The Strange case of the US Economy.

[Sallow]

Been following the market for quite some time. While it's been very volatile, the NYSE has been hovering between the 11,000 - 12,000 range for quite some time. Earnings reports from big corporations have been pretty good. In fact some companies are doing quite well.

But even with the big profits, hiring has been dismal. In fact, without the Stimulus package that provided funding for a good many construction jobs, there would have been little or no new hires. And it looks like employment will not only be a "lagging" indicator but a "non-existent" indicator.

Some time ago I put up a thread in another forum that basically said that many industries are not hiring because they participating in a "de-facto" hostage taking of the economy. That they were looking for more regulation and tax cuts. As well as a paradigm shift that is occuring where profit is maximized by:
1. Hiring overseas.
2. Having a smaller work force working longer hours for less pay and benefits ( Contract work).
3. Using methods like buying back stock and layoffs to show liquidity.

Looks like these practices are continuing. But it also looks like the system is getting stressed. I had also predicted that the unemployed and under employed would act out eventually. So far it's been very mild. But it is my hope that it stays that way and companies get the memo.

 

[Flopper]

50% of the S&P 500 companies profits come from abroad. There is little incentive to expand business in the US and create jobs because of the lack of demand here. Without jobs there will be no increase in demand. Without demand there will be no increase in jobs.

The government can do nothing and we can muddle along for years and eventually we will see some real growth or we can stimulate the economy with increased spending and/or tax cuts which may speed up the process a bit. With the current political situation, I would bet on the former rather the latter.

 

[Truthmatters]

The right in this country is doing everything they can to depress demand for poltical purposes

 

[Wiseacre]

Taking the economy hostage. Depressing demand for political purposes. I swear, the nonsense around here gets positively disturbing. How anyone can possibly think that a CEO or business owner would deliberately curb or reduce their own profits, it just boggles the mind. It's like the democratic party has opened a huge vat of stupid and people are swallowing it without a second or even first thought of their own.

Everybody talks about a lack of demand as though that's it, increase demand and our worries are over. Well not so fast kemo sabe, it ain't that easy. First of all, there's the question of how to do that, not just temporary shit like the president's jobs bill, but real and permanent job creation. That ain't going to happen until the business climate in this country changes for the better, there's no magic jobs plan or policy that can fix everything and poof, people start hiring again.

Then there's the question of costs, when you raise taxes and increase the number of regulations to be complied with, and healthcare costs continue to go up, as does the cost of energy, the the cost of doing business goes up too and prices soon follow. News flash - demand is not helped when prices rise. The supply side of the equation comes into play too.

 

[CrusaderFrank]

Businesses are holding back because they don't want to get nationalized like GM or GE. They want to try to ride out the Progressive Jihad on Free Enterprise and will expand under a more pro-American, more business friendly Administration.

Listen to Steve Wynn, he nailed it.

 

[Sallow]

50% of the S&P 500 companies profits come from abroad. There is little incentive to expand business in the US and create jobs because of the lack of demand here. Without jobs there will be no increase in demand. Without demand there will be no increase in jobs.

The government can do nothing and we can muddle along for years and eventually we will see some real growth or we can stimulate the economy with increased spending and/or tax cuts which may speed up the process a bit. With the current political situation, I would bet on the former rather the latter.

Basically this was started by the very companies saying that "there is a lack of demand". Mass layoffs began in the Bush administration as a method to show profit. It started a cyclical cascade of mass layoffs that eventually became necessary..because of lack of demand.

 

[iamwhatiseem]

There is little doubt that corporatism in America has greatly diminished our nation.
This was hidden for over 20 years by people borrowing so much money. There was a time in this country when your average middle-class citizen had five figures of debt outside a mortgage and car loan.
Now that the government sponsored and encouraged "loans for everyone" is over...whoops...we have a problem Houston.
Wage stagnation and underemployment is a much, much greater problem than unemployment.

 

[Sallow]

Taking the economy hostage. Depressing demand for political purposes. I swear, the nonsense around here gets positively disturbing. How anyone can possibly think that a CEO or business owner would deliberately curb or reduce their own profits, it just boggles the mind. It's like the democratic party has opened a huge vat of stupid and people are swallowing it without a second or even first thought of their own.

Everybody talks about a lack of demand as though that's it, increase demand and our worries are over. Well not so fast kemo sabe, it ain't that easy. First of all, there's the question of how to do that, not just temporary shit like the president's jobs bill, but real and permanent job creation. That ain't going to happen until the business climate in this country changes for the better, there's no magic jobs plan or policy that can fix everything and poof, people start hiring again.

Then there's the question of costs, when you raise taxes and increase the number of regulations to be complied with, and healthcare costs continue to go up, as does the cost of energy, the the cost of doing business goes up too and prices soon follow. News flash - demand is not helped when prices rise. The supply side of the equation comes into play too.

This is not some "crackpot" theory..it comes from my experience in working with the business world as well as what I've seen in the media. Remember, HP under Carly Fiorina, fired some 30K employees while the company was showing profit. She went on to become a Republican candidate.

Citigroup sent out a famous memo that the US was a "Plutonomy"..

Daily Kos: Citigroup's Shocking 'Plutonomy' Reports -- h/t Michael Moore

Citigroup Plutonomy Report Part 1
Oct 16, 2005



- The World is dividing into two blocs - the Plutonomy and the rest.

The U.S., UK, and Canada are the key Plutonomies - economies powered by the wealthy. Continental Europe (ex-Italy) and Japan are in the egalitarian bloc.

- Equity risk premium embedded in "global imbalances" are unwarranted.

In plutonomies the rich absorb a disproportionate chunk of the economy and have a massive impact on reported aggregate numbers like savings rates, current account deficits, consumption levels, etc.

This imbalance in inequality expresses itself in the standard scary "global imbalances". We worry less.

- There is no "average consumer" in a Plutonomy.
[...]
Indeed, traditional thinking is likely to have issues with most of it. We will posit that:

1.the world is dividing into two blocs - the plutonomies, where economic growth is powered by and largely consumed by the wealthy few, and the rest.
Plutonomies have occurred before in sixteenth century Spain, in seventeenth century Holland, the Gilded Age and the Roaring Twenties in the U.S.

What are the common drivers of Plutonomy?

Disruptive technology-driven productivity gains,
creative financial innovation,
capitalist-friendly cooperative governments,
an international dimension of immigrants and
overseas conquests invigorating wealth creation,
the rule of law, and
patenting inventions.

This sort of demonstrates the private industry at large has very little intention of changing anything until they get most if not all of what they want.

Very low taxes, no regulations.

 

[Sallow]

There is little doubt that corporatism in America has greatly diminished our nation.
This was hidden for over 20 years by people borrowing so much money. There was a time in this country when your average middle-class citizen had five figures of debt outside a mortgage and car loan.
Now that the government sponsored and encouraged "loans for everyone" is over...whoops...we have a problem Houston.
Wage stagnation and underemployment is a much, much greater problem than unemployment.

Wage stagnation explained by borrowing?

Seriously?

What exactly explains the staggering 470:1 executive to employee ratio of wage distribution in this country? Or the fact that about 50% fo this country's wealth is controlled by 1% of it's citizens?

 

[CrusaderFrank]

Why do we even need executives, Komrades? They steal the wages from the Proletariat!

 

[Trajan]

50% of the S&P 500 companies profits come from abroad. There is little incentive to expand business in the US and create jobs because of the lack of demand here. Without jobs there will be no increase in demand. Without demand there will be no increase in jobs.

The government can do nothing and we can muddle along for years and eventually we will see some real growth or we can stimulate the economy with increased spending and/or tax cuts which may speed up the process a bit. With the current political situation, I would bet on the former rather the latter.

Basically this was started by the very companies saying that "there is a lack of demand". Mass layoffs began in the Bush administration as a method to show profit. It started a cyclical cascade of mass layoffs that eventually became necessary..because of lack of demand.

this is why even when you post what appears to be an honest thread, minus rancor, I don't bother,see here;

the very companies saying that "there is a lack of demand". Mass layoffs began in the Bush administration as a method to show profit.

quite reading Thinkprogess for fuck sakes.

they do this in EVERY downturn, its cyclical. jesus christ you're shallow sallow.

 

[iamwhatiseem]

There is little doubt that corporatism in America has greatly diminished our nation.
This was hidden for over 20 years by people borrowing so much money. There was a time in this country when your average middle-class citizen had five figures of debt outside a mortgage and car loan.
Now that the government sponsored and encouraged "loans for everyone" is over...whoops...we have a problem Houston.
Wage stagnation and underemployment is a much, much greater problem than unemployment.

Wage stagnation explained by borrowing?

Seriously?

What exactly explains the staggering 470:1 executive to employee ratio of wage distribution in this country? Or the fact that about 50% fo this country's wealth is controlled by 1% of it's citizens?

You been in this country very long?
Wage stagnation was masked by debt - people were getting what they wanted by spending more than they made.
People bought homes they could not POSSIBLY afford.
In other words the real pain of stagnate wages was partially hidden by people having no uneasiness in borrowing a years salary.
Now that the cheap debt without question is over - people have awaken to reality.

 

[Conservative]

The right in this country is doing everything they can to depress demand for poltical purposes

Do you consider taking something that does not belong to you, 'theft'?

 

[Sallow]

There is little doubt that corporatism in America has greatly diminished our nation.
This was hidden for over 20 years by people borrowing so much money. There was a time in this country when your average middle-class citizen had five figures of debt outside a mortgage and car loan.
Now that the government sponsored and encouraged "loans for everyone" is over...whoops...we have a problem Houston.
Wage stagnation and underemployment is a much, much greater problem than unemployment.

Wage stagnation explained by borrowing?

Seriously?

What exactly explains the staggering 470:1 executive to employee ratio of wage distribution in this country? Or the fact that about 50% fo this country's wealth is controlled by 1% of it's citizens?

You been in this country very long?
Wage stagnation was masked by debt - people were getting what they wanted by spending more than they made.People bought homes they could not POSSIBLY afford.
In other words the real pain of stagnate wages was partially hidden by people having no uneasiness in borrowing a years salary.
Now that the cheap debt without question is over - people have awaken to reality.

No it's not!

Wage stagnation is just that. Labor did not get any real raises in salary.

Simple as that.

 

[Sallow]

50% of the S&P 500 companies profits come from abroad. There is little incentive to expand business in the US and create jobs because of the lack of demand here. Without jobs there will be no increase in demand. Without demand there will be no increase in jobs.

The government can do nothing and we can muddle along for years and eventually we will see some real growth or we can stimulate the economy with increased spending and/or tax cuts which may speed up the process a bit. With the current political situation, I would bet on the former rather the latter.

Basically this was started by the very companies saying that "there is a lack of demand". Mass layoffs began in the Bush administration as a method to show profit. It started a cyclical cascade of mass layoffs that eventually became necessary..because of lack of demand.

this is why even when you post what appears to be an honest thread, minus rancor, I don't bother,see here;

the very companies saying that "there is a lack of demand". Mass layoffs began in the Bush administration as a method to show profit.

quite reading Thinkprogess for fuck sakes.

they do this in EVERY downturn, its cyclical. jesus christ you're shallow sallow.

Oh gosh.

This is what I saw while working in the financial sector for pete's sake. People doing the actually work getting 2% raises, yearly and newly minted executives getting 3 million dollar base salaries and 10 million dollar bonus.

Without showing anything by way of performance to justify that sort of compensation.

 

[iamwhatiseem]

Wage stagnation explained by borrowing?

Seriously?

What exactly explains the staggering 470:1 executive to employee ratio of wage distribution in this country? Or the fact that about 50% fo this country's wealth is controlled by 1% of it's citizens?

You been in this country very long?
Wage stagnation was masked by debt - people were getting what they wanted by spending more than they made.People bought homes they could not POSSIBLY afford.
In other words the real pain of stagnate wages was partially hidden by people having no uneasiness in borrowing a years salary.
Now that the cheap debt without question is over - people have awaken to reality.

No it's not!

Wage stagnation is just that. Labor did not get any real raises in salary.

Simple as that.

WHat?
I am agreeing with you here...corporatism and wage stagnation is an undeniable problem...as I have said numerous times on this forum - underemployment is a bigger issue than unemployment.
All I am saying is that people have not felt the true effects of 20 years of slowing and diminishing salaries until recently because they were borrowing so much money...in other words people were treating debt as income.
Now that cheap and wildly available debt has greatly diminished - the problem of wage stagnation is truly being realized both as individuals and as a nation.

 

[Oldstyle]

You been in this country very long?
Wage stagnation was masked by debt - people were getting what they wanted by spending more than they made.People bought homes they could not POSSIBLY afford.
In other words the real pain of stagnate wages was partially hidden by people having no uneasiness in borrowing a years salary.
Now that the cheap debt without question is over - people have awaken to reality.

No it's not!

Wage stagnation is just that. Labor did not get any real raises in salary.

Simple as that.

WHat?
I am agreeing with you here...corporatism and wage stagnation is an undeniable problem...as I have said numerous times on this forum - underemployment is a bigger issue than unemployment.
All I am saying is that people have not felt the true effects of 20 years of slowing and diminishing salaries until recently because they were borrowing so much money...in other words people were treating debt as income.
Now that cheap and wildly available debt has greatly diminished - the problem of wage stagnation is truly being realized both as individuals and as a nation.

You have to use small words and short sentences or Sallow gets confused...

 

[editec]

We liberated capital from national responsibility.

Capital knows no patriotism.

 

[California Girl]

50% of the S&P 500 companies profits come from abroad. There is little incentive to expand business in the US and create jobs because of the lack of demand here. Without jobs there will be no increase in demand. Without demand there will be no increase in jobs.

The government can do nothing and we can muddle along for years and eventually we will see some real growth or we can stimulate the economy with increased spending and/or tax cuts which may speed up the process a bit. With the current political situation, I would bet on the former rather the latter.

Basically this was started by the very companies saying that "there is a lack of demand". Mass layoffs began in the Bush administration as a method to show profit. It started a cyclical cascade of mass layoffs that eventually became necessary..because of lack of demand.

this is why even when you post what appears to be an honest thread, minus rancor, I don't bother,see here;

the very companies saying that "there is a lack of demand". Mass layoffs began in the Bush administration as a method to show profit.

quite reading Thinkprogess for fuck sakes.

they do this in EVERY downturn, its cyclical. jesus christ you're shallow sallow.

Sallow, like many, puts too much faith in his chosen news outlets to provide factually accurate coverage with no political spin. Touching but stupid.

 

[California Girl]

You been in this country very long?
Wage stagnation was masked by debt - people were getting what they wanted by spending more than they made.People bought homes they could not POSSIBLY afford.
In other words the real pain of stagnate wages was partially hidden by people having no uneasiness in borrowing a years salary.
Now that the cheap debt without question is over - people have awaken to reality.

No it's not!

Wage stagnation is just that. Labor did not get any real raises in salary.

Simple as that.

WHat?
I am agreeing with you here...corporatism and wage stagnation is an undeniable problem...as I have said numerous times on this forum - underemployment is a bigger issue than unemployment.
All I am saying is that people have not felt the true effects of 20 years of slowing and diminishing salaries until recently because they were borrowing so much money...in other words people were treating debt as income.
Now that cheap and wildly available debt has greatly diminished - the problem of wage stagnation is truly being realized both as individuals and as a nation.

Yea, but you're not blaming the Republicans, so swallow must disagree with you.