After six straight months of gains in consumer spending the April numbers showed no change from March, according to the Commerce Department. This was a surprise to some who have been tracking such things as the University of Michigan’s index of consumer confidence (higher), consumers’ expectations on the economy over the next 12 months (higher), moderate real job creation (higher), savings rate (higher) and manufacturing activity (higher).
The timing of the sellout by Senator Bernie Sanders (I-Vt.) could not have been more politically auspicious — or more suspicious. For months the Senator had been denouncing the secrecy of the Federal Reserve’s bailout operations, which have exceeded two trillion dollars. For months he had been pledging that he would push for a genuine audit of the Fed. He authored an amendment in the Senate identical to “Audit the Fed” legislation in the House (H.R. 1207) authored by Congressman Ron Paul (R-Texas).
“Paychecks from private business shrank to their smallest share of personal income in U.S. history during the first quarter of this year,” according to USA Today. “At the same time,” continues the paper, “government-provided benefits — from Social Security, unemployment insurance, food stamps and other programs — rose to a record high during the first three months of 2010.” This reflects, says USA Today, “a major shift in the source of personal income from private wages to government programs.”
When former Comptroller General Bill Walker, who headed the U.S. Government Accountability Office, said two years ago that the “official” debt of the United States “is only around $10 trillion,” he wryly suggested that since this number was produced by “government accounting, which … allows one to ignore Social Security, Medicare and the new prescription drug benefit [it was like] ignoring rent, food and utilities in your household budget [and] it will lead to a few bounced checks.”
Item: The April 22 Washington Post reported that President Obama was making an “assertive stride into the debate on financial regulatory reform.” The President flew to New York “to deliver a stern address to an audience that included prominent financial executives, telling them that greater government oversight is in the best interest of the industry — and the country. ‘Unless your business model relies on bilking people, there’s little to fear from these new rules,’ he said.”