Union Bailouts?

President Obama is asking for $50 billion dollars worth of emergency aid for the State and local governments. For more info on this act of desperation, click the link Obama Pleads for $50 billion. According to President Obama, "the money would avoid massive layoffs of teachers, police, and firefighters". It does NOT fix anything, but rather kicks the can down the road for the next politician to deal with.

This bailout is clearly for unions, as they are not willing to accept concessions. There was a rally of Union employees recently where their chant was "raise our taxes". Here is a link to the video: Union Employees' Want Higher Taxes. You have to read the top comments associated with the video...

We cannot bailout the unions because that will NOT solve the underlying issues. The issues are as follows: union pay (far above private companies), union benefits, and of course pensions. The process will be difficult, but the sooner we fix the underlying issues the sooner we can be on the road to recovery. Regardless what the mainstream media tells you, we are clearly not in "recovery" just take a look at the foreclosure numbers (among many other economic metrics).

Stock Market Gains Created By Government Bailout Monies

If you have been following the stock market closely since March 2009, you would be able to draw the conclusion that the gains of the stock market are not based on solid economics. I think what we are seeing is what market analysts call a 'dead cat bounce'. Per Bob Chapman, "there is low volume in the overall market and short covering", which typically infers a bear market and lower market prices. In addition, the market is pricing in the future economic strength that we are suppose to have, and this is simply not possible with a weak dollar. You cannot have a weak dollar, and a strong economy. Also, there is no such animal as a jobless recovery, especially when our economy is fueled by 70% spending. What's more is that the savings rate among Americans is increasing quickly, so the people that do have money are saving more and spending less. The latest government numbers showed that Americans were saving approximately 7% of their income on average, versus 0% of their income on average a year ago. This is the highest our savings rate has been since 1994. Based on the graphics below, I would conclude that people across all generations are saving more and making less.