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Speakeasy: Is this too political a question?
Is this too political a question?
by TONI H - 6/10/09 5:37 AMI keep seeing on the news for the last year about the rising unemployment numbers along with all the other financial headaches this country has had to endure, and will continue to do so for at least a while longer, and the same question keeps coming up in my head with no news stations even questioning it.
If the unemployment rate at 9% is the highest since the 1980's and you compare that date in time with today, I get a headache trying to understand how: If the unemployment rate is the same, the car makers still were making a profit even with the UAW demands, the banks and credit card companies were still being creative in their lending attitudes in order to get people to buy homes and take their credit cards, and people were making enough money to live the American dream, what is so different today in that we were able to 'recover' in the 1980's without much fanfare but we are unable to do so now?
The ONLY thing I can find that is different today is that NATFA was literally at the heart of our downfall. Steel companies were the first to be hit and closed down, then companies were given free leeway to leave our country for cheap labor and materials overseas/Mexico and we were left holding the bag and paying more for those same products because of shipping costs involved to get the products back here for our own consumers.
Help me understand because there is no way I am convinced that shady and extravagant bonus structures for CEO's and Wall Street corruption has been around for forever and our country never got hit this hard. We've been thru wars before without using that as the sole reason for this current disaster. None of this is making any sense to me and I'm sick to death of listening to financial wizards on the news interviews giving such ridiculous explanations...and none agree with each other anymore, but nobody seems to be touching on the one thing I see as a glaringly obvious conclusion.
TONI H
no money to invest
by jolysmoke - 6/10/09 6:04 AM In reply to: Is this too political a question? by TONI HNot necessarily if you keep it on a non-party political level.
As the banks and investors have lost so much money in the present financial crisis, they are now sitting on what money they have to balance the books, wondering when and where the new investment opportunities will present themselves, if they do. They are being very, very careful, because previously they were far too rash. And the banks still don't trust each other or lend to each other, since as yet the "bad" certificates have not yet been weeded out in a "bad bank" and it is impossible to know what a bank is really worth.
Only when people start investing and banks start lending again will the economy start to climb again, but people know that if they start too early, they could lose everything that remains.
What you suggest can't happen
by TONI H - 6/10/09 6:24 AM In reply to: no money to invest by jolysmokeif the people don't have the money to invest because they have no jobs....with the States and Local Governments increasing taxes on real estate, products, etc. and cutting normal services (such as the chipper program for downed trees etc), there will be even more people losing their homes because they now can't afford to also pay a tax increase on that property. With the increasing prices on gasoline, even ones who still have jobs are losing the small increase in their paychecks that they acquired with the new Federal tax break that was just given to them. With the vicious circle getting larger and larger, most people are now trying to cope with one foot literally nailed to the floor because anything the Feds have 'given' to them is being taken away by State and Local Governments as quickly as those changes can be passed into being on the books now.
Prince William County in Manassas passed a real estate tax increase of 28% (my county which is very small with only 15,000 people in it including children and older people on fixed incomes and has lost nearly every business that was here as little as 8 years ago, passed increases across the board of 4% with little hope that the unemployed or social security recipients will be able to continue to foot that tax base bill).
The only people with money to invest are the same people who got the huge bonuses and were/are still at the top of the pyramid.
Most people here have gone back to basics of growing and canning their own food again and this had pretty much gone to the wayside for years....and supplies for that process have increased in price by 25% because of supply and demand. AEP (American Electric Power) has again requested another 25% rate increase....even tho they just got one last year for the same percentage amount. Trash pickup has increased by $3 per month for every household in the county when it was $1 a month ago. All of these tax increases go into effect in three weeks, and yet the Board of Supervisors (five people on the board) which hold part time status are being paid a combined total of $600K+ per year.....and they all have full time jobs or are Xmas tree growers. I have a hard time rationalizing those salaries for part time jobs.
TONI H
RE: it was $1 a month ago
by JP Bill - 6/10/09 6:42 AM In reply to: What you suggest can't happen by TONI HTrash pickup has increased by $3 per month
Could be worse
Try $250/year $21/month
James. I removed your post. Wrong thread?
by MarkFlax
- 6/10/09 12:12 PM
In reply to: no money to invest by jolysmoke
I assume you posted about the shootings at Holocaust Museum in Washington DC, in this thread in error, so I removed it.
Let me know if I have made a mistake.
Mark
Yes, should have started a thread.
by James Denison - 6/10/09 2:48 PM In reply to: James. I removed your post. Wrong thread? by MarkFlax
At least that explained what happened to one post about today's news, which is still on hours later, all day long.
How bout this
by JP Bill - 6/10/09 6:10 AM In reply to: Is this too political a question? by TONI HIf the unemployment rate is the same, the car makers still were making a profit even with the UAW demands, the banks and credit card companies were still being creative in their lending attitudes in order to get people to buy homes and take their credit cards, and people were making enough money to live the American dream
They were a little to creative and the dreams were in High Def.
Countries (like a person) can only go into debt so far before they/you start to suffer the consequences.
Chickens come home to roost?
I may cross the line now so
by TONI H - 6/10/09 6:35 AM In reply to: How bout this by JP Billif that's the case, the Moderators can remove this post and I'll try to reword it and stay within the boundaries.
You said: They were a little to creative and the dreams were in High Def.
If my memory serves me correctly, the real creative banking didn't go into effect until the Clinton era when Bill pretty much demanded that every person should have the opportunity to get a home loan, and the banks and mortgage companies began putting the brakes on what constituted a 'safe' risk by doing away with the old normal rules of the loan process by eliminating those who just flat out didn't qualify due to income or not enough of a down payment, etc.
Does this mean that the liberal wants/demands of a Democratic President and the thought process not being carried far enough of what was to come for the future of banking and NAFTA brought this country to its knees?
Before the creativity of loaning money and before the abuse of NAFTA, we WERE able to recover from a high unemployment rate....so what really caused the current situation if not those two things working simultaneously?
TONI H
Response
by JP Bill - 6/10/09 6:56 AM In reply to: I may cross the line now so by TONI HThe people that got the home loans didn't only belong to one political party....Free or almost free money is very attractive. Even enough to switch party affiliation.
The world is the market now, not a country. It's a Global Economy. Many plants are so efficient that they can produce more than one country can use, and to be efficient/profitable they MUST export.
Countries don't trade with each other any more, they manufacture products together.
You don't think the unemployment rate will EVER go down?
Yes, I do but
by TONI H - 6/10/09 7:45 AM In reply to: Response by JP Billonly because history from the 1980's has shown that it will. However, the employed will have a whole new face compared to what used to be there. There will be more specialized and trained jobs, leaving the majority of the work force out in the cold in the future.
Unemployment rates only indicate NEW claims filed....it never indicates how many have run out of benefits and are still out of work, struggling to figure things out. That means nearly an entire still living generation of people who are not paying into the tax base anymore because they are unemployable now due to the work they were able to do before is no longer available or because they are too old and won't be hired no matter what kind of new training they are willing or able to go through. Although the law states an employer cannot discriminate based on age, the fact is your application will prove your age and employers will use it against you when deciding who to hire. If a 55 year old man was in construction and it's all he was doing since high school, and the construction business picks up even a little, he will be the last one to be considered....that's reality. The one to be hired will be the young man who also has computer savvy because so many pieces of construction equipment today has that technology built into it and for physical labor, the young man will have the stamina to do it. There are very few companies that don't have computerized assembly lines that the jobs that used to be available for non-computerized assembly lines are gone for good. More and more machines will be utilized and more and more people will stay out of work...
The unemployment percentage will go down...but it will never reflect how many people will never be employed again.
TONI H
Response
by JP Bill - 6/10/09 9:08 AM In reply to: Yes, I do but by TONI HUnemployment rates only indicate NEW claims filed (Doesn't it indicate number of claims already opened?)
If a 55 year old man was in construction and it's all he was doing since high school, and the construction business picks up even a little, he will be the last one to be considered....that's reality.
UNLESS The company calls the Union Hall and says "I want 20 electricians" The Union takes the next 20 people that are at the top of the unemployed workers list (which is not sorted by age) and sends them to the job. They may get a number of apprentices to maintain the Journeyman/ apprentice ratio.
B.C. construction industry pleads for new workers
VANCOUVER — It sounds like a contradictory message. At a time when housing starts have collapsed and private builders are putting projects on hold, causing unemployment in the construction sector to swell, a key industry group is pleading for governments and companies not to cut back on training new workers.
However, despite the ups and downs of the construction business cycle, demographics tells the industry in B.C. that it will need some 26,000 new workers to replace retiring tradespeople by 2017, according to the Construction Sector Council’s latest forecast.
Beyond that, the council expects the industry will need 6,400 more new workers to accommodate expected economic growth beyond 2017.
He said the risk is that companies and governments will cut back on the training of new workers in an overreaction to the current bad news, which will sell the province short in the long term.
Empey said that is what happened during the recession of the 1990s, when there were significant reductions in apprenticeship training programs.
“It took four or five years, but it wasn’t long before people looked back and said that was a mistake,” he said.
Back in the old days if/when you were on Unemployment Insurance you had to go to the office weekly and fill out your weekly claim and collect you cheque. Now everything is done by mail/internet and no one sees the actual person that is unemployed.
I've always thought it would be a good plan for all unemployed people to go the Main Square of their home town every week at Wednesday Noon hour to let the Government know that there is a face to the Unemployed.
And the "old guys" can supervise the work or work in the Stores or the Tool Room.
Not everyone agrees where this all started
by Diana - 6/10/09 8:59 AM
In reply to: I may cross the line now so by TONI H
“This bill is the most important legislation for financial institutions in the last 50 years. It provides a long-term solution for troubled thrift institutions. ... All in all, I think we hit the jackpot.” So declared Ronald Reagan in 1982, as he signed the Garn-St. Germain Depository Institutions Act.
He was, as it happened, wrong about solving the problems of the thrifts. On the contrary, the bill turned the modest-sized troubles of savings-and-loan institutions into an utter catastrophe. But he was right about the legislation’s significance. And as for that jackpot — well, it finally came more than 25 years later, in the form of the worst economic crisis since the Great Depression.
Read the rest of the article and see if you agree or disagree and what you see right or wrong with it. I don't remember that much of the details of the Reagan years. I remember the taxes going down and the deficits tripling. I also remember the deductions for normal people being eliminated because the taxes would be sooo low that we wouldn't need them anymore. I also remember I got an extra 75 cents per week in my paycheck.
I think that people never believe (no matter what the odds are) that bubbles will never burst whether it's the dot com or oil or housing prices or whatever. And then there is pain.
Diana
What you don't remember, Diana,...
by Paul C - 6/12/09 3:20 AM In reply to: Not everyone agrees where this all started by Diana
...is the fact that revenues to the Treasury moire than doubled from 1982 to 1988. That fact gives the lie to the allegations that it was the Reagan tax cuts that caused the deficit of that period, which look actually attractive given the spending and money printing debauch that began late in the Bush2 administration and has accelerated in the Obama administration.
What caused the 1980s deficit was that while revenues more than doubled, Congress more than tripled the rate of government spending over the same period, despite having "promised" to hold the line on their spendthrift ways.
All I know is that the deficit went from
by Diana - 6/12/09 4:45 PM
In reply to: What you don't remember, Diana,... by Paul C
one trillion to four trillion in eight years.
Does anyone know how much it is now? It seems like no one knows how much was given away.
Diana
My take.
by Angeline Booher - 6/10/09 6:33 AM
In reply to: Is this too political a question? by TONI H
From what I heard, US steel plants started losing market share because the did not modernize so could not produce steel at a competitive price.
Those secret accounts in Swiss banks had been around for decades, but "off shore" accounts then entered the mix. It was easy to hide money.
Corporations got a real deal. Some "opened" offices on some island so then could avoid US taxes. Those offices are little more than P.O. boxes.
Taking high risks by investing is not new. One junk bond king went to jail. The promise of high returns was inviting.
The failure of the savings and loans has a familiar ring.
(chronology)
http://www.fdic.gov/bank/historical/s&l/
http://en.wikipedia.org/wiki/Savings_and_Loan_crisis
It seems like yesterday that corporations began closing factories here and opening them overseas for cheap labor. On one hand the costs to employers for benefits was becoming too much. At the same time the CEOs were raking in huge bonuses.
I recall when a company would offer a pension, but little else. They began offering the same moon that union workers had because the work force was needed, and it was hoped loyalty would follow.
Health care costs are rising higher and higher, to the point they are becoming too much of a burden for companies to offer. Some workers are not willing to pay more in the way of co-pays, etc. So both ends lose.
The USA used to have an economy built on market production. It became one built on financial institutions.
I think that we also bear some blame. We began trying to live beyond our means with plastic and other credit , and took high risks when investing. Of course, we were encouraged to do so, which is really no excuse. Those returns that sounded too good to be true should have sent up a red flag. Both sides of the table were out to make money.
Angeline
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