Once again a record share of American small businesses were closed as of February despite the “booming growth in GDP” which Treasury Secretary Janet Yellen and Federal Serve Chair Jerome Powell are exulting over. Some 22% of all small businesses were closed in that month, equaling the high of May 2020, according to the Small Business Roundtable in a survey reported on CNBC April 9. In January the figure had fallen to 15%. This provides one insight into the continuing phenomenon of close to 20 million Americans on unemployment benefits, when only 9 million are considered officially unemployed as this is generally counted. Small business owners and their employees, like most informal and contract employees, would not have been counted as unemployed, or received benefits, after so long a period were it not for the Federal Pandemic Emergency benefits.
The growing “official” poverty in the United States, forecast heading toward 13.5% of the population this year from 9% two years ago, forms another part of the background against which Fed Chair Jerome Powell gave a “60 Minutes” interview April 11 consisting of nothing but promises to “complete the recovery” by holding interest rates at zero and QE at $120 billion/month indefinitely. He made the same aery forecast of a 6%-plus U.S. GDP “boom” as had Yellen to Congressional committees 10 days ago.
Powell’s interview included this shameful comment: “We don’t have the answer to everything, but the job that we do for the benefit of the public is incredibly important, and we do understand that if we get things right, we can really help people,” he said. “If the people who are at the margins of the economy are doing well, then the rest of it will take care of itself.”
Did he mean the banks doing margin calls? Not only is the number of American in poverty growing by 15 million these two years; bank lending is lower than a year ago despite the Fed having made banks’ deposits and reserves 15% and 30% higher respectively; and so forth.
