problem, in October, the number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 5.0 million. These individuals accounted for 40.6% of the unemployed (a higher percentage than normal – as it has been for the duration of the too-big-too-fail job recession.

The civilian labor force rose by 578,000 to 155.6 million in October, and the labor force participation rate edged up to 63.8%. Total employment rose by 410,000 over the month (I am guessing this is not seasonally adjusted – the highlighted figures normally quotes are seasonally adjusted figures). The employment-population ratio was essentially unchanged at 58.8%, following an increase of 40 basis points in September.

Related: Unemployment Rate Reached 10.2% (Oct 2009) – USA Economy Adds 151,000 Jobs in October and Revisions Add 110,000 More (Oct 2010, unemployment rate at 9.6%) – USA Unemployment Rate Drops to 8.6% (Nov 2011) – USA Lost Over 500,000 Jobs in November, 2008

Health care added 31,000 jobs in October. Over the past year, employment in health care has risen by 296,000.

Manufacturing employment changed little in October. Since April of this year manufacturing employment has shown little change. Manufacturing output has been raising and if we sustain the recovery I would not be surprised to see jobs added in manufacturing, which is not a common result in the last few decades.

In October, the average workweek for all employees on private nonfarm payrolls was 34.4 hours for the fourth consecutive month. The manufacturing workweek edged down by 0.1 hour to 40.5 hours, and factory overtime was unchanged at 3.2 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls edged down by 0.1 hour to 33.6 hours.

In October, average hourly earnings for all employees on private nonfarm payrolls edged
down by 1 cent to $23.58. Over the past 12 months, average hourly earnings have risen
by 1.6%.

The huge federal deficient and continued extreme actions by the fed to bail out too-big-too-fail financial institution are serious problems. But the short term effect on the job market in the USA has been fairly amazing. It is amazing we were able to restrain the impact of the extremely bad policies that created the huge mess and led to over 10% unemployment and the shedding over over half a million jobs a month for several months this effectively (even with the huge debt and worrisome actions by the fed).

We can’t continue to provide huge benefits to too-big-fail institutions and allow massive speculation backstopped by fed bailouts on top of huge federal deficits. I am very worried about the long term consequences of the current policy but it has been more successful in the short term than anyone had the right to sensibly hope for (even though plenty of people hoped for even better results). Those optimists, I think, failed to appreciate the dire straits we got ourselves into. And people continue to downplay the dangers caused by the continued massive actions by the Fed and huge deficits.

The post also includes data showing the only groups with income increases as those 65-74 years old and, 75 and over which is surprising. 25-34 took the 2nd largest drop decreasing 8.9%.

Another interesting tidbit is the percent of people over 65 with jobs. In 1960 20% of those over 65 had jobs. Which pretty much decreased steadily to 10% in 1986 and then has increased steadily to 17% in 2011.

Related: USA Individual Earnings Levels: Top 1% $343,000, 5% $154,000, 10% $112,000, 25% $66,000 –
Looking at Data on the Value of Different College Degrees – 60% of Workers in the USA Have Less Than $25,000 in Retirement Savings – Credit Card Regulation Has Reduced Abuse By Banks

The change in total nonfarm payroll employment for May was revised from +77,000 to +87,000, and the change for June was revised from +80,000 to +64,000. Which means the total job gains for this report is 157,000 (163,000 +10,000 [for May] and -16,000 [for June]).

One of the continuing severe problems (since the credit crisis bubble burst) has been long term unemployment. In July, the number of long-term unemployed (those jobless for 27 weeks and over) was 5.2 million. These individuals accounted for 40.7% of the unemployed (a high figure historically).

Given all the problems created by the financial system failure (created over the last 15 years – in the USA and Europe) it is actually fairly amazing that we have been adding jobs nearly as much as we have. But climbing out of the huge whole we created for ourselves (by continually re-electing those that allowed the too-big-too-fail financial mess – and those we elect continue to reward their friends that created the mess instead of fixing it) is a huge task. It requires much better job creation than we have had this year.

Adding 150,000 jobs a month would be decent if we hadn’t created such a huge problem that digging out of it requires much better results. Moving back above that average is much better than being below it, but we really need to bring the new jobs created above 200,000 for a couple years to make a serious dent in the problems created earlier.

Related: USA add 117,000 Jobs in July 2011 and Adjusts Previous Growth in May and June Up 56,000 More – USA Unemployment Rate at 9.6% (Sept 2010) – Unemployment Rate Drops Slightly to 9.4% (Aug 2009) –
Over 500,000 Jobs Disappeared in November 2008

Given the mess the economy was left in by the too-big-too-fail banks and their supporters (in DC) and those supports supporters (all the rest of us) and the continuing mess in Europe it is fairly amazing we are doing nearly as well as we are.

The massive reliance on huge rewards to the bankers and huge debt for the taxpayers is very worrisome. This is a very bad situation for the long term.

The average workweek for all employees on private nonfarm payrolls was unchanged at 34.5 hours in July. Both the manufacturing workweek, at 40.7 hours, and factory overtime, at 3.2 hours, were unchanged over the month. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at 33.7 hours.

Over the last year, average hourly earnings have risen by 1.7%, bringing average hourly earnings of private-sector production and nonsupervisory employees to $19.77.