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US: We Are Witnessing a Collapse
  • Vitaliy_KiselevVitaliy_Kiselev

    Richard Yamarone, senior economist at Bloomberg Brief.

    When asked what’s really happening with the US economy, Yamarone responded, “I think people are just running out of money. We have contracting, real disposable incomes. Most of the job creation that we have is from minimum wage type jobs.”

    “I’m fortunate enough to travel and speak to chambers of commerce with 300 to 500 people in the audience. They all tell me, ‘Hey, listen, I am letting go of workers. I’m hiring them back at a fraction of what I used to pay them.’

    You hear from the other side, ‘Hey, I finally got a job after two years of being unemployed. I used to make $100,000 (each year), now I’m making $45,000 or now I’m working part time.’

    “So you are actually seeing this collapse, contracting on a real basis, of real disposable personal incomes. If you don’t have the money, you can’t facilitate expenditures. So that’s the core of the problem. That’s what’s really going on in the US economy.

    You don’t listen to what all of these bigger numbers coming across the screen tell you. You talk to the people who are running the country. 99.7% of all employer firms in this country are small businesses. So when they speak, you have to listen.

    You have to listen to what the small businesses are telling you and right now they are telling you, ‘Hey, I’m the head of a 3rd or 4th generation, 75 or 100 year old business, and I’ve got to shut the doors’ or ‘I’ve got to let people go. And if I’m hiring anybody back, it’s only on a temporary basis.’

    Sometimes they do this through a hiring firm so that they can sidestep paying unemployment benefit insurance. So that’s what’s really going on at the grassroots level of the economy. Very, very, grossly different from what you’re seeing in some of these numbers coming out in earnings releases.”

    Yamarone also added: “Monetary policy is very different from the days when we were an industrial behemoth. If you look at the first eight recessions after World War II, when we were a big manufacturer, back then, if the Fed saw a problem they cut rates and boom, manufacturers sparked up their idled plants and factories.

    In fact, the first eight recessions after World War II, it took, on average, twenty months for us to respond and get all of the jobs that we lost during the recession back. So, in a little less than two years the Fed policy response would get all of the jobs back.

    However, you look at the last two recessions, in ’90/’91 and the 2001 recession, they were jobless recoveries. We don’t respond to monetary policy the same way because we are no longer that manufacturing behemoth. So the Fed cuts rates at the first sign of trouble and it takes, during those recessions, forty months for us to get back all of the jobs we would lose.

    In this current recession, we are not even close (to getting the jobs back) and that’s 50 months and counting.”

    Via: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/4/26_Yamarone_-_We_Are_Literally_Witnessing_a_Collapse.html

  • 16 Replies sorted by
  • agoltzagoltz

    Prospects for Europe are no better:

    Gao Xiqing, president of China Investment Corp., said the nation’s sovereign wealth fund has stopped buying European government debt on concerns about the region’s financial turmoil.

    "CIC will continue to look for new investments in Europe as part of its strategy to boost allocations to infrastructure, private-equity assets as well as emerging markets to help boost returns", Gao said. CIC, with an estimated $440 billion in assets, is the world’s fifth-largest country fund, according to Sovereign Wealth Fund Institute.

    “What is happening in Europe right now is of course of concern,” Gao said in an interview in Addis Ababa, Ethiopia, during the World Economic Forum on Africa. “We still have our people looking at opportunities in Europe, even though we don’t want to buy any government bonds.”

    "Europe’s turmoil is reigniting on the second anniversary of policy makers’ first attempt to prevent Greece’s woes from spreading. That raises fresh doubt over the strategy just as Greece’s election spurs concern that the country may not meet the terms of its international rescues and will seek a solution outside the euro.

    The 17-nation euro area is on the verge of losing one of its members, with more than 50 percent of investors predicting an exit this year as Greece’s election impasse threatens to push the crisis to new depths, according to a Bloomberg Global Poll.

    “Two or three years ago we started moving gradually from Europe and North America to Asia and Latin America,” Gao said. “We aren’t doing too much” in Europe.

    Source: http://www.bloomberg.com/news/2012-05-09/china-investment-stops-buying-europe-debt-on-crisis-concern-1-.html

  • allenswrenchallenswrench

    In Europe, the prospects are a lot more grim. The system is "starving the beast" as they are in no rush. Same workers (but way fewer will be hired at slave wages, and they will be happy as most their friends are unemployed.) Also, they will be set against eachother as it is better they fight eachother than think about what is wrong with the system. I know many people here comfort themselves with a fact that being asshole is not a crime. Guillotining people is also not a crime in certain conditions, it is an obligation! it is between those 2 that our history oscillates. Europe might feel as it has lost it's momentum (and fear of the gallows) but nobody is as educaded, angry, forsaken and smart. You will wish for the gallows!

  • allenswrenchallenswrench

    It's quite "funny" looking at the "banking" "financial" "crisis" and the extremization it leads to. Anyone worried would be good to know that treason by politicians leads to trials, and anyone responsible (and unfortunately many more) will be tried as a traitor. There is but 1 sentence for treason. Spain never had Nuremberg trials, which is why they are still largely dancing to the nationalist tunes, and people believe in fairytales! Shoot + the +traitors +in + the +head = justice

  • Vitaliy_KiselevVitaliy_Kiselev

    Shoot + the +traitors +in + the +head = justice

    It is not justance. It is attempt to solve very complex problems using simple methods.
    And no, it is not banking fincancial crysis.

  • TheNewDealTheNewDeal

    Really, this is very simple:

    (a) Expanded communication x (b) expanded transportation x (c) technology empowerment x (d) available happy slavery = expanding world wide competition, market opportunities, and labor/environmental deregulation:

    There are jobs, but for the good jobs, people are now competing world wide for them. Many people just don't open their eyes and see the new economy:

    • Their skill are just not as unique as they once thought, so they really are not as in demand as they previously were. In fact, employers are finding near slaves in foreign countries that can and will happily do your job for far less.
    • Your employers are perfectly happy to hire nearly anyone else to make a few percentage more profit. With the expanded communication x expanded transportation x technology empowerment x available happy slavery, now they clearly can and will happily hire near slaves instead of you, whenever possible. They just don't care. Really, they don't. We are just "meat in shoes" to them. If you still have a job, it's only because they haven't figured out how to have other near slave priced "meat in shoes" do your job instead yet.
    • While most working class people in the U.S. believe labor and environmental laws are a good thing, the employers are proving they just don't really care at all. A few pennies more per dollar and they will gladly cause on the job injuries and environmental damage without flinching an eye...

    Sorry, but just being honest. Welcome to the new "communication/transportation/technology/slavery" economy. The U.S., British, and Germany middle class is it's first victim. It's just evolution, greed, and a complete total lack of executive morals. Brought to you by quarterly driven profit decision making from the Harvard School of Business.

    Welcome to the next 30-50 years... Then they will run out of available happy slaves again. And we will see what happens then. Robots? Aliens? Who knows. But I'll be dead by then. So this is it. We have to learn to swim in it or starve.

  • brianlucebrianluce

    @TheNewDeal That's why I think people are smart to learn skilled work with their hands. Very hard to outsource Nursing, auto repair, Carpentry, etc. I'd like to see Vitaliy hack a GH2 that can give my Grandfather a hip replacement or drive a 40 ton diesel truck.

  • Vitaliy_KiselevVitaliy_Kiselev

    Very hard to outsource Nursing, auto repair, Carpentry, etc.

    I really do not like your list.
    I believe that people can live better because of new tech, cheaper energy, and resources. But as most of life improvement factors do not work now, it all goes to usual route. You can live better because someone live worse, general rule of competition. Global free market and global competition accompanied with constant energy deficit, and rising food prices is worse thing that ever existed.

  • TheNewDealTheNewDeal

    (A) You do something your employer believes no one else can do just as well for the same price.
    (B) Or your employer gets his ego rubbed by your presence. You open his door, make him and his buddies a sandwich, keep his car running, make him look good in presentations, deliver his viagra, get him laid, help him not get fired for his incompetence, etc...

    If not, he is trying to outsource and deregulate you. Right now. I'm not saying that's good or bad. That's just is the new economy. We must learn to swim it or starve or get into the Harvard Business School of disgusting soul eating individuals to join them. I didn't write the movie. I just see the same scenes playing out day after day, in location after location.

  • brianlucebrianluce

    What wrong with my list? Those are REAL jobs that will continue to demand a living wage. What's wrong with that? I'd like to know. They have nothing to do with cheap energy and new technology. I'd like to see the new technology that comforts a stricken kid in a cancer ward or fixes a clogged sewage pipe.

    And why are you saying a person's life gets better at the expense of another when you just listed a bunch of things like technology and energy that can create more efficient systems? Which way are you going on this? You can't go in two directions at the same time.

  • Vitaliy_KiselevVitaliy_Kiselev

    What wrong with my list? Those are REAL jobs that will continue to demand a living wage.

    Many things is wrong. Problem is that real income on all of this jobs is dropping all across the world. In many countries it is main jobs for immigrants now.

    Which way are you going on this?

    I really like your selective skipping.

    So, let's try again to read whole thing,

    I believe that people can live better because of new tech, cheaper energy, and resources. But as most of life improvement factors do not work now, it all goes to usual route. You can live better because someone live worse, general rule of competition.

    It is really simple thing, energy is not getting cheaper anymore, new technologies progress became slower, most resources are in high demand but big shortage.
    So, we live in the competition era. And competition, both in local and global scale will be tougher with each day.

  • danabramsdanabrams

    What makes you think the Collapse of middle class incomes is the incorrect price? That is, what reason is there to believe that medium skill labor should be earning $100k annually, and that at $45k they're being underpaid? Why not the opposite? That at $100k they were massively overpaid and now there's been a correction that more accurately prices their labor.

    Given the fact that the US has been financing it's lifestyle through debt, I'd think the latter is more likely. Just look at a company like Dewey LeBouef, which is going to dissolve because it has so much debt. That's what happened to Borders and Circuit City and Lehman and Baer Stearns.

  • TheNewDealTheNewDeal

    So true. It's purely "supply and demand." For many years, the USA has bragged about the glory of supply and demand. And now, global supply and demand has shifted, which is what is tearing apart their USA middle class. Even in things like camera gear. Historically we bought from the people we trust at a local dealer. Now, we have better communication and easier access buying from an Ebay name, directly from China. Supply and demand. The "good old days" are over. It's the new economy.

    -Internet communication. -Transportation. -Technology empowerment. -Happy slave labor.

    That combination has redefined supply and demand for the future.

    There is plenty of available energy. We will see it readily available when the prices raise to meet the greed of the dominant players to sell it.

  • brianlucebrianluce

    USA has been importing nurses for 50 years and wages are still solid. Mexicans have been working construction for over a century and yet plenty of guys I know make $100/hour. I have no trouble with foreign born nurses or air conditioning mechanics as long as they can do the job. Not all Americans think immigrants are the boogeyman. Give an immigrant a living wage and you know what you get in 5 years? An American.

    "It is really simple thing, energy is not getting cheaper anymore, new technologies progress became slower, most resources are in high demand but big shortage. So, we live in the competition era. And competition, both in local and global scale will be tougher with each day." Sure, but that's nothing to do with the long term viability of jobs that are essential and difficult to outsource. I don't get your point, you've merely divined the present. Yes, times are tough and look to be getting tougher. So what should a person do? Arm yourself with employable skills that are immune from outsourcing and automation.

    You guys are funny, you (not V) want to tear down people who contribute to the country -- claiming they're overpaid and ruining the economy, meanwhile the bankers are reaming out your ass -- yet they're not the problem somehow, it's Nurses and Carpenters and school teachers that you blame. I think a top teacher is absolutely worth 100k/year. Who has a job more important? You local Congressman?

  • Vitaliy_KiselevVitaliy_Kiselev

    @brianluce

    Again, you proposing very hard, highly competitive jobs with big number of them taken by immigrants who are ok to work for less or give up on social packages, that are also in the first risk line in the case of pension and debt crisis (transportation will collapse, nurses fill be fired and load on remaining will be much more, auto market will have trouble with people saving every penny and using cheap unauthorised repair, so income will fall fast, and many big centers will fire people).

  • brianlucebrianluce

    And as I've said, there's a long tradition of hiring immigrants to work as nurses, 40 to 50 years worth, and none of what you say happened. And many such jobs aren't competitive, that's why immigrants get them, USA nursing schools can't provide adequate supply.

    Auto repair has also always been done mostly by independents once a car is out of warranty -- and let me tell you, it's not cheap! It takes more than a wrench to fix a car these days with all the computer modules.

    I'm not denying things are hard, but you take a severe doom and gloom view that exaggerates vulnerabilities and doesn't match match reality -- for example your claim that immigrants are depressing wages in the medical field. The nurses I know, and many are naturalized immigrants, are doing just fine.

  • bluesblues

    It's all very simple,world have taken a new economic dynamics. The west , the U.S. and Europe no longer have the advantage set by previous neo colonial mercantilism era.The political capital ran its course and have finally lost steam due to the new economics that has emerge caused by the unregulated and relentless capital greed the west have placed itself in. It is harder to undo or unlearn what has been embeded in the western mindset that it alone has the economic ascendancies in the world arena. They were trap by the lure for cheap labor during the information and technological age.now the party is over and time to work n compete like everybody else.

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