What, exactly, is recovering in the economy?

Record levels of long-term unemployment in US

A recent study conducted by the John J. Heldrich Center for Workforce Development at Rutgers University, “No End in Sight: The Agony of Prolonged Unemployment,” found that 80 percent of 1,200 unemployed people interviewed in August 2009 were still out of work in March 2010. Of those one in five who managed to find work, over half had to take a pay cut from what they earned in their prior jobs, “and about a quarter took a significant salary hit.”

Obama hailed as “very encouraging” last week’s Labor Department report that 290,000 jobs had been added to the economy. The job total, however, is well below the number that must be added each month—over the course of the next four years—just to keep up with the increased demand of new workers entering the job market.

The official jobless rate of 9.9 percent in April is a gross underestimation. If millions of “discouraged” workers who have given up searching for work were added, along with those forced to work part-time, the real jobless rate would be 17.1 percent. All told, there were nearly 27 million workers either unemployed or underemployed in April.

Thursday's panic reminded many of the darkest days of the financial crisis when trillions of dollars were pared from market-cap in 5 months of carnage. Now risk aversion is back; the yield on the 10-year Treasury is falling, the dollar is strengthening, Libor is on the rise, and the flight to safety is on. All of the upbeat data on manufacturing, retail sales, consumer spending and inventory restocking, won't allay the fears of jittery investors. When volatility is this extreme, animal spirits are curbed and people look for a place to hide.

Zero Hedge has railed against high-frequency trading for more than a year. Maybe now, someone will listen. Here's an excerpt from their website in 2009:

"What happens in a world where the very core of the capital markets system is gradually deleveraging to a point where maintaining a liquid and orderly market becomes impossible... When the quant deleveraging finally catches up with the market, the consequences will likely be unprecedented, with dramatic dislocations leading the market both higher and lower on record volatility... (and today) What happened today was no fat finger, it was no panic selling by one major account: it was simply the impact of everyone in the High-Frequency Trading (HFT) community going from port to starboard on the boat, at precisely the same time.....After today investors will have little if any faith left in the US stocks, assuming they had any to begin with." (zero hedge, The Day the Market Almost Died)

The Securities and Exchange Commission (SEC) knows that High-Frequency Trading (HFT) is fraught with danger, and that a drubbing like yesterday's can happen at any time. Apparently, that's a risk that SEC chair Mary Schapiro is willing to take in order to give the big financial institutions a leg-up on the little guys. But that's not the way to restore confidence or lure people back into the markets. For that, Schapiro's going to have to do her job and fix the system.

Peterson is also funding a high school curriculum in the hopes of indoctrinating the nation's young with his quest. He has even created a news service called the "Fiscal Times". The Fiscal Times intends to plant deficit scare stories in newspapers that are desperate for copy now that they have downsized their news staffs. Peterson's son assembled the staff from the large group of journalists displaced by the collapse of the newspaper industry.

Peterson even funded the creation of a game "budget ball" to convince young people that taking away grandma and grandpa's Social Security and Medicare can be fun. Of course we haven't said a word about all the politicians of both political parties that this crew owns.

When kids get scared watching a horror flick, we tell them to repeat: "it's only a movie." As the Peterson gang ramps up its anti-Social Security and Medicare crusade, it is important to remember: "it's just Wall Street propaganda."