The FDIC closed a total of five banks Friday including the sixth largest ever, this caused a downturn on global financial markets that was reflected in the US markets today. The back to school sales have been characterized as a train wreck and this does not bode well for the Christmas retail season. It is very likely however that many retailers won’t be around for that debacle.
Retail sales are being driven down by declining income on several fronts. Major cities and even state governments across the country are giving workers unpaid days off and cutting pay as well. Some governments are to the point of scheduling 16 days unpaid for the coming fiscal year and should really be measuring the time off in weeks. This compounds the income already lost to vanished factory jobs and expired unemployment benefits. The inevitable loss of retail jobs will accelerate the decline of the economy still further and as retail sales decline, tax revenue will drop since Republicans have insisted on the regressive sales tax to fund local and state government.
The spiraling unemployment will also push more prime loans into foreclosure and spike the number of people who no longer get health insurance burdening still further public health assistance. The decline in property values is expected to cause fully half of mortgages to be underwater by the end of the year putting anybody who is out of work or experiences an income loss in a desperate position. Selling or refinancing becomes impossible and bankruptcy only provides marginal relief since the Republicans blocked the courts from rewriting middle class home mortgages reserving that for corporations and the rich.
If something isn’t done soon the speed of the collapse could exceed the ability of government to stop it. With garbage beginning to pile up in the streets and the nuts beginning to carry guns to political rallies things are getting to the point where some unforeseen crisis could put us over the edge. Hurricane season is suddenly picking up as the upper level winds are no longer cutting the tops off of tropical storms. A couple major hurricanes could devastate the oil refineries. China is becoming less and less concerned about the consequences of cutting us off and moving to assume control of our former trading partners. Saudi Arabia is in the middle of a banking crisis that could destabilize the monarchy and other middle-east countries are having currency problems brought on by a real-estate collapse. The list things that could cause a cascade of unfortunate events goes on and on.
Why can’t the corporate crooks stop after they get theirs? As well a the psychopathology there is a fundamental Ponzi dilemma. They didn’t get to the point of a 9 figure salary by being a get along choir boy. There are people up and down the food chain that are expecting to continue to get their millions too. They can’t just stop because they "have theirs", there are too many memos and tapes and alternate sets of books in various safes. Then their are the politicians who expect to continue getting paid off to keep them out of prison and on and on. Once put in motion these "on going criminal conspiracies" can’t stop.