Meanwhile, hours after trumpeting the mega-colossal terrific, never-before-seen good news that home sales were turning around and ending the recession — again — ("New Home Sales Jump from Record Low," Associated Press, 04/23/10), we received the news that "Stocks Mixed as Gains from New Home Sales Fade" (Associated Press, 04/23/10). As the article stated, "early gains from a strong report on new home sales mostly dried up by late morning. Mixed news from earnings reports and Greece's decision to trigger a bailout package kept the market in check."
Meanwhile, back at the ranch, a growing number of Federal Reserve officials, evidently convinced that "America (and the housing market) is Back!" (see last week's "News from the Network"), are talking about divesting the Federal Reserve of its holdings of mortgaged-backed securities ("Several Fed Members Favor Selling Mortgage Assets Soon," CNBC, 04/23/10). Within the current economic and financial framework far removed from the common sense of binary economics, a sell-off would drive up interest rates and depress the housing market, triggering inflation and stalling the recovery. Of course, if the Federal Reserve were to do the rational thing, and sell off its holdings at the real fair market value to Homeowners Equity Corporations by taking back no-interest paper, the problem might solve itself.
Meanwhile, back in the world defined by the "economics of reality,"
• Last week's "News from the Network" was posted before the Second Social Justice Collaborative and the CESJ Annual Celebration took place. We are now in a position to report that both went very well. Additional reports filtered in regarding last Thursday's "Rally at the Fed." The general consensus of the participants was that the Rally was the most successful to date.Those are the happenings for this week, at least that we know about. If you have an accomplishment that you think should be listed, send us a note about it at mgreaney [at] cesj [dot] org, and we'll see that it gets into the next "issue." If you have a short (250-400 word) comment on a specific posting, please enter your comments in the blog — do not send them to us to post for you. All comments are moderated anyway, so we'll see it before it goes up.
• The Second Social Justice Collaborative was a little slow getting started, but once it got moving several key people made definite commitments to reach specific goals, all of which are geared toward enactment of the Capital Homestead Act by 2012, the sesquicentennial of Abraham Lincoln's 1862 Homestead Act. A (free) light lunch was provided, "hunter's macaroni" (penne rigate with tomatoes, mushrooms, and garlic) and a green salad, fueling people adequately for the more active afternoon session. The focus is on getting doors opened to "prime movers," with President Obama being the primest of movers.
• The CESJ Annual Celebration the following day, Saturday, April 17, was also extremely successful, even without allowing for the fact that many participants were beginning to fray a little at the edges from the intense level of activity, both preparation for and participation in the events. The business meeting took place in the morning, during which commitments made the previous day were renewed and confirmed, with some specifics being filled in. News items and non-business reports were to be deferred to the afternoon, but after the meal of Syrian cuisine provided by O'Connor Catering, informal discussion of aims and goals replaced the formal agenda.
• Rudy Wroble, a long-time CESJ member, located a high school economics text from 1928. Perhaps not surprisingly, the book treats very seriously some subjects, such as Say's Law of Markets, that modern texts ignore or dismiss completely. Going through the discussion in the book it becomes evident that the increased role of the State, which accelerated phenomenally as a result of the New Deal, is largely responsible for much of what has happened in the past eighty years, economically speaking. The State has taken on so many new duties and is trying to do so much that it has reached functional overload. The result is that even the State's proper, if limited functions are not being carried out, even inadequately. The book is currently on loan to CESJ.
• On Thursday we received a telephone call from a woman from Zambia who was investigating various programs for adoption by a candidate for public office in that country. Coming across the CESJ website, she immediately realized that Capital Homesteading has the potential to turn things around for Zambia. She is currently looking over the material on the website, especially the "parallel legal system," and will be working to arrange a meeting between the candidate and Dr. Norman Kurland.
• Research for the current "Own the Fed" series has uncovered some interesting data. For example, the Bureau of Labor Statistics released two unemployment rates for March of 2010: the official 9.7% rate, and the "real" rate of 17.5%. Added to this is the fact that the percentage of the population included in the "labor force" has increased greatly since the Great Depression. As one small example, according to the Census Bureau, the proportion of women in the labor force in 1930 was 24%, while in 2000 it was 61%, a 250% increase. What does that mean? A crude calculation to try and compare the 17.4% unemployment rate in September of 1932 with the 17.5% unemployment rate in March of 2010 gives us an unemployment rate for March of 2010 of 19.95% in 1930s terms. (According to the Census Bureau, in 2000 women made up c. 46.5% of the labor force. Multiplying 17.5% times .465 and then by 2.5 gives us 19.95%.) In 1933, the worst year for employment during the Great Depression, the unemployment rate maxed out at 24.9%.
• Since we're looking at Scary Statistics That People Think Are Good, in September of 1929 the Dow hit a then-time high of $381.17. At the worst of the Great Depression, the Dow was down to $41.22. It didn't recover its pre-Crash level of $381.17 until the mid-1950s, a full quarter century, recovering to 83% of its former level by 1954. In comparison, the Dow reached a high of $13,390.01 in October of 2008, falling to $7,062.93 by March of 2009. This morning, the Dow was at $11,145 — an astonishing recovery!! America is saved!!! The Dow took a little over a year to recover 83% of its former high, doing what it took those poor jerks of 1930-1955 twenty-five years to accomplish!!!(!). Further, Federal Reserve authorities and government officials as well as Wall Street pundits and academic economists assure us this is not a speculative bubble! The megadollars pumped into bailing out failed gamblers and speculators and into price supports and subsidies for toxic assets had absolutely no speculative effect! It would be interesting to find out if Mr. Bernanke, President Obama, Mr. Geithner, Mr. Paulson, et al., have read Charles Mackay's Extraordinary Popular Delusions and the Madness of Crowds (1841). Just a suggestion.
• As of this morning, we have had visitors from 45 different countries and 49 states and provinces in the United States and Canada to this blog over the past two months. Most visitors are from the United States, Canada, the UK, Australia, and Brazil. People in Venezuela, Guatemala, Maldives, Pakistan and Rwanda spent the most average time on the blog. The most popular posting, appropriately enough, is "Kemp Harshman, Soldier of Justice," followed by "Thomas Hobbes on Private Property," Guy Stevenson's "Expanded Capital Ownership Now," "Full Employment" in the "Own the Fed" series, and "The Great Society," also in the "Own the Fed" series.