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the metaphor would be the house never looses TM, i'm just a fan of Mel's take on that
so, for you supply siders who think likewise, i find RR's rather simplistic take in step>
Stock Tip: Be Worried. Workers are Consumers. Friday, August 19, 2011
Repeat after me: Workers are consumers. Consumers are workers.
Were slouching toward a double dip, and the stock market is imploding, because consumers whose spending is 70 percent of the economy have reached their limit.
Its not just the jobless who cant spend. Its mainly people with jobs. Median wages continue to fall. Weekly wages in July for Americans with jobs were 1.3 percent lower than eight months before.
Americas median earners are now earning less (adjusted for inflation) than they earned ten years ago.
Every CEO of every company that continues to squeeze payrolls (Verizon, are you listening? Ford?) needs to understand theyre shooting themselves in the feet. Where do they expect demand for their products and services to come from?
Theyre doing the reverse of what Henry Ford did back in 1914 paying his workers three times what the typical factory employee earned at the time. The Wall Street Journal called his action an economic crime but Ford knew it was a cunning business move. With higher wages, his workers became his customers, snapping up Model-Ts and generating huge profits.
Many on Wall Street are scratching their heads, trying to understand why the stock market is plummeting. After all, they tell themselves, corporate earnings are still near record highs.
But its becoming clear those earnings cant be sustained. Corporate earnings are the highest theyve been relative to worker wages and benefits since just before the Great Depression. And the richest 1 percent of Americans are getting a higher percent of total income since just before the Great Depression.
Get it? It was only a matter of time before the boom on Wall Street turned into a bust. Economic booms cannot continue without American workers participating in them.
The problem with todays system is that the world is run by monetary systems, not by national credit systems. . . . [Y]ou dont want a monetary system to run the world. You want sovereign nation-states to have their own credit systems, which is the system of their currency. . . . [T]he possibility of productive, non-inflationary credit creation by the state, which is firmly stated in the US Constitution, was excluded by Maastricht [the Treaty of the European Union] as a method of determining economic and financial policy.
The world company acquires assets by preventing governments from issuing their own currencies and credit. Money is created instead by banks as loans at interest. The debts inexorably grow, since more is always owed back than was created in the original loans. (For more on this, see here.) If currencies are not allowed to expand to meet increased costs and growth, the inevitable result is a wave of bankruptcies, foreclosures, and sales of assets at firesale prices. Sales to whom? To the world company.