The financial elites are all worried that consumer spending isn’t increasing. Maybe they should have thought of that before they shipped all the jobs overseas

bingo

why the hell do we subsidze companies that ship their manufacturing to countries that allow slave labor, child labor, unhealthy work conditions?

those “tax incentives” designed to send companies overseas MUST be rescinded

I’m unemployed and I can say looking for a job that doesn’t exist isn’t all it’s cracked up to be. I have to find a different way, which I think I have however I’m just not sure I can hold onto my house until I get it going.

The financial elites are all worried that consumer spending isn’t increasing. Maybe they should have thought of that before they shipped all the jobs overseas.

Yep. I’ve been wondering for years how folks are supposed to buy consumer products when the only jobs available don’t even pay enough for basic subsidence.

But then, I’m not a highly paid economist shilling for the highest bidder.

Funny how those geniuses who got us into this each thought the other genius would pay the salaries to buy their product; Alan Greenspan tho’t the effects of bad loans would be so widely dispersed that it would slip by. For this they’re getting bonuses?

Have you got a spare room/space that you can rent out?

why the hell do we subsidze companies that ship their manufacturing to countries that allow slave labor, child labor, unhealthy work conditions?

Higher profits for companies that ship jobs overseas, bigger bribes for pols who let them do it, lower prices for American consumers (the ones who still have jobs), and an opportunity for those unhealthy child slave laborers to stay busy so they don’t dwell on how much their lives suck. Everybody wins!

Seconded.

Beautiful analogy masaccio.

It isn’t just the extraordinary courage of the newly less rich that offers inspiration to the jobless. See the privation:

But she’s months overdue for a visit to her colorist, a telltale sign of economic distress for a woman such as Steins. The smell in the basement could mean a crack in the septic line; unlike a $200 hair appointment, a plumber will be in the thousands.

Hmmm, my house smells like crap, my hair is reverting to it’s natural color, but I’ve got $40,000 a year for the nanny.

odd dont you think .. just as we get word foreclosures are at a record high.. we also get news that home sales are also setting new records ..

it’s sort of a WTF moment .. imo..

i really don’t know what the economists are thinking .. with unemployment still rising .. how do they expect consumer spending to carry the day ..

and at the same time all of this is ongoing into a general collapse .. the financials we bailed out are forging ahead …

has anyone else ever noticed the trend that what appears to be “best for the market” is really shitty for the rest of us commoners ??

when do we uncouple the idea of “what’s good for wall street is good for the rest of us” .. it certainly doesn’t seem that way to me ..

The economy is tanking (pay no attention to the DOW). We’re going to have a dead cat bounce and then a hammering the likes of which this country has never seen. It will be a bumpy ride for BO&Friends.

“The financial elites are all worried that consumer spending isn’t increasing. Maybe they should have thought of that before they shipped all the jobs overseas. “

They did think about it. The thought was: “Gimmie 5 years with these stock options and I’ll get mine before this golden goose keels over.”

SLightly OT I have been trying to find out something about the vulture bankers. CITI is paying its commodities trader $100million in bonus. Is this for driving up oil and food prices?

By the way does anyone have a recipe for cooked goose?

Back in the Eighties I worked in the home office of a billion-dollar corporation still run by a founder who thought his stores were the only important thing and who got rid of employees every chance that presented itself. Eventually he was on his way to going out of business and left wondering what happened to his customers.

I’m reminded of a conversation that I had with an person who worked for a company that developed a key technology: the bar code.

IIRC, this company was purchased by a Swedish firm in the late 1990s; how the US let that company (which, I was led to believe, meant also owing the **patents**) be sold to non-US corporate interests struck me as completely self-defeating and unbelievably stupid.

At any rate, this EE (Electrical Engineer) had been sent to a country in Southeast Asia to train some new employees. Upon returning, she said to me, “I realized after about five days that I was training my replacements, and I felt really stupid for not seeing it sooner.”

This is not a slam about any countries in Asia, nor is it a slam about Sweden.

This EE has **years** of professional and technical training, including two degrees granted by public universities. Public universities are funded by taxes from you, me, and other Americans. Like probably many who hang out around here, that woman had paid tens of thousands of dollars for her education, and many companies would have hired her ’skillset’.

But to pay for her ’skillset’ in my region is minimum $60,000 + medical + benefits. Does someone in Sweden or Southeast Asia really give a rat’s ass, when they can pay the same ’skillset’ at least 1/3 of that rate — AND those individuals will have some kind of government-subsidized medical, which makes them more attractive to multinationals.

This woman, with two advanced degrees, and I had a conversation about the fact that our local hairdressers have more job security, in the sense that no one is going to hop a plane to Asia for a haircut. Ditto things like groceries, pet supplies, bus driving, teaching, policing, and firefighting.

So those of us who busted our asses to get ‘a good education’ are in a global market, whereas the people who provide local services are actually in some respects more ’stable’ in their employment patterns — they are also unionized.

A few weeks after that conversation — which, FWIW, occurred within a 6 months after a software group that I’d been working with moved to India — I was reading “Business 2.0″ or some such rag, and read about a marketing exec who was rolling in money because he’d ‘outsourced’ Photoshop and Illustrator work to Eastern Europe. He could pay people $7.50/hr or so, which was terrific money (no idea how well their electric grids work, or how old their software is, but hang in here with me). In my region, that same work runs between $25 – $75/hr.

This is the world in which we live.

Meanwhile, my high school aged kids were being sent weekly offers of credit cards — no proof of employment, and completely irresponsible on the part of those credit card companies.

We don’t pay people to drive the elderly to doctor appointments; if we did, we’d be creating viable jobs.

We have 30 kids in each classroom in my region; think what benefits we’d get if we doubled the number of teachers! And it would be long term benefits.

We don’t have school nurses any longer, so the people who used to make sure that all the children had hearing tests and vision screening are otherwise employed.

We don’t have nutritionists working with kids in schools, but we have childhood obesity.

We don’t pay enough people to work with kids in active, after school (or before school) playground or sports activities — when I was a child, I don’t recall kids being overweight. But today? Too many kids are overweight starting by age 10, but they aren’t getting the physical activity they need for good brain development and learning.

So there are 5 good ‘jobs’ that we don’t pay for, that would stay in local communities: physical recreation for kids (and adults), elder assistance, more school nurses, child nutritionists (showing kids how to fix snacks and track their foods), and more teachers.

We could have much better communities, smarter kids, and better lives if we stopped believing in the mythology that ‘capital’ is the source of wealth.

It isn’t.

Helping people by providing services, including learning and wellness, is the key to a better economic future because those jobs can’t be outsourced.

(Too long a comment, masaccio — sorry!)

The Bush family and the Republics want everyone to believe that Decider Bush handed over a highly tuned and functioning economy in January and Obama destroyed it all in just seven months.

We are experts at cutting off our noses to spite our faces. Making every move designed to capture the quickest dollar seems rarely to anticipate the quickest decline in long term income. Everyone cannot work in a service industry (like fast food or discount retail)if there is no one left to buy the service. Nothng costs a dollar at a dollar store anymore, and even fewer people have dollars, anyway.

The irony of the brightness of our imediate enterprise is the dimness if its foresight.

YES!!!!!!!!
It is!!!!

If you want some great background, go over to CSPAN and search for a Senate Hearing held in early June 2008. (George Soros was a witness, so search on “Soros” and then find a Senate Hearing for June 2008 on commodities trading).

Washington State Senator Maria Cantwell chaired the hearing, and Sen Byron Dorgon asks some great questions — he’s clearly figured out a whole lot about this whole mess, and was one of only 6 Senators who voted against the demise of Glass-Steagall back in late 1990s.

One of the witnesses is a man from central Washington state who represents energy distributors. Those people sell fuels to farmers and ranchers. Thus to ‘energy distributors’ know a lot about the food supply in an age of corporate ag.

And Soros points out that because pension funds, sovereign wealth funds, etc, were spooked over currencies, they stopped trading in currencies and (pardon my reckless, faulty recollection) basically started buying futures in corn flakes, grapes, and bacon because the markets were so bizarre.

I can’t say “enjoy”, but that one single CSPAN hearing is well worth anyone’s time.

“Being a mother on her own in married suburbia requires courage. One night, Steins is invited to a cocktail party and as usual she stands alone on the doorstep of the magnificent house and rings the bell, suspended in that endless moment of waiting until the door opens and the host appears.”

God I was the edge my chair!!!

Repealing Glass-Steagall helped SOFTEN the blow of this recession.

http://blog.heritage.org/2008/…..gall-myth/

A week ago, Loew’s — the second largest home improvement chain after Home Depot — announced that their Q2 earnings for 2009 were 19.1% below Q2 in 2008.

Many were surprised by this, because in past recessions, when home sales dropped home improvement spending went up. The explanation is that during a recession, people find it easier to fix up the old place than to buy a new one.

This time around, though, this isn’t holding true. If you are being foreclosed on, you’re not going to head to Lowe’s or HD to start some big improvement project on a house you’re being kicked out of next week. If you are behind in your payments but not yet in foreclosure, you are more concerned with simply catching up on the past due bills. For many folks who are current in their payments now, they are on the edge of missing that next one, a trip to Lowe’s is not in the cards.

That leaves the folks who are current in their payments who might have some cash lying around. Right now, more folks are keeping that rainy day fund untouched should they lose their job than are dipping into that reserve to improve the old house.

To me, the Lowe’s numbers were a huge red flag that say this recession is nowhere near done. Consumers with money are cautious, and consumers without money can’t consume.

I think it’s that CSPAN hearing, or maybe another one, in which you also learn about ‘energy traders’ parking oil tankers in fjords to wait for the energy prices to rise higher.

FWIW, it’s my hunch that Cantwell came to this whole topic of ‘commodities’ via her involvement trying to get FERC (Fed Energy Regulatory Commission) to put the brakes on Enron. Cantwell was elected in 1998?, and by a short time into her term the price of electricity had been so manipulated — and there was such a public fury — that she had to look into Enron and FERC.

And if you watch the excellent video, “Smartest Guys in the Room”, you’ll see that Cheney had a handle on FERC, and that the Bush admin was allowing Enron to ramp up utility prices into order to put political pressure on Gray Davis in CA, so that they could grab back the California governorship.

Farther north in Washington state, those climbing electricity prices meant that utility commissioners who had inked contracts with Enron were booted out of office, and a few new Commissioners insisted in going to court against Enron. Cantwell surely got a lot of calls about electricity prices, and public fury about Enron.

At the beginning of that CSPAN hearing, you’ll hear Cantwell say that what’s happened with commodities (as of June 2008, but it’s a safe bet since then) is that they were ‘Enronized’. The **very same traders** who pulled that crap manipulating electricity prices then moved into oil, and ag products.

We’re in very, very deep trouble.

One thing that struck me as really stupid about offshoring is it lost us our technological advantage. By making things in China were were transfering the technolgy(unavoidable that)and giving away our lead.

It seems that my crackpot theory about the Wall Street Banksters and Congress funneling all the money upwards for a generation now has had the effect of slowing consumer spending. Imagine that!

Let’s see, real wages have stagnated or dropped for the last 30 or so years; banks are allowed to charge usurious interest rates and fees; utilities, insurance, gasoline, groceries, etc. have all undergone massive increases in price over the last few years; housing and transportation costs have skyrocketed and then plummeted to only about 150% more than they should be in a real world.

No one could’ve predicted that cutting the taxes of the rich while increasing spending on wars would place the burden of government spending on the backs of those who could least afford it, could they?

And here we are with Wall Street sitting pretty, the US Government having bought a lot of big shitpile from under them without the concomitant passing of regulations and reforms that would prevent them from making even more vulturous profits off of the crashing economy.

Joe and Mary sixpack? Well, they shouldn’t be so damned lazy or so free with their spending in their desire to keep up with the Jones’s, right? Isn’t that the Republican/Calvinist attitude that underpins all of our public policies now? And the Democratic party has joined in the fun! Woo hoo!

I’m looking for some change and hope, and oh, nevermind….

You reinforce my main point. What most people want is a pleasant and decent community in which to live and raise their kids. People want jobs that give them a sense of accomplishment and the feeling they are adding to their communities. The funny thing is the crazy birthers and deathers and anti-healthers want that too, within the limits of their imaginations.

No, according to one friend who’s a realtor, and another who appraises houses, what’s happened is that a lot of people who were able to refinance and make home improvements are doing so — so while some people are losing homes, others are remodeling.

And the credit unions who were doing solid ‘due diligence’ and careful about loans are getting very, very good loans and excellent customers.

The people who’d had employment as realtors, in home construction (much of it crappy subdivisions), bank loan officers, title agents…. many of them are out of work and they need to find other kinds of employment. Those employment sectors shrunk, and need to remain smaller — they were employable during the housing bubble, but those jobs are gone.

But who pays for “services”? The govt mostly. Sevice jobs cant be outsourced but they do dissappear when no one has any spending money. I grew up thinking that an economy was based on producing things from raw materials, and that nations rich in raw materials(they can defend) are well off. With no manufacturing economy eventually service jobs dissappear.

The heritage foundation is not a credible source

The financial elites are doing to the American public what they’ve already done to businesses via their now dominant financial model of “management”: rape and pillage, in effect, by demanding such high rates of return that you have to tear up the company to generate enough ready cash to pay back Wall Street what it thinks it’s owed for its money.

Society and businesses depend, to the contrary, on a “going concern” model. To survive and prosper, they must be run for the long term, not for immediate payback. That’s why we have schools, playgrounds and museums, not just hospitals and fire departments, why we have zoning and building codes and not just paddy wagons and tasers.

Wall Street is squeezing so much blood from the stone of the people – enabled by Democrats and Republicans in Washington – that they won’t be able to keep paying those mortgages and credit cards and payday loans, let alone their doctors and hospitals. I assume Wall Street anticipates that when it’s mopped up all the blood to be had, they will move on to China or Russia and do it again, and/or invent new ways to yield yet more blood. Their inventiveness in repackaging new wine into old bottles is endless.

It reminds me of the abuse known as Social Darwinism. What it glorified for the Robber Barons at the end of the 19th century – when Carnegie and Rockefeller were the wealthiest men in America – via such newspaper shorthand as “survival of the ‘fittest’” was unprincipled, ruthless selfishness.

One thing we forget about Darwin’s real observations is that present populations are surviving remnants at the thin end of the hyperbolic curve. The bulk of populations – of people as well as the bacteria you brush out of your mouth or flush out of your bloodstream via anti-biotic drugs – die out.

Markfromireland, in an exceptional piece here earlier today, considered the stoked fears of white conservative christians who fear they are losing dominance in “their” America, ceding it to some liberal mongrel society that will attack their values or, more importantly, take away their meager homes and jobs. The Right’s manipulation of those fears is breathtakingly capable.

Masaccio’s article reminds us that it’s not just conservative white christian men who fear for their jobs, homes and way of life. We can’t leave, so we better fight back.

Then why is Lowe’s losing money in a recession?

The number of folks who are remodeling is way down from where Lowe’s and others would expect it to be during an economic downturn. Some are doing the remodeling work, but not nearly in the numbers that past recessions say we should expect.

The Lowe’s press release put it like this (from the link above):

“Wavering consumer confidence, unseasonable weather in core markets, and restrained customer spending compared to last year’s fiscal stimulus-aided results led to lower than expected sales in the second quarter,” commented Robert A. Niblock, Lowe’s chairman and CEO. “Cautious consumers remain reluctant to take on discretionary projects until signs of economic improvement are more evident.”

Yup.
Remember when the markets melted down in September — did we see any PHOTOS of Bernanke with Bush? Or with Cheney?

Did we see PHOTOS of Paulson with Bush? Or with Cheney?

Nope.
We saw Pelosi, Dodd, Reid, etc with Paulson and Bernanke.

For illiterates, for Faux News viewers, and for the easily distracted, the ‘meltdown’ is associated with the people they saw in photos — which just happen to be Dems.

If you think that’s mere accident on the part of the GOP, I can sell you some lovely beach property in the heart of Arizona.

Two of many lifestyle “changes” Steins is forced to accept jumped out:

- One by one, they talk. The room is quiet. An older woman sitting on an ottoman speaks. “They say we’re in a depression,” she says. “I look around the world — Darfur, India — and I don’t feel that sad for us.”

As the night comes to an end, a guest who doesn’t work on Wall Street leans in and makes an observation. Not about the recession, but about the bigger engine of capitalism.

“What you didn’t hear was all the toxic stuff from the 45- to 55-year-old guys,” he says. “They think all this is bull — . They’re coming back.”

*the “captains of capitalism” totally clueless as to how they fucked it all up. And:

- At night when it’s quiet, way up the quarter-mile driveway, Steins knows how fortunate she is. She has a job. She will gut out the remains of the recession, even if it’s her version of paycheck to paycheck. She will keep it all afloat.

The children are asleep. The house is quiet. Her alarm is set for 6, when another morning of urgent needs and requests from the inhabitants of Birch Hill will begin again. She will go downstairs in her designer suit, brushing off dog hair and shuttling kids to the bus stop and asking the painter if she can delay paying him until next month.

“We might live in nice houses and drive nice cars, but we’re just holding on,” she says. Perfect looks perfect from a distance.

*the irony of how she “borrows” the helps paycheck to maintain her lifestyle, how would Steins react if her boss instead of handing over a check next pay day said “Can you wait ’til next month? I’ve got some personal things I need to cover.” The new service economy income: “When I get mine you’ll get yours, now go do the grocery shopping….and less pasta! Obesity is a sign of poverty!”

What do you expect the Heritage Foundation to say. The article makes this argument:

First of all, Gramm-Leach-Bliley is hardly the momentous event the left makes it out to be. The 1933 Glass-Steagal Act that prohibited commercial banks from owning investment banks, and vice versa, had been steadily weakened since the 70s by an increasingly diverse and complex new financial reality. Waivers from regulators for merger became routine and the 1998 merger between Travelers and Citigroup functionally repealed the law. Gramm-Leach-Bliley only put a de jure stamp of approval on a de facto regulatory framework.

This means that the regulators violated the spirit of the law, allowing commercial banks to get into investment banking. In turn, that led to the massive creation of securitized debt obligations, including huge amounts of mortgage securities. Those bankers needed mortgages to peddle, and that meant big increases in subprimes mortgages, a major cause of the disaster.

The Heritage Foundation then argues that none of the giant banks failed, completely ignoring the reason they didn’t fail: stupefying infusions of cash from taxpayers.

It’s hard to take that argument seriously.

It depends how the deals were inked.
But yes, I agree, this is a really big problem.

Selling a company is often kabuki for getting the patents.
The new owners don’t give a rat’s ass about the existing products and employees in some cases; it’s the patents they are really after.

It all comes down to who has the best attorneys, or so I’m told.

“Obesity is a sign of poverty!”
correct. most fresh food is out of range of poor people, who no longer live in a pastoral america and grow it. what is available at the kind of market the poor are able to shop in, is limited and expensive and pauntzy markets like “whole foods” are for people like MS. Stein

So, why are they complaining? They’re still raking in trillions in profits from two illegal wars. They drained the treasury dry of trillions, and reward themselves with hundreds of billions in bonuses. They’re buying up all the properties they foreclosed on at bargain rates. Courtesy of the US taxpayer, they’re getting paid full value for their toxic assets that have destroyed the global economy. They solved the pesky problem of unions and decent wages by outsourcing serious jobs to overseas slaves.

And to make sure there’s no one here in significant numbers to seriously obstruct them, they’re busy destroying any hope of a national health care program, explaining to our faces that the lives of all Americans mean nothing, when healthy insurance company profits are at stake.

In other words, having drained every drop of lifeblood and marrow from the population of this nation, these leeches, these enemies of humanity, are now upset to discover that the unemployed, bankrupt, ruined, sick people they created, have no money with which to purchase their slave labor Chinese shit. It’s possibly dawning on them that drilling holes in the bilges of the SS America is not the best solution to draining the water, but I doubt it.

I would prefer to see the citizens of this nation start turning out to complain to the Vichy Whores who laughingly call themselves our elected officials, that they had better start representing the interests of the People, not the Corporatocracy, but I doubt that that will happen as well.

right, the heritage foundation (not suprisingly) is endorsing corporate socialism which simplified, is the basis of fascism.

The funny thing is the crazy birthers and deathers and anti-healthers want that too, within the limits of their imaginations.

I completely agree. They’ve been sold out by ideologues, some of whom would not be able to find very good employment in the private sector IMVHO. The Bush43 years were high-rolling good times for a few young GOP of my acquaintance. Oh, and they’re totally irresponsible with their credit cards.

I seriously doubt that John Ensign is the only GOPer asking mom and dad to pay his debts. In fact, I can say for certain from keeping my mouth shut and my ears open at the local health club that this is not limited to Ensign.

And they lecture US about money (!!!!!!!!!)
Jeez, louise…

Thanks for the locations – I remember seeing them. What I am interested in knowing is are we paying a commodity trader and a TARP funded bank huge amounts of money for fucking up the prices of oil and food.

Corporate socialism like bailing out GM and Chrysler to payback UAW cronies?

And TARP should’ve never, ever been passed. The banks should have failed.

to pay back WHO?? lol

Then this story from the West Coast and of the working classes:

Living Large (Too Large)

Equity soon became irresistible.

Ms. Sanchez and Mr. Winkler, the couple with two daughters, wanted a new car. So they pulled $15,000 out of the house. Mr. Godfrey and Ms. Saldamando, the schoolteachers, dipped into their equity to landscape their back yard. Mr. Blanco, the electrician, used it to invest in a lot in the desert, and Mr. Soto, the landscaper, picked up a rental home in the Central Valley, an agricultural area northwest of here.

The block’s first residents, Ms Hernandez and her husband, bought a shiny commercial truck, with dreams of expanding his trucking business. He pulled money out of the house nearly annually. And the couple from South Los Angeles used their house — bought for $152,500 in 1997 — as a veritable cash machine, refinancing three times before selling it in 2006 for $440,000.

But one by one, the strings began to come apart.

The new buyer of the Los Angeles couple’s home was quickly in over his head; he lost the house in less than a year, with $375,273 still owed.

Title records show that Ms. Hernandez and her husband bought their home in 1997 for $123,000, using nearly 100 percent borrowed money. They refinanced first in 2003, at 11.1 percent interest on $129,000. The equity loans kept coming: the balance rose to $230,000 in 2004; $323,00 in 2005; $374,000 in 2006; then, finally, $415,000, at 8.12 percent, in 2007.
http://www.nytimes.com/2009/08…..038;ref=us

The Hernandez’ pulled $286,000 of equity out of the home in 10 years – $28k a year, like Steins were both families thinking the party would never end? We.Are.So.Fucked.

It seems that my crackpot theory about the Wall Street Banksters and Congress funneling all the money upwards for a generation now has had the effect of slowing consumer spending. Imagine that!

Here’s what you and I and everyone else needs to understand: “Wall Street” is international.

This is GLOBAL finance.
What global finance wants is: (1) no restrictions on the movement of capital, (2) zero taxes, so they need lots of tax havens, (3) people to believe that ‘capital’ is the source of wealth.

Listen to the GOP going back to Bush41 and Reagan.
They think that ‘capital’ is like Jack and the Beanstock: plant a bean and the next day you can climb up to the sky and grab the Golden Goose and all its eggs.

They’re predatory.

And I say this as someone who is a fervent, avid believer in what might be called ‘Main Street Capitalism’.

The GOP, global capitalists are predators.
The will buy and sell companies like you and I buy peachs at the local market.
They are looking at computer screens, spreadsheets, and ‘bottom lines’.

They are missing the nuance, the fine distinctions on which expertise and judgment depend.

They claim that their ‘capital’ is the source of ‘investment’, and that ‘private investment’ is the source of wealth.

This gives them claim to be gods.
They aren’t.

Capital is only one aspect of economic activity; it’s been inflated way out of its real importance and it’s become a fetish that has bamboozled everyone from Milton Friedman to Greenspan.

It’s time to cut it down to size and put it in perspective.

Water’s just ’stuff’; it goes in one river or another but it’s still just water.
Same with ‘capital’; just because it flows to China or India doesn’t make it golden. It’s still just ’stuff’.

foothillsmike, I’m writing wayyyyy too much here, and I don’t have a handle on all these things, but if you watch that CSPAN hearing, it will move you pretty far along.

I’m also hoping that Nomi Prins’ next book “It Takes A Pillage” *due out in late Sept* will take on this topic, but not sure. She’ll be at an FDL Book Salon later this fall; meanwhile, if you can get your hands on her earlier title, “Other People’s Money”, that might answer some of your questions. That book is first-rate!

Do you think the FDIC had enough money to pay the deposit insurance for Bank of America or Citi?

That was part of wal(mart)st. bailout. If they could have accomplished it by dsertroying the UAW they would have, as it went down, the govt casualy voided the most of UAW contracts and forced them to agree to the bailout terms.

The govt mostly. Sevice jobs cant be outsourced but they do dissappear when no one has any spending money.

With apologies to masaccio for too many comments on this thread…

Service jobs can’t be outsourced.
They disappear when people don’t have ’spending money’.

But that’s based on the assumption that private companies are the wealth drivers of an economy.

If that’s so, then how did tribal people survive for about 700,000 years? Why didn’t they all die out?

Some jobs come from getting raw materials and changing them into ’stuff’: cars, houses, pots, pans, pens… medicines, MRI machines…

Other jobs come from caring for others: teaching, firefighting, law enforcement, justice system, health care, recreation/fitness.

The jobs that come from caring for others have been UNDERPAID!

Look at the crap pay of childcare workers, compared to some jerk who bundles toxic assets!

One holds in their trust the brains, ideas, social abilities, ethics, emotional health, and creativity of the people who will be in charge 20, 30 years out.

The others?
The get paid a percentage of whatever shite they bundle together based on the info they interpret from spreadsheets, screens, phone calls, and the bigger the bundle, the more they get paid.

Look 20, 30 years out and what’s the value of their ‘work’?
LOOK at what they are creating — d-e-b-t.

In short, why are we paying people to create vast amounts of debt?!
And then we pay people crap to raise children, which — if we actually believed that this was the Information Age, and we realized that Information is processed by human brains, we’d put our money into anyone who assists and strengthens brain development, social attachment, and ethical conduct.

We live in a world with a totally corrupt, amoral economic system.
And it’s producing terrible, very costly results.

Wealth does NOT come from making up lots of crap.
It comes from making smarter brains.

We need to recognize that simple fact.

Remember that if you can CONTROL the amount of the commodity, plus the way that it enters the market, you can manipulate prices.

The more of the commodity that you control, the more you can control the price.

It looks to me as if we basically have commodity traders acting in monopolistic ways, but I think that I have to wait for Nomi Prins to be at FDL before I can ask someone whether my hunch is correct.

Anthony Bourdain did a travel special recently and in cities that Elmore travels a lot…….. Baltimore, Detroit and Buffalo……THIS is the result of killing or shipping “hard” manufacturing off shore. The video was sad & painful. Reports of Elmore driving over an hour to find a real grocery store.

As a consumer society we still need that base…. the hard manufacturing which then can fund the soft consumerism, it still isn’t goods made in USA but there needs to be money coming up below retail.

WHY OH WHY does the Gop want to make this into a mad max world? OR Terminator?

We’re all well aware of both the current financial problems that we face as well as what brought us to the abyss. The question now, is what to do about it? I remember Obama’s pledge to do something about NAFTA. To address the core reasons as to why our manufacturing was shipped off to Asia, but as yet, haven’t heard a peep out of him as to how to stop the bleeding of jobs.

He waxed eloquent at first about creating 3 to 4 million jobs which at this point is a drop in the bucket, then 30 days prior to the election he changed his tune to “save or create 3 to 4 million new jobs and neither has come to pass.

He spoke about new industries springing up with billions that would be put into shovel ready projects and updating the electrical grid. So far hundreds of billions have gone to rehabilitate Wall Street and little for main street. See a pattern here? I’ve lived long enough to know that whether a candidate is Democrat or Republican, their pre-election visions of sugarplums dancing in their heads sells well to the masses. But when it comes to reality, they seem more inclined to follow the path of their corporate masters. As always in Washington. The more things change, the more they stay the same.

so, should we move back on to the “gold standard”

i agree with you. I would love to see American capitalism fail. The american experience has been the never ending fight between “free bootersmarketeers” and the govt trying to impose some sanity on thier capitalistic cage match.The good thing is, even if we dont live to see it, it CANT go on indefinately. One force will eventually gain controll of the other. I think that the capitalists are on the verge of doing that. They almost did, and look what happend If the govt hadnt steped in to save it, it would have failed AGAIN. Maybe we should should just get out of the way and let capitalism destroy itself. I wonder whats going to happen to the “global” market when we really begin to run out of oil.

It could be done. However it would mean an end the the current Federal Reserve system, and politically I doubt either party has the will or the balls to pull it off. The hand writing is already on the wall. It won’t happen as a bolt out of the blue, but the process has begun. China now trades Yaun with Brazilian reals. Iran no longer sell it’s oil for dollars. Japan is buying oil in either euro’s or pounds sterling.Paul Starobin’s book that was highlighted here yesterday gives an excellent glimpse as to what America will look like after the end of dollar hegemony. It’s coming. Slowly but surely, it is happening. One can only hope that those in DC who at any cost would rather protect the interests of the current banking structure will wake up in time to change course in a meaningful way.

I’d love to see Socialism fail. Oh wait, it already did! See: USSR

But why??what is the benefit of the goldstandard?

Both gold and silver have been the only real money that mankind has ever known for over five thousand years. Our country used to have Treasury dollars that were backed by gold. That ended in 1933. Legal tender laws were changed so that fiat or Federal Reserve notes were the currency of the land. A fiat dollar today, is only a promisory note. An I.O.U. to pay a debt just as any piece of paper. It has no intrinsic value as Nixon broke the link between gold and the dollar. with gold and silver, you own something of value and it is no one else’s liability.

This is the great con game that the Fed has played with Americans as well as the rest of the world. Fiat and ever increasing debt is what generates financial bubbles. Gold and silver act as the ultimate barometer of inflation. This is why gold is approaching $1,000 an ounce while the dollar is collapsing. Our creditors are pulling back from all things paper and if you look at the current TIC data, it is the Federal Reserve through banks such as Goldman Sachs and JP Morgan using the Fed’s make believe money that are going into the markets and buying our own T-bills at weekly auctions.
The rest of the world knows the value of real money when it come to the metals as they are quietly pulling back from the dollar. The simple answer to your question is to look at what has happened to other empires that debased their currency and spread their armies too thin. Gold acts as an anchor for the paper currency it backs and as Alan Greenspan himself said in his historic 1966 paper.

“This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard”.

http://www.321gold.com/fed/greenspan/1966.html

It’s all about “confidence”. Once that is lost Solerso, no currency is worth the paper it is printed on and the world is losing confidence in the US dollar.

It isn’t just the jobs sent overseas. It is 30 years of stagnant wages here at home. It is the high debt levels that were promoted. Now it is the job losses, the declining numbers of hours worked per week, and the attempts to save a little more and pay down or keep abreast of debt. And it is all the programs that the government has extended to the banks that it has not extended to ordinary Americans. It is the extra fees and charges that banks are trying to make off of already cash strapped customers. It is their attempts to speculate and rip off investors and slow movers like pension funds. All of this taken together explains why there is little likelihood of a consumer led recovery now or in the future.

The only source of increased spending is the government and under both Bush and Obama most of this has been wasted.

Your right Hugh and how are high debt levels reached over the years? By printing paper with nothing of value to back it. By taking in one dollar and lending out 9 to 12 in the forms of loans and hoping that the borrower will pay it back. This is a classic ponzi scheme on a grand scale and sooner or later the piper had to be paid. The worse offender is our government. Government cannot tax itself: so its only financial product is DEBT. In sharp contrast, the private sector generates WEALTH which the Government sector can TAX to finance its operations and debt.

Thanks, Masaccio – great post.

How stupid is American business?

They don’t realize that the things that could deliver the greatest ROI in the current environment are:

Hiring people, paying people good wages and salaries
Paying taxes, even paying the taxes they have avoided through accounting tricks

And they pretend be compensated for their “talent”!

If she can afford $200 to get her hair done, she isn’t really hurting.
If she can afford a house, she isn’t really hurting, either.

Everyone who has tried to sell a house in the last thee years knows better.

There isn’t enough gold and silver in the entire world for them to be used as currency.

The US went off the gold standard decades ago, when it became obvious that trying to do it that way was a short route to No Money.

Read about the years right after the American Revolution: cash was scarce, so people bartered for everything, or traded scrip and IOUs. Then states decided they wanted taxes paid in hard cash that no one had ….
That was what cased Shays’s Rebellion.

i agree with you. I would love to see American capitalism fail.

I’m confused.
Upthread, I stated that I am an advocate of ‘Main Street Capitalism’.

The global finance capitalism of which you speak has created bubbles, and does not align with what people need. It creates financial capital while destroying ’social capital’.

Social capital is not recognized as having value by globalization dweebs like the egoists on Wall Street who swap CDOs.

We need to address pricing structures, tax incentives, and the way that we value social support; currently, we value money and finance over the creators of **social capital**.

If you want to see environmental nightmares, look at parts of the USSR. I have zero interest in aiding or abetting that economic system, and it quite clearly did not work.

‘Capitalism’ is a big, messy word that covers too much territory to be very useful.
I believe that on average, capitalism best aligns with how people make decisions; but the type of capitalism represented by CDOs, by TARP bailouts — by bogus mortgage fraudsters — that’s a disaster.

I want American capitalism to escape the chokehold and the suffocating predation of the global finance interests who don’t give a rat’s ass about the relationships that need to happen in communities all over the planet.

That’s very different from saying that I want American capitalism to fail.
I want it to succeed.

Fiat and ever increasing debt is what generates financial bubbles.

I disagree.

Currently, ‘monetary policy’ regulates currency.
Credit ALSO needs to be regulated!

Financial bubbles are generated by social activities, including hype, hedging, and unregulated derivative trading.

he worse offender is our government. Government cannot tax itself: so its only financial product is DEBT.

Since Ronald Reagan, and definitely under GHWB and his cronies, there was a belief that ‘capital’ was the key driver of economic growth.

Capital is managed by people in ‘finance’.
‘Finance’ gained clout and by the late 1990s it was running the show. (I’ll spare you a digression about how ideas from software and eComm infected assumptions about ‘capital’, but the short version is that a lot of people in ‘finance’ didn’t know jack shit about their ‘products’ — other than that they made tons of money buying and selling them.)

In the early 1900s’, ‘government’ created national parks; look up how much revenue those generate some day. Lots of ‘business interests’ would like to buy, own, and operate our national parks.

‘Government’ at its best also ‘produces’: clean water, electricity, safety standards, meat inspections, and a host of other good outcomes.

Government does not ‘produce’ debt, unless and until it has been captured by ‘finance’. Debt is not always a bad thing; however, what we’ve had in the US, enabled and accelerated by dumb laws, has been the creation of debt by private interests — who then profit magnificently from that debt.

Here’s hoping that group that Brooksley Bourne was appointed to can tell this story better than I ever will.

Hiring people, paying people good wages and salaries
Paying taxes, even paying the taxes they have avoided through accounting tricks

Companies may be able to pay good wages, but it’s hard to cost out climbing health care costs. You can cover a salary, but that doesn’t mean you can also cover health care — which is why there are plenty of people who work, but do not have health care.

That’s why we need to address health care as an economic driver that affects job creation.

In my limited experience, good biz people pay their taxes.
They recognize that it’s stupid to soil your own nest.
What’s happened is that the tax code is so damn complicated that you can pay your taxes while others think anyone who pays taxes is a chump.

We need simpler tax laws and more enforcement against cheats.
Simpler laws would solve a lot of problems.

Everyone makes the same mistake in thinking that it is the amount of physical metal that is important. It is not. It is however the value that the world puts on it. This is why the dollar continues to fall while the price of gold and silver continue to rise. it makes no difference how much of a real commodity exists, yet isn’t it odd that the more dollars that are printed, the less their purchasing power.

Your example describes the Federal Reserve to a tee. They print monopoly money with nothing of value to back it and then charge tax payers interest on an exponentially increasing debt load. It is our government that has given permission to a private banking cartel to steal all of us blind. Thus, government can only produce debt. Not real income that can be taxed other than federal taxes collected from ones paycheck. Government can create jobs, but still has to borrow more make believe money to hire people and the carousel continues.