This Economic Downturn is Different
I've lived through several recessions but this one is different. I thought that the late 1970s, early 1980s recession was bad. This one will prove to be much worse, more like, but different than the 1930s depression. I'm no economist, but I am observant. This downturn is different than previous recessions and may linger for generations.
Firstly, the world has changed forever in the last decade. US financial and manufacturing preeminence has permanently declined. I believe that the US was in a special position at the end of world war 2 that enabled the US to dominate the global economy. The rest of the world was destroyed and the US was the only stable, functioning place to put your money and buy the finished goods that you needed to rebuild your country. The world war 2 generation saved and invested, worked hard and lived frugally enabling research and development, modern infrastructure and solid companies that provided a robust middle class. Promises were made based upon global economic conditions that existed only in the bubble of prosperity created by world war 2 and it's aftermath. Those conditions haven't existed for more than a decade.
But the world has not stood still for the past 64 years. Countries have rebuilt, developed and now compete, often out-compete, US firms. The next generation spent rather than saved, believed themselves entitled to their benefits and middle class lifestyles and has neglected research and development, infrastructure and has mostly avoided frugality and hard work.
We have adopted technology and improved productivity, eliminating millions of labor intensive and administrative jobs. But many of the replacement jobs don't pay enough to maintain a middle class lifestyle let alone pensions and insurance benefits. Meanwhile medical technology has blossomed making longer healthier lives possible but at very high cost.
So here we stand with high expectations and limited means. The pie is shrinking yet we want to keep our lifestyles and entitlements. An impossible dilemma!
The idea of putting people in their own home is admirable. Surely people would be more productive in an ownership society. People would take care of their own home better than a HUD apartment and work to make their community a better place to live. Extending credit to marginally worthy people would power the consumer economy and raise all boats. Giving state-of-the art health care to all regardless of ability to pay is both moral and establishes a sense of community. But who will pay for all this?
The US economy took on more than it could afford. Sure, the government can borrow money to pay for all this or can print money if it there isn't enough available to borrow. Americans seem to have always expressed a sense of boundless limits. We can do anything if we set our minds to it. But is there a limit?
This downturn is different. We are putting skilled, experienced 50 year old men on the curb like sacks of garbage. Companies say "We don't need your experience because we aren't going to make anything here anymore". Companies terminate pension plans, cancel medical coverage and line up with their hand out to the tax payers to bail out their already hollowed out enterprises. But just who are these tax payers? Are they 30 year olds living with mom and dad or are they 50 year old men making middle class wages? With all these 50 year olds out of work (and often on the public dole)
who is going to pay for the bailouts?
In previous downturns, companies kept their skilled, experienced workers. This time around they are put on the street because the management knows that this time, they aren't going to do these jobs again. Better to keep the low paid, benefit poor, healthier younger workers until they move the work to Zimbabwe.
So we have all of these 50 year old men, who should be in their peak productivity years at peak salary on the public dole, with their pension, life savings and medical benefits gone. They will not be saving for investment in research and development, building companies or infrastructure improvement. They will not be participating in the middle class, consumer economy. They will not be paying taxes to pay off the enormous debts accumulating on the US balance sheet. Who, excatly will pay for this?
Now the rulers in Washington have decided that we need national health care. This benefit will be added to the already insolvent social security obligations that are on the books. Exactly how do these czars think this can be paid for?
I can see the future of the US and it is bleak. The 50 year olds will blow through their savings and their inheritance that their parents accumulated in the post war years, as well as all the money that Washington can borrow just to survive. When this generation passes it will leave a legacy of debt and servitude to our children, and generations to come. The exceptionalism that was America will die soon thereafter. A great shame on all of us.
Perhaps the only bright light is that future generations will have to live and work as hard as our forbears did, and build the character of our forbears in the process.
That is, if our descendents have enough freedom remaining to wrench themselves from servitude of the coming feudal society that is settling around us.
May God have mercy on our wicked souls.
Firstly, the world has changed forever in the last decade. US financial and manufacturing preeminence has permanently declined. I believe that the US was in a special position at the end of world war 2 that enabled the US to dominate the global economy. The rest of the world was destroyed and the US was the only stable, functioning place to put your money and buy the finished goods that you needed to rebuild your country. The world war 2 generation saved and invested, worked hard and lived frugally enabling research and development, modern infrastructure and solid companies that provided a robust middle class. Promises were made based upon global economic conditions that existed only in the bubble of prosperity created by world war 2 and it's aftermath. Those conditions haven't existed for more than a decade.
But the world has not stood still for the past 64 years. Countries have rebuilt, developed and now compete, often out-compete, US firms. The next generation spent rather than saved, believed themselves entitled to their benefits and middle class lifestyles and has neglected research and development, infrastructure and has mostly avoided frugality and hard work.
We have adopted technology and improved productivity, eliminating millions of labor intensive and administrative jobs. But many of the replacement jobs don't pay enough to maintain a middle class lifestyle let alone pensions and insurance benefits. Meanwhile medical technology has blossomed making longer healthier lives possible but at very high cost.
So here we stand with high expectations and limited means. The pie is shrinking yet we want to keep our lifestyles and entitlements. An impossible dilemma!
The idea of putting people in their own home is admirable. Surely people would be more productive in an ownership society. People would take care of their own home better than a HUD apartment and work to make their community a better place to live. Extending credit to marginally worthy people would power the consumer economy and raise all boats. Giving state-of-the art health care to all regardless of ability to pay is both moral and establishes a sense of community. But who will pay for all this?
The US economy took on more than it could afford. Sure, the government can borrow money to pay for all this or can print money if it there isn't enough available to borrow. Americans seem to have always expressed a sense of boundless limits. We can do anything if we set our minds to it. But is there a limit?
This downturn is different. We are putting skilled, experienced 50 year old men on the curb like sacks of garbage. Companies say "We don't need your experience because we aren't going to make anything here anymore". Companies terminate pension plans, cancel medical coverage and line up with their hand out to the tax payers to bail out their already hollowed out enterprises. But just who are these tax payers? Are they 30 year olds living with mom and dad or are they 50 year old men making middle class wages? With all these 50 year olds out of work (and often on the public dole)
who is going to pay for the bailouts?
In previous downturns, companies kept their skilled, experienced workers. This time around they are put on the street because the management knows that this time, they aren't going to do these jobs again. Better to keep the low paid, benefit poor, healthier younger workers until they move the work to Zimbabwe.
So we have all of these 50 year old men, who should be in their peak productivity years at peak salary on the public dole, with their pension, life savings and medical benefits gone. They will not be saving for investment in research and development, building companies or infrastructure improvement. They will not be participating in the middle class, consumer economy. They will not be paying taxes to pay off the enormous debts accumulating on the US balance sheet. Who, excatly will pay for this?
Now the rulers in Washington have decided that we need national health care. This benefit will be added to the already insolvent social security obligations that are on the books. Exactly how do these czars think this can be paid for?
I can see the future of the US and it is bleak. The 50 year olds will blow through their savings and their inheritance that their parents accumulated in the post war years, as well as all the money that Washington can borrow just to survive. When this generation passes it will leave a legacy of debt and servitude to our children, and generations to come. The exceptionalism that was America will die soon thereafter. A great shame on all of us.
Perhaps the only bright light is that future generations will have to live and work as hard as our forbears did, and build the character of our forbears in the process.
That is, if our descendents have enough freedom remaining to wrench themselves from servitude of the coming feudal society that is settling around us.
May God have mercy on our wicked souls.
posted by lugh lampfhota at 12:15 PM
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