Economic reality
While I'm on the subject of the economy, there's a simple truth out there which doesn't seem to be getting much play. We're currently experiencing one of the greatest economic times in the history of the country.
The future forecast is bad; but it's been bad for 40 years. The primary reason it's bad is because of the potential Social Security collapse. A secondary reason is because individuals have been relying more on Credit than ever before, resulting in a greater individual debt. A third reason is because we've been shifting away from a production-based economy toward a service-based economy, leaving us vulnerable to foreign pressures on physical goods. That combination could be lethal to our future economic stability.
But the present is wonderful. We've come back from the double hit of the September 11th attacks and the Corporate Board scandals which had grown steadily after the pay restructuring of 1994 and beyond (that's when massive quantities of stock options became typical, instead of prearranged monetary outlays, inspiring many board members to play games to manipulate their stock value.) We have an unemployment rate which has remained at near-record levels for years. We have record levels of average individual wealth, of government tax receipts, of corporate profits, and of individual worker efficiency. We've had steady wage growth, outstripping inflation. Interest rates are remarkably low. The record-high deficit is shrinking, despite the dramatically increased spending seen both under the Republicans and now the Democrats in their respective budgets. The Dow has been hitting record high after record high, with the S&P 500 hovering near its own record high. And there is no significant "bubble" seen in the investment fields, such as was seen in the 1920s or in the late 1990s, the collapse of which often creates a recession or depression; the closest we've seen is an overburdened sector, housing, which has been called a "bubble" primarily for sound bite purposes.
The primary cause of hardship today is not desperation, it's overconsumption. That's not to say desperation isn't there; if you think about it, the lowest known unemployment rates (outside of during a draft-infused war) have been now and during the late 1990s, and in both of those cases roughly one out of every 25 people were out of a job, and were at least theoretically looking for one. If you know 25 average people, you probably know one who is hunting for a new job, and during that time, they're desperate to cover their bills.
But there are more people complaining about their funds, or running into fiscal problems, than one out of 25. That leads to the impression... the wholly inaccurate impression... that the economy is weak.
It isn't. It's absolutely great, hitting on all cylinders without a serious stock market bubble, and with new transparancy rules to minimize any future CEO accountancy games.
The future forecast is bad; but it's been bad for 40 years. The primary reason it's bad is because of the potential Social Security collapse. A secondary reason is because individuals have been relying more on Credit than ever before, resulting in a greater individual debt. A third reason is because we've been shifting away from a production-based economy toward a service-based economy, leaving us vulnerable to foreign pressures on physical goods. That combination could be lethal to our future economic stability.
But the present is wonderful. We've come back from the double hit of the September 11th attacks and the Corporate Board scandals which had grown steadily after the pay restructuring of 1994 and beyond (that's when massive quantities of stock options became typical, instead of prearranged monetary outlays, inspiring many board members to play games to manipulate their stock value.) We have an unemployment rate which has remained at near-record levels for years. We have record levels of average individual wealth, of government tax receipts, of corporate profits, and of individual worker efficiency. We've had steady wage growth, outstripping inflation. Interest rates are remarkably low. The record-high deficit is shrinking, despite the dramatically increased spending seen both under the Republicans and now the Democrats in their respective budgets. The Dow has been hitting record high after record high, with the S&P 500 hovering near its own record high. And there is no significant "bubble" seen in the investment fields, such as was seen in the 1920s or in the late 1990s, the collapse of which often creates a recession or depression; the closest we've seen is an overburdened sector, housing, which has been called a "bubble" primarily for sound bite purposes.
The primary cause of hardship today is not desperation, it's overconsumption. That's not to say desperation isn't there; if you think about it, the lowest known unemployment rates (outside of during a draft-infused war) have been now and during the late 1990s, and in both of those cases roughly one out of every 25 people were out of a job, and were at least theoretically looking for one. If you know 25 average people, you probably know one who is hunting for a new job, and during that time, they're desperate to cover their bills.
But there are more people complaining about their funds, or running into fiscal problems, than one out of 25. That leads to the impression... the wholly inaccurate impression... that the economy is weak.
It isn't. It's absolutely great, hitting on all cylinders without a serious stock market bubble, and with new transparancy rules to minimize any future CEO accountancy games.
posted by AM | 9:29 PM
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