Anyway, I ran across an article that reminded me of this thread:
The theme is why this downturn is unlike the Great Depression, but the support for the thesis seems to feed right into this thread. It is kind of long- the main point is that during the Depression we were the world’s biggest creditor nation. Things were bad but we had an income stream from all that international interest and dividends &etc. Now we are the world’s biggest creditor nation.
Don’t miss the graphs of the S&P 500 running away from the money supply and GDP, that fits right into this thread. There is a lot of talk of viewing the stock market in terms of how much gold the dollars are worth- I am not sure that is a valid way of looking at it, but there is a point there.
Bottom line- we have been devaluing our currency for a long time, and that can make the markets go up because you need more dollars to equate to the same purchasing power. Yet during the “boom”, we were running a stimulus program rather than paying things down, and we are going to devalue it even more, maybe until the rest of the world abandons the dollar as a reserve currency. Then we’ve really got problems.
Not to mention the immanent mass casualty event which will likely cost a million lives just in this country.
In the depths of the recession, Obama and the Democrats had the right idea. Bail out the financial system but then start putting money in the hands of consumers, and more than that, a value-driven economy that builds a working class over time.
Republicans and weak-kneed Democrats like Max Baucus made that impossible. We bailed out the Fortune 500 instead. We kept unemployment checks coming for a little while but that’s not a ticket to socioeconomic mobility. We ended up touting the gig economy as evidence our ‘innovation’ and boot-strappiness.
Meanwhile companies were also using the financial equivalent of HGH testosterone steroids to pump up the value of their stock by simply using debt to buy it back and create artificial demand. A lot of people never recovered from the recession of 07-09.
And the proof is our “success” (or lack of it) is in terms of wealth inequality. The situation is unsustainable when more and more people rely on the financial decisions of fewer and fewer people at the top. The rampant inequality of the 1910s and 20s was a precursor to the misery of the 1930s, and it’s not a coincidence that this is happening again in our lifetimes. Inequality now is inextricably tied to aggregate economic distress later.
It’s no more bullshit than it was 10 years ago, but it’s worse now because we needed the last 10 years to recover from the last pile of bullshit and we squandered that opportunity. We rehabbed the financial system and credit markets - and not much else. All that did was encourage more irresponsible behavior by corporate America, exploded the gap between rich and poor, and force us to borrow a shit ton more against the future. How much more can we borrow against people living in their 40s, 50s, and 60s?
I’ll ask everyone reading this that question because that’s about how old most of us are. How much more of your SS and medicare are you willing to cough up so that we can protect Jeff Bezos and the Koch Bros’ seat at the top of the food chain? The reason these programs existed was because elderly poverty was a serious problem even back when life expectancy was a good decade shorter than now. What do you think post-60 something retirement is going to look like in 10-20 years? Not pretty for many of us.
So, I’m a fulfillment center worker and have a 401(k) and IRA. My pay has temporarily more than doubled (factoring in OT), though that will probably settle down to only a 10-15% increase. My IRA is just about worthless and I haven’t looked at my 401(k) in awhile and I just keep investing. On the down side, I took the FC job when my business stalled a few years back, but I was still managing to make from a few hundred to a couple grand a month from self-employment and that’s how I really ate. Most of that income dropped during the coronapanic. So the OT is mostly just covering my lost business income. Also, I am working 60 hours and going to school 16 hours a week.
So, am I a winner or a loser, and how am I supposed to feel right now according to the premises of this topic?
I don’t know much about the economy, but I feel like I am a canary in the mine here that just died.
I am the guy that comes in and watches the work you do and then builds robots that do your work so you can get laid off. It’s a weird job but it’s how I provide for my family.
I got laid off yesterday, and the plan is that my robots are going to run until they break or meet service, then they are shut off. I might get called back to repair them as a 1099 employee, but I have to see if that would make my unemployment checks stop, and I can’t go in and repair them at that point.
I’m one of those poor assholes that can’t cover a 400 dollar expense without a credit card. I used to be able to do that, but now with no income, I have to keep my savings up so I can cover rent or have the money to move again for another job. It’s tough, usually right when I get ahead something stupid like CV happens to drain my savings. I can’t save much more than I have been saving, I drive a paid for 40 year old car and I am the primary care provider for my wife’s mom. My wife got laid off yesterday too.
It’s like the recession all over again. I used to own a small 2 bedroom house during the last recession. After being laid off for 9 months traveling looking for work then I lost my house. Never really recovered from that one either. My student loans have almost doubled in size although I haven’t missed a payment in years, I can’t pay enough down on them a month to beat the interest curve. My credit is perfect except for the high balance of the student loan. I sold plasma once to make the student loan payment. Looks like we are headed to the plasma center when it opens up again. Man I thought I was done with that shit.
I don’t know all the answers but I do know more people like me than people that are better off. I used to be the guy that bailed out everyone, now it looks like we all lose.
Heh. Back in 1991, kaylasmom and I started hanging out with one of her friends from adolescence and her husband. The husband had recently foundered on the rocks of a real estate boom/bust. They had a refrigerator magnet that read: Please Lord; give us another real estate boom. I promise not to squander it this time.
Calling America’s economy a “fraud” because a coronavirus requires a shutdown/quarantine that also in the process halts economic activity is like calling Boeing a bad airplane manufacturer because one of its 777s got shot down by a Russian missile over Ukraine (which it did.)
If we want to blame Trump for allowing the virus to spread in America, that’s a whole different story (and I agree, he deserves blame.) But this coronavirus requires a shutdown/quarantine which would have greatly damaged ***any ***president’s economy had it happened in their time - Obama’s, Bush’s, or Clinton’s.
The pillow guy is just a businessman who makes money by selling overpriced pillows. Nothing wrong with that (except when he made claims about the therapeutic effects of his pillows). Pretty much any garment manufacturer can convert into a mask factory is they can get their hands on enough HEPA fabric.
But he is not a health care expert. Birx is too political for my tastes, she is providing cover for her boss. Redfield is too ideological, he puts his ideology (political and religious) ahead of sound policy.
How do you protect your unskilled labor force from losing out to much cheaper labor overseas?
There is a limit to what you can do with trade wars. No country is going to allow us to protect our $25/hour labor enough to overcome their $5/hour labor.
So what are you gonna do? Pay people a middle class salary to make cars that could be made cheaper, faster, and higher quality by machines?
(Also remember that those now those made in America cars that you made have to sell at a ludicrous price, to justify the labor costs – so now what even IS a middle class lifestyle if they cant afford your cars because the more you pay them the more you charge for the car, and “middle class” isnt about how many dollars you make but about what you can buy, and oh no now that everything is hand made by Americans it is so expensive because you gotta pay those Americans so much to buy those expensive goods! Gasp)
Our economy is doing better than ever in terms of how much it can produce, with fewer and fewer people doing the producing. Whatever the unemployment rate, there are fewer people actually working in jobs that physically produce goods, and yet our capacity for the production of goods has skyrocketed. The problem is that these enormous gains have gone straight to the top. In other words, the problem isnt production. Its distribution.
Just to be clear, I am not making light of your situation at all. I write threads like this because I’m so fucking fed up with all the bullshit peddlers in the media who are not talking about the reality that so many people - like many of us - are living with. And while I like a lot of things about America, we are some naive, bury-our-head in the sand idiots who always want to be positive and optimistic. We don’t need optimism right now; we need anger. Controlled, focused anger. We need to stop putting up with this shit.
You might have to wait longer. The amount of borrowing against the future that it’s going to require to stabilize the economy just so that people don’t end up rioting in the streets is going to be massive. This might be inaccurate, but I believe we’ve already committed to plunking down the equivalent of 1-2 years worth of our total federal budget spending already – believe me that this is just the beginning. It’s going to be a budget deficit the size of Alpha Centauri.
:p;)