Monday, August 3, 2009

Off the Cliff and into the Dark Ages

Our out of control tumbling downhill may have slowed but we are still headed for the cliff. When we start thinking of our current economy as improving we are really kidding ourselves. One problem is that anybody under 40 can’t even remember "good" times. Even if we went back to the five years ago we would still be in trouble. Oh sure, many individuals have experienced high incomes and have accumulated some wealth, but if it’s in a 401k, good luck with that.

Do you have your "wealth" in your home? It could easily become more valuable to copper thieves than to anyone else. Own a small business? My condolences. Family farmer? Rest in Peace. Union job? New hires are getting half wages and reduced benefits (if any). When is the last time you heard of an increase of pay let alone a strike?

Much has been made of people maintaining their lifestyle with credit cards and home equity loans. The group with some of the highest card balances are the elderly, blamed mostly on health care costs, it’s a question of maintaining life. Boomers as a group have no savings or even home equity left and are often shocked to find their parents don’t have enough to support themselves let alone leave anything to the kids.

Recent college graduates are benefiting from the increase in the minimum wage since this is where many of them are employed. Teenagers who want to get an service job (read that as low pay and no advancement) to help support the family can find themselves in the same hiring line with their fathers as Dad is being told his middle-class job is gone forever.

We are losing 500,000 jobs a month with no plan or even any intention of bringing these jobs back. Each unemployed person is producing nothing and the rest of the economy must support them one way or another. We’ve been masking this lack of productivity with cheap imports purchased on credit from China. When our credit runs out the full magnitude of this folly will become apparent. Comparisons to the Great Depression are inadequate. Comparisons to the Dark Ages would be more appropriate.

1 comments:

Anonymous said...

The people that bought and paid for Ronnie how many years ago decided that making things here, providing real services (even such services as call centers) was too expensive and it was much easier to make your money by using other people's money and not risking your own.

They have crafted a message that is anti communistic (but having China that has what type of government is great as one our biggest trading partners?) that mouth the words on immigration but actually don't do anything about since while you can't export certain jobs (going to send dirty dishes to China or Vietnam?) you can get almost as good as deal by bringing (actually they pay their own way) workers here, ones that you can treat like garbage and when they begin to think they might be getting the shaft...you can make a phone call and your friends in the government will ship them home for you!

I feel that the system is falling apart but that upper two percent assumes that they will be able to either live safe in armed compounds or move some place safe like Switzerland. As always it is the idiots like us that are too honest and too stupid to want to live by screwing over others that will pay the costs just as we saved the butts of those devout capitalists that were willing to take risks (don't want any of that government regulation!) for big gains...but not really take risks since they got us (the people they view as idiots) to once again bail them out...so they steal from us coming and going. But they own the country and either own our government or at least lease it. I don't think there is going to be a happy ending.

I mean we can't all sell lattes and hamburgers to each other.