Tell It To Al

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Inflation is under control as long as you don’t eat anything.

Shoppers at Compton’s Foodland could not help but notice rising food prices following last summer’s drought. Corn goes into nearly everything we eat, and the corn crop withered in the baking sun last summer.

If you get on the ground in the towns across middle America, you can’t help but see it. News Channel 5 in Nashville notes some economists are predicting spikes of 15% to 20% this year,

“It’s going to hurt a lot,” shopper Jo Riggan told the news station. Click here to see the full report.

Besides corn, the other commodity that goes into producing just about everything we eat is gasoline.

 Click here to read a report from the Associated Press on gasoline prices spiking 20 cents over the past two weeks.

One bright spot, however, is wheat. Favorable growing conditions have lead to an 8-month low in wheat prices. Click here to read about that.

Inflation, at least as it’s measured by economists, remains under control, but for how long? Or is this just someone’s idea about how to manage the nation’s obesity crisis?

Four years of easy money from the Federal Reserve and corporate coffers are just stuffed with cash.

Companies are increasingly using this money, not so much to expand and create jobs, but to pursue mergers and acquisitions.

So far 2013 is off to the quickest start for M&A activity since the heady Internet bubble days of 2000, according to data from Dealogic. These deals are great for the stock market, but do they create jobs?

Some deals, like the merger between Office Depot and OfficeMax, will actually eliminate jobs.

This is more than a tad ironic considering the Fed’s stated goal of continuing its bond buying programs is to get the unemployment rate down to 6.5%.

Click here to read my column in The Sunday Wall Street Journal.

Higher payroll taxes, delayed tax refunds, higher fuel costs, ongoing malaise in the jobs market – it’s all dragging on the outlook for one of the world’s largest companies, Wal-Mart.

Click here to read more from The Associated Press.

Four years after the Great Recession began, America’s poor and the lower rungs of the middle class are still hanging on by threads.

If anybody knows this, it’s Wal-Mart. The discount retailer can literally track the ebbs and flows of its sales by the very seconds people get paid.

“The Wal-Mart customer is a bit of a microcosm of the U.S. economy,” a top Wal-Mart executive once explained. (Click here to see the 2010 column I wrote about this Wal-Mart executive’s unique perspective on the economy in The Sunday Wall Street Journal.)

“You need not go further than one of our stores on midnight at the end of the month,” he said. “It’s real interesting to watch. About 11 p.m., customers start to come in and shop, fill their grocery basket with basic items, baby formula, milk, bread, eggs, and continue to shop and mill about the store until midnight, when…government electronic benefits cards get activated and then the checkout starts.”

On the plus side, the poorer America becomes, the more it needs Wal-Mart. On the minus, if America gets too poor, Wal-Mart can’t keep growing.

Here’s what Time magazine calls “The Most Important Chart In American Politics.”

Robert Shapiro, former Under Secretary of Commerce for Economic Affairs under President Clinton, says it means “The American Dream is in Big Trouble.”

Productivity is way up. The nation’s gross domestic product is up, too. Guess what’s not up? Household incomes.

The economy is producing more, but most American’s are earning less. The gap between rich and poor keeps widening.

Mr. Shapiro says the incomes of working Americans rose, on average, 5.3% during the 1983-1991 business cycle, and grew by 14.2%in the 1992-2001 cycle. But in the 2002-2007 expansion, and the recession that followed, incomes shrank by 3.4%.

It’s good to see the numbers, but the sad truth is that too many Americans do not need to look at this chart to be familiar with this economic trend.

Oh, how far we have not come since the start of the Great Recession.

The Economic Policy Institute lays it all out in a new report it released today: “From free-fall to stagnation: Five years after the start of the Great Recession, extraordinary policy measures are still needed, but are not forthcoming.”

Ongoing weakness in the economy boils down almost entirely to a lack of demand, the report says.

Some other key findings from the report:

* As of December 2012, 9.1 million jobs needed to be created to get back to where we were before the recession.

* National output was roughly $1 trillion below what it could have been if the economy were at full employment

* The big jump in federal budget deficits beginning in 2008 is a symptom of the weak economy, and has supported a return to economic growth.

* Too many near- and medium-term economic forecasts assume a return to full employment relatively quickly.

* The U.S. economy is projected to remain depressed, with GDP between $941 billion and over $1.0 trillion below full employment output at the end of 2013.

* Five years after the Great Recession began, “full economic recovery still remains years and years away.”

Click here to read EPI’s full report.

The next 20 years are going to be nothing like the last 20 years.

That, says Chris Martenson, is pretty much guaranteed.

Mr. Martenson is a neurotoxicologist who has put the global economy under the microscope and what he’s found isn’t pretty. The economy will either bump along for years on end, as it is doing now, or it may just collapse, he says.

Mr. Martenson believes a collapse is more likely. He said he quit his job helping big companies make the same mistakes they always make and founded a website, PeakProsperity.com, to help people learn how to thrive in the face of a looming global economic crash.

It’s worth the time to take his “crash course,” explaining in compelling, easy-to-understand detail why the global economy, as it’s structured today, is simply not sustainable. Click here for the course.

Click here to read my column on Mr. Martenson on MarketWatch.

The average U.S. household spent $2,912 on gasoline last year, or about 4% of household income before taxes, according to the U.S. Energy Institute.

This is at the highest level in three decades, except for 2008 when we had a really big spike in oil prices.

There’s no getting around it. High energy prices are a constraint on growth and it’s one reason why our economy isn’t really going anywhere.

Click here to see the report.

No matter what you do for a living, the unemployment rate in your occupation rate is probably still a lot higher than before the Great Recession, according to this chart complied by the Economic Policy Institute.

So much for all that banter about worker shortages in some fields. “We are not seeing any occupational categories where demand for workers isn’t substantially lower than it was five years ago,” EPI reports.

Click here to read more from EPI.

Click here to watch me sing it on Denver’s 9News.

We wish you a Merry Cliffsmas;
We wish you a Merry Cliffsmas;
We wish you a Merry Cliffsmas and a recession next year.

Higher taxes for you and all your kin;
We wish you a Merry Cliffmas and a pink slip next year.

Oh, bring us some fiscal pudding;
Oh, bring us some fiscal pudding;
And bring us more food stamps so we can buy beer.

We won’t go until we get some
We won’t go until we get some
We won’t go without entitlements, so bring them right here

We wish you a Merry Cliffsmas
We wish you a Merry Cliffsmas
We wish you a Merry Cliffsmas and a recession next year.

Click here to read my Cliffsmas column on MarketWatch.

When it comes to the economy, most economists agree we should do something about our nation’s spending, just not now.

That’s according to a new survey by the National Association for Business Economics.

Yes, they are for harsh medicine, as long as we do it later.

Politicians, needing to be elected, have to think this way. But economists? Can’t they take a stronger stand than this?

Click here to read my column on MarketWatch. To read the survey, click here and open the PDF,”Policy: September 2012.”